AstraZeneca eyes Xtandi windfall with potential £7B bid for Medivation

Soriot

San Francisco’s Medivation reportedly turned down a recent bid from Sanofi--and now, it looks like one of the French pharma giant’s competitors may swoop in with its own offer.

AstraZeneca ($AZN) is considering a £7 billion bid for Medivation ($MDVN) after months of weighing a deal, the Sunday Times reports. The U.K. company has had its eye on the U.S. biotech--maker of quick-launching prostate cancer pill Xtandi--for 6 months now, sources told the British newspaper, and it’s held internal talks about coming forward with a proposal.

If AstraZeneca does go after Medivation, it may have to contend with Sanofi ($SNY), which is reportedly weighing a hostile move after getting the cold shoulder last week. And as The Telegraph points out, AstraZeneca and CEO Pascal Soriot have been known to avoid bidding wars; getting into one now could especially spook investors, considering an earlier promise from Soriot to largely hold off on big deals.

But while Medivation’s stock price may be in the doldrums--it has presidential hopeful Bernie Sanders and 11 other members of Congress to thank for that, with their recent calls to lower Xtandi's $129,000-plus price tag weighing down shares--there are plenty of reasons for AstraZeneca’s interest. Soriot has been targeting the oncology field to help spark a revenue turnaround for the company, and he’s beefed up AZ’s pipeline through a series of recent deals. Plus, he's said he wants to move on from M&A focused purely on R&D to deals that will bring in new sales immediately.

Medivation would certainly do that: Its 2015 Xtandi sales came in at $1.9 billion worldwide, shared with partner Astellas. Analysts have even higher hopes for Xtandi down the road. Some expect Medivation's med to overtake first-to-market competitor pill Zytiga from Johnson & Johnson, partly because Zytiga needs to be administered alongside prednisone while Xtandi is taken on its own.

But those factors may draw interested bidders beyond just Sanofi and AZ. Rumors have swirled that deal-hungry Big Biotechs Amgen ($AMGN) and Gilead ($GILD) may be interested in entering the fray, too.

- get more from the Sunday Times (sub. req.)
- see The Telegraph's take