Pfizer Inc is in advanced talks to acquire U.S. cancer drug company Medivation Inc for close to US$14 billion, as it seeks to boost its oncology portfolio, people familiar with the matter said on Sunday. Pfizer offered to pay $81.50 for each of Medivation's shares, which it is going to pay for in cash, it said in a regulatory statement on Monday.
Reuters had reported that Pfizer, Sanofi, Merck & Co Inc, Celgene Corp and Gilead Sciences Inc had submitted expressions of interest to acquire Medivation.
Medivation's shares closed at $67.16 on Friday, giving it a market value of $11.1 billion. The drugmaker brought in $943 million in revenue a year ago.
The deal comes about three months after Medivation rejected a $9.3 billion takeover bid from the French drugmaker Sanofi, saying that offer, worth $52.50 per share, undervalued the company. Shares of Pfizer, the largest USA drugmaker, were down 0.4 percent at $34.84.
Pfizer said its earnings would increase immediately after buying Medivation.
"The Medivation deal increases the likelihood of a split", said SunTrust Robinson Humphrey analyst John Boris. But it has gone ahead with a couple of acquisitions since then, including a $5.2 billion purchase of Anacor, announced in May.
Pfizer expects the acquisition will build upon its success with the breast cancer drug Ibrance and transform it into "a leading oncology company".
The boards of both companies have approved the deal, which is targeted to close in the third of fourth quarter.
A year ago, Pfizer paid $15 billion for Hospira, which sells generic hospital products and is developing biosimilars meant to compete with big-selling injectable biotech drugs.
Pfizer's financial advisers were Guggenheim Securities and Centerview Partners, with Ropes & Gray LLP providing legal counsel.