With several Big Pharma players rumored to be interested in Medivation, plenty of industry watchers see another bidder potentially jumping into the mix to thwart Sanofi’s hostile quest. But which among them is most likely to do it?
Credit Suisse has some ideas about who may--and who most likely won’t. For starters, take Roche, who “needs to be considered as a potential acquirer” given its leader status in the oncology space, they wrote in a recent note to clients. The Swiss drugmaker has “no prostate cancer footprint,” though, so a deal for Medivation--whose claim to fame is blockbuster prostate cancer pill Xtandi--wouldn’t yield the same cost-cutting opportunities it would for the company’s peers. And that’s one reason the analysts “would view their interest as significantly less likely than other potential acquirers,” they wrote. And it’s a similar story at Roche’s cancer-focused crosstown rival, Novartis.
Then there’s Eli Lilly, which is plenty keen on oncology—but not so much on big deals. The largest pickup it’s ever made was $6.5 billon for ImClone in 2008, and the Indianapolis drugmaker is proud of it. At the company’s recent investor day, Lilly “highlighted that not participating in large M&A deals has provided them with the opportunity to focus on their internal assets, avoid unnecessary distractions and drive improved R&D productivity,” the analysts wrote. And with Medivation already having rejected Sanofi’s $9.3 billion offer as too low, it’s unlikely Lilly will want to swoop in, they figure.
What about AstraZeneca, which has been scouting oncology deals as it plots a turnaround? A deal that would pad earnings “could make sense” for the British pharma giant, considering that it’s “struggling to bridge the investment needed in the pipeline” in a world where generics are hitting hard. It also boasts Zoladex for prostate cancer and it’s investigating Lynparza in that area, too--so the analysts see a “significant fit” there. But with Medivation’s PARP-centric pipeline? Not so much, considering that AstraZeneca has its own PARP franchise--of which Lynparza is the star.
So who does Sanofi need to look out for, with those peers more likely to stay out of the equation? Pfizer and Amgen, the way the analysts see it. Pfizer is on the prowl for in-market or near-market assets now that its Allergan megamerger has been scuttled, and it could potentially find “effective roles” for Xtandi and Medivation candidate talazoparib in combination with its new cancer star Ibrance and its immune-oncology hopefuls. As for the Big Biotech, it’s said it’s looking to start doing larger deals again, and its large oncology portfolio indicates that it’s willing to play in that field.
Those probably aren’t the names Sanofi wants to hear, considering that reports have said Medivation has opened its books to the pair--something it refused to do for its French suitor. It’s repeatedly said no to sitting down at the bargaining table, despite multiple assurances from Sanofi that it’d be willing to raise its bid during negotiations.
But Sanofi needn’t worry. As the analysts wrote in another recent investor note, there are still plenty of prime takeover targets to go around. BioMarin and Alexion would both make worthy buys, they said, and Sanofi has listed rare diseases as an area where it wants to build scale.
Big Pharma’s next deal targets? Alexion, BioMarin and Incyte
Sanofi may add milestones to sweeten its $9.3B Medivation bid: Bloomberg
Sanofi and buyout target Medivation issue warring ballots as board fight officially begins
Most-wanted buyout target Medivation and hostile Sanofi line up for board fight
Hostile Sanofi puts forth its slate of Medivation directors as Gilead, Celgene weigh their own bids
Medivation opens books to Pfizer, Amgen as bidders circle: Reuters