) was up 7.52% after the company posted earnings of 60 cents per
share in the second quarter of 2014, turning around the year-ago
loss of 7 cents per share and easily beating the Zacks Consensus
Estimate of earnings of 28 cents per share.
Medivation, Inc - Earnings Surprise |
Revenues came in at $148.1 million, up 111.1% from the year-ago
period, beating the Zacks Consensus Estimate of $129 million.
The Quarter in Detail
Xtandi delivered U.S. net sales of $143.7 million, as reported by
), in the second quarter, up 15.4% sequentially. The upside was
driven by strong demand in the post-chemotherapy segment during the
Awareness about Xtandi among oncologists and urologists continues
to be high. Ex-U.S. net sales were $83.3 million, well above $47.8
million in the first quarter.
Xtandi is approved for the treatment of patients with metastatic
castration-resistant prostate cancer (mCRPC) who have previously
received docetaxel. It is currently approved in more than 40
Medivation's collaboration revenues in the second quarter were
$148.1 million consisting of U.S. collaboration revenues of $71.9
million, ex-U.S. collaboration revenues of $10 million and upfront
and development milestone payments accounting for the remaining
Operating expenses increased 32.9% to $93.1 million. Research and
development expenses increased 43% to $40.3 million. SG&A
expenses increased 26% to $52.8 million. The higher expenses
reflect the company's investment in the launch of Xtandi, its label
expansion efforts and a further expansion of the U.S. field sales
2014 Outlook Up
Medivation expects U.S. net sales of Xtandi in the range of $600
million to $640 million, up from the earlier guidance of $540
million to $575 million. Guidance was raised to reflect
stronger-than-expected sales in the second quarter and robust
demand expected in the latter half of the year.
The company expects to record development milestone payments of
about $279 million from Astellas, up $50 million from the prior
guidance of $229 million. The updated guidance includes $50 million
of sales milestone payments related to Xtandi reaching worldwide
net sales of $800 million in 2014.
Total collaboration revenues are expected to in the range of
Operating expenses (after adjusting cost-sharing payments) are
still expected in the range of $400 million to $430 million. While
SG&A spend will account for slightly more than 50% of total
operating expenses, the balance will be spent on R&D.
Medivation is working on expanding Xtandi's label. Medivation
and Astellas are currently seeking FDA approval for Xtandi in the
lucrative pre-chemo population. A response from the agency should
be out by Sep 18.
Meanwhile, Medivation is enrolling patients in a phase IV study
(PLATO) on Xtandi which will compare Xtandi plus Zytiga and
prednisone to Zytiga and prednisone in chemo-naïve metastatic
prostate cancer patients whose disease has progressed following
treatment with Xtandi. Xtandi is being evaluated in other studies
as well, including breast cancer studies.
In Apr 2014, Medivation entered into a research and license
agreement with OncoFusion Therapeutics, Inc. for certain compounds
targeting bromodomain and extra-terminal proteins for potential use
in cancer and other disease areas.
We are pleased with Medivation beating expectations on the top as
well as the bottom line. Xtandi's performance was strong and helped
the company's revenues. Moreover, the increased Xtandi guidance is
Xtandi could very well be a game-changer for Medivation. The
prostate cancer market holds a huge commercial potential.
Medivation has consistently presented impressive data on Xtandi.
Expansion into the pre-chemo setting would be a major positive for
Medivation is currently a Zacks Rank #3 (Hold) stock. Some
better-ranked stocks in the biotech sector include Cytokinetics,
) and Gilead Sciences Inc. (
). Both are Zacks Rank #1 (Strong Buy) stocks.
Want the latest recommendations from Zacks Investment Research?
Today, you can download 7 Best Stocks for the Next 30 Days.
Click to get this free report
GILEAD SCIENCES (GILD): Free Stock Analysis
MEDIVATION INC (MDVN): Free Stock Analysis
CYTOKINETCS INC (CYTK): Free Stock Analysis
ASTELLAS PHARMA (ALPMY): Get Free Report
To read this article on Zacks.com click here.