Pfizer Buys Medivation For $14 Billion

Global leaders in the pharmaceutical industry competed in an auction to bid for Medivation Inc, which is at the forefront in manufacturing oncology drugs. Many people were glued to this auction to predict the future of oncology drug development. This curiosity took a backseat when Pfizer put up a $14 billion bid. Both companies reached a settlement on Monday, 22nd August.

With this recent development, the shares of Medivation have witnessed a sudden increase in their value, from less than $30 in February to $81.5 at present. With advancements in genetics and immunology pertinent to oncology, the giant pharmaceutical companies are shifting their research and monetary resources to formulate oncology drugs. Pfizer has not been very successful in its endeavor to take a lead in cancer drug development. It did receive an approval for metastatic breast cancer drug Ibrance in February this year.

In a recent press release from Pfizer, the group president, Pfizer Innovative Health, Albert Bourla said, “The proposed acquisition of Medivation will build upon Pfizer’s success with our IBRANCE® (palbociclib) launch in HR+/HER2- metastatic breast cancer and with our strong immuno-oncology portfolio, and will transform Pfizer into a leading oncology company.”

On the other hand, Medivation’s Xtandi is the only marketed product from Medivation that treats cancer, while two more drugs are in clinical trials. It is worth noting that Xtandi is a hormone therapy which was developed in collaboration with Japan-based Astellas Pharma and approved by Food and Drug Administration (FDA) in 2012.

The drugs which are under clinical trials include talazoparib and pidiluzumub. These drugs are in their late clinical trials, and aim at treating breast cancer and blood cancer, respectively. Talazoparid is an oral drug which works as a poly-ADP ribose polymerase (PARP) inhibitor which is in 3rd phase clinical trial. Targeting specifically breast cancer cells, carrying BRCA genes, this drug elicits cytotoxic effects on the tumor cells by catalytic inhibition of PARP enzymes and traps PARP which otherwise repairs DNA of cancer cells and facilitates in their survival.

Pidiluzumub, however, is an immunotherapy drug which is under trial for lymphoma cell cancers. This drug likely targets the programmed death pathway 1 (PD-1) in tumor cells which suppress the immune cell productions, leading to cancer progression to advanced stages. Upon use, it is thought that this immune cell checkpoint pathway is blocked which will help immune cells to kill tumor cells. It is likely to help patients of B-lymphoma and related cancer types.

Now that Medivation has partnered with Pfizer, the research on these drugs is likely to be sped up as well. In this regard, Founder, President and CEO of Medivation, David Hung, MD, said, “We believe the combination with Pfizer is the right next step in our growth trajectory and is a testament to the passion and dedication by which the Medivation team has delivered on our mission to profoundly transform patients’ lives through medically innovative therapies.”

He added that Pfizer is an ideal partner to increase the outreach of Xtandi and will help reach next stage in the development of aforementioned oncology drugs, at the soonest.

Xtandi, known otherwise by its generic name enzalutamide, is an androgen (male hormone) receptor inhibitor that interferes with the signaling pathways in tumor cells in the patients of metastatic castration-resistant prostate cancer (CRPC). It inhibits androgen binding to the androgen receptor. These androgen receptors are further inhibited from entering the nucleus which leads to the inhibition of androgen receptor from binding to DNA molecules. This ultimately helps in reducing tumor cell proliferation and prevents cancer from advancing.

This pill was used to treat 64,000 men with prostate cancer in the United States alone. In the last four quarters, the drug sales generated $2.2 billion globally and according to an estimate $4 billion or more profit per annum is predicted for future.

Attributed as the second major cause of deaths in the US, cancer remains a point of focus for therapeutic research and drug development for experts at a global level.

With this collaboration in place, other companies who are working towards oncology drugs research and development are hopeful to enter a similar collaboration with big pharmaceutical companies which will not only help them with better support for speedy drug development but also profit them by increasing the value of their shares. Amongst these companies, Clovis, Tesaro and Incyte are hopeful for a Medivation-Pfizer-like venture.

However, many analysts think that Pfizer did not make a prudent move with a massive investment. Despite the criticism, Pfizer claims to be able to increase annual profits by 5% per share with this acquisition of Medivation.

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