- After having a previous offer rebuffed, Sanofi has gone public with a $9.3 billion, all-cash bid for the U.S. cancer company Medivation.
- The offer proposes a $52.50 price per share for Medivation, which would be a 50% premium over the two month volume-weighted average price prior to rumors of a takeover. Medivation closed at 52.05 Wednesday however, reflecting several months of steady gains.
- Sanofi is eyeing Medivation's prostate cancer drug Xtandi, which has seen rapid sales growth in the U.S. Xtandi is co-marketed by the Japanese drugmaker Astellas and the two companies split revenue equally.
Sanofi's patience appears to be wearing thin. In a letter dated April 28, Sanofi chief Olivier Brandicourt asked Medivation CEO David Hung for an explanation of the two-week delay in replying to Sanofi's initial April 15 proposal.
Brandicourt said he had first requested a meeting in a phone call with Medivation CEO David Hung in late March and again on April 3. But Hung told Brandicourt there was no interest in discussing a transaction, according to the letter.
Sanofi then sent Medivation its original offer, which also proposed a $52.50 price per share. But other than acknowledging receipt of the letter, Sanofi heard nothing back.
"We do not understand the delay in responding to our letter," Brandicourt wrote. "The price we put forth represents a very substantial premium, and it would be all cash without any financing condition. In these circumstances we believe it is appropriate to make this letter public, which we are doing today."
The success of Medivation's Xtandi has generated substantial M&A interest from other firms. AstraZeneca is also reportedly considering making an offer but no formal offer has been made.
Xtandi pulled in $1.9 billion in global sales last year, an 80% increase over prior year sales. Medivation is in clinical development for two other oncology drugs, in addition to pursuing a wider indication for Xtandi.
Sanofi hopes to build out its capabilities in oncology, and sees Medivation as a "very strong fit" in its long-term strategy in the therapeutic space. But given Medivation's initial resistance to Sanofi's offer and the interest from other firms, Sanofi could face a takeover fight.