- Pfizer has reportedly approached cancer biotech Medivation to discuss a possible acquisition, only days after Medivation's board rejected a $9.3 billion bid from Sanofi. Pfizer has not yet made an offer and Medivation is still debating whether to engage in discussions, according to Reuters.
- Sanofi went public with its all-cash offer last Thursday, proposing a $52.50 price per share. Medivation's CEO David Hung called the offer "substantially inadequate." With the possibility of an offer from Pfizer, and reported interest from AstraZeneca and others, Medivation may be able to command a higher price than Sanofi's initial offer.
- Interest in Medivation is spurred by the success of its prostate cancer drug Xtandi, which generated $1.9 billion in global sales last year. Medivation splits U.S. revenue equally with Astellas and earns a royalty on all sales outside of the U.S.
In a recent call with investors, Pfizer CEO Ian Read said the company would continue to search for "assets that we think can add value to shareholders," indicating the preference would be for products close to market or already on the market rather than in development.
Medivation and Xtandi would certainly fit that framework and give Pfizer an important oncology asset following its failed $160 billion merger with Allergan. But there is no guarantee Pfizer will make an official offer, according to Reuters.
On Tuesday, Pfizer reported strong revenue in the first quarter and raised its forecasts for the remainder of the year. Several new drugs, including the breast cancer treatment Ibrance, and strong vaccines performance drove higher sales and helped offset flat or declining revenue from mainstay drugs like Lipitor and Viagra.
Under the collaboration deal with Astellas, Medivation earned $943 million from the $1.9 billion in global Xtandi sales. While some of that revenue came from milestone payments, continued rapid growth could drive Medivation's collaboration revenues from the drug above $1 billion.
But Sanofi hasn't dropped its offer yet and other drugmakers may yet make a bid for the company. Already, interest in Medivation has helped drive the company's stock above $58 dollars a share - close to the highs seen last spring and well above Sanofi's offer of $52.50.