Medivation again refuses Sanofi bid
S.F. drugmaker turns back renewed offer from French company
Medivation again rejected Sanofi’s bid to acquire the biologic drugmaker for $9.3 billion, saying Thursday that it “substantially undervalues” Medivation and its prospects.
The swift response came hours after Parisbased Sanofi, France’s biggest drugmaker, threatened Medivation’s board members with possible removal if they won’t discuss a deal.
Sanofi released a letter it sent to the board of Medivation, which about a month ago became a hot acquisition target for large multinational drugmakers looking for ways to boost their medicine portfolios and future sales.
The letter stated that the acquisition is a “priority for Sanofi.” It said Sanofi might raise its offer price if Medivation will discuss the deal and can show “additional value,” adding Sanofi will attempt to replace Medivation’s board members if they don’t negotiate. Sanofi added that it’s talked with Medivation’s top shareholders and believes “there is overwhelming support by your shareholders for a transaction.”
On April 28 Sanofi offered $9.3 billion in cash, or $52.50 a share, for the San Francisco drugmaker, well above its $37 range before deal rumors began. Medivation’s board promptly rejected the offer as too low.
On Thursday, Mediva- tion said in a brief statement that “Sanofi’s letter simply restates an inadequate proposal” that undervalues the company, “its leading oncology franchise, and innovative latestage pipeline.”
Medivation is a specialty drugmaker, focused on developing medicines for cancer and serious diseases with few treatment options. It has only one approved product, Xtandi for advanced prostate cancer that doesn’t respond to hormone-based medicines.
Last year, Medivation posted revenue of $943.3 billion, about half of it from Xtandi and the rest from payments from various collaborators.
The company released first-quarter financial results after the market closed Thursday. Medivation swung to a profit of $4.82 million, or 3 cents a share, for the first three months of the year. Adjusted earnings per share improved to 11 cents, while revenue rose 41 percent to $182.5 million. The stock closed regular trading up 16 cents at $59.22 and then added 18 cents in afterhours trading.
“Sanofi’s letter simply restates an inadequate proposal” that undervalues the company, “its leading oncology franchise, and innovative latestage pipeline.” — Medivation