Pfizer previously announced plans to decide by the end of the year whether to split into two separate companies specializing separately in patent-protected drugs and generics, and CFO Frank D’Amalio told The Wall Street Journal that the acquisition won't impact the timing of the pharmaceutical giant's decision. The Medivation pickup, however, suggests the company may be bulking up its patent-protected holdings in anticipation of just such a split.
In April, Medivation rejected an unsolicited bid from the French drug maker Sanofi at $52.50 a share, believing (rightly, in retrospect) it could find a better deal. Medivation's stock had traded as low as $26.41 in February, but rebounded to over $60 by early May. The company's stock was up 19.74% following the Pfizer announcement, closing the day at $80.42. Pfizer’s shares fell $0.14 in the wake of the deal, closing at $34.84.