If I don't miss my guess,
) shares will come under pressure today based upon an 8-K it filed
on Monday. The decline, if it happens, reflects a basic lack of
understanding of how long prostate cancer drug development takes.
Since Medivation's Xtandi is the best-in-class drug for prostate
cancer, any serious decline in Medivation's shares may make for a
Medivation's 8-K noted it was filing an appeal concerning a lawsuit
it brought asserting ownership over a drug called ARN-509 created
at UCLA - the source of the company's IP for Xtandi. A few traders
seem to think ARN-509, currently in development by private little
Aragon Pharmaceuticals, is a near-term competitive threat for
ARN-509 just started its first Phase II trial. This trial is in
earlier stage patients and is not expected to generate data until
2018. ARN-509 is a nice-looking drug based on what I've seen from
the Phase I data. It isn't as spiffy as the Aragon executives make
it, but no drug is as spiffy as money-seeking executives make it
out to be.
That said, ARN-509 will absolutely be competitive with Xtandi… in
Aragon execs did a conference presentation earlier in 2013 where
they really went after Xtandi. Aragon executives certainly have no
love for Medivation's executives - after all, Medivation's lawsuit
can't be making it easy for Aragon to raise money. So Aragon is
motivated to beat on Xtandi. Apparently, investors attending this
presentation really ate up the idea that ARN-509 will kill Xtandi,
and do it quickly.
So how long before Aragon gets ARN-509 into a position to cause
revenue problems for Xtandi? Not soon.
Knowing the prostate cancer space as I do, I also know Aragon's
oncology advisers. These doctors will almost certainly advise
Aragon to take ARN-509 into the post-chemo indication first. This
presents two problems for the thesis that ARN-509 is an imminent
First, long before ARN-509 would be approved in post-chemo, Xtandi
will be kicking
Johnson & Johnson's
) Zytiga's butt in the pre-chemo setting. Xtandi would also be a
long way towards the long-term trials generating an approval in
castrate-sensitive prostate cancer (CSPC, where the big money is).
So even if ARN-509 is approved in the post-chemo indication in five
years (which would be record speed), it will not be a competitor to
The second problem is what 95% of people selling Medivation due to
ARN-509 don't understand. The current prostate cancer space is
generally defined as pre-chemo and post-chemo. This is why both
Zytiga and Xtandi could do placebo-controlled trials. ARN-509 won't
have that same pathway to approval.
If Aragon wants to take ARN-509 into post-chemo, ARN-509 would
either have to be tested in Xtandi/Zytiga failures or go
head-to-head with one of them before the FDA will approve the drug.
Either way, Aragon isn't remotely prepared to run that sort of
The same situation exists in the pre-chemo space. Aragon could try
and slot ARN-509 after Xtandi/Zytiga failures and before
chemotherapy. Or, it could try to go head-to-head against Xtandi or
Zytiga. Either way, Aragon isn't remotely prepared to run that kind
of a Phase III trial.
Aragon management is shamelessly hinting they will launch their
first pivotal study in the CSPC space, but this is bluster. The
Phase II they just started is only 90 patients and won't read out
survival data until 2018. Perhaps Aragon (or whatever pharma buys
it) could jump the gun and start a CSPC trial before the full data
from the Phase II reads out, but you're still talking not starting
that trial until 2016. And any large Phase III trial in the CSPC
space will take five to six years to mature.
ARN-509 is probably a real drug, but it's certainly not a
competitive threat to Xtandi in the next five years. It's probably
not a competitive threat to Xtandi this decade. So if Medivation's
stock takes a dive today, it might be a good time to take a closer
look at the company.