Medivation: Xtandi Has Huge Upside Potential, Says Canaccord


In a research report issued today, Canaccord analyst John Newman upgraded shares of Medivation (NASDAQ:MDVN) to Buy from Hold and doubled his price target to $132 (from $60), which represents a potential upside of 31% from where the stock is currently trading.

The following bullets contain some highlights from Newman’s report: 

  • Our analysis shows an underestimated pre-chemo setting, with peak sales of $2.7B US in this market alone, giving Xtandi huge upside potential if only capturing a small percentage of this population. We see a ~$60M increase in revenue for each 1% gain in patient share. If expanded to the large hormone sensitive population, a small 0.1% share capture could add ~$80M in incremental revenue, representing a significant profit driver.
  • Lack of steroid use, no food restrictions, and improved efficacy vs. Zytiga should resonate well with physicians as front line therapy in metastatic pre-chemo setting, a positive for Xtandi acceptance. Additionally, increased PFS vs. Zytiga may change urologist prescribing patterns favorably since their goal of therapy is prevention of disease progression vs survival.
  • Expect positive TERRAIN (YE14/1H15) and STRIVE (YE14) data vs. Casodex, possibly penetrating the ~$80B hormone sensitive market with huge upside potential. Additionally, IMS data already shows a 10-fold increase in Xtandi prescriptions since top-line data reported in AUA this year, with potential for exponential increases in the coming year after FDA approval in pre-chemo metastatic setting. We believe Xtandi will follow Zytiga in urologist uptake, a huge positive.

According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst John Newman has a total average return of -3.1% and a 57.1% success rate. Newman is ranked #2880 out of 3303 analysts.

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