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Medivation Misses Q1 Estimates As Sanofi Turns Up The Buyout Heat

Drugmaker Medivation ( MDVN ) missed Wall Street’s Q1 estimates and affirmed guidance late Thursday, as it fended off the increasingly hostile attentions of big pharma Sanofi ( SNY ). Medivation’s revenue rose 41% over the year-earlier quarter to $182.5 million, missing analysts’ consensus by $14 million, according to Thomson Reuters. Net income climbed 35% to 11 cents a share, badly missing consensus of 23 cents. Medivation nonetheless affirmed its full-year guidance, calling for $900 million to $970 million in revenue and $1.30 to $1.40 in EPS. Last year, it made $1.01 a share on $943 million in revenue. The company’s revenue comes from royalties on its prostate-cancer drug Xtandi from Japan’s Astellas, which markets the treatment. Medivation said that Xtandi brought in a total of $547 million in the quarter and should sell $1.425 billion to $1.525 billion in the full year. “Consistent with the first quarter of 2015, our first-quarter 2016 non-GAAP net income was impacted by several seasonal items, including the lower royalty rate on ex-U.S. Xtandi sales, the higher gross-to-net (i.e. rebating) accrual by Astellas on U.S. net sales, inventory drawdowns and the previously mentioned SG&A (sales, general & administrative) expenses related to our Astellas collaboration,” Medivation said in its earnings release. Medivation stock was down a fraction in after-hours trading, following its earnings release. Shares had risen a fraction in Thursday’s regular session to 59.22. Earlier Thursday, Medivation rejected a renewed $9.3 billion buyout offer from Sanofi, which Sanofi first made last week, and which Medivation rejected as undervalued. Sanofi CEO Olivier Brandicourt said in a letter to Medivation’s directors that “there is overwhelming support by your shareholders for a transaction.” He said he preferred to engage with Medivation’s management rather than go hostile, but “if you are not prepared to engage with us, we have no choice but to go directly to your shareholders. As you know, your shareholders have the ability to act at any time by written consent to remove and replace the board.” Medivation responded with a press release saying that there was nothing new in the letter and that the offer was still inadequate. Meanwhile, rumors continued to fly about other interested parties. AstraZeneca ( AZN ), Novartis ( NVS ) and Pfizer ( PFE ) had already been named by anonymous sources in previous weeks, but on Thursday Bloomberg reported that big biotech Amgen ( AMGN ) was also pondering a bid as it seeks a major acquisition to fill out its aging drug portfolio. Weeks of buyout speculation have driven the stock up more than 120% since its 30-month low, hit on Feb. 9, helping it to a strong IBD Composite Rating of 97 and the No. 50 spot on the IBD 50 list of top-performing stocks over the past 12 months.

Forget Allergan: Pfizer Has Its Sights On This Cancer Drugmaker

Less than a month after Pfizer ( PFE ) scrapped its $160 billion takeover of Allergan ( AGN ) over new anti-inversion rules, the drug giant is eyeing a possible bid for cancer biotech Medivation ( MDVN ), Reuters reported late Tuesday. Pfizer has approached Medivation for talks, according to Reuters. That could lead to an offer that would top a $9.3 billion bid for Medivation from France’s Sanofi ( SNY ). Medivation has rejected Sanofi’s $52.50-share bid as undervaluing the company, which is best known for prostate cancer drug Xtandi. Medivation shares have been trading well above that Sanofi offer price, closing down 0.8% to 57.52 on the stock market today. Medivation rose above 60 late Tuesday on the Pfizer report. Pfizer stock rose 2.7% to 33.70 during the regular session, breaking out of a consolidation, after the pharmaceutical king reported its best quarterly earnings per share gain in more than six years. Pfizer’s 32% EPS rise , better than expected, benefited from several one-time factors, including its recent Hospira takeover.

Pfizer Raises Guidance As Lead Drugs Drive Q1 Beat; Stock Up

Big pharma Pfizer ( PFE ) rose early Tuesday after it beat Wall Street’s Q1 estimates and raised its guidance, as the company moved on after it and Allergan ( AGN ) last month called off their mammoth $160 billion merger. Before the open, Pfizer said earnings, excluding one-time items, rose 32% over the year-earlier quarter to 67 cents a share, beating analysts’ consensus by 12 cents. Revenue increased 20% to $13 billion, beating consensus by about $1 billion. The accounting in Q1 was complicated by several factors, including the Sept. 3 acquisition of generic drugmaker Hospira. “If we look closely to year-over-year revenue growth, it is worth mentioning that out of $2.1 billion growth vs. Q1 ’15 (or $2.9 billion of operational growth or 26% year-over-year) favorable FX (foreign-exchange rates) contributed $729 million, and inclusion of Hospira contributed $1.2 billion,” wrote Evercore ISI analyst Mark Schoenebaum in an email to clients. “Excluding FX and Hospira, Pfizer stand-alone revenue increased by $1.7 billion (15% year-over-year growth). “There is also an additional factor favorably contributing to revenues — $900 million due to an additional five selling days this quarter. Excluding this impact, operational year-over-year revenue growth comes as 8%, which is still very good growth for Pfizer with its relatively mature portfolio of products.” Still, none of these factors except foreign exchange contributed to Pfizer’s full-year guidance increase. The company added $2 billion to its revenue guidance, now $51 billion to $53 billion, and 18 cents to its EPS range, now $2.38 to $2.48. Pfizer said that about $1 billion of the revenue hike and 12 cents of the EPS gain were due to improved operating performance. Pfizer stock was up 2.4% in early trading on the stock market today , near 33.60. A number of important drugs also beat consensus, including breast-cancer treatment Ibrance, epilepsy drug Lyrica, and pneumococcal vaccine Prevnar 13. Enbrel —  Amgen ‘s ( AMGN ) rheumatoid-arthritis drug, which Pfizer markets outside the U.S. — also beat expectations, as it did domestically for Amgen in its Q1 report last week. Nonetheless, investors’ minds may be elsewhere, wrote Credit Suisse analyst Vamil Divan in a research note. “We expect investors to view the quarter as a positive but maintain their focus on the strategic outlook of the company following the failed Allergan deal and ahead of a decision on a potential split of Pfizer ,” he wrote. Pfizer and Allergan, based in low-tax Ireland, called off their merger , which would have been the industry’s largest ever, after the U.S. Treasury unveiled new rules to curb tax inversion deals.