WEBVTT - Koons on Pfizer Agreeing to Buy Medivation (Audio)

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<v Speaker 1>This is taking stock with pim Box and Kathleen Hayes

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<v Speaker 1>on Bloomberg Radio, Fiser Fiser beating out a SnO fee

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<v Speaker 1>to take Metivation. It's a fourteen billion dollar deal, and

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<v Speaker 1>fires are looking to acquire not only Metivations pipeline, but

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<v Speaker 1>a significant cancer drug to fight prostate cancer. Cynthia Coon's

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<v Speaker 1>is Bloomberg's own healthcare reporter and she joins us in studio. Cynthia,

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<v Speaker 1>very nice to see you. Thank you for being here.

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<v Speaker 1>Why does Fightser need to buy Metivation, particularly at such

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<v Speaker 1>a fourteen billion dollar price tag, which I believe is

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<v Speaker 1>about double what Snofi had offered or had been talking

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<v Speaker 1>about when they decided that Metivation was a company worth

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<v Speaker 1>looking at. Well, Fightser is really in this to build

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<v Speaker 1>up their pipeline. What Fiser wants to do is build

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<v Speaker 1>the two different sides of the company, the innovative side

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<v Speaker 1>and the branded side with the older match her drugs.

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<v Speaker 1>And what they've talked about doing is splitting the company

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<v Speaker 1>into But what analysts say can't happen at this stage

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<v Speaker 1>is they can't split up yet. They don't have enough

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<v Speaker 1>of an innovative pipeline for them to be able to

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<v Speaker 1>justify doing that sort of a division of the company.

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<v Speaker 1>And so this is part of what will probably be

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<v Speaker 1>a series of deals for a Fightser to buy more

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<v Speaker 1>pipeline because while they have this drug you mentioned for

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<v Speaker 1>prostate cancer and they could potentially add indications there, what's

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<v Speaker 1>coming down the pike is the other drugs that they have,

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<v Speaker 1>and that's what fighter is really focused on, and that's

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<v Speaker 1>where they really see the value in this asset. Well know,

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<v Speaker 1>sadly for so many people, but good for the pharmaceutical

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<v Speaker 1>industry and then of course for people who are fighting cancer.

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<v Speaker 1>There are it's a very very hard hot part of

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<v Speaker 1>the big farmer world biotech along the lines um extending

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<v Speaker 1>more of a late stage drug apparently, uh, the question

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<v Speaker 1>is late stage versus early stage. This is a big

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<v Speaker 1>part of this deal being done correct. Extandy is probably

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<v Speaker 1>what makes it the most attractive, and that Fightser has

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<v Speaker 1>already said that they want to do. As for assets

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<v Speaker 1>where there are drugs already on the market. I mean

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<v Speaker 1>there's two types of deals a pharmaceutical company can do.

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<v Speaker 1>They can buy something that's purely exploratory doing a lot

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<v Speaker 1>of early stage research, and that can hold a lot

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<v Speaker 1>of promise. You can find a lot of gems in there,

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<v Speaker 1>but it's a lot of risk, and Fiser wants to

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<v Speaker 1>make sure that they're doing deals where they're going to

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<v Speaker 1>be able to show shareholders, we have this much money

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<v Speaker 1>coming in the door in year one or year two,

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<v Speaker 1>and that's that's what Xtandi offers. But Meditation certainly has

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<v Speaker 1>other drugs that are further down the pike. And Fiser

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<v Speaker 1>has its own pipeline in oncology and it's a part

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<v Speaker 1>has a partnership with German merc which is also part

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<v Speaker 1>of its big oncology platform to move into the immuno

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<v Speaker 1>oncology space, which is really where a lot of the

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<v Speaker 1>hot innovation is going on right now. So just to understand,

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<v Speaker 1>Fiser is bulking up on these innovative new drugs in

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<v Speaker 1>order to eventually split the company into a company that

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<v Speaker 1>has innovative and new drugs and it's branded portfolio of

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<v Speaker 1>older drugs. Well, that was always the plan, but what

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<v Speaker 1>they said today essentially was that they've said since the

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<v Speaker 1>Allergan deal didn't work out earlier this year, which would

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<v Speaker 1>fall more in the branded side than stay innovative, for example,

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<v Speaker 1>but since the Allergan deal didn't work out. They've said

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<v Speaker 1>they would make a decision by the end of this year,

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<v Speaker 1>and they said today they're still sticking to that timeline.

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<v Speaker 1>So analysts are saying at this point, probably they're not

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<v Speaker 1>going to split. Probably they don't feel like they have

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<v Speaker 1>enough on the innovative side to make it its own company.

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<v Speaker 1>But that is essentially the strategy they've been pursuing. And

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<v Speaker 1>no matter what they do, you need pipeline as a

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<v Speaker 1>pharmaceutical company. That's where all the growth is coming from

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<v Speaker 1>from the new drugs and the blockbusters. So no matter

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<v Speaker 1>what they decided to do, if they split or stay

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<v Speaker 1>stay together, they really need to make sure that they

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<v Speaker 1>have drugs coming down the pipe that will get approved

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<v Speaker 1>in two just to keep the revenue studying. Well, just

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<v Speaker 1>to give you the detail, and kathink go right ahead,

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<v Speaker 1>because I just gonna tell you that Fiser shares right

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<v Speaker 1>now down about fourteen cents, thirty four dollars eighty four cents.

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<v Speaker 1>The stock is about eight percent so far this year,

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<v Speaker 1>pays about a three and a half percent dividend. Well

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<v Speaker 1>and cine your story mentioned and to experimental products, a

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<v Speaker 1>drug for breast cancer, another one for the blood cancer lymphoma, again,

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<v Speaker 1>these are the kinds of cancers that touch so so

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<v Speaker 1>many lives. Um, what kind of what are analysts saying

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<v Speaker 1>about this deal about where the company is heading, particularly

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<v Speaker 1>again with these cancer drugs that are so so important.

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<v Speaker 1>I think what analysts really want to see now, and

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<v Speaker 1>it's going to take probably some time, is to see

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<v Speaker 1>whether or not they can actually develop these drugs and

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<v Speaker 1>how successful these drugs are going to be. I mean,

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<v Speaker 1>as much as it's it's um they might be looking

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<v Speaker 1>at big indications where there's a lot of promise, there's

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<v Speaker 1>there have been major drug failures in every disease area,

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<v Speaker 1>and particularly and oncology. Even some of the greatest breakthroughs

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<v Speaker 1>have only affected small segments of patient population. So even

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<v Speaker 1>though they might be going after some of these big areas,

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<v Speaker 1>there's a lot of competition, and Fiser has their own

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<v Speaker 1>breast cancer drug that's been very successful, and so what

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<v Speaker 1>Visor talked a little bit today about was doing combinations

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<v Speaker 1>with their existing drugs and other things in the pipeline,

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<v Speaker 1>and that's where things really exciting from a patient's point

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<v Speaker 1>of view. But then it also gets tricky from a

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<v Speaker 1>payer point of view, because how does the medical system

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<v Speaker 1>absorb the cost of several very high priced drugs. So

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<v Speaker 1>that's kind of the future of the debate in oncology

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<v Speaker 1>and where we'll have to see the debate go if

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<v Speaker 1>we figure out if these drugs do work. So that

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<v Speaker 1>will be another dimension to this story, but probably not

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<v Speaker 1>for several years. Does Fightser spinoff or get rid of

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<v Speaker 1>businesses while they're trying to sort out the bigger issue

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<v Speaker 1>of splitting the company, I mean their non core assets

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<v Speaker 1>that you could see Fightser trying to sell into the marketplace.

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<v Speaker 1>I mean, there certainly are small pieces here and there.

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<v Speaker 1>I don't think Fightser is a company quite like some

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<v Speaker 1>others where you might segment out big chunks and say, oh,

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<v Speaker 1>they should get rid of that. I mean, there are

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<v Speaker 1>pieces that they picked up through the Hospia transaction and

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<v Speaker 1>through other deals they've been doing that could potentially bamboo therapeutics.

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<v Speaker 1>I know that they've been doing a lot of small

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<v Speaker 1>deals as well, anacore pharmaceuticals and so on. Yeah, and

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<v Speaker 1>in some of these deals there might be part to

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<v Speaker 1>the business that aren't necessarily valuable to Fiser. So they

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<v Speaker 1>could pick up a pick up an asset and then

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<v Speaker 1>sell off a small piece. But the story about Fiser

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<v Speaker 1>isn't going to be about investors is it's going to

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<v Speaker 1>be about acquisitions. There's no doubt they're going to continue

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<v Speaker 1>to be very busy on the deal front, and they're

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<v Speaker 1>going to continue to do lots of deals, and they

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<v Speaker 1>can do large deals. That's the capacity that Fightser has.

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<v Speaker 1>They have a lot of money, and they're a force

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<v Speaker 1>to be reckoned with, as everyone learned just looking at

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<v Speaker 1>the valuations that they were able to pay today compared

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<v Speaker 1>to everyone else. So thank you, so very much. She's

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<v Speaker 1>a healthcare reporter for Bloomberg News talking to us about

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<v Speaker 1>Fiser beating out Santa Fe to take motivation in the

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<v Speaker 1>fourteen billion dollar deal. Of course, it's very important what

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<v Speaker 1>this means for investors, however, so important what it means

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<v Speaker 1>for people. It's one of the things that makes this

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<v Speaker 1>big farming industry so very very interesting. And Kathleen Hayes

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<v Speaker 1>along with pim Fox and this is Bloomberg