Pfizer Acquires Medivation in $14B Deal - Drug Discovery and Development

Pfizer announced a definitive merger agreement to acquire the cancer drug company Medivation in a deal with a $14 billion-dollar price tag—adding Medivation’s oncology portfolio to Pfizer’s offerings.

Paying $81.50 per Medivation share (a 21 percent premium to Friday’s closing stock price), Pfizer’s purchase comes at the end of months of bidding for Medivation. According to reports, Pfizer wasn’t the only company interested in acquiring Medivation—Sanofi, Merck, Celgene, and Gilead Sciences also expressed interest. Three months ago, Medivation rejected a “$9.3 billion takeover bid from the French drugmaker Sanofi, saying that offer, worth $52.50 per share, undervalued the company,” AP said.

Medivation’s late-stage prostate cancer treatment, Xtandi, generates about $2 billion in yearly sales, with the potential to more than double. It is indicated for men with prostate cancer who no longer respond to medical or surgical treatment. Specifically, it is “an androgen receptor inhibitor indicated for the treatment of patients with metastic castration-resistant prostate cancer,” according to the full prescribing information. Xtandi is jointly marketed by Medivation and Astellas.

Medivation is also developing talazoparib, which—some analysts project—has the potential to accrue several billion each year in sales.

According to The Wall Street Journal:

Pfizer said the deal would add 5 cents to earnings in the first full year after closing and isn’t expected to affect its 2016 financial guidance. Pfizer said it plans to finance the transaction with its cash holdings.

If the deal isn’t completed, Medivation could pay Pfizer a $510 million termination fee, according to a regulatory filing.

Medivation, one of the few “independent biotechs left with a cancer treatment that is already approved and selling well,” has a promising pipeline of cancer drugs in late-stage clinical development, including treatments for breast cancer and lymphoma.

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