Pfizer announced Monday it will acquire cancer drug company Medivation in a deal worth nearly $14bn (£10.6bn).
After earlier rumours, the deal was confirmed by Pfizer on Monday morning.
Both company's boards have unanimously approved the deal; with Pfizer saying the takeover will propel the company into a leading position of oncology.
“The proposed acquisition of Medivation is expected to immediately accelerate revenue growth and drive overall earnings growth potential for Pfizer,” Ian Read, Pfizer chief executive, said in a statement.
“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,” said David Hung, founder, president and chief executive of Medivation.
By acquiring Medivation, Pfizer is expected to gain Xtandi, a blockbuster prostate-cancer treatment, that’s already approved for sale in the US and that Bloomberg analysts project will generate $1.33bn (£1.02bn) in annual sales by 2020.
“We believe that Pfizer is the ideal partner to extend the reach of our blockbuster Xtandi franchise and take our promising, late-stage assets – Talazoparib and Pidilizumab – to their next stages of development so that they can be made available to patients as quickly as possible,” Hung added.
Pfizer, best known for Viagra and its cholesterol treatment Lipitor has been relying on new branded treatments, including cancer drugs, to boost revenue, as sales of older medicines have slowed.
Pfizer will offer Medivation shareholders $81.50 (£62.20) per share in cash, a premium of 21.35 per cent to the stock's Friday close of $67.16 (£51.26), according to Reuters.
Medivation stock soared more than 19 per cent before in pre-market trading on Monday.
In April, Pfizer had to terminate its $160bn (£113bn) agreement, the biggest pharmaceutical deal in history, with Botox maker Allergan after the Obama administration took steps to clamp down on tax avoidance deals.
Pfizer was seeking to domicile itself in Ireland in a so-called “tax inversion” deal that would have substantially reduce the taxation the combined company would pay in the US.
Join our new commenting forum
Join thought-provoking conversations, follow other Independent readers and see their replies