Sanofi Moves to Replace Medivation's Board -- WSJ
May 26 2016 - 2:03AM
Dow Jones News
By Noemie Bisserbe
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.
Write to Noemie Bisserbe at noemie.bisserbe@wsj.com
(END) Dow Jones Newswires
May 26, 2016 02:48 ET (06:48 GMT)
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