Pfizer and Medivation have entered into a definitive merger agreement under which Pfizer will acquire Medivation, a biopharmaceutical company focused on developing and commercializing small molecules for oncology, for $81.50 a share in cash for a total enterprise value of approximately $14 billion.
The Boards of Directors of both companies have unanimously approved the merger, which is expected to be immediately accretive to Pfizer’s Adjusted Diluted EPS upon closing, approximately $0.05 accretive in the first full year after close with additional accretion and growth anticipated thereafter. Pfizer does not expect the transaction to impact its current 2016 financial guidance.
“The proposed acquisition of Medivation is expected to immediately accelerate revenue growth and drive overall earnings growth potential for Pfizer,” said Ian Read, Chairman and Chief Executive Officer, Pfizer. “The addition of Medivation will strengthen Pfizer’s Innovative Health business and accelerate its pathway to a leadership position in oncology, one of our key focus areas, which we believe will drive greater growth and scale of that business in the long-term. This transaction is another example of how we are effectively deploying our capital to generate attractive returns and create shareholder value.”
Medivation’s portfolio includes XTANDI (enzalutamide), an androgen receptor inhibitor that blocks multiple steps in the androgen receptor signaling pathway within the tumour cell. XTANDI is the leading novel hormone therapy in the United States today and generated approximately $2.2 billion in worldwide net sales during the past four quarters, as recorded by Astellas Pharma Inc., with whom Medivation entered an agreement in 2009 to develop XTANDI globally and commercialize jointly in the US.
Since its approval for advanced metastatic prostate cancer by the US Food and Drug Administration in 2012, XTANDI has treated 64,000 men to date in the US alone. Medivation and Astellas have built a robust development programme for XTANDI, including two Phase III studies in non-metastatic prostate cancer and another Phase III study in hormone-sensitive prostate cancer. It is also being further developed in Phase II studies for the potential treatment of advanced breast cancer and hepatocellular carcinoma.
In addition, Medivation has a promising, wholly owned, late-stage oncology pipeline, which includes two development-stage oncology assets, talazoparib and pidilizumab. Talazoparib, currently in a Phase III study for the treatment of BRCA-mutated breast cancer, has the potential to be a highly potent PARP inhibitor and could be efficacious across several additional tumours. Pidilizumab is an immune-oncology (IO) asset being developed for diffuse large B-cell lymphoma and other haematologic malignancies and has the potential to be combined with IO therapies in Pfizer’s portfolio.
“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,” said David Hung, MD, founder, President and CEO of Medivation.
“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.”
“The proposed acquisition of Medivation will build upon Pfizer’s success with our IBRANCE(palbociclib) launch in HR+/HER2- metastatic breast cancer and with our strong immuno-oncology portfolio, and will transform Pfizer into a leading oncology company,” said Albert Bourla, Group President, Pfizer Innovative Health.
IBRANCE and XTANDI are anchor brands in breast and prostate cancer respectively, giving Pfizer leadership in two hormone-driven cancers. Similar to IBRANCE in the breast cancer setting, XTANDI is being explored for its potential to move from metastatic prostate cancer to treat earlier stages of non-metastatic prostate cancer. In addition, Medivation’s portfolio within prostate cancer and across diverse tumors will complement Pfizer’s broad IO portfolio.
Finally, Medivation adds commercial scale to better compete with other top tier oncology companies in advance of the potential emergence of Pfizer’s IO pipeline expected in the next few years. Together, we believe Pfizer and Medivation can bring the full force of our combined research and resources to combat two of the most common cancers, as well as speed cures and make accessible breakthrough medicines to patients, redefining life with cancer.