Using money honey instead of threats, Sanofi wins a seat at the bargaining table for Medivation buyout

It took a sweeter bid and a CVR for its experimental therapy talazoparib, but Sanofi $SNY can now take a seat at the bargaining table with Medivation $MDVN in pursuit of one of this year’s biggest biotech buyouts.

Sanofi announced this afternoon that it pushed its bid to $58.00 a share – up from $52.50 – and added a $3.00 CVR for sales performance on talazoparib, Medivation’s blockbuster bid for PARP inhibitor glory. That’s a potential $11 billion payout, up from the initial $9.3 billion offer.

Medivation carefully noted that it rejected the offer. And it’s unlikely to accept one that isn’t substantially larger.

Sanofi, which has threatened a variety of sanctions against Medivation in its push for a deal, expressed confidence that it could wrap up a deal. That may be easier said than done, though, as Reuters reported this afternoon that Pfizer and Celgene are also standing in the wings now, looking to see what they may do to step in now. Others may follow.

Sanofi is the first to the table. And it clearly sees the acquisition, bagging Xtandi and a promising late-stage PARP inhibitor, as a big piece in new CEO Olivier Brandicourt’s attempt to make over Sanofi.

“We view this moving on past the initial and painful step in the process where both parties have to act their very toughest but one of them has to eventually flinch and move on to the next step, as a very crucial and significant win for MDVN shareholders; and as the first step in the process which we see culminating in the eventual sale of the company, likely within the next six months and with a price tag that we expect to be in the $70/share range, including the CVR,” notes RBC’s Simos Simeonidis.

Medivation has kicked back hard against Sanofi, particularly raising the prospect of a first-line winner in talazoparib. AstraZeneca was the first to the PARP market with olaparib, but plenty of competition has been in hot pursuit of leapfrogging the big pharma’s pioneering effort. Tesaro just posted promising data for its PARP drug as well, and J&J stepped in to bag prostate cancer rights for its portfolio.

The deal will likely seal Medivation CEO David Hung’s rep as a top dealmarker in the industry. He’s struck major collaborations and wasn’t afraid to pay BioMarin top money for the rights to talazoparib. And despite Medivation’s recent protests about Sanofi’s lackluster rep in oncology R&D, this story is all about the money.

“We are pleased to have the opportunity to engage with Medivation,” said Olivier Brandicourt, Chief Executive Officer, Sanofi. “Our willingness to increase our offer is driven by our in-depth analysis of the benefits and value creation potential of a combination.  We look forward to discussions with Medivation on a combination which we believe is the most value creating transaction for both companies’ shareholders, and would provide Medivation and its employees with an outstanding platform to further grow its oncology franchise.”

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Skyhawk Therapeutics Waltham, MA
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