Pfizer announced Monday a definitive merger agreement to acquire Medivation for $81.50 per share in cash, or approximately $14 billion, boosting its oncology portfolio with the addition of the prostate cancer therapy Xtandi (enzalutamide). The deal, which represents a 21-percent premium to Medivation's closing share price on August 19 and has been approved by both companies' boards of directors, is expected to complete in the third or fourth quarter.
Pfizer CEO Ian Read said the purchase "is expected to immediately accelerate revenue growth and drive overall earnings growth potential." The executive added that the transaction "will strengthen Pfizer's Innovative Health business and accelerate its pathway to a leadership position in oncology, one of our key focus areas."
Xtandi generated around $2.2 billion in global sales over the past four quarters, as recorded by partner Astellas, with analysts estimating that the androgen receptor inhibitor could generate revenue of $5.7 billion by 2020. Meanwhile, Medivation's pipeline includes the PARP inhibitor talazoparib, which is currently being investigated in a Phase III study for the treatment of BRCA-mutated breast cancer, and the immuno-oncology agent pidilizumab, which is being developed for diffuse large B-cell lymphoma and other haematologic malignancies.
Albert Bourla, group president of Pfizer's Innovative Health unit, noted that the deal "will transform Pfizer into a leading oncology company," adding that it will "complement" the drugmaker's immuno-oncology portfolio.
According to Pfizer, the purchase is expected to be immediately accretive to adjusted diluted earnings per share, approximately $0.05 accretive in the first full year after closing, with additional accretion and growth forecast thereafter.
Last month, Medivation rejected Sanofi's latest unsolicited takeover proposal, valued at $58 per share, plus a contingent value right valued at a maximum of $3 a share. At that time, Medivation indicated that it had entered into confidentiality agreements with a "number of parties that have expressed interest in exploring a potential transaction."
(Ref: CNBC, Bloomberg, MarketWatch, Financial Times, The Wall Street Journal, BBC News, Yahoo!Finance, Pfizer)
August 22nd, 2016
By: Matthew Dennis - firstwordpharma
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