Pfizer Inc. (NYSE: PFE) is reportedly in advanced negotiations to acquire Medivation Inc. in a deal amounting to approximately $14 billion, according to reliable sources. The mentioned agreement may be the latest in a streak of blockbuster deals in the drug and biotech sectors.
The Pfizer- Medivation deal may be revealed as early as Monday, said the people familiar with the matter. The stock of the biotechnology firm ended Friday’s session at $67.16, giving it an $11.1 billion market value.
By purchasing Medication, Pfizer Inc will be able to obtain Xtandi, which is a popular treatment for prostate cancer. The sale of Xtandi is already approved in the United States and other parts of the world. According to market analysts, the blockbuster prostate-cancer treatment’s annual sales will hit $1.33 billion by the year 2020. During the month of May, the CEO of Pfizer Mr. Ian Read pointed out that the pharmaceutical giant was more enthusiastic in purchasing late-stage assets as Pfizer already had a lot of early-stage drugs being worked on.
The Ms. Joan Campion, the spokeswoman of Pfizer, refused to give a comment on the matter. Meanwhile, the representatives of Medivation did not also respond to requests for a statement.
Pfizer has been depending on new branded treatments, such as cancer medications in order to ramp up its revenue, as older medicines’ sales have become sluggish. In the month of August, the pharmaceutical corporation posted earnings that topped analysts’ forecasts after the sales of Ibrance—a breast cancer treatment—were higher than the expectations of market analysts.
If Pfizer acquires Medivation for around $14 billion, it would be the company’s largest deal since it purchased Hospira Inc. in 2015 for approximately $17 billion. As oncology transforms into one of the hottest segments in terms of drug development, huge biotechnology and drug corporations have found just a small number of mid-sized acquisition targets that already have approved and revenue-generating treatments. Pfizer will split the sales of Xtandi in the United States with Astellas Pharma Inc—the Tokyo-based firm that teamed up with Medivation on the said drug.
Aside from Xtandi, Medivation currently has 2 experimental products—a drug for blood cancer lymphoma and one for the treatment of breast cancer. The breast cancer medication is categorized as a PARP inhibitor, which works by disrupting the DNA repair process of cancer cells. According to William Blair & Co’s analyst Ms. Katherine Xu, the drug talazoparib may be considered as the most potent drug under the PARP inhibitor class. The financial services firm predicts that the annual peak sales of the drug may hit $3 billion.
By rejecting the initial offer of Sanofi amounting to around $9 billion, Medivation managed to attract more suitors and drive up the bidding. Celgene Corp., Gilead Sciences Inc., as well as Amgen Inc. were just some of the drug manufacturers which are reportedly considering the deal.