Details Medivation’s Track Record of
Creating Enormous Stockholder Value
Highlights the Potential of Medivation’s
Blockbuster XTANDI Franchise and Innovative Late Stage Pipeline to
Create Significant Additional Value
Urges Stockholders to Reject Sanofi’s
Attempts to Facilitate a Substantially Inadequate Proposal
Medivation, Inc. (NASDAQ:MDVN) today announced that it has filed
with the Securities and Exchange Commission (“SEC”) a definitive
Consent Revocation Statement. Medivation stockholders of record as
of June 1, 2016 are eligible to submit consents or consent
revocations by August 2, 2016.
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In conjunction with the filing, Medivation today mailed the
below letter to its stockholders detailing Medivation’s track
record of creating enormous stockholder value and highlighting the
potential of Medivation’s blockbuster XTANDI franchise and its
innovative late stage oncology pipeline to create significant
additional value. The letter also urges stockholders to reject the
coercive tactics employed by Sanofi to acquire the company at an
opportunistic and grossly inadequate price.
Medivation urges stockholders to reject Sanofi’s solicitation
efforts. Stockholders may do this in one of three ways:
1. Mark the “YES, REVOKE MY CONSENT” boxes on the GREEN
Consent Revocation Card 2. Discard and do not submit Sanofi’s WHITE
consent card, or 3. If you have already signed and returned
Sanofi’s WHITE consent card, complete, sign, date and mail the
GREEN Consent Revocation Card as soon as possible.
The letter to stockholders, as well as an accompanying
infographic, can be viewed at the recently launched
www.MedivationForStockholders.com. The website will be updated as
additional information becomes available. The Consent Revocation
Statement and letter to stockholders can also be viewed on the
SEC’s website, www.sec.gov.
The full text of the letter is as follows:
June 13, 2016
Dear Medivation Stockholder,
Medivation has grown rapidly from a small, development-stage
biotechnology company to a uniquely positioned, commercial-stage
oncology company, due to a combination of scientific talent, the
insightful and efficient development of highly differentiated
products, and an intense focus on creating stockholder value. We
believe these same factors that have enabled us to create such a
valuable company make our future incredibly bright.
We are on the cusp of creating significant additional value
for our stockholders: We continue to grow XTANDI; we are
advancing our late stage oncology product candidate, talazoparib,
into multiple potential registrational trials by year end; and we
continue to develop the Medivation pipeline, including pidilizumab,
another late stage oncology product candidate.
This is why we object so strongly to Sanofi’s attempt, through
coercive tactics, to acquire Medivation at an opportunistic, low
price. We urge you to resist Sanofi’s attempt to capture
for itself value that rightly belongs to you, the Medivation
stockholders, by rejecting Sanofi’s attempt to replace your Board
with its own hand-picked slate of director nominees.
Medivation has a track record of creating enormous
stockholder value. We have built XTANDI into the best-selling
drug for prostate cancer in the U.S. – and the franchise continues
to grow. Due to XTANDI’s blockbuster status, Medivation achieved
profitability within only seven quarters from commercial launch,
one of the fastest paths to profitability in the biotechnology
industry. We have taken a disciplined approach to investment, and
have been careful about diluting our stockholders. Medivation has
raised total capital of only $440 million since inception and has
generated superb total stockholder returns (TSR) – 124% over the
past three years, 957% over the past five years, and a remarkable
15,141% since our first financing as a public company1.
Accordingly, we have significantly outperformed our peers, the
NASDAQ Biotechnology Index (NBI) and the S&P 500 over the
short- and long-term. We believe our accomplishments establish the
foundation for an extremely bright future.
In light of this, the timing of Sanofi’s approach is highly
opportunistic. Sanofi approached Medivation just after a period
of significant dislocation in the biotechnology market. In
addition, Sanofi’s hostile approach is timed just as Medivation is
nearing several significant value drivers for our XTANDI franchise
and our late-stage pipeline that have the potential to create
substantial value for our stockholders. Medivation’s stockholders,
not Sanofi, deserve to benefit from the value of these important
events.
In its effort to address the weakness in its own oncology
portfolio, Sanofi is employing coercive tactics aimed at acquiring
your company at an opportunistic, low price. We urge you to
reject Sanofi’s efforts and its proposal, which:
1.
Does not reflect Medivation’s unique franchise value as one
of the few profitable, commercial-stage, rapidly growing oncology
companies;
2.
Substantially undervalues Medivation’s blockbuster drug XTANDI and its leading
oncology franchise;
3.
Denies Medivation’s stockholders the value
of Medivation’s wholly-owned, innovative
late-stage pipeline; and
4.
Is designed to benefit Sanofi stockholders – not
Medivation stockholders.
Sanofi is asking Medivation stockholders to voluntarily
transfer to a hostile acquirer the considerable near- and long-term
value potential of XTANDI and Medivation’s pipeline at an
opportunistic, inferior price by installing a slate of hand-picked
Sanofi nominees with minimal biotechnology industry
experience.
We urge you to reject Sanofi’s solicitation efforts. You may
do so in any one of three ways:
1.
Mark the “YES, REVOKE MY CONSENT” boxes
on the enclosed GREEN Consent Revocation Card and return to the
address below as soon as possible, or
2.
Discard and do not submit Sanofi’s
WHITE consent card, or
3.
If you have already signed and returned
Sanofi’s WHITE consent card, complete, sign, date and mail the
GREEN Consent Revocation Card as soon as possible to:
MacKenzie Partners, Inc.
105 Madison Avenue
New York, NY 10016
Fax: (646) 439-9201 (Please fax both
sides GREEN Consent Revocation Card and confirm
receipt at (800) 322-2885 (toll free)
or at (212) 929-5500 (call collect))
MEDIVATION’S UNIQUE FRANCHISE:VALUE
FAR GREATER THAN SANOFI’S SUBSTANTIALLY INADEQUATE PROPOSAL
We clearly understand Sanofi’s interest in Medivation:
commercial stage oncology companies with meaningful ownership of a
blockbuster drug are rare. Medivation is unique given the
significant further growth potential in XTANDI, our two highly
promising and wholly owned late stage oncology products and our
increasing profitability. We are confident in our ability to
continue to build on this unique franchise to deliver clear benefit
to patients and extraordinary value to our stockholders.
XTANDI: A BLOCKBUSTER FRANCHISE WITH AN
EXCITING EMBEDDED PIPELINE
Medivation has built XTANDI into a blockbuster, multi-billion
dollar oncology franchise. XTANDI is one of the most successful
oncology product launches in history, achieving worldwide annual
net sales of $2.2 billion on a run rate basis, less than four years
after its initial approval.
XTANDI’s momentum was recently demonstrated by our strong first
quarter. For the first time, XTANDI achieved greater than 50% share
of the novel hormonal therapy prostate cancer market in the United
States, surpassing Johnson & Johnson’s Zytiga (abiraterone),
despite launching 16 months later.
XTANDI’s newly established leadership position and the continued
growth of this franchise enabled us to reaffirm full-year 2016
revenue guidance of $900 to $970 million, strengthening our
conviction that Sanofi’s proposal substantially undervalues the
company.
XTANDI also has a number of near- and mid-term catalysts that
we believe will be significant value drivers. Medivation is on
the threshold of a substantial increase in XTANDI’s commercial
potential. We believe that our increased focus on urologists will
greatly expand the number of patients we reach, because urologists
treat a significantly larger patient population of men with
metastatic castration-resistant prostate cancer than do
oncologists. In addition, urologists treat patients who tend to
have less advanced prostate cancer than oncologists, which should
greatly increase the time these patients remain on XTANDI, which we
refer to as the duration of therapy. Further, the October 22,
2016 PDUFA date for the TERRAIN/STRIVE studies is fast
approaching. We expect that FDA approval to update the label to
include data from these studies would result in a significantly
greater pace of adoption of XTANDI by urologists. The PLATO
study will read out in the second half of 2016, a study which
could demonstrate that continuing XTANDI use through disease
progression provides even further benefits to patients, with
potentially significant implications on the duration of the
product’s use.
Beyond urology, Medivation is pursuing clinical development of
XTANDI across three major subtypes of breast cancer, a new and
significant market opportunity for XTANDI. We expect to report
top-line Phase 2 data in patients with ER/PR+ breast cancer, which
represents 50% of all breast cancers, in the second half of
2016.
According to EvaluatePharma, XTANDI is expected to move from
being the 8th largest oncology drug by sales in 2015 to the
4th largest in 20212 – creating
significant additional value for our stockholders.
A WHOLLY-OWNED, INNOVATIVE LATE-STAGE
PIPELINE WITH BLOCKBUSTER POTENTIAL
Sanofi’s proposal would also deny Medivation’s stockholders
the value of the company’s wholly-owned, innovative late-stage
pipeline. We believe the pipeline has blockbuster potential
and will drive significant future growth and stockholder
returns.
Talazoparib has significantly higher potency in vitro relative
to other drugs in its class, and as a result, we believe it has the
potential to be best of breed. Clinical data also support
talazoparib’s broad potential in multiple tumor types. Top-line
data from the Phase 3 EMBRACA trial in germline BRCA mutated
advanced breast cancer is expected in the first half of 2017. We
are preparing to start potential registrational trials – many of
which will be the first initiated for a PARP inhibitor – for
talazoparib in multiple other tumor types by the end of 2016.
Additionally, pidilizumab has the potential to be a novel
immuno-oncology candidate and has demonstrated clinical evidence
and a strong safety profile in several hematologic
malignancies.
Despite the significant potential in these two assets, Sanofi is
trying to “talk down” our pipeline, particularly talazoparib, which
we believe is differentiated and has the potential to exceed XTANDI
sales.
We believe Sanofi’s lack of insight and success in oncology
explains its reluctance or inability to ascribe appropriate value
to our pipeline. Specifically:
- Sales from Sanofi’s oncology segment
declined from €2.6 billion to €1.5 billion, or 43%, between 2011
and 2015;
- Sanofi’s last two oncology launches in
the U.S., Jevtana and Zaltrap, have had lackluster results, and
Jevtana has actually declined in sales following its peak three
months after launch; and
- In 2007, Sanofi acquired a company
called BiPar for a drug which Sanofi characterized as a potentially
best-in-class PARP inhibitor. However, BiPar's compound failed in
two phase 3 studies.
Medivation's talazoparib is a PARP inhibitor. The National
Cancer Institute has published studies that have confirmed it as
the most potent clinical stage PARP inhibitor tested to date.3 We
urge you to consider Sanofi's motives as they seek to minimize
publicly the attractiveness of our compound in an area they sought
to develop but failed.
Our pipeline is progressing toward seven regulatory approvals
between now and 2020 and targets a potential total addressable
market of over $35 billion. Importantly, we believe the full
value of these assets is not yet reflected in Medivation’s current
stock price, let alone Sanofi’s opportunistic proposal.
More information on Medivation’s innovative medical science and
pipeline prospects can be found in the enclosed graphical
supplement.
SANOFI’S OPPORTUNISTIC AND INFERIOR
PROPOSAL
We are pleased that our stockholders have been essentially
unanimous in the view that Sanofi’s proposal greatly undervalues
Medivation, and we are also pleased that the vast bulk of our
stockholders appear to have maintained their investments in our
company since Sanofi announced its proposal.
Although Sanofi claims that its proposal represents a 50%
premium to an “unaffected” share price, it carefully timed the
public launch of their opportunistic proposal to coincide with a
period of significant dislocation in the biotechnology market and
to precede Medivation’s key potential value-creating milestones.
Sanofi’s proposal was publicized when the NBI was off nearly 30%
from its July 2015 high and Medivation was trading at its lowest
levels in two years. In fact, there had not been a lower two-month
volume weighted average price for Medivation’s shares within the
last two years.
Prior to responding to Sanofi’s proposal, our Board carefully
analyzed our anticipated future value creation. In this process,
our Board considered, among other things, a revenue target of $2.5
billion for 2020, a compound annual growth rate (CAGR) of 29%
compared to 2015. We are confident this growth will result in
substantial risk-adjusted returns for our stockholders.
Precedent acquisitions in the biopharmaceutical sector also
highlight the inferiority of Sanofi’s proposal. The median two-year
forward revenue multiple of high growth biotechnology and oncology
transactions in the last five years is 10.4x4 vs. the 6.3x5
multiple that Sanofi’s $8.8 billion proposal implies for
Medivation. Notably, when Pharmacyclics – in our view the most
relevant high-growth oncology peer – was sold, the acquirer paid a
two-year forward revenue multiple of 11.5x.
SANOFI’S COERCIVE TACTICS
In an attempt to force its grossly inadequate proposal on
Medivation stockholders, Sanofi has engaged in a series of coercive
actions and is now seeking to replace your highly qualified and
knowledgeable Board with hand-picked nominees who have minimal
biopharmaceutical expertise and who are being paid by Sanofi.
Through its consent solicitation, Sanofi is attempting to pressure
Medivation’s stockholders into making a rushed judgment about the
future of the company when key value catalysts are merely months
away. We believe it makes no sense to place the responsibility for
your investment in Medivation in the hands of a Board of Directors
selected by a hostile bidder whose interests are diametrically
opposed to yours.
You should also be aware of Sanofi’s other coercive tactics:
- Sanofi has cynically (but
unsuccessfully) attempted to confuse investors by tying the alleged
“premium” of its opportunistically-timed proposal to a carefully
selected (and abnormal) 60-day period coinciding with a low point
in the market;
- Sanofi has avoided any reference to the
low implied revenue multiple reflected in its proposal, whereas the
appropriate comparable trading and transaction multiples for
Medivation would result in vastly higher values; and
- Sanofi has been “talking down”
Medivation’s pipeline. We believe this is an effort by Sanofi to
divert attention from its poor track record in oncology and may
explain its unwillingness or inability to ascribe appropriate value
to the company’s pipeline.
Medivation’s Board consists of seasoned executives with
substantial expertise in the biopharma sector and experience in
M&A transactions. Your Directors – who have a proven history of
creating value and acting in stockholders’ best interests –
understand their fiduciary duties and the value of Medivation, and
will act to deliver to Medivation stockholders the value to which
you are entitled.
Medivation has established a world-class oncology franchise
and developed a unique and highly-promising late stage
pipeline. Do not make the wrong choice by supporting
Sanofi’s hand-picked slate and its grossly inferior proposal.
YOUR BOARD URGES YOU TO REJECT SANOFI’S SOLICITATION EFFORTS. YOU
MAY DO THIS IN ANY ONE OF THREE WAYS:
4.
Mark the “YES, REVOKE MY CONSENT”
boxes on the enclosed GREEN Consent Revocation Card and return to
MacKenzie Partners at the address below as soon as possible, or
5. Discard and do not submit Sanofi’s WHITE consent card, or 6. If
you have already signed and returned Sanofi’s WHITE consent card,
complete, sign, date and mail the GREEN Consent Revocation Card as
soon as possible.
On behalf of Medivation’s Board of Directors, we thank you for
your continued support, and we look forward to continuing to
deliver superior value for our stockholders.
Regards,
Kim Blickenstaff David Hung, M.D. Chairman of the
Board of Directors President & CEO Medivation, Inc. Medivation,
Inc.
1 TSR data as of May 4, 2016.
2 Source: WW Product Sales, EvaluatePharma accessed April
2016
3 Murai J et al. Mol Cancer Ther. 2014;13:433-443;.
4 Selected high growth biotechnology and oncology transactions
with analyst consensus 4-year revenue CAGR greater than 20% include
Pharmacyclics/AbbVie, InterMune/Roche, Algeta/Bayer, Onyx/Amgen and
Amylin/BMS.
5 Firm value based on Sanofi's $52.50 per share proposal, 173.4
million fully diluted shares (164.6 million common shares
outstanding (per latest 10-Q) and 8.8 million shares from options
and warrants (per latest Proxy) calculated using the treasury
method for dilution) and $317 million in cash. Multiple based on
2018E analyst consensus revenue of $1.4bn for Medivation.
If you have any questions, please call
MacKenzie Partners at the phone numbers listed below.
MacKenzie Partners, Inc.
105 Madison AvenueNew York, NY 10016
proxy@mackenziepartners.com
(212) 929-5500 (Call Collect)OrTOLL-FREE (800)
322-2885
About Medivation, Inc.
Medivation, Inc. is a biopharmaceutical company focused on the
development and commercialization of medically innovative therapies
to treat serious diseases for which there are limited treatment
options. Medivation aims to transform the treatment of these
diseases and offer hope to critically ill patients and their
families. For more information, please visit us at
http://www.medivation.com.
Forward-Looking Statements
Forward-looking statements are made throughout this document.
The forward-looking statements in this document include, but are
not limited to, statements regarding Medivation’s strategy, plans,
initiatives and anticipated financial performance, expected
clinical and regulatory developments and the potential for XTANDI
and Medivation’s pipeline assets and how they will drive growth for
Medivation, and are made pursuant to the safe harbor provisions of
the Private Securities Litigation Reform Act of 1995. These
forward-looking statements may also be identified by words such as
“expect,” believe,” “should,” “potential,” “suggest” or similar
expressions. All forward-looking statements are subject to risks
and uncertainties which may cause actual results to differ
significantly from those expressed or implied by such
forward-looking statements. Factors that could cause or contribute
to such differences include, but are not limited to, general
economic conditions, Medivation’s dependence on its collaboration
relationship with Astellas to support the continued
commercialization of XTANDI® (enzalutamide) capsules despite
increasing competitive, reimbursement and economic challenges;
risks that unexpected adverse events could impact sales of XTANDI;
the inherent uncertainty associated with the regulatory approval
process; and other risks detailed in Medivation’s filings with the
Securities and Exchange Commission, or SEC, including its annual
report on Form 10-K for the year ended December 31, 2015, which was
filed on February 26, 2016, and its latest Quarterly Report on Form
10-Q. You are cautioned not to place undue reliance on the
forward-looking statements, which speak only as of the date of this
document. Medivation disclaims any obligation or undertaking to
update, supplement or revise any forward-looking statements
contained in this document.
Additional Information
This document is neither an offer to buy nor a solicitation of
an offer to sell any securities of Medivation. No tender offer for
the shares of Medivation has commenced at this time. In connection
with its proposed transaction, Sanofi has filed a consent
solicitation statement with the SEC and may file tender offer or
other documents with the SEC. Medivation has filed with the SEC a
definitive consent revocation statement together with a GREEN
consent revocation card. Stockholders may obtain the consent
revocation statement (including any amendments or supplements
thereto) and any related materials, free of charge, at the website
of the SEC at www.sec.gov, and from any solicitation agent named in
the consent revocation materials. Stockholders may also obtain, at
no charge, any such documents filed with or furnished to the SEC by
Medivation under the “SEC Filings” tab in the “Investor Relations”
section of Medivation’s website at www.medivation.com. Stockholders
are advised to read the consent revocation statement (including any
amendments or supplements thereto), as well as any other documents
relating to the consent solicitation that are filed with the SEC,
carefully and in their entirety prior to making any decisions
because these documents contain important information.
Certain Information Regarding Participants
Medivation, its directors and certain of its executive officers
may be deemed to be participants in the solicitation of revocations
in connection with Sanofi’s consent solicitation. Information
regarding the identity of these participants and their direct or
indirect interests, by shareholdings or otherwise, is set forth in
the definitive consent revocation statement filed with the SEC in
connection with the consent solicitation. Information regarding the
names of Medivation’s directors and executive officers and their
respective interests in Medivation by security holdings or
otherwise is also set forth in Medivation’s proxy statement for the
2016 Annual Meeting of Stockholders, filed with the SEC on April
28, 2016. Additional information can also be found in Medivation’s
Annual Report on Form 10-K for the year ended December 31, 2015,
filed with the SEC on February 26, 2016, and in Medivation’s latest
Quarterly Report on Form 10-Q.
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version on businesswire.com: http://www.businesswire.com/news/home/20160613005721/en/
Investors:Medivation, Inc.Anne Bowdidge, 650-218-6900orMacKenzie
Partners, Inc.Dan Burch/Bob Marese212-929-5500orMedia:Sard
Verbinnen & CoRon Low/David Isaacs, 415-618-8750orMichael
Henson, +44 (0) 20 3178 8914
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