Stifel Raises Medivation Inc (MDVN) PT to $66 with Company In Play

Stifel analyst, Thomas Shrader, tries to sort through the buyout hype surrounding Medivation (NASDAQ: MDVN) in a note this morning. Recent news reports make it pretty clear Medivation is in play but like many biotechnology stories the value of the company is based on many assumptions. His takeaway is that a fair price would be $66 and possibly as high as $85 depending on the perceived value of Talazoparib. No change to Buy rating.

Xtandi may be on the verge of a significant sales expansion resulting from increased uptake by urologists based on a near tripling of PFS data relative to casodex – or may not be based on its increased tendency to cause fatigue.

The company’s second drug, a PARP inhibitor named Talazoparib, might be the biggest “could be” in the sector based on the potential for the drug in the light of relatively modest clinical data. Any acquirer would need to pay for Talazoparib but some acquirers might then need to divest the drug to obtain FTC clearance.

The analyst thinks the ability of a company to enter the growing arena of mCRPC with a drug as good as Xtandi is unique and he expects a minimum of $66 per share with an additional conditional payout for Talazoparib. An acquirer that accepts Medivation’s arguments that Talazoparib is as valuable as Xtandi and models the two drugs with similar growth ramps, offset for year of introduction, would consider Medivation to be worth $85 per share.

For an analyst ratings summary and ratings history on Medivation click here. For more ratings news on Medivation click here.

Shares of Medivation closed at $57.80 yesterday.

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