Market Overview

Goldman Sachs Talks Pfizer's Acquisition Deal Of Medivation

Share:
Goldman Sachs Talks Pfizer's Acquisition Deal Of Medivation

Pfizer Inc. (NYSE: PFE) finalized a deal to acquire Medivation Inc (NASDAQ: MDVN) for $14 billion Monday morning. Goldman Sachs’ Jami Rubin has a 12-month price target of $37 for Pfizer.

Rubin stated that the acquisition would be consistent with Pfizer’s “stated interest in pursuing bolt-ons.” He added that the reported transaction price implied “2017 EV/S of ~11.9x on published GS estimates,” which compares with a 11x median value for SMID biotech deals for 2017 and a 16x mean value for the same.

Related Link: Recent Patent Ruling A Positive For Pfizer

Comparing To Other Purchases

The acquisition by AbbVie Inc (NYSE: ABBV) of Pharmacyclics, Inc. (NASDAQ: PCYC)'s Imbruvica for $21 billion represented a value of ~18x EV/NTM revenues, Rubin noted.

Imbruvica was partnered similar to Medivation’s Xtandi. Imbruvica’s peak sales were estimated by AbbVie at ~$8 billion, which is significantly higher than the estimate for Xtandi. The peak sales of Xtandi are estimated at $3.2 billion by Goldman Sachs’ Salveen Richter, who expects sales to grow through 2026, driven by earlier lines of therapy.

Rubin added, however, that the market was competitive with Johnson & Johnson (NYSE: JNJ)'s Zytiga as well as its pipeline asset ARN-509, which it acquired from Aragon Pharma.

“We note there is no value for breast cancer indication in our estimates, and there is room for potential upside if that is successful, and from better penetration from earlier lines of therapy. MDVN’s pipeline has a PARP-trapping cancer drug in Ph3, which we estimate will generate heavily risk adjusted peak sales of $328 million in 2028E,” the analyst mentioned.

Full ratings data available on Benzinga Pro.

Do you have ideas for articles/interviews you'd like to see more of on Benzinga? Please email feedback@benzinga.com with your best article ideas. One person will be randomly selected to win a $20 Amazon gift card!

Latest Ratings for PFE

DateFirmActionFromTo
Oct 2019ReinstatesNeutral
Aug 2019UpgradesSellHold
Aug 2019MaintainsEqual-Weight

View More Analyst Ratings for PFE
View the Latest Analyst Ratings

Posted-In: Analyst Color Biotech M&A News Health Care Price Target Analyst Ratings General Best of Benzinga

 

Related Articles (JNJ + ABBV)

View Comments and Join the Discussion!

Latest Ratings

StockFirmActionPT
AMRXRaymond JamesDowngrades
MDStifelUpgrades33.0
CATStandpoint ResearchDowngrades
LULUPiperJaffrayMaintains245.0
LULUWells FargoMaintains260.0
View the Latest Analytics Ratings
Don't Miss Any Updates!
News Directly in Your Inbox
Subscribe to:
Benzinga Premarket Activity
Get pre-market outlook, mid-day update and after-market roundup emails in your inbox.
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Daily Analyst Rating
A summary of each day’s top rating changes from sell-side analysts on the street.
Fintech Focus
A daily collection of all things fintech, interesting developments and market updates.
Thank You

Thank you for subscribing! If you have any questions feel free to call us at 1-877-440-ZING or email us at vipaccounts@benzinga.com

Steel Dynamics Has 33% Upside According To Citi

8 Stocks Moving In Monday's Pre-Market Session