True or false? In an alternate universe, Sanofi played nice and won Medivation

The second-guessing has begun: Would Sanofi have had a shot at winning Medivation if it hadn’t gone hostile so quickly?

Recall that Medivation turned back Sanofi’s first bid--$52.50 per share--as far undervalued, and that Medivation CEO David Hung quickly went on the offensive. And when Sanofi decided to mount a board takeover to win its buyout case, Hung kicked back harder.

In repeated presentations to shareholders, Hung excoriated Sanofi for swooping in with an “opportunistic” bid when his company’s shares were depressed. In multiple PowerPoint slides, Hung touted Medivation’s blockbuster med Xtandi and talked up the company’s pipeline prospects.

Hung maintained that Sanofi wasn’t giving Medivation enough credit. He contended that Medivation shareholders would be better off with Medivation alone than taking Sanofi’s bid.

Meanwhile, Sanofi pressed on with its unusual effort to take control of Medivation’s board via a paper vote, rather than a shareholder meeting, until last month, when it decided to join a bidding contest with other keen buyers.

So here’s the thing: Would Medivation really have been more receptive if Sanofi had played nicer? And if so, would Sanofi have ended up winning the bidding?

Thing is, the bidding was destined to be competitive. As analysts repeatedly pointed out as the deal rumors swirled, Medivation is one of the few oncology targets with an approved blockbuster med and a pipeline, bringing sales from day one and more upside after that. Sanofi could not have eloped with Medivation, even if it had stuck to a positive sales pitch. Not with so many other suitors knocking.

And here’s something else. In the end, Medivation decided that shareholders would be better off with Pfizer. And that’s a fine argument, given the premium Pfizer is paying--$81.50 per share, some 22% higher than Medivation shares Friday and more than double its price when the takeover talk started.

Would Sanofi have been willing to fork over so much? Well, the company won’t outright deny a last-ditch, higher bid, but the mechanics of that would be difficult given deal-related red tape. And with its diabetes franchise struggling--even more so as of Friday, with an FDA delay on its combination med--Sanofi could use an injection of immediate revenue, plus a beefier oncology franchise to offset the diabetes pressure.

But Sanofi doesn’t have as much cash on tap as Pfizer does. It might not want to bet so many billions on Medivation’s key pipeline asset, talazoparib, given its own history with a deal that partly turned on high pipeline expectations.

The French drugmaker forked over more than $20 billion for Genzyme in 2011, partly on the strength of its multiple sclerosis candidate Lemtrada, and that drug is only now cracking the $100 million mark. The parallel was strong enough that Sanofi structured its second bid for Medivation along the same lines as its Genzyme deal, with an up-front payment and contingent value rights based on the success of Medivation’s pipeline.

In acknowledging Pfizer as the winning bidder, Sanofi used the word “disciplined,” which could be construed as a comment on the selling price--but  then again, “disciplined” is a buzzword that pops up for most drugmakers when they’re shopping for M&A.

In the end, Sanofi CEO Olivier Brandicourt might be chastened and disappointed. The company’s farewell was as courteous as it could be. But that doesn’t mean Sanofi is giving up on dealmaking. Rumor has it that Brandicourt had a Plan B in mind, in case Medivation slipped away: BioMarin, a biotech that pops up on deal-target lists fairly regularly. It has rare disease meds that could fit into Genzyme’s portfolio. But that’s another story.

Special Reports: The top 15 pharma companies by 2014 revenue - Sanofi | Top 15 Drug Launch Superstars - Xtandi - Medivation and Astellas Pharma

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