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Koons on Pfizer Agreeing to Buy Medivation (Audio) · Bloomberg Intelligence

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  Speaker 1: This is taking stock with pim Box and Kathleen Hayes
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  Speaker 1: on Bloomberg Radio, Fiser Fiser beating out a SnO fee
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  Speaker 1: to take Metivation. It's a fourteen billion dollar deal, and
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  Speaker 1: fires are looking to acquire not only Metivations pipeline, but
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  Speaker 1: a significant cancer drug to fight prostate cancer. Cynthia Coon's
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  Speaker 1: is Bloomberg's own healthcare reporter and she joins us in studio. Cynthia,
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  Speaker 1: very nice to see you. Thank you for being here.
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  Speaker 1: Why does Fightser need to buy Metivation, particularly at such
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  Speaker 1: a fourteen billion dollar price tag, which I believe is
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  Speaker 1: about double what Snofi had offered or had been talking
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  Speaker 1: about when they decided that Metivation was a company worth
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  Speaker 1: looking at. Well, Fightser is really in this to build
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  Speaker 1: up their pipeline. What Fiser wants to do is build
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  Speaker 1: the two different sides of the company, the innovative side
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  Speaker 1: and the branded side with the older match her drugs.
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  Speaker 1: And what they've talked about doing is splitting the company
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  Speaker 1: into But what analysts say can't happen at this stage
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  Speaker 1: is they can't split up yet. They don't have enough
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  Speaker 1: of an innovative pipeline for them to be able to
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  Speaker 1: justify doing that sort of a division of the company.
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  Speaker 1: And so this is part of what will probably be
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  Speaker 1: a series of deals for a Fightser to buy more
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  Speaker 1: pipeline because while they have this drug you mentioned for
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  Speaker 1: prostate cancer and they could potentially add indications there, what's
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  Speaker 1: coming down the pike is the other drugs that they have,
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  Speaker 1: and that's what fighter is really focused on, and that's
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  Speaker 1: where they really see the value in this asset. Well know,
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  Speaker 1: sadly for so many people, but good for the pharmaceutical
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  Speaker 1: industry and then of course for people who are fighting cancer.
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  Speaker 1: There are it's a very very hard hot part of
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  Speaker 1: the big farmer world biotech along the lines um extending
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  Speaker 1: more of a late stage drug apparently, uh, the question
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  Speaker 1: is late stage versus early stage. This is a big
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  Speaker 1: part of this deal being done correct. Extandy is probably
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  Speaker 1: what makes it the most attractive, and that Fightser has
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  Speaker 1: already said that they want to do. As for assets
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  Speaker 1: where there are drugs already on the market. I mean
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  Speaker 1: there's two types of deals a pharmaceutical company can do.
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  Speaker 1: They can buy something that's purely exploratory doing a lot
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  Speaker 1: of early stage research, and that can hold a lot
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  Speaker 1: of promise. You can find a lot of gems in there,
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  Speaker 1: but it's a lot of risk, and Fiser wants to
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  Speaker 1: make sure that they're doing deals where they're going to
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  Speaker 1: be able to show shareholders, we have this much money
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  Speaker 1: coming in the door in year one or year two,
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  Speaker 1: and that's that's what Xtandi offers. But Meditation certainly has
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  Speaker 1: other drugs that are further down the pike. And Fiser
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  Speaker 1: has its own pipeline in oncology and it's a part
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  Speaker 1: has a partnership with German merc which is also part
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  Speaker 1: of its big oncology platform to move into the immuno
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  Speaker 1: oncology space, which is really where a lot of the
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  Speaker 1: hot innovation is going on right now. So just to understand,
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  Speaker 1: Fiser is bulking up on these innovative new drugs in
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  Speaker 1: order to eventually split the company into a company that
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  Speaker 1: has innovative and new drugs and it's branded portfolio of
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  Speaker 1: older drugs. Well, that was always the plan, but what
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  Speaker 1: they said today essentially was that they've said since the
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  Speaker 1: Allergan deal didn't work out earlier this year, which would
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  Speaker 1: fall more in the branded side than stay innovative, for example,
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  Speaker 1: but since the Allergan deal didn't work out. They've said
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  Speaker 1: they would make a decision by the end of this year,
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  Speaker 1: and they said today they're still sticking to that timeline.
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  Speaker 1: So analysts are saying at this point, probably they're not
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  Speaker 1: going to split. Probably they don't feel like they have
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  Speaker 1: enough on the innovative side to make it its own company.
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  Speaker 1: But that is essentially the strategy they've been pursuing. And
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  Speaker 1: no matter what they do, you need pipeline as a
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  Speaker 1: pharmaceutical company. That's where all the growth is coming from
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  Speaker 1: from the new drugs and the blockbusters. So no matter
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  Speaker 1: what they decided to do, if they split or stay
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  Speaker 1: stay together, they really need to make sure that they
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  Speaker 1: have drugs coming down the pipe that will get approved
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  Speaker 1: in two just to keep the revenue studying. Well, just
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  Speaker 1: to give you the detail, and kathink go right ahead,
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  Speaker 1: because I just gonna tell you that Fiser shares right
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  Speaker 1: now down about fourteen cents, thirty four dollars eighty four cents.
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  Speaker 1: The stock is about eight percent so far this year,
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  Speaker 1: pays about a three and a half percent dividend. Well
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  Speaker 1: and cine your story mentioned and to experimental products, a
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  Speaker 1: drug for breast cancer, another one for the blood cancer lymphoma, again,
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  Speaker 1: these are the kinds of cancers that touch so so
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  Speaker 1: many lives. Um, what kind of what are analysts saying
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  Speaker 1: about this deal about where the company is heading, particularly
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  Speaker 1: again with these cancer drugs that are so so important.
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  Speaker 1: I think what analysts really want to see now, and
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  Speaker 1: it's going to take probably some time, is to see
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  Speaker 1: whether or not they can actually develop these drugs and
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  Speaker 1: how successful these drugs are going to be. I mean,
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  Speaker 1: as much as it's it's um they might be looking
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  Speaker 1: at big indications where there's a lot of promise, there's
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  Speaker 1: there have been major drug failures in every disease area,
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  Speaker 1: and particularly and oncology. Even some of the greatest breakthroughs
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  Speaker 1: have only affected small segments of patient population. So even
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  Speaker 1: though they might be going after some of these big areas,
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  Speaker 1: there's a lot of competition, and Fiser has their own
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  Speaker 1: breast cancer drug that's been very successful, and so what
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  Speaker 1: Visor talked a little bit today about was doing combinations
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  Speaker 1: with their existing drugs and other things in the pipeline,
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  Speaker 1: and that's where things really exciting from a patient's point
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  Speaker 1: of view. But then it also gets tricky from a
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  Speaker 1: payer point of view, because how does the medical system
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  Speaker 1: absorb the cost of several very high priced drugs. So
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  Speaker 1: that's kind of the future of the debate in oncology
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  Speaker 1: and where we'll have to see the debate go if
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  Speaker 1: we figure out if these drugs do work. So that
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  Speaker 1: will be another dimension to this story, but probably not
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  Speaker 1: for several years. Does Fightser spinoff or get rid of
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  Speaker 1: businesses while they're trying to sort out the bigger issue
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  Speaker 1: of splitting the company, I mean their non core assets
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  Speaker 1: that you could see Fightser trying to sell into the marketplace.
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  Speaker 1: I mean, there certainly are small pieces here and there.
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  Speaker 1: I don't think Fightser is a company quite like some
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  Speaker 1: others where you might segment out big chunks and say, oh,
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  Speaker 1: they should get rid of that. I mean, there are
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  Speaker 1: pieces that they picked up through the Hospia transaction and
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  Speaker 1: through other deals they've been doing that could potentially bamboo therapeutics.
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  Speaker 1: I know that they've been doing a lot of small
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  Speaker 1: deals as well, anacore pharmaceuticals and so on. Yeah, and
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  Speaker 1: in some of these deals there might be part to
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  Speaker 1: the business that aren't necessarily valuable to Fiser. So they
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  Speaker 1: could pick up a pick up an asset and then
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  Speaker 1: sell off a small piece. But the story about Fiser
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  Speaker 1: isn't going to be about investors is it's going to
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  Speaker 1: be about acquisitions. There's no doubt they're going to continue
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  Speaker 1: to be very busy on the deal front, and they're
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  Speaker 1: going to continue to do lots of deals, and they
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  Speaker 1: can do large deals. That's the capacity that Fightser has.
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  Speaker 1: They have a lot of money, and they're a force
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  Speaker 1: to be reckoned with, as everyone learned just looking at
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  Speaker 1: the valuations that they were able to pay today compared
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  Speaker 1: to everyone else. So thank you, so very much. She's
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  Speaker 1: a healthcare reporter for Bloomberg News talking to us about
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  Speaker 1: Fiser beating out Santa Fe to take motivation in the
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  Speaker 1: fourteen billion dollar deal. Of course, it's very important what
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  Speaker 1: this means for investors, however, so important what it means
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  Speaker 1: for people. It's one of the things that makes this
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  Speaker 1: big farming industry so very very interesting. And Kathleen Hayes
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  Speaker 1: along with pim Fox and this is Bloomberg