Medivation's Xtandi sales force due for hiring, revamp as urology push falls flat

With a new first-line approval last year in metastatic prostate cancer, Medivation ($MDVN) and Astellas' Xtandi was set up for a head-to-head fight against Johnson & Johnson's ($JNJ) Zytiga. Some analysts figured Xtandi would skate to first place.

But it hasn't turned out that way--and now, Medivation is putting some more money behind its drug to change course.

Medivation now plans to add about 40 more reps to the Xtandi force, after expanding the team to 90 reps from 50 late last year. The company will divide the Xtandi reps into two specialized sales teams, one focusing on oncologists and the other on urologists.

This doesn't mean Xtandi isn't growing; the drug brought in $518 million in third-quarter sales, up 6.5% from the previous quarter, with growth in the U.S. and internationally. But it's not enough for Xtandi to hit the high end of its 2015 sales forecasts of $1.14 billion to $1.18 billion.

More significantly--and the reason behind the salesforce split--the drug isn't making much headway among urologists, which was one of its stated goals. As RBC Capital Markets analyst Simos Simeonidis wrote in a recent note, only 20% of Xtandi sales derived from urologists in Q3.

It's "a significant issue" because "the majority of the expected growth, and the place the company has been wanting to go with this drug is the urology segment," which is a much larger market, where patients are diagnosed and treated earlier in the disease. In fact, the urology push was one reason why analysts were unperturbed by a shortfall in Q1 Xtandi sales. Urology patients would be likely to be treated with Xtandi "for significantly longer" than those treated by oncologists, too--and longer-term treatment means higher sales.

Revamping the sales force is "the right move," Simeonidis wrote; "however, at the same time, we believe this is a clear signal that the drug needs additional commercial support."

So far, there hasn't been much advertising for the drug; direct-to-consumer ads have been mostly in print, and in smaller publications such as Patient Resource. In June, the company said it would launch an unbranded awareness campaign, with details to come. At the time, Medivation execs said they had no plans for Xtandi-branded TV ads.

That could change if investors and analysts press for more action. But Medivation and Astellas are also looking forward to new uses for the drug--including a brand-new field in triple-negative breast cancer, where Xtandi delivered some positive data earlier this year--to help build sales. Some Phase III results in nonmetastatic prostate cancer could add that to Xtandi's label as well.

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