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Medivation, Inc. and Astellas Pharma Inc. recently announced that their prostate cancer treatment Xtandi, gained approval in Canada following a priority review.

Xtandi gained approval in Canada for the treatment of patients with metastatic castration-resistant prostate cancer in the medical or surgical castration setting who have previously received docetaxel.

We note that Xtandi is currently available in the US. Xtandi delivered net sales of $75.4 million in the first quarter of 2013, $18 million above the last quarter of 2012. Revenues were driven by higher volumes and a favorable gross to net adjustment of about $4.4 million taken by Astellas.

Xtandi is currently under regulatory review in the EU (positive opinion gained in Apr 2013) with a decision expected shortly. EU approval would trigger a $15 million milestone payment from Astellas. Medivation and Astellas are also looking to get Xtandi approved in Japan.

We are encouraged by Xtandi’s performance so far. Xtandi, launched in the US in Sep 2012, could very well be a game-changer for Medivation. The prostate cancer market represents huge commercial potential and Xtandi is already off to a strong start. 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 is currently in several studies including for the pre-chemo setting.

Interim results from the phase III PREVAIL study on pre-chemo patients should be out later this year. Expansion into the pre-chemo setting would be a major positive for Medivation. The company also intends to start a phase III trial in patients with non-metastatic castration-resistant prostate cancer this year. Xtandi is being evaluated in other studies as well, including a breast cancer study.

Medivation currently carries a Zacks Rank #3 (Hold). Stocks that currently look well-positioned include companies like Biogen Idec (BIIB - Free Report) and Anika Therapeutics (ANIK - Free Report) . Both are Zacks Rank #1 (Strong Buy) stocks. 

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