Company Update (NASDAQ:MDVN): Medivation Inc Reports 2Q:15 Financial Results


Medivation Inc (NASDAQ:MDVN) reported its financial results for the second quarter ended June 30, 2015. U.S. net sales of XTANDI® (enzalutamide) capsules, as reported by Astellas Pharma Inc., were $298.4 million for the quarter (+108% vs. prior year). Second quarter U.S. net sales increased by 33% compared with first quarter 2015 net sales of $224.0 million. We estimate second quarter 2015 unit demand increased by a low- to mid-teens percentage rate, compared with unit demand in the first quarter 2015. In addition, based on information provided by Astellas, a lower gross-to-net discount rate was applied to second quarter gross sales (compared with the first quarter rate), and a $2.8 million favorable adjustment was recorded in the second quarter by Astellas with respect to gross-to-net discount related to previous period gross sales.

Ex-U.S. net sales of XTANDI, as reported by Astellas, were approximately $188 million for the quarter (+121% vs. prior year). Second quarter ex-U.S. net sales increased by 42% compared with first quarter 2015 net sales of approximately $133 million. U.S. dollar equivalent net sales for the quarter ended June 30, 2015, were adversely affected by a strengthening U.S. dollar vs. other currencies by approximately $3 million, or 2% compared with net sales in the quarter ended March 31, 2015.

“XTANDI’s performance, in both the U.S. and outside the U.S., demonstrates continued traction toward becoming a foundation of therapy for the treatment of metastatic castration-resistant prostate cancer,” said David Hung, M.D., president and chief executive officer of Medivation. “Medivation will continue to pursue innovative programs that have the potential to make a meaningful impact in the quality of life of patients with serious disease.”

Medivation reported GAAP net income of $25.8 million, or $0.31 per diluted share, for the quarter ended June 30, 2015, compared with GAAP net income of $47.9 million, or $0.60 per diluted share, for the same period in 2014. Non-GAAP net income for the second quarter of 2015 was $48.7 million, or $0.58 per diluted share, compared with non-GAAP net income of $4.4 million, or $0.05 per diluted share, for the same period in 2014.

Medivation’s collaboration revenue for the second quarter of 2015 was $175.7 million on a GAAP basis compared with $148.1 million for the same period in 2014 (+19% vs. prior year). Non-GAAP collaboration revenue, which excludes collaboration revenue related to upfront and milestone payments, was $174.8 million for the second quarter compared with $81.9 million for the same period in 2014 (+114% 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 second quarter 2015 was $149.2 million compared with$71.9 million for the same period in 2014 (+108% vs. prior year).
  • Medivation’s collaboration revenue related to ex-U.S. net sales of XTANDI for the second quarter 2015 was $25.6 million compared with$10.0 million for the same period in 2014 (+156% vs. prior year).
  • Medivation’s collaboration revenue related to upfront and milestone payments for the second quarter 2015 was $0.8 million compared with$66.2 million for the same period in 2014 (-99% vs. prior year). In the three months ended June 30, 2014, Medivation earned $62.0 millionof development milestone payments from Astellas. Upfront and milestone payments are excluded from non-GAAP collaboration revenue.

Operating expenses were $122.0 million for the quarter ended June 30, 2015 on a GAAP basis compared with $93.1 million for the same period in 2014. Non-GAAP operating expenses were $98.8 million for the quarter ended June 30, 2015 compared with $73.3 million for the same period in 2014.

Selling, general and administrative (SG&A) expenses for the second quarter of 2015 were $74.7 million on a GAAP basis compared with $52.8 millionfor the same period in 2014. Non-GAAP SG&A expenses for the second quarter of 2015 were $57.5 million, compared with $43.6 million for the same period in 2014. The increase in non-GAAP SG&A expenses primarily relates to higher sales, marketing, medical affairs, administrative expenses, and personnel-related costs (excluding stock-based compensation).

Research and development (R&D) expenses for the second quarter of 2015 were $47.3 million on a GAAP basis compared with $40.3 million for the same period in 2014. Non-GAAP R&D expenses for the second quarter of 2015 were $41.3 million, compared with $29.6 million for the same period in 2014. The increase in non-GAAP R&D expenses primarily relates to higher MDV9300 costs, certain pre-clinical expenses for other programs, and higher facilities and technology costs and personnel-related costs (excluding stock-based compensation).

At June 30, 2015, cash, cash equivalents, and short-term investments were $497.5 million, compared with $502.7 million at December 31, 2014. In the second quarter and in July 2015, respectively, Medivation utilized approximately $93 million and $168 million of its cash balances to redeem the remaining outstanding Convertible Notes.

Enzalutamide Development Program

  • Reported positive top-line results in April 2015 from the Phase 2 STRIVE trial comparing enzalutamide with bicalutamide in patients with non-metastatic or metastatic prostate cancer whose disease progressed despite treatment with a luteinizing hormone-releasing hormone (LHRH) analogue therapy or following surgical castration. Presented additional results in May 2015 from the Phase 2 STRIVE trial at the 2015 Annual Meeting of the American Urological Association.
  • Reported new data in June 2015 from a Phase 2 trial evaluating the investigational use of enzalutamide as a single agent for the treatment of advanced androgen receptor (AR) positive, triple-negative breast cancer at the 2015 American Society of Clinical Oncology Annual Meeting.
  • Enrolled first patient in TRUMPET (Treatment Registry for Outcomes in CRPC Patients), a prospective observational patient registry designed to better understand the unique needs and treatment patterns for patients with castration-resistant prostate cancer (CRPC).
  • In July 2015, the U.S. Food and Drug Administration (FDA) approved a label update for XTANDI based on an updated overall survival analysis of the Phase 3 PREVAIL trial.
  • Initiated start up activities for a Phase 2 study evaluating enzalutamide in hepatocellular carcinoma.

Corporate Developments

  • Issued a notice of redemption in June 2015 to redeem all of Medivation’s outstanding 2.625% Convertible Notes due 2017. In July,Medivation paid approximately $168 million in cash and issued 1.77 million common shares related to the redemption of the remaining outstanding Convertible Notes.
  • Appointed Andrew Powell as senior vice president, general counsel and corporate secretary. Mr. Powell brings to Medivation more than 25 years of leadership experience in the life sciences industry.
  • Announced a two-for-one stock split of Medivation’s common stock to be effected through a stock dividend. Shareholders of record as ofAugust 13, 2015, will receive one additional share of Medivation common stock, par value $0.01, for each share they hold as of the record date. The share distribution is scheduled for September 15, 2015. (Original Source)

Shares of Medivation closed today at $101.44, down $6.76 or 6.25%. MDVN has a 1-year high of $141.58 and a 1-year low of $74.83. The stock’s 50-day moving average is $109.67 and its 200-day moving average is $118.19.

On the ratings front, Medivation has been the subject of a number of recent research reports. In a report issued on August 3, Maxim Group analyst Jason Kolbert maintained a Buy rating on MDVN, with a price target of $171, which implies an upside of 58.7% from current levels. Separately, on July 30, Stifel Nicolaus’ Joel Sendek reiterated a Buy rating on the stock and has a price target of $107.

According to TipRanks.com, which ranks over 7,500 financial analysts and bloggers to gauge the performance of their past recommendations, Jason Kolbert and Joel Sendek have a total average return of -7.0% and 29.5% respectively. Kolbert has a success rate of 33.7% and is ranked #3693 out of 3727 analysts, while Sendek has a success rate of 64.2% and is ranked #128.

The street is mostly Bullish on MDVN stock. Out of 9 analysts who cover the stock, 6 suggest a Buy rating and 3 recommend to Hold the stock. The 12-month average price target assigned to the stock is $144.63, which implies an upside of 34.2% from current levels.

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.

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