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Medivation Beats 4Q Expectations - Analyst Blog

By: Zacks.com
Posted: 3/1/2013 9:00:00 AM
Referenced Stocks: ARRY;CYTK;KYTH;MDVN

Medivation Inc. ( MDVN ) reported a fourth-quarter loss of 43 cents per share, narrower than the Zacks Consensus Estimate of a loss of 51 cents per share but well above the year-ago loss of 15 cents per share.

Revenues came in at $37.2 million, above the Zacks Consensus Estimate of $32 million and the year-ago revenues of $14.9 million.

Full year loss of 56 cents per share remained flat from the year-ago period and narrower than the Zacks Consensus Estimate of a loss of 66 cents per share. Revenues came in at $181.7 million, well above the Zacks Consensus Estimate of $170 million and the year-ago revenues of $60.4 million.

The Quarter in Detail

Xtandi delivered net sales of $57.4 million in its first full quarter since launch. 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 the EU with a decision expected this year.

Operating expenses increased 137.5% to $63.9 million. Research and development expenses increased 22.4% to $22.0 million. SG&A expenses increased 367.2% to $41.9 million.

2013 Outlook

Medivation expects operating expenses (after adjusting cost-sharing payments) in the range of $285-$300 million. Medivation expects capex of about $7 million, especially connected with its new headquarters.

Medivation currently carries a Zacks Rank #2 (Buy). We are impressed with Xtandi's performance in its first full quarter following the product launch and we expect the strong ramp to continue. Medivation has consistently presented impressive data on Xtandi. Based on the data we have seen so far, we believe that the product has blockbuster potential.

Xtandi could very well be a game-changer for Medivation. The prostate cancer market represents huge commercial potential. Xtandi is currently in several studies including studies for the pre-chemo setting, which represents huge commercial potential. Expansion into the pre-chemo setting would be a major positive for the stock. Medivation is also exploring Xtandi for breast cancer (phase I).

Medivation currently carries a Zacks Rank #2 (Buy). Array BioPharma, Inc. ( ARRY ) and Kythera Biopharmaceuticals, Inc. ( KYTH ) also look attractive with a Zacks Rank #2 (Buy). Other biopharma stocks that currently look more attractive include Cytokinetics, Inc. ( CYTK ), which is a Zacks Rank #1 (Strong Buy) company.



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