Shares in Medivation (NASDAQ:MDVN) surged 20% as Pfizer (NYSE:PFE) confirmed it had agreed to buy the cancer drug developer for US$14bn.
Widely flagged over the weekend, the deal adds the blockbuster prostate cancer treatment drug Xtandi to Pfizer’s growing oncology portfolio.
Medivation has been on the block since April when French group Sanofi offered US$52.50 per share.
Pfizer’s US$81.50 per share deal tops that bid by 55% and also blows away other possible suitors said analysts.
Last week it was reported that as many as three other pharma heavyweights had offered to buy Medivation.
Though sizeable, the deal is still small compared to Pfizer’s proposed US$160bn merger with Allergan that fell through in April due to a clampdown on tax dodging deals pushed through by President Obama.
Pfizer had also earlier failed in an attempt to take over UK pharma AstraZeneca, itself rumoured at one time to be interested in Medivation.
Xtandi is the star in Medivation’s portfolio with sales of US$330mln in the latest quarter and is key to the company’s target to grow annual sales this year by 50%.
Medivation has the rights to Xtandi in the US, with Japanese firm Astellas having ownership elsewhere.
Other cancer drugs in its pipeline include breast cancer treatment talazoparib.
Pfizer has its own breast cancer treatment Ibrance in development and is said to be keen to build a strong presence in immunotherapies, where the trend now is for immune system boosters to be combined with cancer drugs.
The deal will add 5c to earnings in the first full year of ownership, Pfizer said, with the acquisition to be funded from its cash holdings.
Shares in Medivation rose US$13.34 to US$80.50, while Pfizer dipped a touch to US$34.96.