If Medivation Is Sold, Brean Thinks It'll Be For Far More Than Sanofi's Bid

Medivation Inc MDVN reported its U.S. and ex-U.S. Xtandi sales for 1Q16 in line with the consensus.

Brean Capital’s Jonathan Aschoff maintained a Buy rating on the company, with a price target of $61.

Xtandi Outlook

Growth in the underlying demand for Xtandi has continued, rising about 7 percent quarter on quarter, beating Zytiga prescriptions despites it Xtandi being launched later.

“We believe treatment duration will continue to increase, as upstream use increases, given the longer treatment duration with earlier stage patients,” Aschoff mentioned.

The analyst believes that with 80 percent of urologists still to prescribe Xtandi, as of 1Q16, the product still had meaningful upside, supported by the company’s recently enlarged sales force.

The results of a Phase 2 trial for Xtandi in breast cancer is expected in 2H16. Medivation has also initiated an ARCHES Phase 3 trial for Xtandi in combination with ADT in metastatic HSPC.

Stock Performance

Given that several companies are interested in acquiring Medivation, Aschoff believes that take-out speculations could continue to drive the stock, “along with the growing Xtandi sales and clinical and regulatory catalysts coming in 2H16.”

The company reiterated its guidance for full year 2016.