Medivation has rejected an unsolicited $9.3bn takeover proposal from Sanofi of France as analysts predicted that AstraZeneca of the UK could be drawn into a bidding war for the US biotech company.
Sanofi went public on Thursday with its $52.50 per share offer for Medivation, maker of the blockbuster Xtandi prostate cancer drug, writes Andrew Ward, pharmaceuticals correspondent.
Medivation’s shares rose as high as $57.41 in early trading on Friday as investors anticipated higher offers for the California-based company.
In a statement, Medivation said: “Our board strongly believes that Medivation’s business plan will deliver value to our stockholders that is far superior to Sanofi’s offer and unanimously rejects [the] proposal.”
Sanofi said it remained committed to the acquisition and that it was ready to speak directly to Medivation shareholders.
“Combining Sanofi and Medivation represents a compelling strategic and financial opportunity to drive immediate and certain value for Medivation’s shareholders.”
Speculation that AstraZeneca could make a rival bid was fuelled by comments from the UK company’s chief executive, Pascal Soriot, after he announced first quarter results on Friday.
Mr Soriot would not comment on Medivation directly but indicated that AstraZeneca was open to further acquisitions, after a burst of deals last year, provided they were immediately accretive to earnings.
Andrew Baum, analyst at Citigroup, said he believed “it is likely that AstraZeneca is actively exploring the acquisition” of Medivation.
He said Medivation would allow AstraZeneca to rebuild its former leadership position in prostate cancer and that, at a purchase price of $60 a share, could add at least 5 per cent to the company’s core earnings per share in 2018.
“We note that Medivation’s recently appointed chief operating officer, Marion McCourt, is a former COO and long-tenured employee of AstraZeneca US,” Mr Baum added.
AstraZeneca and Sanofi are both in need of new products to cope with the loss of patent protection on old blockbusters — and both are focusing on oncology as a source of fresh growth.