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MEDIVATION INC (MDVN)

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MEDIVATION : Reports Third Quarter 2010 Financial Results and Provides Corporate Update

11/05/2010 | 03:05pm US/Eastern

SAN FRANCISCO, Nov. 5, 2010 /PRNewswire-FirstCall/ -- Medivation, Inc. (Nasdaq: MDVN) today provided a corporate update and reported its financial results for the third quarter ended September 30, 2010.

"In the third quarter, we began the expansion of our MDV3100 development program into earlier stage patients with the initiation of the Phase 3 PREVAIL trial, which is enrolling men with advanced prostate cancer who have not yet received chemotherapy. Additionally, we believe that the positive interim analysis of the abiraterone Phase 3 study is a net positive for MDV3100, as it provides further clinical validation for the importance of the androgen receptor signaling pathway in advanced prostate cancer," said David Hung, MD, president and chief executive officer of Medivation. "Together with our partner Pfizer, we continue to investigate dimebon's potential clinical benefit in the ongoing Phase 3 HORIZON trial in Huntington disease and the ongoing Phase 3 CONCERT trial in mild-to-moderate Alzheimer's disease patients who are taking donepezil. We remain on track to complete enrollment in the CONCERT trial this year and look forward to announcing top-line results from the HORIZON trial in the first half of 2011."

Recent Accomplishments and Anticipated Milestones

MDV3100

    --  Initiated the Phase 3 PREVAIL trial evaluating MDV3100 in men with
        advanced prostate cancer who have not yet received chemotherapy.  This
        randomized, double-blind, placebo-controlled, multi-national Phase 3
        trial is expected to enroll approximately 1,700 patients globally.
    --  Continued to enroll patients in the AFFIRM trial and expect to complete
        patient accrual on November 15, 2010. This randomized, double-blind,
        placebo-controlled Phase 3 trial is evaluating MDV3100 in men with
        advanced prostate cancer who have been previously treated with
        docetaxel-based chemotherapy.
    --  On track to initiate two new MDV3100 trials in earlier-stage prostate
        cancer this year: a Phase 2 head-to-head trial comparing MDV3100 with
        bicalutamide; and a Phase 2 trial in hormone-naive patients.
    --  The Proceedings of the National Academy of Sciences (PNAS) published a
        paper showing the preclinical efficacy of MDV3100 against splice
        variants, which are mutated forms of the androgen receptor that may be
        associated with the development of prostate cancer resistance to hormone
        therapy.

Dimebon (latrepirdine)

    --  On track to report top-line data from HORIZON in the first half of 2011.
        This six-month, randomized, double-blind, placebo-controlled Phase 3
        trial is evaluating dimebon's potential benefits on cognition and global
        function in patients with Huntington disease.
    --  Continued to enroll patients in CONCERT and expect to complete patient
        accrual on November 30, 2010.  This 12-month randomized, double-blind,
        placebo-controlled Phase 3 clinical trial in patients with
        mild-to-moderate Alzheimer's disease is evaluating the potential
        efficacy of dimebon when added to ongoing treatment with donepezil.

Corporate

    --  Were awarded a $733,000 research and development grant under the
        Internal Revenue Service's Therapeutic Discovery Project Credit Program.

Third Quarter 2010 Financial Results

Revenue for the third quarter of 2010 was $14.4 million, consisting of partial recognition of the non-refundable up-front payments to date from the Company's corporate partners Pfizer and Astellas. These payments were recorded as deferred revenue upon receipt and are being recognized as revenue on a straight-line basis over the estimated performance period of the Company's obligations under the applicable collaboration agreement.

Total operating expenses for the third quarter of 2010 were $21.1 million, compared with $27.6 million for the same period in 2009. These figures are net of cost-sharing payments from the Company's corporate partners of $17.9 million and $4.2 million in the third quarters of 2010 and 2009, respectively, and include non-cash stock-based compensation expense of $3.3 million and $2.5 million, respectively.

For the nine months ended September 30, 2010, total operating expenses were $77.7 million, compared with $73.8 million for the same period in 2009. These figures are net of cost-sharing payments from the Company's corporate partners of $41.5 million and $16.2 million in the nine months ended September 30, 2010 and 2009, respectively, and include non-cash stock-based compensation expense of $10.0 million and $7.7 million, respectively.

Income tax benefit for the third quarter of 2010 was $1.5 million, compared with income tax expense of $2.8 million in the comparable period of 2009. For the nine months ended September 30, 2010, income tax benefit was $1.5 million, compared with income tax expense of $4.5 million in the prior year period.

Medivation reported a net loss for the quarter ended September 30, 2010, of $5.4 million, or $0.16 per share, compared with a net loss of $14.0 million, or $0.42 per share, for the same period in 2009. For the nine months ended September 30, 2010, the net loss was $30.1 million, or $0.88 per share, compared with a net loss of $28.5 million, or $0.90 per share, for the same period in 2009.

Cash, cash equivalents and short-term investments at September 30, 2010, totaled $211.5 million, compared with $278.2 million at December 31, 2009 and $233.3 million at June 30, 2010.

Financial Outlook

Medivation expects that its existing cash resources are adequate to fund its currently budgeted operations beyond 2012. By the end of 2012, the Company expects to have reported top-line data from the Phase 3 CONCERT trial in mild-to-moderate Alzheimer's disease, the Phase 3 HORIZON trial in Huntington disease and the Phase 3 AFFIRM trial in advanced prostate cancer patients who have failed chemotherapy..

Conference Call Information

To participate by telephone in today's live call beginning at 4:30 p.m. Eastern Time, please call 877-303-2523 from the U.S. or +1-253-237-1755 internationally. In addition, the live conference call is being webcast and can be accessed on the "Events and Presentations" page of the "Investor Relations" section of the Company's website at www.medivation.com. A replay also will be available for 30 days following the live call.

About Medivation

Medivation, Inc. is a biopharmaceutical company focused on the rapid development of novel small molecule drugs to treat serious diseases for which there are limited treatment options. Medivation aims to transform the treatment of these diseases and offer hope to critically ill patients and their caregivers. Together with its corporate partners Pfizer and Astellas, Medivation currently has investigational drugs in Phase 3 development to treat advanced prostate cancer, mild-to-moderate Alzheimer's disease and Huntington disease. For more information, please visit us at www.medivation.com.

This press release contains forward-looking statements, including statements regarding the continued clinical development of Medivation's product candidates, the potential completion of patient enrollment in ongoing clinical trials, the potential initiation of new clinical trials and the potential conduct of an interim analysis in the AFFIRM study, the anticipated timing of announcement of top-line data from ongoing clinical trials and other statements with respect to future clinical trial results, the therapeutic and commercial potential of Medivation's product candidates, the continued effectiveness of, and continuing activities under, Medivation's collaboration agreements with Pfizer and Astellas and the potential sufficiency of Medivation's cash resources, which are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Any statements contained in this press release that are not statements of historical fact may be deemed to be forward-looking statements. Forward-looking statements involve risks and uncertainties that could cause Medivation's actual results to differ significantly from those projected, including, without limitation, risks related to progress, timing and results of Medivation's clinical trials, including the risk that adverse or inconclusive clinical trial results could alone or together with other factors result in the delay or discontinuation of some or all of Medivation's dimebon development activities and the risk that positive results seen in our prior clinical trials may not be predictive of the results of our ongoing clinical trials, difficulties or delays in enrolling and retaining patients in Medivation's current and planned clinical trials, including as a result of the availability of competing treatments or clinical trials of competing drugs for the same indication, partnering of Medivation's product candidates, including Medivation's dependence on the efforts of and funding by Pfizer and Astellas for the development of dimebon and MDV3100, respectively, including the risk that Pfizer could elect to unilaterally terminate the dimebon collaboration agreement with Medivation at its election at any time, the achievement of development, regulatory and commercial milestones under Medivation's collaboration agreements, the manufacturing of Medivation's product candidates, including Medivation's dependence on Pfizer for the manufacture of all clinical requirements of dimebon, the adequacy of Medivation's financial resources, unanticipated expenditures or liabilities, intellectual property matters, and other risks detailed in Medivation's filings with the Securities and Exchange Commission, including its quarterly report on Form 10-Q for the quarter ended September 30, 2010, filed today with the SEC. You are cautioned not to place undue reliance on the forward-looking statements, which speak only as of the date of this release. Medivation disclaims any obligation or undertaking to update or revise any forward-looking statements contained in this press release.

~financial statements follow~


                               MEDIVATION, INC.

                CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                     (in thousands, except per share data)
                                  (unaudited)

                          Three Months Ended           Nine Months Ended
                             September 30,               September 30,
                             -------------               -------------
                            2010          2009        2010           2009
                            ----          ----        ----           ----

     Collaboration
     revenue             $14,350       $16,341     $45,876        $49,021
                         -------       -------     -------        -------

    Operating
     expenses:
       Research
        and
        development       15,633        21,530      59,470         54,851
       Selling,
        general
        and
        administrative     5,454         6,034      18,267         18,950
              Total
               operating
               expenses   21,087        27,564      77,737         73,801
                          ------        ------      ------         ------

    Loss from
     operations           (6,737)      (11,223)    (31,861)       (24,780)

    Other
     income
     (expense),
     net                    (174)           96         245            813
                            ----           ---         ---            ---

    Net loss
     before
     income tax           (6,911)      (11,127)    (31,616)       (23,967)

    Income tax
     benefit
     (expense)             1,468        (2,846)      1,468         (4,538)

    Net loss             $(5,443)     $(13,973)   $(30,148)      $(28,505)
                         =======      ========    ========       ========

    Basic and
     diluted
     net loss
     per common
     share                $(0.16)     $(0.42)   $(0.88)      $(0.90)
                          ======        ======      ======         ======

    Weighted
     average
     common
     shares
     used in
     the
     calculation
     of basic
     and
     diluted
     net loss
     per share            34,570      33,468    34,198       31,588
                          ======        ======      ======         ======


                            MEDIVATION, INC.

                  CONDENSED CONSOLIDATED BALANCE SHEETS
             (in thousands, except share and per share data)
                               (unaudited)

                                                  September   December
                                                      30,        31,
                                                        2010       2009
                                                        ----       ----
    ASSETS
    Current assets:
      Cash and cash equivalents                     $159,936    $57,463
      Short-term investments                          51,562    220,781
      Receivable from collaboration partners          17,865      6,490
      Prepaid expenses and other current
       assets                                         12,256      9,343
                                                      ------      -----
              Total current assets                   241,619    294,077
    Property and equipment, net                          925      1,092
    Restricted cash                                      843        843
    Other non-current assets                             918        678
                                                         ---        ---
    Total assets                                    $244,305   $296,690
                                                    ========   ========

    LIABILITIES AND STOCKHOLDERS' EQUITY
    Current liabilities:
      Accounts payable                                $5,482     $4,840
      Accrued expenses                                22,612     12,054
      Deferred revenue                                57,225     86,570
      Other current liabilities                          158        800
                                                         ---        ---
            Total current liabilities                 85,477    104,264

    Deferred revenue, net of current                 150,067    166,598
    Other non-current liabilities                        978        554
            Total liabilities                        236,522    271,416
                                                     -------    -------

    Stockholders' equity:
      Preferred stock, $0.01 par value per
       share;
         1,000,000 shares authorized; no shares
          issued and outstanding                           -          -
      Common stock, $0.01 par value per
       share;
         50,000,000 shares authorized; issued
          and outstanding 34,571,329 shares
             at September 30, 2010 and 33,823,062
              at December 31, 2009                       346        338
      Additional paid-in capital                     214,995    202,361
      Accumulated other comprehensive gain
       (loss)                                              3        (12)
      Accumulated deficit                           (207,561)  (177,413)
                                                    --------   --------
            Total stockholders' equity                 7,783     25,274
                                                       -----     ------
    Total liabilities and stockholders'
     equity                                         $244,305   $296,690
                                                    ========   ========

SOURCE Medivation, Inc.

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