Pfizer Inc. will pay $US81.50 ($A107.05) per Medivation share. That's a 21 percent premium to the San Francisco biotech's Friday closing price of $US67.19 ($A88.25).
The boards of both companies have approved the deal, which is targeted to close in the third of fourth quarter.
Xtandi drew attention earlier this year from the public interest group Knowledge Economy International, which petitioned the National Institutes of Health to reduce the $US129,000 ($A169,647)-a year list price for the advanced prostate cancer treatment. The government declined.
Pfizer said Medivation also has promising pipeline of cancer drugs in late-stage clinical development. That includes the potential breast cancer treatment talazoparib and a potential lymphoma drug.
The deal comes about three months after Medivation rejected a $US9.3 billion ($A12.23 billion) takeover bid from the French drugmaker Sanofi, saying that offer, worth $US52.50 per share, undervalued the company.
