Shares of Pfizer (NYSE:PFE) have declined about 10% since August 1 along with the S&P 500 Healthcare sector down 6.5%. In late August, the companyannounced the acquisition of Medivation, Inc. (NASDAQ:MDVN) for $14 billion in cash and a month later, Pfizer made a surprise decision against splitting itself up, citing that it is best positioned to maximize future shareholder value creation in its current structure. By acquiring Medivation, Pfizer will be able to expand its oncology product portfolio with prostate cancer drug Xtandi (enzalutamide), approved by the U.S. Food and Drug Administration, or FDA, in August 2012, which could immediately impact top-line growth.
Medivation and Tokyo-based Astellas Pharma Inc. (OTCPK:ALPMF) (OTCPK:ALPMY) have been collaborating on a synthetic non-steroidal antiandrogen enzalutamide (MDV3100) drug since 2009, for which both companies equally share all U.S. developmental and commercialization costs and profits, while Astellas has responsibility for developing and commercializing MDV3100 outside the U.S. and pays Medivation tiered double-digit royalties on ex-U.S. sales. In the second quarter 2016, Medivationreported non-GAAP net income of $50 million on non-GAAP collaboration revenue of $206 million.
