Leerink Swann Rates Medivation (MDVN) Market Perform

Leerink Swann analysts Howard Liang and Jonathan Eckard rated shares of Medivation, Inc. (Nasdaq: MDVN) a Market Perform with a valuation of $14.

The analysts said that the negative readout for the Phase III CONNECTION trial for Dimebon, without any efficacy signal, leads them to believe that investors shouldn't expect much from the Dimebon program.

However, Medivation will continue to explore its Dimebon options.

The Leerink Swann analysts wrote, "Yesterday after the market close, MDVN reported 4Q:09 EPS of ($0.78), wider than consensus of ($0.55) and our estimate of ($0.52), mainly reflecting higher-than-estimated Dimebon R&D spending and SG&A expenses during the quarter as well as ~$2M less in collaborative revenues. We are lowering our 2010 EPS estimates to reflect lower revenues, increased operating expenses related to additional Dimebon spending as most trials appear to be continuing, as well as the inclusion of GAAP tax provisions. Our new 2010 GAAP EPS estimate is lowered to $1.55 from $2.34, and continues to reflect the discontinuation of Dimebon collaboration and recognition of the remaining PFE upfront payment during FY2010."