Count Celgene and Gilead as New Suitors to Acquire the Popular Medivation

Count Celgene and Gilead as New Suitors to Acquire the Popular Medivation May 25, 2016
By Alex Keown, Breaking News Staff

SOUTH SAN FRANCISCO – Bay Area-based Medivation continues to be the belle of the M&A ball as Gilead Sciences and Celgene are also now rumored to be interested suitors in acquiring the company.

Medivation already has a number of suitors, including the highly aggressive French company Sanofi , as well as Pfizer , AstraZeneca , Novartis and Amgen . Although no formal talks have begun, Bloomberg reported that Celgene and Gilead are discussing the possibility of making an offer for Medivation with their advisers. Citing unnamed people “familiar with the matter,” Bloomberg said neither company has moved on bidding for the cancer company and could possibly not pull the trigger on a deal. Both Celgene and Gilead have discussed the possibility of growth through acquisition and Medivation’s prostate drug, Xtandi could add a solid revenue stream to both companies.

As has been reported by BioSpace before, with its marketing partner, Astellas Pharma , sales of Xtandi grew 73 percent in the U.S. in 2015 and 116 percent globally. It 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.

Sanofi has been the most aggressive suitor for Medivation, already making an unsolicited offer of $9.3 billion, or $52.50 per share, for the company that has been rejected. Medivation stock is currently trading at $61.63 per share. 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.” Since the bid was rejected, Sanofi has become even bolder with its threats for a hostile takeover and announced earlier this month that it intended to nominate eight directors to replace Medivation’s current board. Sanofi already filed pre-merger notifications with the Federal Trade Commission.

David Hung, chief executive officer of Medivation, and the company’s board of directors said has so far fended off any would-be acquirers. With the pressure from Sanofi, as well as the indications of other companies calling on Medivation, that company’s board of directors to amend its bylaws in April to give the 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.

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