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Business

Sanofi makes a bid for Medivation

CEO hoping to revitalize Sanofi's oncology business

by Lisa M. Jarvis
April 28, 2016 | APPEARED IN VOLUME 94, ISSUE 18

Brandicourt
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Credit: Sanofi
Credit: Sanofi

Attempting to bolster its oncology franchise, Sanofi has made an unsolicited offer worth $9.3 billion to acquire the cancer-focused biotech firm Medivation.

Medivation’s one approved drug is Xtandi, an androgen receptor inhibitor approved in 2012 to treat prostate cancer. Last year, Medivation reaped $943 million in collaboration revenue related to Xtandi.

In recent weeks, rumors had grown rampant that multiple companies—notably AstraZeneca and Amgen—were courting Medivation. Just days before Sanofi’s offer, Leerink stock analyst Geoffrey Porges predicted the winner would pay between $55.00 and $70.00 per share for Medivation—well above Sanofi’s $52.50-per-share bid.

In a letter, Sanofi CEO Olivier Brandicourt says he made multiple overtures to his Medivation counterpart, David Hung, in the past month, all of which were rebuffed. According to the letter, the French pharma firm decided to take its case public after not getting a response from an April 15 acquisition proposal.

Since taking over as CEO a year ago, Brandicourt has been on a mission to reinvigorate Sanofi’s oncology business. “As we aim to further develop our capabilities in this important area, we believe that Medivation represents a very strong fit,” he wrote.

Brandicourt will likely need to work harder—and pony up more cash—to win over Medivation. RBC Capital Markets analyst Simos Simeonidis told investors that the price tag is likely to rise given that Medivation is the rare independent, cancer-focused biotech company with an oral drug for a sizable patient population. Moreover, Medivation recently acquired the PARP inhibitor talazoparib from BioMarin Pharmaceutical, potentially providing a second healthy revenue stream for an acquirer.

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