The encouraging results Medivation (NASDAQ:MDVN) reported for its late-stage prostate cancer treatment were great news for company investors, as shares of the San Francisco-based biotechnology shot up nearly 140% Thursday.
However, the announcement only further soured the already grim mood at rival Dendreon (NASDAQ:DNDN), which markets the once high-flying prostate medication Provenge. Executives at the Seattle-based company must be asking themselves “What’s next?” On Wednesday, they saw the company’s stock pummeled in after-hours trading after forecasting November sales for Provenge would be lower than October’s. Their shares continued to be battered Thursday following the Medivation announcement, hitting a 52-week low closing of $6.55.
The Medivation compound, known as MDV3100, might even have some advantages over the recently approved Johnson & Johnson (NYSE:JNJ) prostate cancer drug, Zytiga. In the study, patients on MDV3100 enjoyed a survival rate similar to the 3.9 months that Zytiga needed to gain FDA approval. However, unlike J&J’s drug, the Medivation treatment doesn’t require the patient to also take prednisone — a steroid hormone linked to high blood pressure, weight gain, pain, depression and weakness.
“Prednisone degrades the quality of life, which is very important to this patient population,” Wedbush Securities analyst David Nierengarten said in a Reuters article.
Medivation, which is developing MDV3100 with Japanese partner Astellas Pharma Inc., plans to sit down with the FDA in a pre-New Drug Application meeting early next year. When approved, most likely in early 2013, the Medivation pill could become the favored treatment in a new generation of prostate cancer medicines, surpassing Zytiga, also taken orally, and Provenge, which is infused.
“When (MDV3100) is on the market it will displace Zytiga,” Nierengarten said. “It is a once-a-day pill without prednisone The J&J drug can cause hypertension and liver damage and so has to be taken in combination, and beats Zytiga which is twice-a-day with prednisone, very easily.”
Prostate cancer kills about 250,000 men a year globally and is the second-most common cause of cancer death in men in the United States, after lung cancer. The worldwide market for prostate cancer treatments is about $9 billion, according to a Reuters report.
MDV3100 performed so well in the clinical trial that an independent monitoring committee recommended stopping the study so the drug could be used to benefit patients who were taking placebos. While both MDV3100 and Zytiga work by targeting the male hormone testosterone that fuels prostate cancer cell growth, their mechanisms differ. Zytiga works inside cancer cells to block testosterone production, while MDV3100 aims to interfere with the ability of testosterone to bind to prostate cells.
If successful, MDV3100 would represent vindication of sorts for Medivation CEO David Hung. The company’s share price went from near $40 to just more than $12 in March 2010, when its highly touted experimental drug for Alzheimer’s failed in a late-stage study.
Hung, who owns 3.5% of the company according to recent data, also will benefit from the surge in share price. Medivation’s largest shareholders are investment funds QVT Financial LP and Lansdowne Partners.
As of this writing, Barry Cohen did not own a position in any of the aforementioned stocks.