Credit Suisse: Medivation 'Headwinds Loom'

In a report published Monday, analysts at Credit Suisse initiate coverage of

with a Neutral rating and a price target of $115. The analysts believe that the company's current valuation is driven by the M&A environment in the biotech segment, rather than being supported by fundamentals. Although the sales of the company's prostate cancer drug, Xtandi, are likely to meet expectations, Medivation's stock is likely to come under pressure if an acquisition does not occur in the near future. "Our survey suggests strong uptake of Xtandi in the next 12 months, and the market penetration predicted by the survey is consistent with the 2015 guidance. However, the duration of therapy predicted by our survey is consistent with the shorter duration reported in two recent studies," the analysts explained. Among the potential catalysts for Medivation's stock in 2015 are a possible ANDA filing for the company's drug, Zytiga, detailed clinical data for STRIVE, update on the clinical strategy for pidilizumab and additional Xtandi data in TNBC. According to Credit Suisse, "MDVN has recently traded up ~30% in the past two months, despite two data releases that suggest the Xtandi duration of use is significantly shorter than anticipated in the pre-chemo setting."