Narrower Q2 Loss at Medivation

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Medivation Inc. (MDVN) reported a second-quarter 2013 loss of 7 cents per share, narrower than the Zacks Consensus Estimate of a loss of 21 cents per share and the year-ago loss of 8 cents.

Revenues came in at $70.1 million, above the Zacks Consensus Estimate of $61 million and the year-ago revenues of $42.9 million.

The Quarter in Detail

Xtandi delivered net sales of $86.1 million (reported by Astellas (ALPMY)) in the second quarter, $10.7 million above the first quarter of 2013. U.S. sales were $82.4 million.

Xtandi is approved for the treatment of patients with metastatic castration-resistant prostate cancer who have previously received docetaxel. Xtandi is currently under regulatory review in several countries including Japan, Argentina, Australia, Brazil, South Africa and Switzerland.

Operating expenses increased 59.7% to $70.1 million. Research and development expenses increased 30.9% to $28.2 million. SG&A expenses increased 87.5% to $41.9 million.

2013 Outlook

Medivation still expects operating expenses (after adjusting cost-sharing payments) in the range of $285–$300 million. The company provided Xtandi U.S. net sales (reported by Astellas) guidance of $345-$365 million.

Medivation is working on expanding Xtandi’s label. Interim results from the phase III PREVAIL study on pre-chemo patients should be out later this year. The company also intends to start a phase III trial in patients with non-metastatic castration-resistant prostate cancer this year.

Xtandi is being evaluated in other studies as well, including a breast cancer study.

Our Take

We are encouraged by Xtandi’s performance. Xtandi could very well be a game-changer for Medivation. The prostate cancer market represents huge commercial potential and Xtandi is already off to a strong start. Launch in additional countries should drive sales further. Medivation has consistently presented impressive data on Xtandi. Expansion into the pre-chemo setting would be a major positive for Medivation.

Medivation is currently a Zacks Rank #3 (Hold) stock. At present, companies like Biogen Idec (BIIB) and Actelion Ltd. (ALIOF) look attractive with both being Zacks Rank #1 (Strong Buy) stocks.
 

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