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Pfizer Bolsters Oncology Business with Medivation Acquisition

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.

Amar Bhatkhandé is an Audit Partner and a leader in the Life Sciences and Technology Services Group for the firm's West Coast practice, with over 25 years of experience in public accounting and 2 years in private.

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