Canaccord Genuity Doubles Price Target for Medivation

The company developed Xtandi for the treatment of metastatic castration-resistant prostate cancer, and it received FDA approval in 2012.

Newman states that, although there is no formal head-to-head trial, Xtandi matches up well against its rival Zytiga, produced by Cadila Pharmaceuticals. Xtandi provides a greater reduction in death, 29% compared to Zytiga’s 21%. Also a reduced risk of radiographic progress or death, by 83% versus 57%. He concludes that Xtandi is a better product and will look to take up more market share as time goes on.

Newman predicts that that potential revenue from Xtandi will be around $4.5 billion in the pre-chemo setting by 2023. The U.S. peak sales alone are estimated at $2.7 billion in the pre-chemo setting.

Medivation has surpassed its highs from February of $88.20 and gradually continues to move up the chart. Thursday it posted its most recent high of $100.48.

Canaccord Genuity upgraded its rating on Medivation to Buy from Hold, as well as more than doubling its price target to $132.00 from the previous target of $60.00.

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The earnings per share estimate for 2014 has been revised to $1.88 from $3.03. The estimate for 2015 has been revised to $0.39 from $1.93 per share.

Annual revenue for 2014 was revised to $632.8 million from $516.3. Revenues for 2015 were revised to $652.0 million from $594.5.

Medivation has a consensus price target of $102.00, and it has a 52-week trading range of $48.15 to $100.48. The market cap for this company is $7.67 billion.