Pfizer agreed to buy Medivation for about US$14 billion (S$19 billion), gaining a blockbuster prostate-cancer treatment and leaving French drugmaker Sanofi jilted.
Advertisement
The planned purchase of Medivation, with its $2.2 billion-a-year Xtandi, is the latest in a number of deals by large drugmakers willing to pay top dollar for cancer drugs that are more effective than standard, older treatments.
Medivation is also evaluating Xtandi as a breast cancer therapy.
The offer is a 55-percent premium to Sanofi SA’s initial bid to buy Medivation for $52.50 per share in April, which pushed the San Francisco-based company to put itself up for sale. Pfizer said the transaction should close by the end of the year, and will boost Pfizer’s earnings by 5 cents a share in the first full year.
Xtandi is now being evaluated in several studies including a couple of late-stage studies in non-metastatic prostate cancer and another phase III study in hormone-sensitive prostate cancer.
Medivation also cited positive late-stage data for Talazoparib, a drug the company believes will account for a significant part of its long-term value.
Since Pfizer is tucking one of the world’s best-selling oncology drugs into its cancer drug lineup, it gets two potential future cancer drugs, and the deal is immediately accretive, there’s little to dislike about this deal.
Reuters had reported that Pfizer, Merck & Co Inc, Celgene Corp and Gilead Sciences Inc had submitted expressions of interest to acquire Medivation. Talazoparib, now in a phase 3 study for the treatment of BRCA-mutated breast cancer, has the potential to be a highly potent PARP inhibitor and could be efficacious across several additional tumors.
Pfizer executives said that the acquisition would help Pfizer accelerate its revenue growth and bring strategic growth to its cancer business. “Ibrance and Xtandi are anchor brands in breast and prostate cancer respectively, giving Pfizer leadership in two hormone-driven cancers”. That includes the potential breast cancer treatment talazoparib and a potential lymphoma drug.
Jefferies analyst Jeffrey Holford said that while the price may be seen as expensive, the deal is a logical fit for Pfizer.
The university was not involved in the deal between Medivation and Pfizer, said UCLA Health spokesperson Phil Hampton. Earlier this year, Medivation reported that pidilizumab showed promise in a phase 1/2 study in children with a rare brain tumor called diffuse intrinsic pontine glioma, or DIPG.
Advertisement
Pfizer’s financial advisers were Guggenheim Securities and Centerview Partners, with Ropes & Gray LLP providing legal counsel. J.P. Morgan Securities and Evercore served as Medivation’s financial advisors, while Cooley LLP and Wachtell, Lipton, Rosen & Katz served as its legal advisors.
