Pfizer Inc. (NYSE:PFE) has been working to acquire greater market share in multiple therapeutic areas. In an attempt to gain market share of various therapeutic areas, Pfizer Inc. (NYSE:PFE) is undergoing the process of developing multiple molecules. In a similar attempt, the drug giant is also working on mergers and acquisitions (M&A) in the pharma space.
Pfizer Inc. Aims at Brexit and EU
The salt Ibrance–first one to be launched in the region–will be used for the treatment and management of breast cancer. Ibrance was approved by the Food and Drug Administration (FDA) last year in February. It has shown growth since then.
As per Thomson Reuters data, it can touch $2.1 bn in fiscal year 2016 (FY16). The UK is a tough territory for pharma giants. Despite the approvals, the drugmaker is working on the development of generics and biosimilars.
This is not the drugmaker’s sole shot at cancer drugs. Pfizer Inc had held an M&A call when it was to acquire Medivation Inc. Pfizer was to pay $14 bn for Medivation, whose drug Xtandi was discovered by UCLA. Through the deal, Pfizer gained a drug that has generated more than $2.2 bn in net sales worldwide. A year’s worth of the drug, Xtandi, sells for about $129,000. The medicine has generated more than $2.2 bn in net sales worldwide, the firms said while announcing the deal. New York-based Pfizer agreed to pay $81.50 in cash for each share of Medivation. This was a 21% premium over the deal’s previous closing price of $67.16. On the day of the deal, Medivation stock rose $13.26, or 20%, to $80.42. Pfizer shares fell 14 cents, or 0.4%, to $34.84.
First Xtandi, Now Ibrance
Talazoparib is a breast cancer drug that is in phase 3 clinical trials. David Nierengarten is the managing director and head of healthcare equity research at Wedbush Securities. “They get a share of the best prostate cancer drug on the market,” he said. With a highly desirable drug already on the market, Medivation was in strong demand. The firm rebuffed a $9.3-bn bid from French pharmaceutical firm Sanofi this year. Medivation’s stock began soaring in late 2011 after it reported positive results from its clinical trials of Xtandi. The following year, the Food and Drug Administration approved the medication for treatment of prostate cancer.
It is the firm’s only federally approved drug. It accounted for all the $954 mn in revenue for Medivation last year. At that time, the firm reported $245 mn in profit. Net sales of Xtandi in the U.S. increased 69% last year from 2014, and nearly doubled worldwide. Worldwide sales of the drug were up 22% in the second quarter compared with a year earlier. They increased 11% in the U.S. during that period. The San Francisco firm has about 600 employees. It posted a $404-mn loss on $206 mn in revenue in the second quarter of this year. Xtandi, also known by the generic name enzalutamide, was patented by UCLA in 2005 and licensed to Medivation. UCLA received $520 mn of the money for its 43.9% ownership stake in the drug.
UCLA put the money in a portfolio that was expected to generate $60 mn a year until 2027. That is when major patents on the drug expire. UCLA said it would use the money to pay for research, undergraduate scholarships and graduate student fellowships. The university opted for the lump-sum payment on Xtandi rather than annual royalties. “The March transaction allowed us to move forward with planning for strategic investments in research and student scholarships. Those investments, aimed at generating additional discoveries that serve the public good, are our focus.”
The firms said they expect the deal to close by the end of the year. Each firm’s board of directors unanimously approved the deal. If the deal was not completed, Medivation would have to pay a $510-mn termination fee, as per a regulatory filing. Thus, Pfizer Inc. (NYSE:PFE) paid a hefty premium for the much sought-after prostate cancer drug maker, Medivation.