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Analyst Blog

Medivation, Inc. (MDVN - Analyst Report) recently announced that its partner Astellas Pharma Inc. (ALPMY) reported Xtandi (enzalutamide) sales of about $57 million in the US for the quarter ended Dec 31, 2012. This was the first full quarter of Xtandi sales following the product’s launch in Sep 2012.

Xtandi had delivered net sales of $14.1 million in the Sep 2012 quarter. Xtandi is approved for the treatment of patients with metastatic castration-resistant prostate cancer who have previously received docetaxel.

Astellas, which had earlier provided Xtandi net sales guidance of $100 million for the fiscal year ending Mar 31, 2013, said that it expects Xtandi sales to beat the previously provided guidance. However, specific details were not provided.

Our Take

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 the product has blockbuster potential.

Xtandi could very well be a game-changer for Medivation. The prostate cancer market represents huge commercial potential. According to the American Cancer Society, prostate cancer is the most commonly diagnosed cancer among men in the US, other than skin cancer.

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). The company will be reporting its fourth quarter and full year 2012 results on Feb 28, 2013. Other biopharma stocks that currently look more attractive include Targacept, Inc. (TRGT - Snapshot Report) and Peregrine Pharmaceuticals, Inc. (PPHM - Snapshot Report). Both are Zacks Rank #1 stocks (Strong Buy).

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