Xtandi's blockbuster Q2 growth shows why Big Pharma wants a Medivation deal

Medivation posted second-quarter numbers on Tuesday, and they offer more evidence why Big Pharma and Big Biotech are stumbling over themselves to snap up the company.

The company’s flagship drug, Xtandi, brought in $595 million, and not just because more patients are using the prostate cancer therapy. It’s also because more patients are taking it for longer periods of time--9 months now, at the mean. And execs expect that trend to continue as more urologists prescribe the therapy, for a long-term boost to Xtandi’s revenue stream.

The upshot? Medivation was able to crow about Xtandi’s market-share grab. Its head-to-head rival, Johnson & Johnson’s Zytiga, ceded a chunk of its market to Xtandi in the quarter, giving the Medivation drug 51% of the market. Xtandi sales beat Zytiga’s by a bigger margin than ever, CEO David Hung said. Zytiga’s new label warning on liver toxicity, including instructions for liver testing before Zytiga therapy starts, gives Xtandi another competitive advantage, he said.

Xtandi’s prospects are an important piece of Medivation’s appeal to prospective bidders--including Sanofi, which backed off its hostile attempt to come to the table for talks. The drug’s blockbuster revenue stream would deliver a quick top-line increase to any buyer, and it’s backed up by a pipeline med Medivation sees as another catalyst for Xtandi sales hikes. In addition to Sanofi’s public interest, Pfizer, AstraZeneca, Amgen and Gilead Sciences are all rumored to be chasing a Medivation deal.

That’s not to say Xtandi doesn’t face some challenges. International sales fueled much of the Q2 growth: Overall, net sales of the product rose 22%, while U.S. sales ratcheted upward by 11%. Pricing had something to do with the U.S. performance; demand grew by 18%, but the drug’s net price was lower compared with last year’s Q2, CFO Jennifer Jarrett said during the earnings call. Last year, the company raised Xtandi’s price in March, and this time around, it went through in late June.

Reimbursement pressures are intensifying, too. CVS Health barred Xtandi from its 2017 formulary, a surprise decision that will force doctors to appeal for medical necessity. McCourt contends that doctors will do just that, and that the CVS decision won’t have much effect on Xtandi’s growth.

That’s based on some experience with previous CVS restrictions, McCourt said. “[T]here has been experience within CVS that started back in April of last year where a line of business had a similar medical justification required, and we saw minimal impact to XTANDI performance in that line of business,” he said. And a “very small percentage” of U.S. patients are on that CVS formulary, Jarrett said.

An expanded sales force snared some credit for Xtandi’s Q2 increase. Medivation had added 40 reps to its team by late March, and more reps on the ground fueled a 29% increase in sales calls. Marketing partner Astellas also made more sales calls to urologists, a specialty where both companies are targeting marketing efforts because, as Medivation points out, patients under treatment with urologists tend to stay on the drug for longer periods.

Medivation has been pushing for scripts in that specialty since last year. The company amped up its sales team to 90 reps from 50 with that in mind, but its efforts to penetrate the urology market still fell flat. The company pressed on by adding those 40 additional salespeople, and last quarter, 25% of Xtandi scripts came from urologists, and 25% of all patients were on the drug for more than 13 months.

“[W]e are really excited about our sales force,” McCourt said. “Their track record is fabulous. ... Everyone is trained up and running.”

There’s room for more improvement; three-fourths of urologists don’t know about new data showing Xtandi topped a standard-of-care chemo, and those who do tend to lean toward the drug, the company said. Xtandi is up for a label change that would include those data, and if that comes through, reps can tout the study and potentially ramp up urologists’ prescribing. The FDA is due to decide on that labeling tweak by Oct. 22.

McCourt said early marketing analytics--such as intent-to-prescribe numbers--show that “the expansion to create separate, specialized, high-impact urology and oncology teams is having a favorable effect.”

Meanwhile, Medivation is studying Xtandi for more prostate cancer indications, as well as breast cancer, where a Phase II trial is expected to read out in the fourth quarter. “We believe that Xtandi is a pipeline within a product,” Hung said, echoing a favorite phrase of drug execs with a lot of time and money invested in developing new indications.

Not to mention its actual pipeline meds, including talazoparib, a potential partner with Xtandi for combination treatment. The drug is currently enjoying a halo effect from some positive Phase III data on Tesaro’s niraparib, a fellow PARP inhibitor, in ovarian cancer. Medivation expects its first late-stage data on talazoparib next year in breast cancer. The company is studying the drug for a range of other cancers, too.

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