Pfizer To Acquire Medivation

NEW YORK & SAN FRANCISCO–(BUSINESS WIRE)– Pfizer Inc. (NYSE:PFE) and Medivation, Inc. (NASDAQ:MDVN) today
announced that they have entered into a definitive merger agreement
under which Pfizer will acquire Medivation, a biopharmaceutical company
focused on developing and commercializing small molecules for oncology,
for $81.50 a share in cash for a total enterprise value of approximately
$14 billion. The Boards of Directors of both companies have unanimously
approved the merger, which is expected to be immediately
accretive to Pfizer’s Adjusted Diluted EPS upon closing,
approximately $0.05 accretive in the first full year after close with
additional accretion and growth anticipated thereafter. Pfizer does not
expect the transaction to impact its current 2016 financial guidance.

“The proposed acquisition of Medivation is expected to immediately
accelerate revenue growth and drive overall earnings growth potential
for Pfizer,” said Ian Read, chairman and chief executive officer,
Pfizer. “The addition of Medivation will strengthen Pfizer’s Innovative
Health business and accelerate its pathway to a leadership position in
oncology, one of our key focus areas, which we believe will drive
greater growth and scale of that business over the long-term. This
transaction is another example of how we are effectively deploying our
capital to generate attractive returns and create shareholder value.”

Medivation’s portfolio includes XTANDI^® (enzalutamide), an
androgen receptor inhibitor that blocks multiple steps in the androgen
receptor signaling pathway within the tumor cell. XTANDI is the leading
novel hormone therapy in the United States today and generated
approximately $2.2 billion in worldwide net sales over the past four
quarters, as recorded by Astellas Pharma Inc., with whom Medivation
entered an agreement in 2009 to develop XTANDI globally and
commercialize jointly in the U.S. Since its approval for advanced
metastatic prostate cancer by the U.S. Food and Drug Administration in
2012, XTANDI has treated 64,000 men to date in the U.S. alone.
Medivation and Astellas have built a robust development program for
XTANDI, including two Phase 3 studies in non-metastatic prostate cancer
and another Phase 3 study in hormone-sensitive prostate cancer. It is
also being further developed in Phase 2 studies for the potential
treatment of advanced breast cancer and hepatocellular carcinoma.

In addition, Medivation has a promising, wholly-owned, late-stage
oncology pipeline, which includes two development-stage oncology assets,
talazoparib and pidilizumab. Talazoparib, currently in a Phase 3 study
for the treatment of BRCA-mutated breast cancer, has the potential to be
a highly potent PARP inhibitor and could be efficacious across several
additional tumors. Pidilizumab is an immuno-oncology (IO) asset being
developed for diffuse large B-cell lymphoma and other hematologic
malignancies and has the potential to be combined with IO therapies in
Pfizer’s portfolio.

“We believe the combination with Pfizer is the right next step in our
growth trajectory and is a testament to the passion and dedication by
which the Medivation team has delivered on our mission to profoundly
transform patients’ lives through medically innovative therapies,” said
David Hung, M.D., founder, president and CEO of Medivation. “This
compelling transaction will deliver significant and immediate value to
our stockholders and provides new opportunities for our employees as
part of a larger company. We believe that Pfizer is the ideal partner to
extend the reach of our blockbuster XTANDI franchise and take our
promising, late-stage assets – talazoparib and pidiluzimab – to their
next stages of development so that they can be made available to
patients as quickly as possible.”

“The proposed acquisition of Medivation will build upon Pfizer’s success
with our IBRANCE^® (palbociclib) launch in HR+/HER2-
metastatic breast cancer and with our strong immuno-oncology portfolio,
and will transform Pfizer into a leading oncology company,” said Albert
Bourla, group president, Pfizer Innovative Health. “IBRANCE and XTANDI
are anchor brands in breast and prostate cancer respectively, giving
Pfizer leadership in two hormone-driven cancers. Similar to IBRANCE in
the breast cancer setting, XTANDI is being explored for its potential to
move from metastatic prostate cancer to treat earlier stages of
non-metastatic prostate cancer. In addition, Medivation’s portfolio
within prostate cancer and across diverse tumors will complement
Pfizer’s broad IO portfolio. Finally, Medivation adds commercial scale
to better compete with other top tier oncology companies in advance of
the potential emergence of Pfizer’s IO pipeline expected in the next few
years. Together, we believe Pfizer and Medivation can bring the full
force of our combined research and resources to combat two of the most
common cancers, as well as speed cures and make accessible breakthrough
medicines to patients, redefining life with cancer.”

Cancer remains the second leading cause of death in the U.S. and a “Top
10” killer worldwide. According to the American Cancer Society, breast
cancer and prostate cancer are among the top three cancers by annual
incidence in the U.S. There are several parallels between breast and
prostate cancer, including the incidence of prostate cancer in the U.S.,
which is similar to that of breast cancer with approximately 280,000
cases per year.

Pfizer expects to finance the transaction with existing cash.

Under the terms of the merger agreement, a subsidiary of Pfizer will
commence a cash tender offer to purchase all of the outstanding shares
of Medivation common stock for $81.50 per share, net to the seller in
cash, without interest, subject to any required withholding of taxes.
The closing of the tender offer is subject to customary closing
conditions, including U.S. antitrust clearance and the tender of a
majority of the outstanding shares of Medivation common stock. The
merger agreement contemplates that Pfizer will acquire any shares of
Medivation that are not tendered into the offer through a second-step
merger, which will be completed promptly following the closing of the
tender offer. Pfizer expects to complete the acquisition in the Third-
or Fourth-Quarter 2016.

Pfizer’s financial advisors for the transaction were Guggenheim
Securities and Centerview Partners, with Ropes & Gray LLP acting as its
legal advisor. J.P. Morgan Securities and Evercore served as
Medivation’s financial advisors, while Cooley LLP and Wachtell, Lipton,
Rosen & Katz served as its legal advisors.

Conference Call

Pfizer Inc. invites investors and the general public to view and listen
to a webcast of a live conference call with investment analysts at 9:00
a.m. EDT on Monday, August 22, 2016.

To view and listen to the webcast visit our web site at www.pfizer.com
and click on the “Pfizer Analyst and Investor Call to Discuss Proposed
Acquisition of Medivation” link in the For Investors section located on
the lower right-hand corner of that page, or directly at https://www.webcaster4.com/Webcast/Page/748/16852.
Information on accessing and pre-registering for the webcast will be
available at www.pfizer.com
beginning today. Participants are advised to pre-register in advance of
the conference call.

You can also listen to the conference call by dialing either (866)
662-3198 in the United States and Canada or (503) 343-6044 outside of
the United States and Canada. The password is “Pfizer Analyst Call”.
Please join the call five minutes prior to the start time to avoid
operator hold times.

About Pfizer:

At Pfizer, we apply science and our global resources to bring therapies
to people that extend and significantly improve their lives. We strive
to set the standard for quality, safety and value in the discovery,
development and manufacture of health care products. Our global
portfolio includes medicines and vaccines as well as many of the world’s
best-known consumer health care products. Every day, Pfizer colleagues
work across developed and emerging markets to advance wellness,
prevention, treatments and cures that challenge the most feared diseases
of our time. Consistent with our responsibility as one of the world’s
premier innovative biopharmaceutical companies, we collaborate with
health care providers, governments and local communities to support and
expand access to reliable, affordable health care around the world. For
more than 150 years, Pfizer has worked to make a difference for all who
rely on us. For more information, please visit us at www.pfizer.com.
In addition, to learn more, follow us on Twitter at @Pfizer and
@Pfizer_News, LinkedIn, YouTube and like us on Facebook at
Facebook.com/Pfizer.

About Medivation:

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.

DISCLOSURE NOTICE: This release, and statements on the
accompanying call, contain forward-looking information related to
Pfizer, Medivation and the proposed acquisition of Medivation by Pfizer
that involves substantial risks and uncertainties that could cause
actual results to differ materially from those expressed or implied by
such statements. Forward-looking statements in this release and the
accompanying call include, among other things, statements about the
potential benefits of the proposed acquisition, anticipated earnings
accretion and growth rates, Pfizer’s and Medivation’s plans, objectives,
expectations and intentions, the financial condition, results of
operations and business of Pfizer and Medivation, XTANDI and
Medivation’s other pipeline assets, IBRANCE (palbociclib), and the
anticipated timing of closing of the acquisition. Risks and
uncertainties include, among other things, risks related to the
satisfaction of the conditions to closing the acquisition (including the
failure to obtain necessary regulatory approvals) in the anticipated
timeframe or at all, including uncertainties as to how many of
Medivation’s stockholders will tender their shares in the tender offer
and the possibility that the acquisition does not close; risks related
to the ability to realize the anticipated benefits of the acquisition,
including the possibility that the expected benefits from the proposed
acquisition will not be realized or will not be realized within the
expected time period; the risk that the businesses will not be
integrated successfully; disruption from the transaction making it more
difficult to maintain business and operational relationships; negative
effects of this announcement or the consummation of the proposed
acquisition on the market price of Pfizer’s common stock and on Pfizer’s
operating results; significant transaction costs; unknown liabilities;
the risk of litigation and/or regulatory actions related to the proposed
acquisition; other business effects, including the effects of industry,
market, economic, political or regulatory conditions; future exchange
and interest rates; changes in tax and other laws, regulations, rates
and policies; future business combinations or disposals; the
uncertainties inherent in research and development, including the
ability to sustain and increase the rate of growth in revenues for
XTANDI despite increasing competitive, reimbursement and economic
challenges; Medivation’s dependence on the efforts and funding by
Astellas Pharma Inc. for the development, manufacturing and
commercialization of XTANDI; the ability to meet anticipated trial
commencement and completion dates and regulatory submission dates, as
well as the possibility of unfavorable clinical trial results, including
unfavorable new clinical data and additional analyses of existing
clinical data; whether and when any drug applications may be filed in
any jurisdictions for any additional indications for IBRANCE, XTANDI or
for Medivation’s other pipeline assets; whether and when regulatory
authorities may approve any such applications, which will depend on its
assessment of the benefit-risk profile suggested by the totality of the
efficacy and safety information submitted; decisions by regulatory
authorities regarding labeling and other matters that could affect the
availability or commercial potential of IBRANCE, XTANDI and Medivation’s
other pipeline assets; and competitive developments.

A further description of risks and uncertainties relating to Pfizer
and Medivation can be found in their respective Annual Reports on Form
10-K for the fiscal year ended December 31, 2015 and in their subsequent
Quarterly Reports on Form 10-Q and Current Reports on Form 8-K, all of
which are filed with the U.S. Securities and Exchange Commission (the
“SEC”) and available at www.sec.gov.

The information contained in this release is as of August 22, 2016.
Neither Pfizer nor Medivation assumes any obligation to update
forward-looking statements contained in this release as the result of
new information or future events or developments.

Pfizer calculates projections regarding the expected accretive impact
of the potential acquisition based on internal forecasts of Adjusted
Diluted Earnings Per Share (Adjusted Diluted EPS), which forecasts are
non-Generally Accepted Accounting Principles (GAAP) financial measures
derived by excluding certain amounts that would be included in GAAP
calculations. These accretion projections should not be considered a
substitute for GAAP measures. The determinations of the amounts that are
excluded from the accretion calculations are a matter of management
judgment and depend upon, among other factors, the nature of the
underlying expense or income amounts. Pfizer is unable to present
quantitative reconciliations because management cannot reasonably
predict with sufficient reliability all of the necessary components of
the comparable GAAP measure. Pfizer has excluded from the accretion
calculations the impact of purchase accounting adjustments,
acquisition-related costs, discontinued operations and certain
significant items. Such items can have a substantial impact on GAAP
measures of financial performance. For more information on the
Adjusted Diluted EPS measure see Pfizer’s 2015 Financial Report, which
was filed as exhibit 13 to Pfizer’s Annual Report on Form 10-K for the
fiscal year ended December 31, 2015 and Pfizer’s Quarterly Report on
Form 10-Q for the quarterly period ended July 3, 2016.

Additional Information and Where to Find It

The tender offer referenced in this press release has not yet commenced.
This announcement is for informational purposes only and is neither an
offer to purchase nor a solicitation of an offer to sell securities, nor
is it a substitute for the tender offer materials that Pfizer and its
acquisition subsidiary will file with the SEC. The solicitation and
offer to buy Medivation stock will only be made pursuant to an Offer to
Purchase and related tender offer materials. At the time the tender
offer is commenced, Pfizer and its acquisition subsidiary will file a
tender offer statement on Schedule TO and thereafter Medivation will
file a Solicitation/Recommendation Statement on Schedule 14D-9 with the
SEC with respect to the tender offer. THE TENDER OFFER MATERIALS
(INCLUDING AN OFFER TO PURCHASE, A RELATED LETTER OF TRANSMITTAL AND
CERTAIN OTHER TENDER OFFER DOCUMENTS) AND THE
SOLICITATION/RECOMMENDATION STATEMENT ON SCHEDULE 14D-9 WILL CONTAIN
IMPORTANT INFORMATION. MEDIVATION STOCKHOLDERS ARE URGED TO READ THESE
DOCUMENTS CAREFULLY WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN
IMPORTANT INFORMATION THAT HOLDERS OF MEDIVATION SECURITIES SHOULD
CONSIDER BEFORE MAKING ANY DECISION REGARDING TENDERING THEIR
SECURITIES. The Offer to Purchase, the related Letter of Transmittal and
certain other tender offer documents, as well as the
Solicitation/Recommendation Statement, will be made available to all
holders of Medivation stock at no expense to them. The tender offer
materials and the Solicitation/Recommendation Statement will be made
available for free at the SEC’s website at www.sec.gov.
Additional copies may be obtained for free by contacting Pfizer or
Medivation. Copies of the documents filed with the SEC by Medivation
will be available free of charge on Medivation’s internet website at http://www.medivation.com or
by contacting Medivation’s Investor Relations Department at (650)
218-6900. Copies of the documents filed with the SEC by Pfizer will be
available free of charge on Pfizer’s internet website at http://www.pfizer.com or
by contacting Pfizer’s Investor Relations Department at 212-733-2323. In
addition to the Offer to Purchase, the related Letter of Transmittal and
certain other tender offer documents, as well as the
Solicitation/Recommendation Statement, Pfizer and Medivation each file
annual, quarterly and current reports and other information with the
SEC. You may read and copy any reports or other information filed by
Pfizer or Medivation at the SEC public reference room at 100 F Street,
N.E., Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 for
further information on the public reference room. Pfizer’s and
Medivation’s filings with the SEC are also available to the public from
commercial document-retrieval services and at the website maintained by
the SEC at http://www.sec.gov.

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