Pfizer will acquire oncology biotech company Medivation for $14 billion in cash, $81.50 per share, the pharma giant announced Monday. The takeover value is about 21 percent above Medivation’s Friday closing price of $67.16 per share.
The deal is expected to close before the end of 2016, the companies said.
Pfizer would be acquiring the U.S. rights to Xtandi, a blockbuster treatment for advanced metastatic prostate cancer that had global net sales of $2.2 billion in the last four quarters, Pfizer said. Bloomberg reported Sunday night that Xtandi is expected to generate annual sales for Pfizer of $1.33 billion by 2020; Astellas Pharma owns the rights in the rest of the world.
Xtandi is in Phase 3 clinical trials for non-metastatic prostate cancer and hormone-sensitive prostate cancer. Pfizer said it’s also being explored as a treatment for advanced breast cancer and hepatocellular carcinoma.
“Together, we believe Pfizer and Medivation can bring the full force of our combined research and resources to combat two of the most common cancers [prostate and breast], as well as speed cures and make accessible breakthrough medicines to patients, redefining life with cancer,” said Albert Bourla, group president of Pfizer Innovative Health, the company’s biotech arm.
Largely because of this drug, Pfizer Chairman and CEO Ian Read said that the Medivation acquisition would start boosting Pfizer revenue immediately. “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,” Read added in a press release.
A Deep-dive Into Specialty Pharma
A specialty drug is a class of prescription medications used to treat complex, chronic or rare medical conditions. Although this classification was originally intended to define the treatment of rare, also termed “orphan” diseases, affecting fewer than 200,000 people in the US, more recently, specialty drugs have emerged as the cornerstone of treatment for chronic and complex diseases such as cancer, autoimmune conditions, diabetes, hepatitis C, and HIV/AIDS.
San Francisco-based Medivation also has potential blockbusters for BRCA-mutated breast cancer and diffuse large B-cell lymphoma in its pipeline.
“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,” Medivation President and CEO Dr. David Hung added in the press release. “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.”
In other words, the price was right. Medivation had spurned a $9.3 billion offer from Sanofi back in April.
Other bidders included Merck, Sanofi, Celegene and Gilead Sciences, Reuters reported last week.
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