Pfizer Buys Medivation and More

Forget those early- to mid-stage clinical candidates. Pfizer Inc. (NYSE: PFE) jumped the line with its $13.5 billion deal for oncology drug maker Medivation Inc. (NASDAQ: MDVN). The target’s primary product is XTANDI® (enzalutamide), an androgen receptor inhibitor, the leading novel hormone therapy for the treatment of prostate cancer.

Pfizer will pay $81.50 per share in existing cash, a 21% premium to Medivation’s closing stock price on Friday, August 19, 2016.

This deal ends months of bidding for Medivation, which began in April with Sanofi SA‘s $52.50 per share (about $9 billion) offer. Medivation turned down the overture, and Sanofi eventually raised its bid to $58.50 per share. Meanwhile, other companies caught the scent and jumped into the discussions, including Gilead Sciences Inc. (NASDAQ: GILD), Celgene Corp. (NASDAQ: CELG) and Amgen Inc. (NASDAQ: AMGN).

XTANDI generated approximately $2.2 billion in worldwide net sales over the past four quarters, as recorded by Astellas Pharma Inc., which entered into an agreement with Medivation in 2009 to develop XTANDI globally and commercialize jointly in the United States. It was approved for use in treating advanced metastatic prostrate cancer by the Food and Drug Administration in 2012.

Medivation and Astellas have built a robust development program for XTANDI, including two development-stage oncology assets, talazoparib and pidilizumab. Talazoparib is currently in a Phase 3 study for the treatment of BRCA-mutated breast cancer, while pidilizumab is an immuno-oncology asset being developed for diffuse lage B-cell lymphoma and other hematologic malignancies. It has the potential to be combined with IO therapies already in Pfizer’s portfolio.

This acquisition is Pfizer’s largest since its $160 billion takeover of Ireland-based Allergan plc (NYSE: AGN) was called off in April 2016, once the lure of lower corporate tax rates were removed by the federal government. On August 1, Pfizer announced its acquisition of Bamboo Therapeutics, which provides gene therapies for treating rare diseases related to neuromuscular conditions and others affecting the central nervous system.

The day after the Medivation deal was announced, Pfizer came back with an agreement to pay $550 million to AstraZeneca (NYSE: AZN) for the development and commercialization rights to its late-stage small molecule antibiotics business. That is, $550 million upfront, and a deferred payment of $175 million in January 2019. AstraZeneca is eligible to receive up to $250 million in milestone payments, up to $600 million in sales-related payments, as well as tiered royalties on sales of two of the drugs.

This agreement includes the rights to the newly approved EU drug Zavicefta™ (ceftazidime-avibactam), the marketed agents Merrem™/Meronem™ (meropenem) and Zinforo™ (ceftaroline fosamil) and the clinical development assets aztreonam-avibactam (ATM-AVI) and CXL.

In May 2016, the company agreed to pay $5.2 billion for Anacor Pharmaceuticals (NASDAQ: ANAC), which focuses on discovering, developing and commercializing novel small-molecule therapeutics derived from its boron chemistry platform. Its flagship asset, crisaborole, is currently under review by the FDA for the treatment of eczema. There’s still a lot of cash to be spent, and it’s only the third quarter.




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