Cancer Treatment News 2016: Pfizer Closes $14-B Deal with Medivation Inc.; Deal Details and What the Agreement Entails
Following months of high-stakes negotiations, pharmaceutical giant Pfizer clinched a $14-billion merger agreement to acquire US biopharmaceutical company Medivation Monday.
The deal closed in at $81.50 per share in cash, which meant Medivation raked in more than twice the $6 billion value it was pegged earlier this year.
In a press release, Pfizer underlined the significance of this acquisition in making the pharma giant a world leader in oncology and cancer treatments. Both companies expressed their belief in combatting two of the most common cancers, breast and prostate, by bringing together their combined research to create accessible breakthrough medicine for patients.
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What Pfizer will gain from the deal
Pfizer stands to gain from the promising cancer treatments in Medivation's pipeline, the statement said. This includes a prostate cancer treatment called Xtandi, which is projected to generate $1.33 billion in annual sales by 2020. Another contingent late-asset consideration is the future sales of a breast cancer drug called Talazoparib, which is at its late-stage trials.
These cancer drugs, according to Pfizer Innovative Health president Albert Bourla, would greatly complement Pfizer's success with its own breast cancer drug, Ibrance.
Oncology treatment continues to be one of the biggest pharmaceutical markets, hitting $80 million a year and growing. In Medivation's second-quarter earnings call, Xtandi alone reported double-digit growth, affirming the pharma giant's expectations on the blockbuster drug.
Earlier this year
Pfizer was not the only company that expressed a strong interest over Medivation. Merck and Co., Celgene, Sanofi, and Gilead Sciences, Inc., all joined the bidding for Medivation. It was put into play after Sanofi offered $52.50 per share.
Earlier this year, Pfizer was thought to split after being forced to walk away from a $150 million takeover of the company Allergan PLC, following new US Treasury rules that would greatly dent tax benefits of the deal.
Pfizer's business is two-pronged. It houses an innovative arm for new drugs and vaccines, as it is poised to do so with the acquisition of Medivation. It also has an established products business that sells older drugs, as with Pfizer's $17-million acquisition of Hospira, which brought biosimilars to its medical portfolio.
About the company: Medivation
According to a report from the Washington Street Journal, Medivation is one of the few independent biotechs that has successfully launched a cancer treatment. Its Xtandi, stands on solid footing against its rival Zytiga from Johnson & Johnson, raking in almost $2.2 billion in 2015.
This is not the first time Pfizer and Medivation got involved, though not always to the tune of medical triumph. In 2012, they worked on an Alzheimers' trial called CONCERT and failed miserably, forcing the termination of the drug's development.
