MDVN Medivation, Inc. (MM)

By Noemie Bisserbe 

PARIS -- Sanofi SA said Friday it was ready to reach out directly to Medivation Inc. shareholders, after the U.S. biotech firm's board rejected its $9.3 billion offer, paving the way for a protracted takeover battle.

The Paris drugmaker, which has a record of hostile takeovers in the biotech sector, said it remained "committed" to the transaction and looked forward to "engaging directly with Medivation shareholders."

"Combining Sanofi and Medivation represents a compelling strategic and financial opportunity to drive immediate and certain value for Medivation's shareholders," Sanofi said.

Sanofi's offer of $52.50 a share was a 50% premium to Medivation's average share price for the two months before takeover speculation emerged. It is, however, lower than its current share price. Medivation's shares rose 0.1% to $56.20 in early trading in New York, while Sanofi shares closed down 5.4% at EUR72.11 ($82.56) in Paris.

Earlier Friday, Medivation Inc. dismissed Sanofi's offer, saying it was "substantially inadequate" and "undervalued" the firm's innovative cancer drugs.

Medivation, a Nasdaq-listed company that focuses on hard-to-treat cancers, markets one prostate-cancer therapy, called Xtandi, and has two other oncology assets in clinical development.

Xtandi, which the company sells in partnership with Japan's Astellas Pharma, posted 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.

A possible takeover of Medivation would allow Sanofi to significantly ramp up its drugs portfolio at a time when it is under pressure to launch new innovative medicines to make up for declining sales of its blockbuster Lantus insulin.

The French drugmaker said Friday that diabetes-drug sales, which account for about 20% of the company's revenue, fell 6% to EUR1.73 billion in the first-quarter, hurt by a 12% drop in Lantus sales.

Higher biotech revenue and emerging markets, however, helped push total net profit 6% higher to EUR1.09 billion for the three months through March from EUR1.02 billion a year earlier.

Genzyme, Sanofi's biotech unit, posted a 16% jump in revenue to EUR1.37 billion, boosted by sales of its multiple sclerosis treatment, Aubagio. Sales of consumer health-care products fell 8% to EUR905 million while vaccines sales increased 5% to EUR625 million.

Business net income, the company's term for adjusted income excluding the impact of acquisitions and divestments, declined 0.2% to EUR1.72 billion, above analysts' expectations of EUR1.69 billion. Sanofi's total sales fell 3% to EUR7.78 billion.

Sanofi has said it expected its business earnings per share to remain "broadly stable" in 2016 at constant exchange rates, "barring unforeseen major adverse events."

Write to Noemie Bisserbe at noemie.bisserbe@wsj.com

(END) Dow Jones Newswires

April 29, 2016 13:51 ET (17:51 GMT)

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