Biotech M&A – Pfizer Buys Medivation for $14 Billion

- August 22nd, 2016

Medivation (NASDAQ:MDVN), the biotech company based in San Francisco, has been a takeover target of several companies and today a deal has been agreed with Pfizer(NYSE:PFE) at $81.50.

It is good to be wanted. Medivation (NASDAQ:MDVN), the biotech company based in San Francisco, has been a takeover target of several companies and today a deal has been agreed with Pfizer (NYSE:PFE) at $81.50.
This represents a nice premium for Medivation shareholders as the stock was trading at $67 on Friday. The speculation of a takeover had already popped the stock $10 during the summer, so it looks like everyone wins.
Sanofi (NYSE:SNY) tabled an offer of $9.3 billion before coming back with better deal, however it wasn’t in the same ball park as Pfizer’s. Other companies rumored in the hunt included Celgene (NASDAQ:CELG), Merck (NYSE:MRK) and Gilead (NASDAQ:GILD).
Ian Read, chairman and chief executive officer of Pfizer, said the proposed acquisition of Medication will accelerate revenue growth and earnings for Pfzizer.
“The addition of Medivation will strengthen Pfizer’s Innovative Health business and accelerate its pathway to a leadership position in oncology, one of our key focus areas, which we believe will drive greater growth and scale of that business over the long-term,” he said.
Pfizer added the transaction is another example of how the company is generating “attractive returns and create shareholder value.”
Interest Medivation generated due to its drugs and pipeline portfolio for new treatments in oncology.  One of the company’s big revenue source is a drug called XTANDI, which is a novel hormone therapy generating $2.2 billion in worldwide net sales over the last four quarters. This, together with other oncology drugs in late state testing, will allegedly give Pfizer a boast in the oncology sector.
David Hung, M.D. founder, president and CEO of Medivation, said:

“We believe the combination with Pfizer is the right next step in our growth trajectory and is a testament to the passion and dedication by which the Medivation team has delivered on our mission to profoundly transform patients’ lives through medically innovative therapies,” and “This compelling transaction will deliver significant and immediate value to our stockholders and provides new opportunities for our employees as part of a larger company. We believe that Pfizer is the ideal partner to extend the reach of our blockbuster XTANDI franchise and take our promising, late-stage assets – talazoparib and pidiluzimab – to their next stages of development so that they can be made available to patients as quickly as possible.”

Pfizer has the cash to complete the deal which it expects to close in the third or fourth quarter of 2016 subject to the standard closing conditions such as U.S. antitrust and Medivation shareholder approval. To read the full announcement from Pfizer click here.
“Big Pharma” and “Big BioTech” are courting each other so the question analysts and investor are speculating already is: who’s next?
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Securities Disclosure: I, Nick Smith, hold no direct investment interest in any company mentioned in this article.

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