Pfizer (NYSE:PFE) is reportedly close to scooping up cancer drugmaker Medivation for $14 billion.
The Financial Times and Bloomberg are reporting that the deal could close as soon as Monday, citing people close to the deal.
A $14 billion deal would value Medivation at more than $80 a share, a notable premium to the $52.50-a-share offer the pharma giant Sanofi (PA:SASY) had made earlier this year.
Medivation shares ended trading at $67.16 on Friday.
Sanofi went public with its $9.3 billion bid for the company in April. Medivation had rejected that bid but it wasn't long before it was fielding other offers and analysts were speculating about possible buyers, including reports that Pfizer — which in April terminated its merger with Allergan (NYSE:AGN_pa) after the US Treasury released new rules — was in the mix.
Pfizer declined to comment. Medivation did not immediately respond to request for comment.
The San Francisco-based biotech already has one drug on the market to treat prostate cancer. And its big appeal comes from an experimental breast-cancer treatment called talazoparib. It still hasn't been approved for use, but the drug also has potential as a treatment of cervical, lung, and ovarian cancers.
In a July conference call, Medivation talked up the value of talazoparib, saying that it has the potential to be "best-in-class" among so-called PARP inhibitors — a new type of medicine that blocks a particular enzyme that's used by our cells to repair DNA so that tumors can't survive.
Here's what's in Medivation's pipeline that could make it worth a $14 billion sale:
- Medivation's one drug on market already is called Xtandi, or enzalutamide, which the company developed with Japan's Astellas. It's an oral drug that used to treat is used to treat late-stage prostate cancer. It was originally approved by the US Food and Drug Administration in 2012 based on a study that evaluated its ability to increase how long patients survived (median overall survival was 18.4 months for those who took Xtandi in the trial, compared to 13.6 months median overall survival for those who took a placebo). It does cost a list price of $129,000 in the US, which has gotten it in some hot water with Congress.
- Medivation is also researching how enzalutamide works in people with other types of prostate, breast and liver cancers.
- Medivation also has two other cancer drugs in late stage trials, including talazoparib, which it acquired last August. The drug is being studied in certain types of breast cancer, as well as other kinds of cancers including cervical, lung, and ovarian.
- Another drug to treat a certain kind of blood, pidilizumab, is also in a late-stage trial.
- The big thing with these drugs is that they're being explore in combination with immunotherapies, or treatments that use the immune system to fight off cancer cells. Response rates — instances in which the cancer stops spreading or shrinks in response to immunotherapy drugs — on their own are still fairly low, but researchers hope that cancer immunotherapies combined with other treatments (say, Medivation's oral drugs), could push that response rate way up.
- And immunotherapies are a huge business, with multiple investors setting up funds for companies developing immunotherapies.
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