Sanofi has deployed the carrot and the stick in its pursuit of Medivation, proffering a raised offer while simultaneously threatening to mount a hostile takeover bid.
The French group insists its $52.50 offer is a fair price for Medivation – suggesting in a letter to Medivation shareholders that it would otherwise be trading in the $30s – and that subject to negotiations “we could be in a position to revise our offer”.
Last week, Sanofi went public with a $9.3bn offer for Medivation, saying that repeated efforts to engage the company in negotiations had been ignored.
The letter from Sanofi CEO Olivier Brandicourt also warns that Sanofi is determined to get its hands on the US biopharma company and threatens: “if you are not prepared to engage with us, we have no choice but to go directly to your shareholders”.
Brandicourt claims that Sanofi has already been in contact with Medivation’s top shareholders and believes there is “overwhelming support” for a deal, suggesting it may also try to oust members of the US company’s board.
The letter comes as Medivation reported its first-quarter results, headlined by a 53% increase in sales of its only marketed drug – prostate cancer therapy Xtandi (enzalutamide) – to $547m compared to the same period of 2015.
US sales of the drug rose by a third to $308m, with partner Astellas recording an 80% rise in ex-US sales to $240m. The company also reiterated its financial guidance for the year, which suggests Xtandi will bring in around $1.5bn in the US alone.
Sanofi already have a presence in prostate cancer with its Jevtana (cabazitaxel) product, and says the takeover “would broaden our portfolio in this important indication and potentially add two oncology assets in clinical development”.
Medivation yesterday reiterated its position that Sanofi’s offer “substantially undervalues Medivation and is not in the best interests of the company and its stockholders”.