Jefferies Lifts Target On Medivation To $52 From $39 As 'Xtandi Looking Better'

Jefferies raised the price target of Medivation Inc (NASDAQ: MDVN) shares to $52 from $39 after its survey showed "meaningful improvement" in the market for Xtandi on almost all fronts.

The Physician Survey

Jefferies conducted a physician survey "to gauge the outlook for Medivation's Xtandi given recent changes in the metastatic castrate-resistant prostate cancer (mCRPC) landscape including Xtandi's usage in pre-chemotherapy, and the impact from positive TERRAIN and STRIVE data in earlier stages of CRPC."

The survey showed market share has increased in all early lines of therapy, pre-chemo Xtandi share is up meaningfully compared to its October survey, and treatment duration in pre- and post-chemo has also extended.

"Our survey suggests current Xtandi treatment duration of 15.1 months in pre-chemo and 8.4 months in post-chemo up from 9.4 months and 6.4 months respectively," analyst Biren Amin wrote in a note.

Related Link: Why Medivation Will Likely Reject Sanofi's $52.50/Share Buyout Offer

According to the survey, 68 percent of respondents stated that they are aware of the STRIVE/TERRAIN clinical data.

"Our data projects growth in M0–M3 population when prompted with the STRIVE/TERRAIN data. From current share to YE '17 our data projects increase of 26 percent share in M0, 20 percent in M1, and 11 percent in M2/3. Compendia listing of Xtandi could be an important catalyst in driving this growth," said Amin, who has a Hold rating on the stock.

Estimates And Looking Forward

As such, Amin raised U.S. sales estimates for Xtandi above consensus from 2018–2021, despite 2016–2018 estimates currently being in line with consensus. The analyst sees 2021 U.S. sales of Xtandi at $3.099 billion, up $367 million from prior estimate of $2.732 billion and $300 million from consensus estimate of $2.799 billion.

For 2016, the analyst projects Xtandi sales of $1.457 billion, with peak sales of $4.9 billion in 2027.

Meanwhile, Medivation has rejected Sanofi SA (ADR) (NYSE: SNY)'s $52.50 takeover offer, saying the bid "substantially undervalues" the company.

Early Monday afternoon, shares of Medivation were up 0.90 percent to $57.28.