Sanofi goes public with $9.3 billion offer for Medivation

Sanofi has gone public with an unsolicited $9.3 billion offer for Medivation in a bid to boost its pipeline amid declining sales of its diabetes treatment Lantus (insulin glargine).

The all-cash offer from Sanofi values Medivation at around $52.50 per share, a 50% premium to the target’s two-month volume-weighted average, but commentators expect that the French firm will have to raise its bid to seal the deal.

Medivation’s greatest asset is is prostate cancer treatment Xtandi, which is expected to earn sales of around $1.42 billion this year. But the company also has a promising oncology pipeline, which would help Sanofi rebuilt its presence in the key therapy area.

The offer is only just above Medivation’s Wednesday closing price of $52.05 on the NASDAQ exchange, as the stock’s value has increased after weeks of takeover speculation.

Sanofi says the bid has a “compelling strategic rationale”, noting that the proposed combination would immediately begin to boost earnings.

An offer letter from Sanofi chief executive Olivier Brandicourt shows that Medivation’s CEO, David Hung, had been unwilling to talk following a verbal offer in late March, and had rejected the approach early this month.

Sanofi then wrote to Medivation with the $52.50 per share offer on 15 April and has not yet had a response, the letter shows.

Japan’s Astellas, Medivation’s partner on Xtandi (enzalutamide) and AstraZeneca are also rumoured to also be potentially interested buyers.

Medivation has several cancer drugs that are close to market, while Xtandi looks set to expand its range, being in late stage development in three other cancer indications and in phase 2 for four other indications.

It also has talazoparib in phase 3 for gBRCA mutated advanced HER2 normal breast cancer, and pidilizumab in a potentially pivotal phase 2 study for relapsed or refractory diffuse large B-cell lymphoma.

San Francisco-based Medivation has not yet responded to the offer.

Related stories:

Medivation update: AstraZeneca considers $7 billion bid

Sanofi’s big data alliance to predict diabetes medicine adherence

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