Pfizer buying cancer drug maker Medivation for $14 billion

Last Updated Aug 22, 2016 7:46 AM EDT

NEW YORK - Pfizer (PFE) will pay about $14 billion in cash for the cancer drug company Medivation (MDVN), a deal that will add the pricey late-stage prostate cancer treatment Xtandi to its oncology portfolio.

The New York drugmaker said Monday that it will pay $81.50 per Medivation share. That’s a 21 percent premium to the San Francisco biotech’s Friday closing price of $67.19.

Medivation Inc. and the Japanese drugmaker Astellas Pharma jointly market Xtandi, with Astellas selling the drug outside the U.S.

Xtandi drew attention earlier this year from the public interest group Knowledge Economy International, which petitioned the National Institutes of Health to reduce the $129,000-a year list price for the advanced prostate cancer treatment. The government declined.

Pfizer Inc. said Medivation also has promising pipeline of cancer drugs in late-stage clinical development. That includes the potential breast cancer treatment talazoparib and a potential lymphoma drug.

“The addition of Medivation will strengthen Pfizer’s Innovative Health business and accelerate its pathway to a leadership position in oncology,” Pfizer’s chairman and CEO Ian Read said in a statement.

The boards of both companies have approved the deal, which is targeted to close in the third of fourth quarter.

The deal comes about three months after Medivation rejected a $9.3 billion takeover bid from the French drugmaker Sanofi, saying that offer, worth $52.50 per share, undervalued the company.

Shares of Medivation Inc. soared more than 19 percent before the opening bell Monday.