Will Sanofi challenge J&J with Medivation buyout?

Wall Street bull

The buzz on Wall Street now is that Medivation is in play. Bloomberg reports that Sanofi made a bid for the biotech, which was stiff armed. And now other companies are reportedly considering a bid as Sanofi’s new CEO ponders a hostile move.

The key prize here is Xtandi, Medivation’s ($MDVN) prostate cancer drug which has helped change the standard of care in the field. And if Sanofi, or anyone else, successfully engineers a takeover, the buyout would leave them going head-to-head against pharma giant J&J, which has been steadily expanding its franchise R&D operations for prostate cancer in the wake of Zytiga’s approval.

Xtandi, a blockbuster drug that’s sold by Astellas under a profit sharing agreement for $129,000, has been in the headlines recently. Senator and presidential candidate Bernie Sanders and confederates recently raised the prospect of jerking patent protection on Xtandi, saying that taxpayers heavily subsidized the development of the drug at UCLA, where Charles Sawyer did much of the original research.

Sanofi and other potential buyers are likely discounting any threat from Sanders as an election-year stunt with little chance of success.

There are also some experimental drugs to consider in the deal.

Medivation’s experimental drug talazoparib, a poly-ADP ribose polymerase (PARP) inhibitor acquired from BioMarin in a $570 million deal last year, is in Phase III for breast cancer. Medivation’s research group has also been advancing the in-licensed (from CureTech) antibody pidilizumab for large B-cell lymphoma and other hematologic malignancies, such as multiple myeloma. And their earliest-stage asset is a small molecule inhibitor (MDV4463) of the sterol regulatory element-binding protein, or SREBP. That drug is in Phase I.

Just days ago J&J stepped up with a $500 million deal to nab the commercial rights to Tesaro's ($TSRO) late-stage PARP inhibitor niraparib, specifically carving out ownership of the drug for its growing prostate cancer franchise. Back in 2013 the company acquired ARN-509--another anti-androgen prostate cancer treatment--in a $1 billion deal to buy Aragon.

A move by Sanofi now would signal a significant expansion of its cancer R&D operations. The pharma giant restructured oncology last year, chopping 100 cancer research staffers in Cambridge, MA a little more than a year ago, after experiencing some severe setbacks in the clinic.

Sanofi, though, has a new CEO--Olivier Brandicourt--who's been looking to restructure the company (again) as it seeks to enhance R&D productivity. Sanofi has been scoring some big advances in its alliance with Regeneron and also has a major collaboration in place with Alnylam, as well as a group of smaller biotechs.

- here's the story from Bloomberg