PFIZER will pay about US$14 billion in cash for cancer drug company Medivation, a deal that will add the pricey late-stage prostate cancer treatment Xtandi to its oncology portfolio.

The New York drugmaker said yesterday that it will pay US$81.50 per Medivation share. That’s a 21 percent premium to the San Francisco biotech’s Friday closing price of US$67.19.

Medivation Inc and Japanese drugmaker Astellas Pharma jointly market Xtandi, with Astellas selling the drug outside the United States.

Xtandi drew attention earlier this year from the public interest group Knowledge Economy International, which petitioned the National Institutes of Health to reduce the US$129,000-a year list price for the advanced prostate cancer treatment. The government declined.

Knowledge Ecology and the Union for Affordable Cancer Treatment said the price on Xtandi, which amounts to US$88.48 per pill, is two to four times the price in other wealthy countries.

The US government covers much of the cost for Xtandi prescriptions filled under federal health programs such as Medicare, Medicaid and the Veterans Administration.

Medivation focuses on developing medicines for cancer and serious diseases with few treatment options. The drugmaker brought in US$943 million in revenue last year.

Aside from Xtandi, Pfizer Inc said Medivation also has a promising pipeline of cancer drugs in late-stage clinical development. That includes the potential breast cancer treatment talazoparib and a potential lymphoma drug. Researchers also are studying Xtandi as a possible treatment for earlier-stage prostate cancer.

The boards of both companies have approved the deal, which is targeted to close in the third or fourth quarter. Pfizer, which makes the erectile dysfunction treatment Viagra and fibromyalgia, expects to finance it with existing cash.

The deal comes about three months after Medivation rejected a US$9.3 billion takeover bid from France’s Sanofi.