Barclays Lays Out Its Sum-Of-The-Parts Analysis On Medivation, Boosts Target Price By $22

Barclays has raised the price target on the shares of Medivation Inc (NASDAQ: MDVN) to $70 from $48, driven by the increased visibility on duration gains and pipeline front.

The sum-of-the-parts valuation by analyst Geoff Meacham, who has an Overweight rating on the stock, now assigns $55 for Xtandi (up from $39). The SOTP valuation also assigns an incremental $5 per share to Xtandi in breast cancer, $8 per share to talazoparib and $2 per share to net cash.

"[W]e still think there is underappreciated scarcity value in MDVN shares given Xtandi's best-in-class profile and line-of-sight to tapping into new segments of the prostate market," Meacham wrote in a note.

Related Link: Medivation Execs Making A Strong Case For Independent Growth Vs. Sale, Credit Suisse Says

"Combine that with important data read-outs for Xtandi and talazoparib in breast cancer over the next 12 months, and we think the portfolio can support higher valuations even before factoring in synergies with strategic suitors," the analyst added.

Meacham noted that although the biotech company's 2020 guidance ($2.5 billion plus in revenue) will be appreciated, "the details on longer treatment duration, increased visibility on timing for PROSPER / EMBARK read-outs, and insight into the pipeline strategy are more tangible."

According to TipRanks, Meacham has a success rate of 59 percent with an average return per recommendation of +16.2 percent. The analyst is ranked 221 out of 3,899 analysts.

Medivation posted first-quarter U.S. Xtandi sales at $307.6 million and EU sales at $240 million. Non-GAAP EPS came in at $0.11, significantly short of Street expectation of $0.22.

At time of writing, shares of Medivation were up 1.91 percent to $60.35.