Medivation surges on Pfizer deal

Medivation shares surged in pre-market trade after the biopharmaceutical firm agreed to be bought by Pfizer Inc for $81.50 a share in cash, or a total enterprise value of about $14bn.

Pfizer said the deal is expected to be immediately accretive to its adjusted diluted earnings per share upon closing, around 5 cents in the first full year.

The boards of directors of both companies have unanimously approved the transaction, which will add Medivation’s cancer drugs such as Xtandi to Pfizer’s portfolio.

Pfizer chairman and chief executive Ian Read said: “The addition of Medivation will strengthen Pfizer’s Innovative Health business and accelerate its pathway to a leadership position in oncology, one of our key focus areas, which we believe will drive greater growth and scale of that business over the long-term.

“This transaction is another example of how we are effectively deploying our capital to generate attractive returns and create shareholder value.”

Medivation’s founder and chief executive David Hung said Pfizer was the ideal partner to extend the reach of the company’s Xtandi franchise and take its late-stage assets – talazoparib and pidiluzimab – to their next stages of development.

Medivation is focused on developing and commercialising small molecules for oncology. Talazoparib is currently in a Phase 3 study for the treatment of BRCA-mutated breast cancer, while pidilizumab is an immuno-oncology asset being developed for diffuse large B-cell lymphoma and other hematologic malignancies.

Medivation shares were up 20% to $67.16 in pre-market trade.