I wonder how many people have been holding Medivation shares through the years, all the way through? If you have, you must have forgotten that you owned the stuff, because the temptation to unload them, on good news and bad, has been very strong at times. Back in 2010, the company was developing an oddball Alzheimer’s play, a Russia compound called dimebon, but (like every oddball Alzheimer’s play so far, and to be honest every non-oddball one as well) it failed in the clinic once things got serious.
Late in 2011, though, the company came back with very good clinical data (stopped early for efficacy) on an androgen receptor ligand for resistant prostate cancer, MDV3100. This thiohydantoin (!) was approved in 2012 as Xtandi (enzalutamide), and is under investigation in wider markets as well. The company also acquired a PARP inhibitor along the way, and the very strong clinical results in that field earlier this summer have now led to a deal with Pfizer.
Pfizer’s paying $14 billion (!) for Medivation, a hefty price that can be attributed to MDVN’s management (particularly CEO David Hung) playing several potential buyers off against each other. Sanofi was making a $9.3 billion offer for them back in April, raising it last month to $10 billion, and several other companies were probably making quiet inquiries as well. The company’s stock closed Friday at about $67; this Pfizer deal values it at $81.50. If you look at the company’s chart over the years, you’ll see what I was talking about in that first paragraph. The 2010 dimebon debacle looked terrible at the time, but after Xtandi kicked in, it turned into a minor bump in the road. (I made fun of this guy at the time, but in retrospect he was buying at the right time, although perhaps for the wrong reasons). It would have been hard, though, not to unload your shares after Dimebon, and hard not to sell them as they instantly more than doubled after the later androgen-receptor success. Still, that $10 price, appealing as it might be if you were holding the stuff at $2.50 post-dimebon, turned into at >$60 price over the next five years. But then, in mid-2015, the shares headed right back down, and you had a brief chance to buy it under $30 again, until the latest run-up. So yeah, I doubt if too many people have experienced the whole thing; the psychological pressures have just been too great.
What’s particularly rich about this whole thing is that one of the big assets that Medivation has, as mentioned above, is their PARP inhibitor. They picked that one up for about $500 million from Biomarin, who probably wish in retrospect that they’d held on to it. But Pfizer itself had a PARP program, which they unloaded (to Clovis) after Sanofi’s and AstraZeneca’s earlier disappointing results in the field. But then Sanofi also turned around and tried to buy MDVN, and one of the other companies said to be interested, Merck, also used to have their own PARP compound until they unloaded it as well, to Tesaro, whose terrific results started up the whole neo-PARP frenzy. (AstraZeneca was said to be looking at an offer as well). So the whole area has been a festival of “Oh crap, turn around, turn around, why did we ever think. . .”, a dust-clouded field full of brake lights, waving fists, honking horns, and those back-up beepers you hear on garbage trucks. It hasn’t been dull, though. Biotech rarely is.