Medivation Inc (NASDAQ:MDVN) reported its financial results for the third quarter endedSeptember 30, 2015. U.S. net sales of XTANDI® (enzalutamide) capsules, as reported by Astellas Pharma Inc, were $313.0 million for the quarter (+73% vs. prior year). Third quarter 2015 U.S. net sales increased by approximately 5% compared with second quarter 2015 net sales of $298.4 million. The sequential quarter increase in net sales was primarily due to an increase in underlying demand (mid-single digit percent growth, compared withJune 2015 quarter) and a lower gross-to-net rate recorded by Astellas in the third quarter, which was offset by changes in channel partner inventory levels during the quarters.
Ex-U.S. net sales of XTANDI, as reported by Astellas, were approximately $205 million for the quarter (+71% vs. prior year). Third quarter ex-U.S. net sales increased by 9% compared with second quarter 2015 net sales of approximately $188 million.
“During the third quarter Medivation made significant progress led by continued demand growth for XTANDI for the treatment of metastatic castration-resistant prostate cancer,” said David Hung, M.D., president and chief executive officer of Medivation. “In October, we successfully completed the acquisition for the late stage asset talazoparib, a highly-potent, orally-available poly ADP ribose polymerase (PARP) inhibitor. With the acquisition of talazoparib, we now have further diversified our late-stage pipeline beyond XTANDI and pidilizumab to complement our early development programs, providing significant opportunities for growth.”
Medivation reported GAAP net income of $79.5 million, or $0.47 per diluted share, for the quarter ended September 30, 2015, compared with GAAP net income of $78.0 million, or $0.48 per diluted share, for the same period in 2014. Non-GAAP net income for the third quarter of 2015 was $58.4 million, or $0.35 per diluted share, compared with non-GAAP net income of $16.3 million, or $0.10 per diluted share, for the same period in 2014.
Medivation’s collaboration revenue for the third quarter of 2015 was $260.7 million on a GAAP basis compared with $200.5 million for the same period in 2014 (+30% vs. prior year). Non-GAAP collaboration revenue, which excludes collaboration revenue related to upfront and milestone payments, was$190.1 million for the third quarter compared with $106.2 million for the same period in 2014 (+79% vs. prior year).
Medivation’s collaboration revenue consists of three components: collaboration revenue related to U.S. XTANDI net sales, collaboration revenue related to ex-U.S. XTANDI net sales, and collaboration revenue related to upfront and milestone payments.
- Medivation’s collaboration revenue related to U.S. net sales of XTANDI for the third quarter 2015 was $156.5 million compared with $90.7 million for the same period in 2014 (+73% vs. prior year).
- Medivation’s collaboration revenue related to ex-U.S. net sales of XTANDI for the third quarter 2015 was $33.6 million compared with$15.5 million for the same period in 2014 (+116% vs. prior year).
- Medivation’s collaboration revenue related to upfront and milestone payments for the third quarter 2015 was $70.6 million compared with$94.2 million for the same period in 2014 (-25% vs. prior year).
Operating expenses were $121.7 million for the quarter ended September 30, 2015 on a GAAP basis compared with $108.6 million for the same period in 2014. Non-GAAP operating expenses were $98.8 million for the quarter ended September 30, 2015 compared with $79.3 million for the same period in 2014.
Selling, general and administrative (SG&A) expenses for the third quarter of 2015 were $75.8 million on a GAAP basis compared with $63.2 million for the same period in 2014. Non-GAAP SG&A expenses for the third quarter of 2015 were $58.8 million, compared with $47.5 million for the same period in 2014. The increase in non-GAAP SG&A expenses primarily relates to higher sales, marketing, administrative expenses, higher royalties to UCLA and higher personnel-related costs (excluding stock-based compensation).
Research and development (R&D) expenses for the third quarter of 2015 were $45.9 million on a GAAP basis compared with $45.4 million for the same period in 2014. Non-GAAP R&D expenses for the third quarter of 2015 were $40.0 million, compared with $31.8 million for the same period in 2014. The increase in non-GAAP R&D expenses primarily relates to higher pidilizumab (MDV9300) costs, higher facilities and information technology costs and higher personnel-related costs (excluding stock-based compensation).
At September 30, 2015, cash and cash equivalents were $488.9 million, compared with $502.7 million at December 31, 2014. During the third quarter, we completed the redemption of the 2017 Convertible Notes, utilizing $167.8 million of cash. In October 2015, we utilized $410.0 million in cash to fund an upfront payment to BioMarin Pharmaceutical Inc., for the acquisition of talazoparib (MDV3800).
Enzalutamide Development Program
- Reported updated data in September 2015 from a Phase 2 trial evaluating the investigational use of enzalutamide as a single agent for the treatment of advanced androgen receptor positive, triple-negative breast cancer at the 2015 European Cancer Congress.
Recent Corporate Developments
- Closed the acquisition on October 6, 2015, for all worldwide rights to talazoparib, an orally-available poly ADP ribose polymerase (PARP) inhibitor. In connection with the closing, Medivation made an up-front payment of $410.0 million to BioMarin in the fourth quarter of 2015. All other amounts to be paid to BioMarin in connection with this transaction will be subject to the successful achievement of certain regulatory and sales-based milestones and royalties relating to talazoparib.
- Effected a two-for-one stock split in the form of a stock dividend on Medivation’s common stock, pursuant to which stockholders of record onAugust 13, 2015, received an additional share of common stock for each share they held as of the record date. Approximately 81.7 million common shares were issued as a result of the stock dividend in mid-September. Medivation’s common stock began trading on a post-dividend basis on the NASDAQ Global Select Market at the opening of trading on September 16, 2015.
- Entered into a Credit Agreement with JPMorgan Chase Bank, N.A., as administrative agent, and the lenders, providing for a one-year$75.0 million revolving loan facility. On September 17, 2015, Medivation executed a borrowing of $75.0 million under the Revolving Credit Facility, which was scheduled to mature on March 17, 2016. On October 23, 2015, Medivation entered into an amendment and restatement of the credit agreement providing for a five-year $300.0 million revolving loan facility and an uncommitted accordion facility subject to the satisfaction of certain conditions. On October 23, 2015, Medivation borrowed $75.0 million under the amended revolving credit facility, which was used to repay the $75.0 million outstanding under the original credit agreement.
- Announced the appointment of Mohammad Hirmand, M.D., as interim chief medical officer following the retirement of Lynn Seely, M.D. (Original Source)
Shares of Medivation are up 2.18% to $44.50 in after-hours trading. MDVN has a 1-year high of $70.79 and a 1-year low of $38.08. The stock’s 50-day moving average is $44.11 and its 200-day moving average is $52.57.
On the ratings front, Medivation has been the subject of a number of recent research reports. In a report issued on October 27, Jefferies Co. analyst Biren Amin maintained a Hold rating on MDVN, with a price target of $50, which implies an upside of 11.5% from current levels. Separately, on October 9, Canaccord Genuity’s John Newman reiterated a Buy rating on the stock and has a price target of $90.
According to TipRanks.com, which ranks over 7,500 financial analysts and bloggers to gauge the performance of their past recommendations, Biren Amin and John Newman have a total average return of 11.5% and 4.0% respectively. Amin has a success rate of 57.8% and is ranked #363 out of 3824 analysts, while Newman has a success rate of 46.3% and is ranked #915.
Overall, 3 research analysts have assigned a Hold rating and 4 research analysts have given a Buy rating to the stock. When considering if perhaps the stock is under or overvalued, the average price target is $67.50 which is 50.6% above where the stock opened today.
Medivation Inc is a biopharmaceutical company engaged in the development of novel small molecule drugs to treat diseases like Alzheimer’s disease and Huntington disease.