Pfizer spends $14B on Medivation
Company acquires established pipeline of cancer-fighting drugs
Pfizer will pay about $14 billion to buy cancer drug developer Medivation in a cash deal aimed at fortifying its hold in one of the hottest and most lucrative areas of medicine.
The New York drugmaker said Monday that the acquisition will stock its product portfolio with leading treatments for the most common cancers in men and women by adding Medivation’s pricey prostate cancer treatment Xtandi to a lineup that already includes the breast cancer drug Ibrance.
Pfizer CEO Ian Read called the acquisition a “rare opportunity” to add an established treatment and a pipeline of drugs under development.
Medivation presents an attractive target as a specialty drugmaker focused on developing medicines for cancer and serious diseases with few treatment options. Earlier this year, it rejected a $9.3 billion offer from the French drugmaker Sanofi.
Pfizer, best known for massmarket drugs such as impotence pill Viagra and cholesterol fighter Lipitor, began pursuing cancer drugs well after most industry leaders. It has been furiously playing catch up, mainly through partnerships with university researchers and other drugmakers.
Last year, Medivation brought in $943 million in revenue, mainly through Xtandi, which it sells in partnership with the Japanese drugmaker Astellas Pharma.
Xtandi has drawn attention from the public interest group Knowledge Economy International, which has protested the $129,000-a year list price for the treatment. The U.S. government covers much of the cost for Xtandi prescriptions filled under federal health programs such as Medicare, Medicaid and the Veterans Administration.
Aside from Xtandi,
Pfizer Inc. said Medivation also has a promising pipeline of cancer drugs in late-stage clinical development. That includes the potential breast cancer treatment talazoparib and a potential lymphoma drug. Researchers also are studying Xtandi as a possible treatment for earlierstage prostate cancers.
Pfizer said Monday that it will pay $81.50 per Medivation share. That’s a 21 percent premium to the San Francisco biotech’s Friday closing price of $67.19.
The boards of both companies
have approved the deal, which is targeted to close in the third or fourth quarter.
The Pfizer-Medivation deal is much smaller than Pfizer’s proposed, $160-billion combination with Ireland’s Allergan, a plan the drugmakers scrapped after the Treasury Department issued new rules this spring aimed specially at blocking that deal. It was structured as a tax inversion, which means Pfizer’s headquarters would move, on paper only, from New York to reduce the drugmaker’s U.S. tax bill.