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Shares of drugmaker Medivation ( MDVN ) soared more than 20% Thursday to a nearly three-month high on rumors that the company is fending off suitors, leading Wall Street to speculate on how much the company might go for. Late Wednesday, Bloomberg — citing anonymous sources — reported that Medivation hired bankers to defend against takeover interest. Reuters, also citing anonymous sources, said that Medivation had been working with JPMorgan ( JPM ). Medivation stock was up 23% in afternoon trading on the stock market today , near 46. Bloomberg mentioned Sanofi ( SNY ) as a possible buyer. Credit Suisse analyst Vamil Divan wrote in a research note that Sanofi made sense as a buyer, since Medivation’s prostate-cancer treatment Xtandi and its pipeline of other cancer treatments would fit Sanofi’s existing cancer franchise. “We model Medivation worth $55 (per share) to Sanofi ($65 with Sanofi’s 23% tax rate),” Divan wrote. “We see Sanofi’s Taxotere sales force potentially increasing Medivation sales 2% and assume a 20% reduction in Medivation’s R&D and 40% reduction in Medivation’s SG&A (sales, general & administrative expenses). We note a 12% tax-rate benefit over Medivation (23% vs 35%).” Divan added that the greatest synergies would actually come with AstraZeneca ( AZN ), given its market-leading sales force for its prostate-cancer drug Casodex. He estimated that Medivation would be worth $59 a share to AstraZeneca, or $75 with its 16% tax rate. Roche ( RHHBY ), which has a cancer franchise but not in prostate, would do well to pay $54 to $60 a share. Jefferies analyst Biren Amin made a similar calculation and came up with a $51-a-share price for Sanofi, and the same for a hypothetical buyout by Bayer ( BAYRY ). He also considered big biotech Amgen ( AMGN ) as a possible buyer, calculating a $54-a-share value to that company. However, Amin also wrote that if the companies adopt a “rose-colored glasses” view of Medivation’s potential, with U.S. Xtandi sales peaking at $5.5 billion, it could be worth $71 a share to Sanofi and Bayer, and $75 to Amgen. Shares of Amgen and Bayer were up a fraction Thursday afternoon, while Sanofi stock was down 1%. Scalper1 News
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