Medivation Inc. (MDVN) to Be Acquired by Pfizer for $14B

Shares of Medivation Inc. (MDVN) were trading up +13.38 or +19.92 percent to $80.54 per share in Monday’s premarket after news that the company would be taken over by pharmaceutical giant Pfizer (PFE) for approximately $14 billion. Medivation Inc. stock closed at $67.16, down -0.03 or -0.04 percent in Friday’s regular trading session.

Stock Analysis

San Francisco, California based Medivation was founded in 2004 from the acquisition of Medivation Neurology Inc. The biopharmaceutical company specializes in developing new therapies to treat serious illnesses which have limited treatment options.
The company was granted FDA approval in August of 2012 for enzalutamide under the brand name XTANDI. The capsule form drug is used in the treatment of metastatic castration resistant prostate cancer.  Medivation is currently developing pidilizumab, an antibody that employs the patient’s immune system to attack tumors such as multiple myeloma and hematologic cancer.

Incorporated in 1942, New York City based Pfizer Inc. is a global research based biopharmaceutical company and the largest company of its kind in the world by revenue.
Medivation Inc. (MDVN) to Be Acquired by Pfizer for $14B
Image by Ann_San / Pixabay
Pfizer’s products include a wide variety of medicines, vaccines, medical devices and healthcare products. The company’s best known pharmaceutical brands include Lipitor, Diflucan, Viagra and Celebrex.

Early this morning, the two companies announced that they had entered into a definitive agreement for the acquisition of Medivation by Pfizer for $81.50 per share in cash. The deal is expected to have a total enterprise value of $14 billion and is expected to be completed by the third or fourth quarter of the current year.

The transaction was unanimously approved by the boards of both companies and will be immediately accretive to Pfizer’s adjusted diluted earnings upon the close of the transaction. Pfizer expects about $0.05 per share accretive in the first full year after the close of the transaction with further accretion and growth expected thereafter.

Medivation had already been highlighted as a takeover target, with other potential buyers that included Roche, AstraZeneca (AZN), Amgen, (AMGN), Merck & Co. (MRK), Celgene Corp. (CELG), Sanofi (SNY) and Gilead Sciences (GILD). The latest offer came in April of this year for $52.50 per share from Sanofi. The offer was subsequently raised to $58 per share that included a $3 per share contingent value right on one of Sanofi’s cancer drugs, or approximately $9 billion. The offer was rejected by Medivation and cleared the field for other companies to bid on it, which culminated with this morning’s bid from Pfizer.

David Hung, M.D., founder, president and Chief Executive Officer of Medivation stated in Pfizer’s press release that, “We believe the combination with Pfizer is the right next step in our growth trajectory and is a testament to the passion and dedication by which the Medivation team has delivered on our mission to profoundly transform patients’ lives through medically innovative therapies. This compelling transaction will deliver significant and immediate value to our stockholders and provides new opportunities for our employees as part of a larger company. We believe that Pfizer is the ideal partner to extend the reach of our blockbuster XTANDI franchise and take our promising, late-stage assets – talazoparib and pidiluzimab – to their next stages of development so that they can be made available to patients as quickly as possible.”

Medivation stock is currently trading a dollar below the offering price, while Pfizer stock is off a fraction in this morning’s premarket. With the number of other interested parties, a higher offer for Medivation from another company is still a possibility.

Other News About MDVN

Sanofi says talked with Medivation, but will be "disciplined" acquirer

Sanofi stated that it had appreciated the chance to engage in recent talks with Medivation and did not rule out making a higher offer for the company.

Medivation Affirms Guidance As Earnings Growth Flattens

Company stated it was investing ahead of an expected market expansion of  its cancer drug XTANDI.

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Published on Aug 22, 2016
By Jay Hawk
Jay Hawk
Jay Hawk enjoyed a 12-year professional financial markets career incorporating extensive first hand futures and options experience obtained by trading in the stock, commodity and forex markets on U.S. exchanges. Since retiring as a full-time financial market professional, he has been actively trading stock, commodities, forex and options for his own account and managing funds for others, as well as writing financial market commentary and educational articles.

Copyrighted 2016. Content published with author's permission.

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