Global Hunter Securities Raises PT On MDVN To $30

Global Hunter Securities has raised its price target from $24 to $30 on Medivation MDVN in its preview of Q1:11 results which are to be released after the market close on Friday. In the report, Global Hunter Securities writes, “We believe the focus of the earnings call will be on an MDV3100 program update, a discussion of the competitive landscape in hormone-refractory prostate cancer (HRPC) and a dimebon update. We are taking this opportunity ahead of earnings to raise our fair value estimate to $30 from $24, which reflects a change in our pricing assumption for MDV3100 given the recent approval of Johnson & Johnson's (JNJ) drug, Zytiga. We view Zytiga as an appropriate proxy for MDV3100 with its validated mechanism of action (MOA) and as such, believe that MDV3100 could be priced similarly to Zytiga. Upside to our pricing assumption could come from a better survival outcome for MDV3100 and a superior safety profile given Zytiga's need to be used with steroids, the requirement for constant monitoring of LFT's (liver function tests) in hepatically-impaired patients and the potential for increased cardiac issues like sudden death and myocardial infarctions (MI) due to hypokalemia. In our view, Medivation has a compelling risk/reward profile and we suggest owning shares ahead of a potential Phase III MDV3100 interim analysis, likely in Q3, as we believe the program is fairly de-risked with Zytiga as a proxy. We continue to view the Alzheimer's program as a call option.” Global Hunter Securities is reiterating its Buy rating on the stock. MDVN closed yesterday at $22.86.