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Merck Among Drug Giants Looking To Buy Medivation, Says Report

Merck reportedly is among companies interested in acquiring Medivation. (AP)

Big Pharma Merck (MRK) is now looking at a possible buyout of Medivation (MDVN), according to an anonymously sourced report.

Reuters reported Wednesday afternoon that Merck was one of five big pharmas that have submitted indications of interest in buying Medivation, with the others being Sanofi (SNY), Pfizer (PFE), Celgene (CELG) and Gilead Sciences (GILD).

Sanofi has been very public about its attempt to acquire Medivation, and last month Medivation said it had entered a confidentiality agreement with Sanofi as well as other unnamed potential buyers. Earlier anonymously sourced reports said that Pfizer, Celgene and Gilead were among the interested buyers.

There had been speculation that Merck might be interested: BMO Capital's May 5 research note asserted that Merck was preparing for a medium-size buyout and Medivation could be a target. Merck has been focusing much of its energy on cancer lately, and Medivation has one fast-growing drug on the market to treat prostate cancer and other cancer therapies in development.

Medivation's stock had been trading flat on the stock market today, but popped to a 52-week high of 68.37 when the news came out. It closed up 1.9% at 66.48. Merck rose 0.4% to 63.29.


IBD'S TAKE: Medivation was an IBD 50 stock up until its last earnings report, when year-over-year profit growth flattened and delivered a big hit to its EPS Rating. Analysts expect growth to pick up again starting in Q4, however.