MDVN Falls on Alzheimer’s Data

Medivation, Inc. (MDVN - Analyst Report) shares fell 67% following the release of disappointing phase III results on lead pipeline candidate dimebon. The company, along with partner Pfizer, Inc. (PFE - Analyst Report), suffered a huge setback when dimebon failed to achieve both its primary and secondary endpoints in the CONNECTION study.
 
The phase III, multi-national, double-blind, placebo-controlled safety and efficacy trial was conducted across 63 sites in North America, Europe, and South America with 598 patients suffering from mild-to-moderate Alzheimer’s disease.
 
Results showed that dimebon failed to achieve a statistically significant improvement over placebo. These results are extremely disappointing for both Medivation and Pfizer.

Pfizer has already invested a significant amount of money towards the development of the candidate. The company made an upfront payment of $225 million to Medivation under the collaboration agreement and is bearing 60% of the development costs for the candidate.
 
Meanwhile, dimebon is the most advanced pipeline candidate at Medivation, which has no marketed products in its portfolio. The successful development of dimebon would have been a major boost for the company. In addition to the Alzheimer’s indication, Medivation is also studying dimebon for Huntington’s disease.
 
Pfizer and Medivation announced that they intend to analyze the data further before taking any decision regarding future development plans.
 
Chances exist that the companies may seek approval for dimebon as a combination therapy. The candidate is currently being studied in combination with Pfizer’s Aricept for the treatment of mild-to-moderate Alzheimer’s. Positive results from this study could allow the companies to push for approval of the product as a combination therapy.
 
However, at this point of time, the future development path of dimebon remains uncertain. The successful development of therapies for the treatment of Alzheimer’s is challenging and we note that several companies including Bellus Health (BLUS - Analyst Report) have failed in developing treatments for Alzheimer’s.
 
We currently have a Neutral recommendation on Medivation. The high profile phase III failure is a major setback for the company. Medivation could suffer another blow if Pfizer decides to pull out from the collaboration agreement for dimebon.
 
We note that Pfizer already has another Alzheimer’s candidate, bapineuzumab, in its portfolio that is being developed with Elan Corp (ELN - Snapshot Report) and Johnson & Johnson (JNJ - Analyst Report). As such, Pfizer may decide to focus its efforts towards the development of bapineuzumab.
 

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