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Pfizer Inc. (PFE) Acquires Medivation Inc. For $14 Billion

Pfizer NYSE:PFE

Pfizer Inc. may on Monday announce the successful acquisition of Medivation Inc. for $14 billion, if all goes well as private indications have shown, Bloomberg reports. Although everything is still under wraps at the moment, internal sources reveal that Medivation may accept Pfizer’s offer of $14 billion and pass up an earlier offer of $9.3 billion made by Sanofi.

Pfizer NYSE:PFE

Medivation is a top prostate cancer biotech company based in California, and is the maker of the blockbuster Xtandi also marketed as Astellas – a successful prostate cancer treatment already marketed in the US and other countries. It is expected that an acquisition of the company would boost the firm’s revenues and make it a leading marketer of effective prostate-cancer drugs.

Pfizer edges out competitors to clinch the deal on Medivation

It is already on record that Sanofi placed a bid of $9.3 billion to have Medivation, but Pfizer came along and tripped the table by offering a mouth-watering $14 billion to effectively put Sanofi in its place. But then, other rivals such as Gilead Sciences Inc., Merck, Amgen Inc., and Celgene Corp. among others also placed bids but their actual offerings are not known at the moment, according to FierceBiotech.

It is evident from interests across board that Pfizer and its rivals are gunning for Medivation’s cancer treatment drugs because of their accredited effectiveness. The firm’s Chief Executive Officer Ian Read made it clear that his company would prefer to buy late-stage assets because these are more valuable and rewarding at the moment than early-stage drugs of which his company has in excess. The company already acquired a stake in kidney treatment drug firm a few years back.

Given Pfizer’s offer of $14 billion to edge out rivals, it is anticipated that Medivation’s CEO David Hung may be tempted to seal the acquisition deal without any further delay. It is predicted that Xtandi will fetch an annual $1.33 billion earning for Pfizer by 2020.

Pfizer may split Medivation drug sales with Tokyo-based partner

As soon as the deal goes through, it is anticipated that Pfizer may have to split sales made from Xtandi in the United States with Astellas Pharma Inc., a Tokyo-based biotechnology company. Both Medivation and Astellas partnered to develop and market Xtandi which is now a phenomenal success and the target of other drug companies seeking to acquire Medivation.

Pfizer Inc. bought Hospira Inc. for $17 billion last year and is making the largest purchase since then by offering to buy Medivation for $14 billion now. The acquisition of Medivation will automatically involve the acquisition of an experimental drug for breast cancer and another experimental drug for blood cancer lymphoma.

Pfizer Inc. which has a biotech center in China now has a market value of $11.1 billion after its stocks closed at $67.16 on Friday, but industry analysts predict the shares might rise to as much as $85 after the successful acquisition of Medivation. Nasdaq reports that buying Medivation may be the best thing to happen to Pfizer Inc. this year given that the biotech company has been struggling to leverage on many successful drugs in recent times.

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