Date: 2016-07-05
Type of information: Company acquisition
Acquired company: Medivation (USA - CA)
Acquiring company: Sanofi (France)
Amount: $ 9.4 billion (€ 8.2 billion)
Terms: On August 22, 2016, Pfizer and Medivation announced that they have entered into a definitive merger agreement under which Pfizer will acquire Medivation for $81.50 a share in cash for a total enterprise value of approximately $14 billion. * On July 5, 2016, Medivation announced that it has entered into confidentiality agreements with a number of parties that have expressed interest in exploring a potential transaction and demonstrated that interest to the Board of Directors’ satisfaction. Medivation also confirmed that it entered into a confidentiality agreement with Sanofi and that Sanofi agreed to terminate its consent solicitation. Before entering into the confidentiality agreement with Sanofi, Medivation received from Sanofi, and Medivation’s Board of Directors unanimously rejected as not in the best interests of the company and its stockholders, a new unsolicited proposal to acquire Medivation. The proposal, which was conditional upon the execution of a confidentiality agreement and the receipt of information, was for $58.00 per share in cash plus a Contingent Value Right for talazoparib sales representing a potential payment in 2022 of a maximum of $3.00 per share. The confidentiality agreements include customary six-month standstill provisions, subject to limited early termination events, and Medivation expects to provide each party the opportunity in the near term to review non-public information and meet with Medivation’s management. Evercore and J.P. Morgan are serving as financial advisors to Medivation, and Wachtell, Lipton, Rosen & Katz and Cooley LLP are acting as legal counsel. * On June 14, 2016, Sanofi announced the expiration of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (HSR) in connection with Sanofi’s intent to acquire Medivation. This milestone further supports Sanofi’s belief that the all cash acquisition proposal, which is not subject to any financing condition, would provide the highest level of transaction certainty to Medivation shareholders. As announced on April 28, 2016, Sanofi proposed to acquire Medivation for $52.50 per share, representing an all-cash transaction valued at approximately $9.4 billion. * On June 13, 2016, Medivation announced that it has filed with the Securities and Exchange Commission a definitive Consent Revocation Statement. Medivation stockholders of record as of June 1, 2016 are eligible to submit consents or consent revocations by August 2, 2016 . In conjunction with the filing, Medivation mailed a letter to its stockholders detailing Medivation's track record of creating enormous stockholder value and highlighting the potential of Medivation's blockbuster Xtandi® franchise and its innovative late stage oncology pipeline to create significant additional value. The letter also urges stockholders to reject the coercive tactics employed by Sanofi to acquire the company at an opportunistic and grossly inadequate price. * On June 8, 2016, Sanofi announced that it has filed an investor presentation with the U.S. Securities and Exchange Commissio in connection with its proposed acquisition of Medivation. This presentation notes that the proposed transaction would provide compelling strategic and financial benefits for Sanofi and Medivation shareholders. * On May 25, 2016, Sanofi announced that it has filed preliminary consent solicitation materials with the SEC seeking to remove and replace each member of Medivation's Board of Directors with eight independent and highly-qualified candidates who are willing to fully and fairly evaluate all of Medivation’s strategic options, including Sanofi’s acquisition offer, in accordance with their fiduciary duties to Medivation and its shareholders. The slate of highly qualified directors proposed by Sanofi includes: * On May 5, 2016, Medivation reiterated its rejection of Sanofi's substantially inadequate proposal to acquire the Company for $52.50 per share in cash, following the receipt of a letter from Sanofi. Medivation notes that Sanofi's letter simply restates an inadequate proposal that the Medivation Board of Directors has already determined substantially undervalues the Company. * On May 5, 2016, Sanofi announced that it has sent a letter to Medivation's Board of Directors. The group has reiterated its preference to negotiate a transaction. * On April 29, 2016, Medivation announced that its Board of Directors, after consultation with its financial and legal advisors, unanimously determined that the unsolicited proposal from Sanofi to acquire Medivation for $52.50 per share in cash substantially undervalues Medivation and is not in the best interests of the company and its stockholders. The proposal substantially undervalues Medivation and its leading oncology franchise. Medivation has significant scarcity value as one of the few profitable, commercial-stage oncology companies;it has brought a blockbuster product to market and is leveraging its expertise to develop and bring to market additional products. The company has built Xtandi® (enzalutamide) capsules into a rapidly-growing, multi-billion dollar oncology product and remains on track to achieve its 2016 U.S. net sales guidance, which implies approximately 28% growth (at the mid-point) for the year. The company has generated a 1,440%+ total shareholder return for its stockholders since 2009. Medivation has already achieved two years of profitability, despite only launching Xtandi® in late 2012, and the company has pursued minimal, dilutive capital raises. Sanofi's timing is designed to benefit Sanofi - not Medivation's stockholders. Sanofi approached Medivation following a period of significant market dislocation in biotech and just as the market was beginning to recover. * On April 28, 2016, Medivation confirmed that it has received an unsolicited, non-binding proposal from Sanofi to acquire all outstanding shares of Medivation common stock for $52.50 in cash. On April 15, 2016, Medivation's Board of Directors received a private letter from Sanofi making an indicative, non-binding proposal to acquire the Company under the same economic terms, subject to completion of due diligence and other conditions. The Company promptly acknowledged receipt of the letter and committed to respond. Consistent with its fiduciary duties, the Board, with the assistance of its independent financial and legal advisors, immediately began the process of evaluating this proposal. As the public disclosure of this proposal does not differ materially from the private correspondence received less than two weeks ago, the Board expects to complete its review of the proposal at a scheduled meeting today and will provide an update promptly thereafter. There are no assurances that a transaction will be reached or on what terms. Medivation stockholders are advised to take no action at this time. Evercore and J.P. Morgan are serving as financial advisors to Medivation, and Cooley LLP is acting as legal counsel. * On April 28, 2016, Sanofi announced that it has sent a letter to Medivation, in which it makes a non-binding proposal to acquire Medivation for $52.50 per share. This would represent an all-cash transaction valued at approximately $9.3 billion. The proposed purchase price represents a premium of over 50 percent to Medivation’s two-month volume weighted average price (VWAP) prior to there being takeover rumors. The proposed combination has an attractive financial rationale as it would be immediately accretive to earnings and would offer value creation opportunities for Sanofi shareholders. There can be no assurance that any transaction will result from this proposal. Sanofi is confident in its ability to close the proposed transaction and receive all necessary regulatory approvals. The transaction would not be contingent on any financing condition.
* On June 13, 2016, Sanofi announced that it has filed definitive consent solicitation materials with the U.S. Securities and Exchange Commission seeking to remove and replace each member of Medivation Board of Directors with eight independent and highly-qualified candidates. Sanofi’s nominees are committed to fully and fairly evaluating all of Medivation’s strategic options, including Sanofi’s acquisition offer, in accordance with their fiduciary duties to Medivation and its shareholders. Sanofi is mailing a letter to Medivation’s shareholders along with the definitive consent solicitation statement, which includes a WHITE consent card, providing Medivation shareholders the ability to demonstrate support for a transaction.
Sanofi believes there is a clear path to completion: the record date to determine Medivation shareholders entitled to give their written consent has been established as June 1, 2016. Sanofi expects the initial Hart-Scott-Rodino (HSR) waiting period to expire on June 13, 2016. Sanofi anticipates filing definitive consent solicitation materials in mid-June 2016; and Sanofi signed a consent on June 3, 2016 for the shares it owns in Medivation and therefore expects that the 60-day consent solicitation period will conclude no later than August 1, 2016.
- Michael E. Campbell, the former Chairman, President and Chief Executive Officer of Arch Chemicals, Inc. and a current director at WestRock;
- Barbara Deptula, the former Executive Vice President of Business Development and Chief Corporate Development Officer of Shire Plc. and a current director at AMAG Pharmaceuticals;
- Wendy E. Lane, the current Chairman of Lane Holdings, Inc., an investment firm, and a current director at MSCI Inc. and Willis Towers Watson;
- Ronald S. Rolfe, a retired Partner at Cravath, Swaine & Moore LLP, a premier law firm in the United States, where he practiced until his retirement in December 2010;
- Steven J. Shulman, managing partner of Shulman Family Ventures, a private equity firm since 2008, and Chairman of Accretive Health, Inc. and CareCentrix, Inc.;
- Charles P. Slacik, the former Chief Financial Officer and Senior Vice President of Beckman Coulter Inc.;
- James L. Tyree, the co-founder and managing partner of Tyree & D’Angelo Partners, a private equity investment firm, and a current director at SonarMed, Genelux, ChemoCentryx and Innovia; and
- David A. Wilson, former President and Chief Executive Officer of the Graduate Management Admission Council, and a current director at CoreSite Realty Corporation and Barnes & Noble Education, Inc.
Following SEC approval of a definitive consent solicitation statement, Sanofi will make the definitive consent solicitation statement available to Medivation shareholders and shareholders may begin to deliver their written consents to Sanofi’s proposals. For Sanofi’s proposals in the consent solicitation to become effective, written consents would need to be properly completed by the holders of a majority of Medivation shares outstanding as of the close of business on the record date.
f* On April 29, 2016, Sanofi commented on Medivation’s rejection of its non-binding all-cash proposal to acquire Medivation for $52.50 per share. Combining Sanofi and Medivation represents a compelling strategic and financial opportunity to drive immediate and certain value for Medivation’s shareholders while benefiting patients and both companies’ respective stakeholders. Sanofi’s all-cash proposal represents over a 50 percent premium to Medivation’s two-month volume weighted average trading price (VWAP) prior to takeover rumors. While to date Medivation has chosen not to enter into discussions regarding this value-creating transaction, Sanofi remains committed to the combination and looks forward to engaging directly with Medivation shareholders with regard to our proposal.
The "private offer" was submitted to Medivation when the NBI index was almost 30% below its July 2015 high. The proposal offer price is: 21% below Medivation's 52-week trading high of $66.40 Less than a 14% premium to Medivation's 12-month volume weighted average price, or VWAP Only a 9% premium to Medivation's VWAP over the last month
Details: Medivation is a San Francisco-based biopharmaceutical company with one marketed prostate cancer therapy, Xtandi®, and two additional oncology assets in clinical development. Xtandi® has achieved worldwide annual net sales of $2.2 billion on a run rate basis, less than four years after its initial approval. The drug has significant patent life with 10+ years of remaining exclusivity. Xtandi® is poised to capitalize on a substantial, near-term commercial opportunity in urology, enabling it to serve a larger patient population of men with metastatic castration-resistant prostate cancer (mCRPC) and increasing the duration of therapy. The PDUFA date for TERRAIN/STRIVE label expansion on October 22, 2016 , is rapidly approaching and is anticipated to drive significantly greater adoption by urologists. In April, the CHMP issued a positive opinion to include findings from the TERRAIN trial in the European label.
Ongoing Phase 3 trials, i.e. PROSPER and EMBARK, are designed to move Xtandi® even earlier in the prostate cancer treatment paradigm; PROSPER is on track to complete enrollment of 1,560 patients in mid-2017.
Medivation is pursuing clinical development across three major subtypes of breast cancer, a new and significant market opportunity for Xtandi®, and expects to report top-line Phase 2 data in patients with ER/PR+ breast cancer, which represents 50% of all breast cancers, in the second half of 2016. A Phase 3 trial in Triple Negative Breast Cancer is expected to initiate later in 2016.
The company continues to explore Xtandi® in other solid tumor indications and settings, e.g., in hepatocellular carcinoma and in combination with immunotherapy.
Talazoparib represents another blockbuster opportunity as a potentially best-in-class PARP inhibitor targeting a wide range of oncology indications. Top-line data from the Phase 3 EMBRACA trial in germline BRCA mutated advanced breast cancer is expected in the first half of 2017. Recent data reported at AACR demonstrate talazoparib's potential in tumors with defects in DNA repair beyond BRCA deficiency and possibly in patients without evidence of homologous recombination deficiency when used in combination with low dose chemotherapy. The company is preparing to initiate several clinical trials in 2016, including in breast cancer beyond germline BRCA mutations, prostate cancer, ovarian cancer and small cell lung cancer, including potentially registrational trials. Medivation recently met with the FDA to discuss clinical trial design and a potential accelerated approval pathway in prostate cancer. Talazoparib is highly synergistic with our existing development and commercial infrastructure. Additional clinical data demonstrating talazoparib's potent activity is expected to be presented at a medical meeting later in the year.
Pidilizumab has the potential to be a novel immuno-oncology candidate supported by clinical efficacy and a strong safety profile in several hematological malignancies.
Related: Cancer - Oncology
