Pfizer’s pursuit was driven mainly by its desire to obtain best-selling prostate cancer drug Xtandi, which generated U.S. net sales of $330million in the second quarter. It is also in mid-stage development for the treatment of advanced breast cancer and hepatocellular carcinoma. Xtandi is also marketed by Medivation partner Astellas Pharma, of Japan.
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Medivation also has been looking to expand the use of Xtandi into breast cancer treatment, which would boost its value, Nierengarten said.
Arfaei briefly gave his two cents about the acquisition, noting, “The addition of Xtandi and a key pipeline asset in Talazoparib should alleviate concerns about Pfizer’s Innovative segment, including overreliance on Ibrance and slowing Prevnar sales”.
The Nasdaq Biotechnology Index gained as much as 2.2 percent, its biggest intraday rise since August 1, as investors speculated that the Medivation deal could set off a fresh round of acquisitions in an industry that has already gone through a record period of consolidation.
By rejecting the initial offer of Sanofi amounting to around $9 billion, Medivation managed to attract more suitors and drive up the bidding. At the same time, Pfizer CEO Ian Read has declined to rule out going after even bigger acquisition targets that analysts have put forward, including and even AstraZeneca, the British drugmaker that Pfizer already tried and failed to acquire in 2014. According to a press statement, Pfizer will acquire the company for $81.50 a share in cash, for a total of approximately $14 billion. BMO Capital Markets restated a “market perform” rating and issued a $50.00 target price (up previously from $47.00) on shares of Medivation in a report on Monday, May 9th. Shares of Pfizer, the largest USA drugmaker, were little changed.
The purchase of Medivation, if approved by regulators, would be Pfizer’s biggest buy since it bought the medical device company Hospira a year ago for $17 billion.
Despite charging high prices often surpassing $100,000 a year per patient, companies haven’t faced the challenges securing reimbursement that have limited sales of new drugs for other diseases.
According to reports Pfizer Inc.(NYSE:PFE) is looking to pay over $80 per share for Medivation Inc (NASDAQ:MDVN), a significant premium to the $52.50 suggestion for Medivation that France’s Sanofi SA (SASY.PA) made in April, which ultimately resulted in the company putting itself up for sale. Medivation’s revenue for the quarter was up 17.4% compared to the same quarter past year. Xtandi sold about $2.2 billion worldwide over the past four quarters.
One of Pfizer’s most well-known drugs is the anti-impotency product Viagra.
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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.
