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Pfizer Bolsters Oncology Business with Medivation Acquisition

Aug 23, 2016

Pfizer announced it will acquire San Francisco-based Medivation Inc., for $14 billion.  

Medivation’s portfolio includes the successful prostate cancer medication Xtandi, which may also have applications for both advanced breast cancer and for liver cancer. Medivation also has a pair of promising drugs in its R&D pipeline: another one for breast cancer (Talazoparib) and one for blood cancer (Pidilizumab). 

With this purchase, Pfizer is continuing its focus on taking a leadership position in oncology, which it considers one of its key product lines—some of the others being immunology, inflammation, cardio vascular, metabolic and neuroscience.  

Pfizer’s bid of $81.50 per share in cash far surpassed Sanofi’s April bid of $52.50 per share. Merck & Company, Gilead and Celgene were also thought to be interested in acquiring Medivation. 

Medivation was founded in 2004. The company’s Xtandi product has generated more than $2 billion in worldwide net sales since 2015 and is forecast to reach $5.7 billion in sales by 2020.  

This is Pfizer’s first major acquisition since its ill-fated attempt to purchase Allergan in April. The U.S. Treasury Department had blocked that deal citing it as a “tax inversion,” where a U.S. firm attempts to merge with a company in a country with a lower tax rate. 

The deal was approved by the boards of both companies, and Pfizer expects to complete the Medivation acquisition later this year.

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