Medivation rejects Sanofi's $9.3-billion takeover bid

Medivation announced Friday that its board unanimously determined that Sanofi's unsolicited proposal to acquire the company for $52.50 per share in cash "substantially undervalues" Medivation. CEO David Hung remarked "Sanofi's opportunistically-timed proposal, which comes during a period of significant market dislocation, and prior to several important near-term events for the company, is designed to seize for Sanofi value that rightly belongs to our stockholders."

Specifically, Medivation argued that its decision was based on its position as "one of the few profitable, commercial-stage oncology companies." The drugmaker specifically touted Xtandi (enzalutamide), which has been cleared in the US and EU for the treatment of metastatic castration-resistant prostate cancer, noting that the therapy has already surpassed Johnson & Johnson's Zytiga (abiraterone) in US market share despite its later launch. Medivation noted that a potential label expansion later this year could significantly increase the use of Xtandi, adding that the therapy also possesses multiple opportunities beyond prostate cancer that are not reflected in the company's current valuation.

Medivation also stated that Sanofi's offer would deny investors the benefits of its late-stage pipeline, including the investigational PARP inhibitor talazoparib and the experimental immunotherapy pidilizumab. "We believe the continued successful execution of our well-defined strategic plan will deliver greater value to Medivation's stockholders than Sanofi's substantially inadequate proposal," Hung said.

Commenting on the news, Sanofi stated that its proposal "represents a compelling strategic and financial opportunity to drive immediate and certain value for Medivation's shareholders while benefiting patients and both companies' respective stakeholders." The French drugmaker added that the "all-cash proposal represents over a 50 percent premium to Medivation's two-month volume weighted average trading price prior to takeover rumours." Sanofi explained that although Medivation has refused to enter into negotiations, it "remains committed to the combination and looks forward to engaging directly with Medivation shareholders with regard to our proposal."

Earlier this month, unnamed sources disclosed that AstraZeneca has held "internal talks" regarding a takeover bid for Medivation, although the UK firm has yet to make an offer. Bloomberg reported Friday, citing people close to the matter, that AstraZeneca, Novartis and Pfizer are all considering offers for Medivation. However the sources indicated that deliberations are at an early stage and the companies may decide against submitting proposals.

According to one person, Medivation is holding out for a bids of at least $65 a share, while sources suggested that Sanofi has the capacity to increase its offer, though it is reluctant to overpay. For related analysis, see ViewPoints: Medivation steels for a takeover fight – on the off chance one emerges

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