Pfizer has today claimed the pharmaceutical industry’s latest big prize, beating a group of rivals after months of jockeying to buy Medivation and its blockbuster cancer drug for US$14 billion.
Left behind was the French drug maker Sanofi, whose aggressive and at one point hostile pursuit of Medivation helped to open up the process to Pfizer, Gilead Sciences and others that were said to be involved. Pfizer will pay $81.50 a share in cash, the companies said on Monday, well above Sanofi’s initial $52.50 a share offer.
By acquiring Medivation, Pfizer gets Xtandi, a cancer drug that is already approved for sale in the United States and elsewhere, and that analysts project will generate $1.33bn in annual sales by 2020.
Shares of Medivation, which closed at $67.16 on Friday, climbed 20 per cent to $80.42 in trading before the US markets opened. Sanofi was down less than 1 per cent to 69.46 euros at 2:36pm in Paris.
The deal is a blow to Sanofi’s ambition of expanding into oncology, one of the hottest areas in the pharmaceutical industry. The company spent five months courting and pressuring Medivation to reach a takeover agreement, and at one point attempted to replace Medivation’s board and force a deal. Medivation, which repeatedly rejected Sanofi’s bids, later opened up the sales process, inviting in other drug makers for a look, including Gilead, Celgene, Merck and Pfizer, according to people familiar with the process.
“We appreciate the opportunity to have engaged constructively with Medivation,” Sanofi said on Monday. “While we recognised the potential strategic benefits of a combination with Medivation, we are first and foremost a disciplined acquirer and remain committed to acting in the best interests of Sanofi shareholders.”
The deal with Pfizer contains a “no shop” provision, under which Medivation would pay Pfizer a $510 million termination fee for Medivation if it ends the deal and accepted another offer. Pfizer said the transaction should close by the end of the year, and will boost Pfizer’s earnings by 5 cents a share in the first full year.
The $81.50 a share price represents an about 118 percent premium, compared to Medivation’s price on March 30, the day before Medivation was said to have hired advisers to defend against a takeover. In April, it was said to have rejected Sanofi’s initial approach.
Pfizer’s shares fell 0.7 per cent to $34.75 before the markets opened.
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