J&J Just Made Medivation's Day

If you missed the Cougar Biotechnology(CGRB Quote) takeout, take a look at Medivation(MDVN Quote).

The $900 million or so Johnson & Johnson(JNJ Quote) is shelling out to buy Cougar highlights the good value to be had right now in Medivation, which has both an Alzheimer's drug in phase III trials (partnered with Pfizer(PFE Quote)) and a prostate cancer drug similar to Cougar's abiraterone moving soon into phase III studies.

And you get all that from Medivation for a market cap of $640 million.

Medivation owns 100% rights to its prostate cancer drug MDV3100 but is seeking a partner. Thursday, J&J just set a mighty high sales comp for phase III prostate cancer drugs.

Medivation, with two drugs in phase III studies, is worth more.

Abiraterone and MDV3100 are similar drugs that work by starving prostate cancer cells of testosterone produced naturally in the body. Testosterone helps prostate cancer grow, so cutting off the hormone can help arrest tumor growth. The difference between the two drugs is that abiraterone shuts down testosterone production at the adrenal gland while MDV311 blocks a testosterone receptor on the surface of prostate cancer cells.

In separate phase II studies, patients treated with both drugs revealed evidence of anti-tumor activity, although neither drug has yet been shown to prolong survival.

Cougar began phase III studies of abiraterone last year. One study is testing the drug in men with a very advanced prostate cancer that continues to grow even after treatment with chemotherapy. The second phase III study is enrolling men with less advanced disease -- those for whom hormonal (anti-testosterone) therapy has stopped working but who have not tried chemotherapy.