Gutsy Sanofi to Nominate 8 Directors for Medivation Board, Files Pre-Merger Papers

May 13, 2016
By Alex Keown, BioSpace.com Breaking News Staff

PARIS – Sanofi is not one to take no for an answer. Deal hungry Sanofi is carrying out its threats for a hostile takeover of Bay Area’s Medivation . Despite repeated rejections by that company’s board of directors on a possible merger, Sanofi said it plans to nominate eight directors to replace Medivation’s current board and has also filed pre-merger notifications with the Federal Trade Commission.

Paris-based Sanofi’s threat is intended to force Medivation into talks about a merger between the two companies. In looking to acquire Medivation, Sanofi made an unsolicited offer of $9.3 billion, or $52.50 per share. Medivation stock is currently trading at $61.59 per share. However, Sanofi’s CEO Oliver Brandicourt suggested in a letter that Medivation’s stock value would only range in the $30s had it not been for Sanofi’s wooing of the company. There was an indication that Medivation’s stock was moving upward based on the company’s own work. Medivation rejected Sanofi’s merger idea, calling the $9.3 billion price tag a “substantially inadequate proposal.” In its rejection, Medivation’s board of directors said they believe the “execution of Medivation’s business plan will deliver value to its stockholders that is far superior to Sanofi’s proposal.”

In a letter sent to Medivation, Sanofi indicated it had discussed the acquisition with top Medivation shareholders and believes there is “overwhelming support by your shareholders for a transaction”, which has most likely lead to the company making the threat to replace the board of directors.

While Sanofi is planning its move, there have been reports that Amgen was interested in a possible merger with Medivation as well. AstraZeneca and Pfizer have also shown interest in Medivation. Pfizer had a partnership with Medivation for a Huntington’s disease drug, which was terminated in 2012.

What’s driving these companies to woo Medivation is that company’s prostate drug, Xtandi. As has been previously reported by BioSpace , sales of Xtandi grew 73 percent in the U.S. in 2015 and 116 percent globally. The company also has at least two additional oncology drugs in its pipeline, pidilizumab to treat B-cell lymphoma and other blood cancers, and talazoparib for breast cancer. Talazoparib is considered a possible blockbuster—over $1 billion in annual sales. Also, recent recommendations by the European Medicines Agency’s Committee for Medicinal Products for Human Use (CHMP) will allow Xtandi to be marketed and labeled as being better than rival drugs.

With all of the suitors circling, Medivation amended its bylaws in April to give its board of directors more leverage in negotiations. The amendment includes two provisions. The first indicates that written consent actions from stockholders can be independently reviewed, while the second requires that any claims against the company by stockholders have to be done in the Court of Chancery of the State of Delaware.