Ahead of the Bell: Medivation
NEW YORK (AP) — An analyst raised his price target for Medivation on Monday after the drugmaker announced that it received approval from the Food and Drug Administration for Xtandi.
Xtandi, which is expected to launch in the middle of September, is used for treating prostate cancer in patients for whom other treatments have failed.
Brean Murray Carret & Co.'s Jonathan Aschoff increased San Francisco-based Medivation's price target to $125 from $105 and kept a "Buy" rating.
Medivation shares closed at $104.86 per share on Friday after rising to an all-time high of $105 earlier in the session
Aschoff said in a client note that Xtandi now has FDA approval for patients with metastatic castration resistant prostate cancer who have previously received docetaxel. The analyst anticipates that Xtandi will receive FDA approval in all hormone refractory patients by the end of 2013.
"This broader population is the true near term market opportunity for Xtandi, and longer term we believe the drug will prove to be safe and effective in patients still responding to hormone therapy," he wrote.
Yaron Werber of Citi Investment Research says that Xtandi is a game-changing drug and will be priced at $7,450 a month - higher than the analyst's earlier $6,000 estimate.
Werber believes that Medivation Inc. will see its U.S. Xtandi sales at about $172 million for 2013 and $390 million for $2014.
The analyst reaffirmed a "Buy" rating and $129 price target.