French drugmaker Sanofi has swooped in with a $9.3 billion-bid for US biopharma Medivation, in an attempt to secure access to prostate cancer drug Xtandi and further bulk up its oncology offering.
Xtandi (enzalutamide) is currently the only drug Medivation has on the market, but it also has two additional oncology assets in clinical development.
The proposed purchase price – of $52.50 per share – represents a premium of over 50 percent to Medivation’s two-month volume weighted average price prior to there being takeover rumours.
“Last November, Sanofi outlined our mid-term strategy which includes rebuilding our position in oncology, one of the largest and fastest growing therapeutic areas in the biopharmaceutical sector,” said Sanofi’s chief executive Olivier Brandicourt.
“With Medivation’s best-in-class offerings in prostate cancer, we believe a combination would benefit patients and, at the same time, generate value for shareholders of both companies.”
Sanofi says Medivation would benefit from its “global capabilities, significant resources, internal pipeline of assets and complementary product offerings”, and that the proposed combination has “an attractive financial rationale” as it would be immediately accretive to earnings and would offer value creation opportunities for Sanofi shareholders.
But so far its advances have been spurned by the US group. In a letter to Medivation’s chairman, published on Sanofi’s website, Brandicourt describes three previous attempts to enter discussions with the firm.
“During our first call on March 25, you said that you were unwilling to meet, and in our subsequent conversation on April 3 you said that, after a review with your Board, there was no interest in discussing a transaction. Given your unwillingness to meet or to hear our proposal, we sent you a letter on Friday, April 15, setting forth a proposal,” Brandicourt wrote, adding: “We have not heard anything from you for almost two weeks, other than an acknowledgment of receipt of our letter. We do not understand the delay in responding to our letter”.
“We are convinced that Medivation’s employees would find a very attractive environment within our Sanofi Genzyme specialty business unit and our R&D organisation, giving them the opportunity to fully develop their skills and help bring new treatments to patients on a worldwide basis,” he stressed.
Publication of its offer comes just days after it emerged that AstraZeneca could also be considering a move on Medivation. Citing unnamed sources from the City and Wall Street, The Sunday Times reported that the firm has been tracking the US group for the last six months and has now held internal talks about a bid, said at the time to be valued at around $7 billion.
