Medivation shares down after co expands Alzheimer's drug study
BANGALORE Nov 11 (Reuters) - Shares of Medivation Inc MDVN.O fell as much as 18 percent on Tuesday, a day after the company posted a wider-than-expected quarterly loss and said it would expand the late-stage study of its Alzheimer's disease (AD) drug, Dimebon, potentially delaying the drug's launch.
Financials are largely irrelevant at this point, Natixis Bleichroeder analyst Corey Davis said, adding that much more important was the company's announcement of a dramatically expanded late-stage study for Dimebon, which Medivation is co-developing with Pfizer Inc (PFE.N: Cotización).
The expanded trial will include late-stage trials in moderate to severe AD and a 12-month study assessing the safety and efficacy of Dimebon when administered in combination with an acetylcholinesterase inhibitor.
Cholinesterase inhibitors like Pfizer's Aricept prevent the breakdown of acetylcholine, a chemical messenger important for learning and memory.
The company had previously planned to conduct one late-stage trial in patients with mild-to-moderate AD.
The expanded program is likely to push the launch out by two years, at least into 2013, and it will cost significantly more, Davis said and cut his price target on the stock to $14 from $16. "The risk profile increases substantially since there is zero evidence that the drug works in severe patients and in combination with other drugs," Davis added. The analyst maintained a "sell" rating on Medivation stock.
However, Leerink Swann analyst William Tanner said the new strategy, with a more comprehensive clinical data set available at launch, should provide the opportunity for broader-based commercialization at the outset.
The company now expects to file a new drug application for Dimebon with U.S health regulators in 2011, versus its previous expectation of 2010.
"Assessing whether Dimebon works in a complementary manner with an acetylcholinesterase may allow Pfizer to preserve the Aricept franchise especially if the two drugs can be co-formulated," Tanner added. Continuación...