Court rules against Medivation in fight with UCLA over cancer drug

The Superior Court of California for the County of San Francisco issued a ruling in a dispute over the rights to certain chemical compounds designed to treat late-stage prostate cancer. Pharmaceutical company Medivation (MDVN) was arguing that its agreements with the Regents of the University of California granted it certain exclusive rights to compounds and that the University broke its agreements by licensing certain compounds to another pharmaceutical company, Aragon. The court ruled that the Regents were within their rights under the pact signed with Medivation to grant Aragon a license to use the "A-series" compounds. Aragon is using the licensed compounds in its effort to develop a drug that would compete with Medivation's Xtandi, which is approved by the FDA for the treatment of patients with metastatic castration-resistant prostate cancer who have previously received docetaxel, another cancer therapy. In a note to investors this morning, Citigroup analyst Yaron Werber wrote that Medivation said it was surprised by the ruling and may appeal. Werber also stated that Aragon's drug will be late to market and that Wall Street may be under-appreciating the size of the market served by Xtandi. The analyst maintained a Buy rating and $70 price target on Medivation shares.

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