Undeterred by hostile threats, Medivation spurns Sanofi again

Hung

If there’s one thing that was clear after Medivation’s ($MDVN) Thursday earnings call and investor presentation, it’s that it’s not afraid of Sanofi’s ($SNY) hostile takeover threats.

Just a few hours after once again rejecting the French drugmaker’s $52.50-per-share cash proposal, the California company laid out a series of reasons why it’s not interested in the bid its wannabe buyer is offering up.

For starters, Medivation doesn’t think Sanofi’s offer takes into account all of its growth prospects; it believes star med Xtandi has a “massive” market opportunity in prostate cancer alone, and it’s planning on expanding the drug out to other cancers, too. It’s also got a couple of late-stage candidates in the works, one of which--talazoparib--arguably has even greater sales potential than Xtandi, which is already a blockbuster, CEO David Hung told investors on the call.

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Medivation isn’t happy with Sanofi’s timing, either. Sanofi “approached us during a period of significant market dislocation for biotech,” a move Medivation found “extremely opportunistic.” It also came before a number of “other important inflection points” for Xtandi that could have taken shares higher and expanded sales, Hung said.

And then, there’s the fact that “Medivation is a unique opportunity”--and it knows it. There aren’t many oncology buys out there that can immediately kick in revenue from a marketed product, especially one with sales like Xtandi’s. As it illustrated, the only other recent deal for such a company was AbbVie’s ($ABBV) buy of Pharmacyclics, and that buy drew the kind of money--$21 billion--that analysts termed “staggering.”

In short? It’s not coming to the bargaining table with Sanofi--at least, not now. And with several other bidders circling, it may never need to. Pfizer ($PFE), Novartis ($NVS), AstraZeneca ($AZN) and Amgen ($AMGN) are all reportedly weighing jumping into the fray, and some analysts have valued the company at up to $70 per share.

And never mind the fact that earnings missed the mark and sales looked flat in Q1; analysts aren’t. The way Leerink Partners’ Geoffrey Porges sees it, Medivation’s guidance of $1.425 billion to $1.525 billion for U.S. net sales of Xtandi “implies a significant acceleration in revenue growth … through the year,” he wrote in an investor note.

“This was another ‘meh’ quarter for Xtandi, but this doesn’t seem to matter to anyone,” RBC Capital Markets’ Simos Simeonidis added in his own note to clients. “We think Medivation will be gone by year-end 2016.”

- read Medivation's latest rejection of Sanofi's bid
- see the call transcript
- view the presentation (PDF)

Special Report: Top 15 Drug Launch Superstars - Xtandi - Medivation and Astellas Pharma 

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