Medivation Inc. (NASDAQ: MDVN), a hot biotech company, has just received U.S. regulatory approval for a late-stage treatment for prostate cancer. The company’s shares had increased sixfold over the past year.
The drug is called Xtandi, and it was developed in conjunction with Astellas Pharma Inc. (TYO: 4503). The two companies will split sales. Based on this approval, Medivation’s sales for 2013 may be as high as $357 million in comparison to last year’s $60 million.
Xtandi was approved three months before the scheduled decision date, and it is intended for patients whose cancer has progressed beyond the prostate despite prior treatment. The drug extended patients’ survival to an average 18.4 months from 13.6 months for those not on the treatment.
“The need for additional treatment options for advanced prostate cancer continues to be important for patients,” Richard Pazdur, the FDA director of the Office of Hematology and Oncology Products, said in the statement. “Xtandi is the latest treatment for this disease to demonstrate its ability to extend a patient’s life.”
With Xtandi, Medivation now competes against Johnson & Johnson’s (NYSE: JNJ) Zytiga and Dendreon Corp.’s (NASDAQ: DNDN) Provenge. The two have generated sales of $432 million and $162 million, respectively, in the first half of this year. Medivation hopes to begin selling Xtandi from mid-September onward.
The drug will cost $7,450 for 30 days, and patients will likely use it for eight monts or more. Medivation plans to make use of Astellas’s U.S. sales force to drive marketing and sales.
Based on the approval news last Friday, Medivation rose to $104.86, or 7.6 percent, at 4PM New York time. That’s the company’s highest closing price ever. Near the end of August, Medivation stated that they intend to go for a two-for-one stock split on September 21.
Medivation has also pitched the drug to the European Medicines Agency, an action that allowed the company to receive $5 million from Astellas on top of $30 million it already received for clearing FDA approval.