Medivation (MDVN) to be acquired by Pfizer (PFE) for $14 billion

Pfizer Inc (PFE), beating out numerous other bidders, said it would buy U.S. cancer drug company Medivation Inc (MDVN) for $14 billion in cash, adding its blockbuster prostate cancer drug Xtandi to the company's growing oncology roster.

  

• Pfizer beat out rivals Celgene (NASDAQ:CELG), Gilead (NASDAQ:GILD), Sanofi (NYSE:SNY), Merck (NYSE:MRK) and AstraZeneca (NYSE:AZN). 
• Medivation makes the leading prostate cancer drug, Xtandi, which is expected to generate $5.7B in annual revenue by 2020.

Medivation shares were up 20 percent at $80.43 in afternoon trading, just shy of the offer price of $81.50 per share. Shares of Pfizer, the largest U.S. drugmaker, were down 0.5 percent at $34.82.

The offer is a 55-percent premium to Sanofi SA's (SASY.PA) initial offer to buy Medivation for $52.50 in April that pushed the San Francisco-based company to put itself up for sale. And it would represent a 118-percent increase since Reuters reported on March 30 that Medivation had hired JP Morgan to handle interest from companies in a potential acquisition.

The planned purchase of Medivation and its $2.2 billion-a-year Xtandi is the latest in a number of deals by large drugmakers willing to pay top dollar for cancer drugs that are more effective than standard older treatments. Perhaps the most notable example is AbbVie Inc's (ABBV) $21-billion purchase last year of Pharmacyclics. The deal gave AbbVie shared ownership with Johnson & Johnson (JNJ) in blockbuster leukemia drug Imbruvica.

8/19/16, before the acquisition announcement