June 17, 2016
By Mark Terry, BioSpace.com Breaking News Staff
Rumors are flying that Paris-based Sanofi is developing a backup plan just in case its hostile takeover bid for San Francisco-based Medivation falls through. The possible target? Novato, California-based BioMarin Pharmaceutical , best known for its failed drug for Duchenne Muscular Dystrophy.
In late March and early April, Olivier Brandicourt, Sanofi’s chief executive officer, contacted Medivation’s founder, president, and chief executive officer, David Hung, regarding a potential acquisition. Both Hung and the Medivation board rejected the offer.
On April 15, Sanofi then sent a written proposal, which Medivation ignored. Turning up the heat, on April 28, Sanofi went public with its offer in hopes of pressuring the board and shareholders into at least discussing the deal.
In the proposal, Sanofi offered $52.50 per share, which was a 50 percent premium to Medivation’s average share price the two months prior to the offer. Medivation took measures to hold off a takeover, including adding a provision to its bylaws that would make it more difficult for stockholders to overturn the board of directors. In May, Sanofi escalated the attempt, sending a public letter to the company that, in a reasonable tone, spelled out the threat of a hostile takeover.
Medivation’s appeal is its prostate cancer drug, Xtandi. With its marketing partner, Astellas Pharma (ALPMY), sales of Xtandi grew 73 percent in the U.S. in 2015 and 116 percent globally. It has at least two additional cancer drugs in its pipeline, pidilizumab for B-cell lymphoma and other blood cancers, and talazoparib for breast cancer.
Now, writing on his blog Betaville, Ben Harrington says, “Top sources have told me the French pharmaceutical giant has begun looking at U.S.-based rare disease specialist BioMarin Pharmaceutical as a potential alternative takeover deal after growing frustrated in pursuit of Medivation, which has resisted the French company’s advances.”
On June 1, BioMarin announced that it was abandoning its Kyndrisa (drisapersen) program for DMD. The U.S. Food and Drug Administration (FDA) rejected the company’s application for the drug in January. DMD is a muscle wasting disease caused by mutations in the dystrophin gene. The disease is progressive and typically causes death in early adulthood, with serious complications that include heart or respiratory-related problems. It mostly affects boys, about 1 in every 3,500 to 5,000 male children.
BioMarin also canceled its European application for the drug, as well as three other first-generation follow-on products, BMN 044, BMN 045 and BMN 053, which were all in Phase II trials for specific types of DMD.
If Sanofi is interested in BioMarin, it’s probably not related to its DMD programs, but for its focus on rare genetic diseases. It has five products on the market, Vimizim for Morquio A Syndrome (MPS IVA), Kuvan for PKU, Naglazyme for MPS VI, Aldurazyme for MPS I, and Firdapse for LEMS. It also has several products in the pipeline for achondroplasia, CLN2 disease, Hemophilia A and Sanfilippo Syndrome.
“Now, clearly the very idea of Sanofi—which is being advised by Morgan Stanley and Goldman Sachs—looking at an alternative deal to Medivation might just give the U.S. company’s shareholders that extra bit of encouragement to work with the French giant in replacing Medivation’s board,” writes Harrington. “But this story really has come from excellent sources, so I’m taking Sanofi’s interest in BioMarin seriously.”
BioMarin is currently trading for $83.63.
Medivation is trading for $59.
Sanofi is trading for $38.04.
