Sanofi Moves to Replace Medivation Board
PARIS—French pharmaceutical company Sanofi SA Wednesday stepped up pressure on U.S. biotech firm Medivation Inc. to engage in takeover talks, calling a shareholder vote on whether to remove the entire board of the oncology drugmaker.
Sanofi, which has been in pursuit of Medivation for more than two months, said it had filed documents with the U.S. Securities and Exchange Commission, to open the way for a shareholder vote through written consent. Sanofi has proposed eight candidates to replace Medivation’s board of directors.
Medivation swiftly urged its stockholders to reject Sanofi’s maneuver, calling it “a tactic for the French firm to facilitate its substantially inadequate and opportunistically-timed proposal to acquire Medivation.” The company said it expected to “promptly” file its own consent revocation materials with the SEC.
Sanofi’s move is aimed at forcing Medivation’s board to come to the negotiating table. To prevent such a vote, the San Francisco-based firm could begin talks and open its books to Sanofi.
“If you do that, we would not need to proceed with a consent solicitation to remove and replace the Medivation directors,” Sanofi Chief Executive Olivier Brandicourt wrote in a letter dated May 25 to Medivation’s board. “We have been very clear that if you engage and provide information, we would be in a position to increase our offer,” he added.
Medivation could help Sanofi expand its new products portfolio and build a competitive position in a hotly tipped market in which it is still a small player. Sanofi said late last month it has made an unsolicited offer worth $9.3 billion for Medivation, which the firm promptly rejected, claiming Sanofi’s proposal undervalued the cancer-treatment company.
A provision of the law in Delaware, where Medivation is registered, allows shareholders to remove the board by written consent instead of calling a vote at the general assembly meeting. Sanofi has bought some Medivation shares, according to a person familiar with the matter.
“Despite multiple attempts, both prior to and following the public disclosure of Sanofi’s proposal, Medivation has thus far refused to engage with us regarding the merits of a value-creating transaction,” said Mr. Brandicourt.
“Unfortunately, this has left us with no choice but to commence a process to elect directors who are more open to supporting the best interests of Medivation shareholders regarding a potential transaction,” he added.
Sanofi’s offer is in line with the company’s stated strategy to refocus on fewer businesses, while broadening its reach. Last November, the Paris-based company said it would consider acquisitions in several sectors including oncology.
Medivation, a Nasdaq-listed company that focuses on hard-to-treat cancers, markets one prostate cancer therapy, called Xtandi, and has two additional oncology assets in clinical development.
Xtandi, which the company sells in partnership with Japan’s Astellas Pharma, garnered sales of $1.9 billion in 2015. According to analysts, this number could go much higher if the treatment is extended to patients in early- stage prostate cancer—it is today mostly used by late-stage cancer patients.
By Noemie BisserbeMay 25, 2016