Pfizer confirms plan to buy Medivation in $14 bln deal

Pfizer, which employs about 3,200 people at six sites in Ireland, is to buy US cancer drug company Medivation Inc in a deal valued at about $14 billion to boost its oncology portfolio.

Pfizer will offer Medivation shareholders $81.50 per share in cash, a premium of 21.35 percent to the stock's Friday close of $67.16. Reuters had reported that Pfizer, Sanofi, Merck & Co Inc , Celgene Corp and Gilead Sciences Inc had submitted expressions of interest to acquire Medivation.

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

Pfizer, whose oncology offerings include breast cancer drug Ibrance and several other promising immuno-oncology products, 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.

Medivation earlier this year rejected two acquisition offers from Sanofi, the latest for $58 a share in cash and $3 a share in the form of a contingent value right relating to the sales performance of Talazoparib.

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

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

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.

Reuters