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Pfizer Has Emerged The Victor In The Buyout Battle For Medivation

Pfizer Inc. PFE has offered a final deal value of $14 billion for Medivation Inc MDVN, according to Financial Times. With the final price being significantly higher than what investors were likely expecting, Pfizer could be the winner in the multi-party pursuit of Medivation, Credit Suisse’s Vamil Divan said in a report.

The final price being offered by Pfizer is higher than the CS estimate of $72 per share, analyst Divan noted.

Good Fit

The acquisition is a good match for what Pfizer had been seeking in terms of business development, since Medivation would boost the former’s Innovative Health [IH] business, Divan mentioned. He added that the deal represented a “solid strategic overlap” to boost Pfizer’s oncology footprint.

“We believe PFE should be able to drive further growth for MDVN’s flagship product Xtandi given its presence in the genitourinary space and PFE’s broader commercial footprint. We also expect PFE to work to find effective roles for Xtandi as well MDVN’s PARP inhibitor talazoparib in combination with PFE’s emerging blockbuster Ibrance as well as other products in PFE’s emerging immuno-oncology (I-O) pipeline,” the Credit Suisse report stated.

The analyst commented that the deal may be dilutive in the near term, before generating longer-term upside. Credit Suisse has Outperform ratings on Pfizer and Medivation, with price targets of $40 and $72, respectively.

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DateFirmActionFromTo
Aug 2016JefferiesMaintainsBuy
Jul 2016JefferiesMaintainsBuy
Jun 2016JefferiesMaintainsBuy

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