Medivation’s Acquisition for $14 Billion by Pfizer Near Final Stage: Reports

As Pfizer Inc seeks to boost its oncology portfolio, it has reached a position of advanced talks for the acquisition of the U.S. cancer drug company, Medivation Inc, for a value that is believed to be close to $14 billion, the media reported citing sources with knowledge of the matter.

One of the sources was quoted as saying that a little more than $80 per share for Medivation has been agreed to be paid by Pfizer. Compared to an earlier offer of $52.50 per share of Medivation that France’s Sanofi SA made in April, this offer by Pfizer is carries a substantial premium. The earlier offer by the French company resulted in Medivation eventually putting itself up for sale. Medivation shares ended trading in New York on Friday at $67.16.

Expressions of interest to acquire Medivation were earlier made by Pfizer, Sanofi, Merck & Co Inc, Celgene Corp and Gilead Sciences Inc, the media had reported citing information from sources.

The manner in which companies that own new cancer treatments, which can possibly add years to patients’ lives, and the demand for such treatments, could spell billions of dollars in revenue, is exhibited by the strong acquisition interest in the San Francisco-based company.

Although the negotiations still could fall apart at the last minute, the sources reportedly said that Pfizer has so far prevailed in the auction for Medivation and could announce a deal very soon. One of the sources said that the deal is expected to be paid for by Pfizer in its entirety, or at least mostly, with cash.

Since the negotiations are confidential, the sources asked not to be identified. Ere were no comments available in the media from Pfizer and Medivation. On Sunday, there was a report in The Financial Times that Pfizer was nearing a deal for Medivation.

Pfizer is now set to get access to Medivation’s successful prostate cancer drug Xtandi, as well as Talazoparib, another breast cancer treatment under development by Medivation and this is ex[ected to significantly augment the company’s existing oncology offerings that include breast cancer drug Ibrance and several other promising immuno-oncology products.

Two acquisition offers from Sanofi were rejected by Medivation earlier this year. $3 per share in the form of a contingent value right relating to the sales performance of Talazoparib and $58 per share in cash was the last offer made.

However after Sanofi agreed to drop a campaign to oust Medivation’s board of directors, Medivation agreed to share confidential information with potential buyers in July.

Affirming the company’s expectations of more than 50 percent revenue growth for the year, Medivation reported continued double-digit year-over-year growth for Xtandi in its second-quarter earnings call earlier this month.

Talazoparib, a drug the company believes will account for a significant part of the long-term value of Medivation, were also reported to have achieved  positive late-stage data.

(Adapted from Reuters)

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s