Medivation (MDVN) shares are up 14% to $86.36 in early Wednesday trading following the release last night of very strong Xtandi data from the "PREVAIL" phase III study in pre-chemo prostate cancer patients.
Bottom line: Medivation and Astellas now have the data needed to accelerate Xtandi sales growth and turn the drug into a $3 billion-a-year blockbuster. Xtandi should now become the No. 1 choice for urologists treating pre-chemo prostate cancer patients, more so than Johnson & Johnson's (JNJ) competing prostate cancer drug Zytiga.
J.P. Morgan analyst Geoff Meacham sums up the bull case for Medivation well:
In our view, the full phase 3 PREVAIL data of Xtandi in pre-chemo prostate cancer (PC) leave little room for debate on whether Xtandi or JNJ's Zytiga will have majority market share. We acknowledge the caveats of cross-trial comparisons, but in our judgment, many of the efficacy metrics definitively favor Xtandi. Importantly, Xtandi also wins on convenience metrics which are commercially relevant (no need for steroids, 1x/day, no food effect). Overall, we believe that the profile of Xtandi in pre-chemo PC should be very attractive to both urologists and oncologists, with the former being largely untapped and critical for upstream use. We suspect that utilization may accelerate in the US prior to YE14e label expansion and as such, we are raising our 2014-2016 WW forecasts by 5-20% given increasing duration of therapy and higher market share for Xtandi. Yesterday, we raised our Dec 2014 target to $85 from $75 based on what we thought would be a differentiated clinical profile of Xtandi. Today, we are raising our Dec 2014 target to $101 from $85 based on emergence of real phase 3 data which we believe positions Xtandi as the clear winner in pre-chemo, justified by higher forecasts and additional upside levers.
You want to hear from a urologist directly? Dr. Ben Davies, assistant professor of Urology at University of Pittsburgh and an expert in urological cancer, had this to say on Twitter last night: