Sanofi Ups Bid for Medivation; Enters Confidentiality AgreementBy
Sanofi has entered into a confidentiality agreement with Medivation, a San Francisco-based biopharmaceutical company, under which Sanofi will be provided due diligence access and confidential information. Sanofi indicated that it has been advised by Medivation that Sanofi is being given the same opportunity as others to participate in a process relating to a potential transaction. A data room will be opened and management meetings will be scheduled in the near term.
Sanofi also confirmed that on June 27, 2016 it advised Medivation that upon signing a confidentiality agreement and being provided information, Sanofi would increase its offer to $58.00 in cash and $3.00 in the form of a contingent value right (CVR) relating to talazoparib sales performance.
Under the confidentiality agreement, Sanofi has agreed to a customary standstill for six months subject to limited early termination events and has agreed to withdraw its consent solicitation. Sanofi had earlier bid $9.3 billion for Medivation, an offer that Medivation had rejected. The new offer is approximately $10 billion.
Talazoparib is an orally available poly-ADP ribose polymerase, or PARP, inhibitor, which is currently is in a Phase III clinical trial for the treatment of patients with gBRCA mutated breast cancer (i.e., advanced breast cancer in patients whose BRCA genes contain germline mutations). The company is also targeting a number of other solid tumor indications in which to investigate talazoparib, including breast (beyond gBRCA mutations), prostate, small cell lung, and ovarian cancers.
In a statement, Sanofi said it is “confident that its due diligence can be quickly completed and that if an agreement is reached on a mutually acceptable transaction, Sanofi can close promptly given that it has received US regulatory clearance, and there would be no financing condition.”
Medivation confirmed that Sanofi is one of several companies in which it had entered a confidentiality agreement with the company.
Sanofi first made a bid to acquire Medivation Medivation in late April and again in early May. Sanofi then took the strategy of seeking to replace the Medivation board, a process that was expected to end no later than August 1.
Medivation’s key product is Xtandi (enzalutamide), a drug to treat prostate cancer, for which it is partnered with Astellas. In its first-quarter earnings release, Medivation reported that US net sales of Xtandi, as reported by Astellas, are expected to range between $1.425 and $1.525 billion in 2016.
Sanofi’s strategic rationale to acquire Medivation is based on a strategy to replace revenue losses for its top-selling drug, Lantus,