Max Nisen is a Bloomberg Gadfly columnist covering biotech, pharma and health care. He previously wrote about management and corporate strategy for Quartz and Business Insider.

One of the oddest M&A fights of 2016 is coming to a head.

Sanofi has been trying to buy Bay Area cancer-drugmaker Medivation since late March. Medivation won't give Sanofi or its $9.3 billion dollar bid the time of day. Sanofi is now proposing to replace Medivation's whole board -- which it says isn't acting in shareholders' best interests -- with eight sale-friendly directors. The ballots went to shareholders Monday; it's in their hands now. 

In a letter to shareholders on Monday, Medivation accused Sanofi of opportunism, coercive tactics and, worst of all, trying to buy it too cheaply. Medivation's main point, as it tries to convince investors to reject the French company's advances: What's the rush? 

Medivation is profitable, which in biotech makes it more of a unicorn than a billion-dollar valuation. It expects potentially stock-boosting data from drug trials later this year. Seemingly half of the world's pharma companies are rumored to have considered counter-bids for it. Unless shareholders have no faith in Medivation's future or in biotech valuations to perk up from a long slump, they might as well wait. Medivation's stock has consistently traded above Sanofi's $52.50 offer, trading around $60 as the board brawl began. 

The market doesn't seem to give Sanofi's $52.50 a share offer for Medivation much of a chance.
Source: Bloomberg

Medivation's argument for patience is largely about its pipeline. Xtandi, the company's FDA-approved crown jewel of a prostate-cancer drug, has been on the market since 2012. But a lot of its potential depends on getting approvals in a broader selection of prostate patients and in a difficult-to-treat type of breast cancer. 

For now, Xtandi sales growth is slowing. Medivation's revenue from the drug (it splits proceeds with Astellas) declined sequentially in the first quarter from a peak of $202 million in the fourth quarter of 2015 to $182.5 million. Medivation expects $900 million to $970 million in sales this year, compared with analyst consensus of $732 million. Medivation is targeting $2.5 billion in total revenue in 2020, most of which would come from Xtandi. Analysts expect $1.85 billion in total revenue. 

Medivation's prostate cancer drug Xtandi is no longer growing at the breakneck pace the company might like.
Source: Bloomberg

The company's early-stage pipeline of cancer drugs is even less of a sure thing. It includes a breast cancer drug, talazoparib, acquired last year from BioMarin, and pidilizumab, an immuno-oncology drug, meaning it uses the body's immune system to fight cancer. Medivation argues talazoparib has multi-billion-dollar sales potential in multiple cancers. But analysts expect just $200 million in sales from both by 2020.

But even with that uncertainty, there's a case to wait and see what happens. The FDA is due to decide in October if it should expand Xtandi's label in prostate cancer, which may boost its use. Data on Xtandi's use in breast cancer and on the drug's longer-term use in prostate cancer are also expected in the second half of the year. 

Medivation wants time to show Xtandi's slowdown is a blip, not a trend; time to prove it isn't a one-trick pony; time for biotech valuations to creep out of the cellar; and time for at least one if its many rumored alternative suitors to stop flirting and step up. Pfizer, Amgen, Gilead, AstraZeneca, and Merck have all been rumored to be interested. The first two reportedly signed non-disclosure agreements with Medivation.

Medivation has rewarded patience in the past. According to the company, its total shareholder return since its first public financing in 1996 was 15,141 percent as of May 4.  So why accept just a fifty percent premium on shares that were down more than 40 percent from a 2015 peak before takeover speculation mounted? 

Sanofi says it's willing to make a higher offer if Medivation signs a confidentiality agreement and gives it more financial information than what's available to the public. But Sanofi's tactics have been all about ratcheting up pressure and hurrying its target along. 

A little patience doesn't seem like too much to ask. 

This column does not necessarily reflect the opinion of Bloomberg LP and its owners.

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Max Nisen in New York at

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