Sunday, August 21, 2016

UPDATED: Pfizer Has Offered A Whopping $14 Billion -- For Medivation

In candor, I generally think Mr. Read tends to overpay for his assets. [Full rewrite and update here.]

And this rumored news has all the earmarks of being another one of those kinds of deals. Financial Times is reporting a rumor tonight -- that Pfizer may announce a $14 billion buyout of Medivation -- as early as tomorrow morning.

Last week, I had guessed it would go for between $12 billion and $13 billion, so this is premium pricing again, if the report is accurate.

I suppose one way to think about the high price here is to recognize that Mr. Read cannot afford to spend another decade bringing up the rear, in next gen oncology. That is, he cannot allow any of these other suitors to lock him out of Medivation's pipeline -- and put Pfizer in fourth place (or worse) in oncology for another decade. So, he has to bid over 15 times sales revenue for the asset. Yikes. Here's a bit, from FiercePharma, and the very capable Tracy Staton:

. . . .The Medivation hunt may be all but over. Pfizer is close to striking an agreement to buy the California-based biotech in a deal worth about $14 billion, the Financial Times reports.

If Pfizer and Medivation do finalize a deal, it would wrap up a months-long buyout race that pulled in much of Big Pharma and Big Biotech along the way. With its blockbuster oncology med Xtandi ready to add to a buyer’s sales, plus a much-anticipated late-stage cancer candidate and a pipeline of other prospects, Medivation has been a sought-after prize in an otherwise slow summer for biopharma M&A. . . .

This would mean that Merck has been outbid. And that may turn out to be the very good news. Time will tell. . . now sleep well, all you samba dancers, fondly leaving Rio behind. . . smile. Pssst! A fun one is due up early tomorrow!

1 comment:

Anonymous said...

MRK outbid by PFE. PFE gets the promising PARP inhibitor. Agree that PFE likely overpaid, but everyone said the same about GILD and Pharmasset.