Viagra maker Pfizer is to acquire cancer drug company Medivation in a deal valued at about $14 billion (£10.6bn).
Medivation is best known for prostate cancer treatment Xtandi, which it jointly markets with Japanese pharmceutical group Astellas Pharma.
Pfizer said yesterday that it will pay $81.50 per share for San Francisco-based Medivation – a 21 per cent premium on the biotech firm’s closing price of $67.19 last Friday.
The offer is also at a substantial premium to French drug maker Sanofi’s rebuffed bid to buy Medivation for $9.3bn in April that pushed the company to put itself up for sale.
Both the Pfizer and Medivation boards have approved the latest deal, which is expected to close in the third or fourth quarter.
Ian Read, Pfizer’s Scots-born chairman, said: “The proposed acquisition of Medivation is expected to immediately accelerate revenue growth and drive overall earnings growth potential for Pfizer.
“This transaction is another example of how we are effectively deploying our capital to generate attractive returns and create shareholder value.”
Pfizer added that Medivation also has a promising pipeline of cancer drugs in late-stage clinical development, including the potential breast cancer treatment talazoparib and a lymphoma drug.
The takeover comes four months after Pfizer and Ireland-based Allergan scrapped their proposed $160bn merger that had been based on a move to reduce taxes. Pfizer has since bought Anacor Pharmaceuticals in a $5.2bn deal.