Medivation (MDVN): Goldman Sachs Sees Nice Setup in Q2
8:53 AM ET, 07/22/2014 - Street Insider
"Goldman Sachs maintained a Buy rating on Medivation (NASDAQ: MDVN) with a price target of $88. Analyst Navdeep Singh sees a nice setup into Q2. "MDVN s partner on Xtandi, Astellas, is expected to announce earnings results on Aug 1. In our view, Xtandi should be able to post a solid Q2 due to: (1) carry-over of Q/Q end-user demand growth of ~10% in Q1, (2) publication of PREVAIL data in NEJM during ASCO in June and (3) PREVAIL presentation at ASCO GU in January. Hence, we are raising our Xtandi US sales estimates for Q2/2014 to $133mn/$574mn from $126mn/$560mn. We are also updating Xtandi milestone payments to MDVN from Astellas. As a result, our 2014 diluted GAAP EPS goes to $1.61 from $1.29," said Singh. For an analyst ratings summary and ratings history on Medivation click here. For more ratings news on Medivation click here. Shares of Medivation closed at $72.58 yesterday."
If you were thinking of adding more shares and you saw all those hopeful retail investors sitting on call options which expire Friday, why wouldn't you wait until late Friday or perhaps early Monday before buying? Frankly, given the level of euphoria, I'm surprised that it didn't close at 88.50
At best, I think it might sell down to 88, then continue upwards toward 92-3. This is a great stock to own for longterm growth. All those who are playing it for the ultra short term are missing the point, I think.
The options suggest that this will go no higher than 92, even if the earnings are strong. I would expect it to sell off a bit,even on good news, then rally tomorrow. Assuming that earnings are in line with expectations and there are no surprises. The major upside now would seem to reside in a boost in projected 2015 earnings.
Get a grip. If you're lucky enough to live into decrepitude, burning up your GILD profits for nursing home care, you'll be grateful for all those Guatemalan types who'll be changing your diapers. One way or another, sick people will get treated. Not because we're noble or naïve, but because it's the smart thing to do. HIV, and to a lesser degree HPC, are contagious diseases, and there's a net societal benefit in controlling them. Note that we even provide lifetime care for people who injure theirs skulls or spines by falling off their Harley-Davidsons ... even if they were stupid enough to not be wearing a helmet. Maybe we are naïve.
Yeah. I had to Google it to be sure. I was lucky enough to own some PBYI when it made its first surge from 40 to 140 last year. I congratulated myself on selling it at around 120 as it slipped down into the 50's on an inconclusive trial. Then I saw it crossing last week in the 60's and thought, "I should check that out again." But, alas, I didn't. To illustrate my point, PCYC - for which the consensus earnings estimate in 2015 is 23 cents - is up 9 points at the moment. In fact, the short positions onvirtually all the biotechs are getting taken out today. Which suggests that the problem with GILD is that everyone likes it too much and there aren't enough shorts.
..on the heels of the PBYI bonanza. A fact for which I'm grateful, since I own quite a few of them The irony, of course, is that GILD, which is about to report strong earnings and has just had another drug approved, is one of the few not benefitting as the traders and options players back and fill. Incidentally, who cares whether they earn $7 this year or $6? The stock is a bargain at either level.
Citing relatively strong sales and an increase in projected milestone payments from Astellas, the Goldman analyst ups his estimate of 2014 diluted GAAP earnings from $1.29 to $1.61.
Personally, I think that the stock is being held down today by the holders of call options (wisely, I think) cashing in their chips. The popular 92 call is still selling for a buck, which means that the stock has to go to 93 upon a well-anticipated earnings beat for these folks to make more money. And yes, the stock will probably sell off a bit on earnings, upon which the smart money will add shares.
According to Betaville (whoever they are), Glaxo is considering an offer for ITMN and has engaged Lazard to advise them. This from the Schwab research page.
I first noticed the release about the breakthrough designation for perfenidone after hours on Friday. I am reasonably certain that I had heard nothing about it until this point. When I went to this board, I saw that faosto had posted about it. Now I see the PR release from ITMN dated July 17'th. Did I miss this or was Yahoo! just late in posting it?
Well, in the process of "killing" 1,300 89 puts, those sinister MM's sure drove a much larger number of calls into huge gains. ( 10,000 82.50's, 9,000 85's, 6,000 87.50's, etc). The notion that MM's can manipulate share prices to make options expire worthless is an enduring myth. It's the option holders themselves who manipulate the prices toward expiration. It looks to me like those who had their shares called away today went out and bought more. Incidentally, I also thought we would close much lower today.
For two months in a row. Expected this to sell off on options expiration, then rally at the close. Sold the shares out of my IRA when it was up 2.20 and then had to buy them back at a higher price. Fortunately, I had plenty in other accounts. It seems that people can't wait to roll over into the post-earnings options. Should continue upward Monday.
I was just about to post this. Went to see if I could pick up a few more shares cheap after hours, but the ask is now 45.73. Let's hope that it opens near there Monday.
To be exact, Zytiga sales were up 35.1% yoy in the US and 48% in overseas markets. The prechemo indication is obviously helping them. The fact that the recent quarter's sales would indicate annual sales of at least $2.25 billion gives us some idea of how strong Xtandi sales can be behind a prechemo indication. Incidentally, JNJ is also down about 5 points since they reported earnings.