Analyst Conference Summary


conference date: August 6, 2015 @ 1:30 PM Pacific Time
for quarter ending: June 30, 2015 (Q2, second quarter 2015)

Forward-looking statements

Overview: Revenue up y/y, but net income down due to higher expenses.

Basic data (GAAP):

Revenue was $175.7 million, up 36% sequentially from $129.2 million, and up 19% from $148.1 million in the year-earlier period.

Net income was $25.8 million, up sequentially from negative $3.1 million, but down from $47.9 million year-earlier.

Diluted EPS was $0.31, up sequentially from negative $0.04, but down from $0.60 year-earlier.


Increased revenue guidance for the full year 2015. Expects U.S. net Xtandi sales of $1.14 to $1.18 billion resulting in non-GAAP collaboration revenue to $670 to $700 million. May also earn milestone payments of up to $245 million.

Conference Highlights:

The stock will split 2 for one to shareholders of record on August 13, with distribution on September 15.

U.S. Xtandi sales by Astellas were $298.4 million, up sequentially, from $224 million. Included a $2.8 million positive gross-to-net adjustment.

Xtandi ex-U.S. sales by Astellas were $188 million, up 41% sequentially from $133 million and up 121% from year-earlier.

Total global sales were $487 million.

Xtandi showed continued traction for treating metastatic castration resistant prostate cancer. Most prescriptions are from oncologists, but urology prescriptions grew to 20% in the quarter. Believes Xtandi is now prefered for novel agents.

Medivation collaboration revenue for the U.S. was $149.2 million, and outside the U.S. was $25.6 million. Upfront and milestone revenue was just $0.8 million.

Non-GAAP numbers: net income $48.7 million, up 263% sequentially from $13.4 million, and up from $4.4 million year earlier. EPS $0.58, up 241% sequentially from $0.17, and up from $0.05 year-earlier. Collaboration revenue, which excludes upfront and milestone payments, was $174.8 million, up 37% sequentially from $127.8 million.

Xtandi (enzalutamide) pipeline developments:

In April Phase 2 STRIVE trial reported positive results in patients with non-metastatic or metastatic prostate cancer whose disease progressed despite treatment with a luteinizing hormone-releasing hormone (LHRH) analogue therapy or following surgical castration.

In January the first patient was enrolled in the Phase 3 EMBARK trial for enzalutamide alone or in combination with androgen deprivation for high-risk, hormone-sensitive, non-metastatic prostate cancer that has biochemically recurred following definitive local therapy with radical prostatectomy and/or radiation. The primary endpoint of the trial is metastasis-free survival. The trial will have three arms, including a combination arm.

The Phase 2 triple-negative breast cancer (TNBC) trial reported new data in June. About 20% of women are triple negative. The study met its primary endpoint of a 35% clinical benefit rate. Also developed a diagnostic test to select for efficacy. Other breast cancer trials with other subtypes of patients continue.

The first patient was enrolled in a registry of CRPC patients.

A Phase 2 trial of enzalutamide for hepatocellular carcinoma is in its startup phase.

MDV 9300 (pidilizumab) is being considered as an immuno-oncology agent. It is a PD-1 inhibitor.

Cash balance ended at $497.5 million, down sequentially from $568.6 million. Convertible note debt $149 million. Contingent consideration debt $111 million. $93 million was used in the quarter to redeem convertible notes, and in July $168 million was used to redeem the remaining convertible notes.

GAAP operating expenses were $122 million, consisting of $47.3 million for research and development and $74.7 million for selling, general and administrative expenses. Leaving income from operations of $53.7 million. Interest and other expense was $13.2 million (including $7.9 million loss on extinguishment of convertible notes). Income tax expense $14.6 million.


Breast cancer data will be submitted to, and hopefully presented at, upcoming medical meetings.

ARV7 targetted drugs? ARV7 is one of the splice variants and is associated with any anti-androgen signalling therapy. But there is no evidence that it does not correlate with therapy outcomes. But its expression does increase with advanced disease. Xtandi appears to inhibit it. So there is no compelling evidence taht ARV7 predicts clinical outcomes.

% of patients who may test positive with your breast cancer diagnostic? 50%. So about 10% of all metastatic breast cancer.

Urologists reaction to new data. We continue to grow share in the urology segment. We get new presciption writers each quarter. We surpassed sales of Zytiga this quarter. We expect an increase in prescriptions and duration among urologists.

Are you thinking of combining your PD1 drug with Xtandi? It may be an attractive thing to do.

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Disclaimer: My analyst call summaries may include both our condensations of statements made by company representatives and my own analysis. They are not covered by any warranty. I cannot guarantee anything said by company representatives is true. I try not to make errors, but it is possible. This is investment journalism, not financial advice.

Copyright 2015 William P. Meyers