Medivation is urging shareholders to reject Sanofi’s $9.3 billion offer for the company, while the would-be buyer is said to be considering raising its bid for the San Francisco biotech.

In a letter to shareholders yesterday, Medivation board Chairman Kim Blickenstaff and President and CEO David Hung, M.D., restated the company’s previous contention that Sanofi’s bid undervalues the company and its cancer holdings.

Sanofi confirmed its $9.3 billion offer in April, saying the deal would help rebuild its oncology presence as called for in a growth plan unveiled late last year.

Medivation’s cancer franchise is anchored by its marketed prostate cancer drug Xtandi® (enzalutamide), which generated $1.15 billion in U.S. net sales—plus $757 million outside the U.S. as reported by development partner Astellas Pharma. But Medivation has come under criticism over Xtandi because of its high wholesale list price in the U.S. of $129,000 for a year’s course of treatment.

Medivation’s cancer pipeline includes two additional oncology candidates. One is the Phase III candidate talazoparib (MDV3800), an orally available poly(ADP ribose) polymerase (PARP) inhibitor now in a pivotal trial in patients with gBRCA mutated breast cancer.

The other candidate, pidilizumab (MDV9300), is an antibody with immune-mediated antitumor effects licensed from CureTech. Medivation has said it plans to develop pidilizumab in diffuse large B-cell lymphoma and other hematologic malignancies, such as multiple myeloma.

“Under the Board’s leadership, Medivation has delivered enormous stockholder value AND developed numerous opportunities for a bright future,” Medivation stated in the letter. “The Medivation Board remains committed to rewarding you with superior returns and urges you to reject Sanofi’s maneuver.”

Earlier this month, Sanofi said in a regulatory filing that it had offered $75,000 to each of eight candidates it has nominated for seats on Medivation’s board, with the goal of ousting the biotech’s current board which opposes the deal—an action taken after Medivation initially refused to engage in talks.

Medivation has denounced Sanofi’s move as a “devil’s bargain” that could hurt shareholders, saying the new directors could approve a takeover at a price lower than what Medivation’s current board would support.

Sanofi is also considering adding contingent value rights to its acquisition proposal, Bloomberg News reported on Wednesday, citing unnamed sources. Sanofi and Medivation have both declined comment on the report, which said that executives of the pharma giant had met Medivation investors in recent days to discuss the possible inclusion of contingent value rights committing Sanofi to additional payments tied to achieving milestones.

Medivation’s letter included rebuttal arguments for six of Sanofi’s arguments in favor of the deal. Among topics at issue:

  • The deal’s prospects for delivering “substantial” value to shareholders
  • The premium represented by Sanofi’s offer
  • How favorably does Sanofi’s offer compare with other acquisitions involving oncology drug developers
  • The potential value of talazoparib
  • How realistic is Medivation in identifying and realizing the blockbuster potential value of pipeline candidates
  • How closely is Medivation listening to shareholders.

“Sanofi’s highly opportunistic, low-priced takeover attempt offers you mere words and tactics—but not value. The words are misleading, in our view, and the tactics are designed to capture for Sanofi value that belongs to you,” the letter added.




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