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Alzheimer's Trial Boosts Its Outlook
BY PETER BENESH
INVESTOR'S BUSINESS DAILY
Posted 5/4/2007
Can an antihistamine improve the brain function of Alzheimer's sufferers? Based on phase two trials of its developmental drug, Dimebon, Medivation (MDVN) believes the answer is yes.
Dimebon was approved for use as an oral allergy treatment in Russia in 1983. Russians have used it for more than two decades without notable side effects, says David Hung, a medical doctor, and founder and chief executive of Medivation.
Medivation's research shows the drug can inhibit brain cell death in both Alzheimer's and Huntington's disease patients. Medivation got the rights to Dimebon from a Russian institute for royalties capped at $5 million.
Six-month results from a phase two study show that mild to moderate Alzheimer's patients on Dimebon actually improved compared to patients on placebo.
Dimebon is after a huge market, Hung says. "The current total spent on Alzheimer's therapeutics is $3 billion worldwide."
That will rise as populations age. By 2050, U.S. Alzheimer's patients will quadruple from the present 4.5 million to 18 million, Hung says.
Dimebon could be a $1 billion Alzheimer's drug if further tests substantiate the early data, says analyst Michael Yee of RBC Capital Markets.
Huntington's disease afflicts fewer people — some 30,000 in the U.S. Dimebon for Huntington's would address a U.S. market of $900 million a year, says a research note from analyst Raymond A. Myers of Emerging Growth Equities, which has done business with Medivation.
THE FINANCIALS
Assuming regulatory approvals, Medivation will show its first annual profit in 2011. Thomson Financial analysts see losses of 95 cents a share this year and $1.07 in 2008.
The firm has $47 million in cash, enough to take Dimebon into phase three trials for both Alzheimer's and Huntington's, Hung says.
Medivation's stock began to move upward in September, rising from 6 to a high of 20.50 on March 13. The stock currently trades near 19.
THE COMPANY
Medivation seeks out existing bio-pharmaceutical products that can be adapted for new uses. The company has only 15 employees and uses the services of 75 consultants.
In addition to Dimebon for Alzheimer's and Huntington's, Medivation is working on a treatment for a strain of prostate cancer that doesn't respond to hormone therapy. Myers estimates the potential market at well more than $1.1 billion a year. That's the sales figure for AstraZeneca's (AZN) Casodex, which targets prostate cancer that does respond to hormone therapy.
If Medivation's drug gets regulatory approval, Myers sees 2011 sales of $200 million.
LOOKING AHEAD
On June 12 Medivation will announce results of a 12-month, phase two follow-up trial of Dimebon for Alzheimer's.
The firm's calendar is filled with phase one, two and three trials of its developmental drugs in the next 18 months. It'll apply for approval of its Huntington's version of Dimebon in 2009 and seek approval for Alzheimer's Dimebon in 2010.
Dimebon is a also "a novel potential treatment" for many other neuro-degenerative diseases, analyst Yee says |
