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Pfizer Buys Medivation

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.

 

 

23 comments on “Pfizer Buys Medivation”

  1. JAB says:

    This is too bad, because Medivation’s real value was that they were talented at walking compounds across the “Valley of Death”, i.e., med chem, PK, ADME. They did a very nice job getting the androgen inhibitor from academia to market. Now that the Pfizer borg will swallow them up for the PARP inhibitor, the skilled folks will disperse. Hopefully the scientists managed to get a chunk of the deal for themselves.

    1. Me says:

      “Hopefully the scientists managed to get a chunk of the deal for themselves.”

      While I also hope this is true, I still *lol*. They’re probably already getting their severance packages as I write this.

    2. TroyBoy says:

      “Medivation’s real value was that they were talented at walking compounds across the “Valley of Death”, i.e., med chem, PK, ADME. They did a very nice job getting the androgen inhibitor from academia to market. ”

      I don’t see how Medivation was involved much in med chem, PK or ADME or in “walking the inhibitor from academia to market.” The J. Med Chem paper (PMID: 20218717) lists only academic scientists, where they showed all the PK and efficacy data. They also describe the final compound (MDV3100; compound 92) that become Xtandi.

      Medivation may get credit for the clinical trials. (You can’t get an academic grant large enough to pay for a large Phase II or III trial.) But it was academic talent that discovered the compound.

      1. JAB says:

        No question that Sawyers & Jung discovered the compound, and Astellas carried the ball on the phase III trial, but that’s the point of the VoD meme – things just don’t cross that chasm on their own.

        Also a pity that UCLA and Medivation got into a squabble over credit and royalties.

  2. Imaging guy says:

    In January you wrote a post about Medivation’s “PD1” antibody (Pidilizumab) which turned out to be not acting on PD1.
    http://blogs.sciencemag.org/pipeline/archives/2016/01/26/medivation-decides-that-their-drug-isnt-what-they-thought

  3. anon says:

    This is a perfect example of why I keep reading this blog:
    “…a dust-clouded field full of brake lights, waving fists, honking horns, and those back-up beepers you hear on garbage trucks.”

    1. Derek Lowe says:

      That image just suddenly came to me as I was writing the paragraph!

      1. Garrett Wollman says:

        Boston driving will do that to you.

    2. your mom says:

      Another favorite: “There are covalent functional groups that are weakly reactive (epoxides), and there are covalent functional groups that are ready to party, and a quinone methide shows up already lurching to one side, with sloshing red party cups in both its hands.”

  4. Pfizer Joe says:

    Lets get the recruiters ready. Lots of Pfizer ex’s are going to be available.

  5. Neil Mathews says:

    so is the compound / company actually any good ie will it give significant progression free survival to a significant proprtion of patients with a decent quality of life? Or is it a continuing sign of Pfizer’s desperation to acquire and maintain it’s bloated corporate life?

  6. Robert S. says:

    As a prostate cancer victim, I take a somewhat different view….My insurance company has refused to pay for Xtandi, the drug that is feeding this Wall Street frenzy. A years supply of this drug retails for $130,000 …Prostate cancer victims face bankruptcy if this drug turns out to be their last hope and they have weak or no insurance…Mind you, this drug does not cure cancer. It just slows it down a little and gives victims an extra 4 ot 6 months of life….
    So while 32,000 men a year die from prostate cancer, Pfizer jumps in to extract as much money out of them as they possibly can……

    1. Anon says:

      Very sorry to hear about your situation. Frankly if I was in your shoes, I’d put that money on my kids education, or open a trust fund as downpayment on their first house. But I agree, allowing Pharma companies to take all your money just to live an extra 4 or 5 months is utterly selfish. Of both parties.

  7. David Young MD says:

    Well, one of the rare side effect of Xtandi is seizures. There is said to be analogue anti-androgens that do not cause seizures. If this is true and those drugs are a little better tolerated (and work at least as well) they could come to market with an advantage over Xtandi. Xtandi could lose its market really fast. There are a lot of “‘ifs” there, of course and those analogues might have hit a dead-end already.

    And just who knows how good the PARP inhibitor is. There will be a bunch of these from various companies and who knows which will turn out the best in the shuffle.

    1. Mol Biologist says:

      I will not touch a moral aspect of Xtandi, the drug that is feeding this Wall Street frenzy which.
      But what I see is a good example of the possibility to develop Test of Scientific Literacy Skills (TOSLS). Measuring Undergraduates’ Evaluation of Scientific Information and Arguments.
      http://www.ncbi.nlm.nih.gov/pmc/articles/PMC3516792/

      To repeat over and over that Xtandi is anti-androgen drug and 3-bromopyruvate is an anticancer therapy and clearly 3-BP is an indiscriminate alkylating agent. I propose to raise the issue and arguments for those who do not agree that this is so.

      1. c says:

        Does this comment seem to anyone else like one of those Markov chain experiments?

        And why does “feeding this Wall Street frenzy” appear here and in another comment by a different (?) user?

        1. Mol Biologist says:

          Yes, I quoted two people with opinions which I can’t ignore.
          I will not touch a moral aspect of Xtandi, the drug that is feeding this Wall Street frenzy which slows cancer down a little and gives victims an extra 4 ot 6 months of life.
          Do you have other arguments regarding MoA of Xtandi or 3-BP?Just curious?

  8. PorkPieHat says:

    Enough cant be said about Medivation’s CEO. This guy gets an MD and then he’s heading Lead Discovery and Development / New Projects at Chiron. When was the last time you saw an MD leading some of the earliest stages of the pharma industry process? Then he leads a privately held device/diagnostics company to an acquisition (on 8-fold value over the total of development costs!) only three years in. Then he leads Medivation through the very tough dimebon fiasco in AD, to some really strong investments that play out well. Dude’s got to have some good leadership skills.

    1. Barry says:

      Dr. David Hung has worked at many things before settling into Medivations. Curiously, his background in Lead Discovery led him to invest not in Drug Discovery/Medicinal Chemistry but to acquire a candidate from Charles Sawyer.
      “Dr. David T. Hung, M.D., is the Founder of Medivation, Inc. and has been its Chief Executive Officer and President since December 17, 2004. Dr. Hung served as the Chief Executive Officer and President of Medivation Neurology, Inc., a subsidiary of Medivation, Inc. from September 2003 to December 2004. He co-founded Medivation (NASDAQ: MDVN) in 2003. He served as Consultant and Adviser of Freedom Eye Ltd. since July 13, 2006. From 1998 to 2001, He was employed by Pro-Duct Health Inc. where he served as its Chief Scientific Officer from 1998 to 1999 and President and Chief Executive Officer from July 1999 to November 2001. He served as the Chief Executive Officer and President of Orion Acquisition Corp. II since December 17, 2004. Dr. Hung is a specialist medical expertise is in internal medicine and oncology. From 1995-1998, he served in various senior positions at Chiron Corporation, a public biotechnology company, with his last position being Vice President of Preclinical Research, Vice President of Lead Discovery and Development and Vice President of New Projects. He served as a Consultant to Cytyc Corporation from December 2001 to January 2003. He has more than 15 years of experience in molecular biology research, having completed basic research fellowships at the Brain Tumor Research Institute and the Cardiovascular Research Institute and heading a National Institute of Health-funded laboratory at the University of California San Francisco. He serves as Director of NKT Therapeutics Inc. He has been an Executive Director of Medivation Inc. since December 17, 2004. He served as a Director of Medivation Neurology, Inc. since September 2003 until December 2004. He served as an Independent Director of Opexa Therapeutics, Inc. since May 16, 2006 to October 27, 2011. He served as a Director of Sportan United Industries Inc. since May 15, 2006. He served as Non Executive Director of FYI Resources Limited from October 2004 to July 13, 2006. He served as a Director of LifeSync Holdings Inc. since July 1999; and Orion Acquisition Corp. II since December 17, 2004”

      1. drsnowboard says:

        Does he do his own PR, or does he rely on acolytes?

  9. Pfizer Joe says:

    Pfizer will spinoff the oncology group. Wonder what it’s name will be?

    1. pfizered-123 says:

      “Pficogene” perhaps?

      1. Pfizer Joe says:

        Lets have a contest!

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