Pfizer is paying a hefty premium for the much sought-after prostate cancer drug maker, Medivation. Fred Katayama reports.
Pfizer won the bid to buy the highly sought-after biotech firm, Medivation. It'll pay $14 billion to acquire the company that sells Xtandi. That's a prostrate cancer drug that pulls in about $2 billion in annual sales. It'll complement Pfizer's strength in breast cancer drugs. Pfizer's paying a huge premium to what Sanofi had initially offered for the firm back in April. Pfizer's move comes four months after it abandoned its deal to buy Dublin-based Allergan. The U.S. Treasury cracked down on cross-border agreements that aim to lower taxes by moving the company's headquarters to a foreign country. Bernstein senior analyst Tim Anderson said just before the deal was announced, "For a company of Pfizer's size, a Medivation deal is barely a needle-mover. We estimate Pfizer earnings accretion of only about 2 percent on average over the next five years. Medivation's shares surging in early trading. Pfizer's stock rose. The Medivation deal will also need the blessing of antitrust regulators. Pfizer expects to complete this acquisition in the third or fourth quarter.