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Medivation: Senior Director, Investor Relations

The following excerpt is from the company's SEC filing.

(415) 543-3470

(650) 218-6900

MEDIVATION REPORTS THIRD QUARTER 2015 FINANCIAL RESULTS

Third Quarter Non-GAAP Collaboration Revenue $190.1 Million (+79% vs. Prior Year);

Third Quarter Non-GAAP Net Income $58.4 Million, or $0.35 per Diluted Share

Third Quarter GAAP Collaboration Revenue $260.7 Million (+30% vs. Prior Year);

Third Quarter GAAP Net Income $79.5 Million, or $0.47 per Diluted Share

Conference Call Today at 4:30 p.m. Eastern Time

SAN FRANCISCO, CA November 5, 2015 Medivation, Inc. (NASDAQ: MDVN) today reported its financial results for the third quarter ended September 30, 2015. U.S. net sales of XTANDI

(enzalutamide) capsules, as reported by Astellas Pharma Inc, were $313.0 million for the quarter (+73% vs. prior year). Third quarter 2015 U.S. net sales increased by approximately 5% compared with second quarter 2015 net sales of $298.4 million. The sequential quarter increase in net sales was primarily due to an increase in underlying demand (mid-single digit percent growth, compared with June 2015 quarter) and a lower gross-to-net rate recorded by Astellas in the third quarter, which was offset by changes in channel partner inventory levels during the quarters.

Ex-U.S. net sales of XTANDI, as reported by Astellas, were approximately $205 million for the quarter (+71% vs. prior year). Third quarter ex-U.S. net sales increased by 9% compared with second quarter 2015 net sales of approximately $188 million.

During the third quarter Medivation made significant progress led by continued demand growth for XTANDI for the treatment of metastatic castration-resistant prostate cancer, said David Hung, M.D., president and chief executive officer of Medivation. In October, we successfully completed the acquisition for the late stage asset talazoparib, a highly-potent, orally-available poly ADP ribose polymerase (PARP) inhibitor. With the acquisition of talazoparib, we now have further diversified our late-stage pipeline beyond XTANDI and pidilizumab to complement our early development programs, providing significant opportunities for growth.

Medivation reported GAAP net income of $79.5 million, or $0.47 per diluted share, for the quarter ended September 30, 2015, compared with GAAP net income of $78.0 million, or $0.48 per diluted share, for the same period in 2014. Non-GAAP net income for the third quarter of 2015 was $58.4 million, or $0.35 per diluted share, compared with non-GAAP net income of $16.3 million, or $0.10 per diluted share, for the same period in 2014.

Medivations collaboration revenue for the third quarter of 2015 was $260.7 million on a GAAP basis compared with $200.5 million for the same period in 2014 (+30% vs. prior year). Non-GAAP collaboration revenue, which excludes collaboration revenue related to upfront and milestone payments, was $190.1 million for the third quarter compared with $106.2 million for the same period in 2014 (+79% vs. prior year).

Medivations collaboration revenue consists of three components: collaboration revenue related to U.S. XTANDI net sales, collaboration revenue related to ex-U.S. XTANDI net sales, and collaboration revenue related to upfront and milestone payments.

Medivations collaboration revenue related to U.S. net sales of XTANDI for the third quarter 2015 was $156.5 million compared with $90.7 million for the same period in 2014 (+73% vs. prior year).

Medivations collaboration revenue related to ex-U.S. net sales of XTANDI for the third quarter 2015 was $33.6 million compared with $15.5 million for the same period in 2014 (+116% vs. prior year).

Medivations collaboration revenue related to upfront and milestone payments for the third quarter 2015 was $70.6 million compared with $94.2 million for the same period in 2014 (-25% vs. prior year).

Operating expenses were $121.7 million for the quarter ended September 30, 2015 on a GAAP basis compared with $108.6 million for the same period in 2014. Non-GAAP operating expenses were $98.8 million for the quarter ended September 30, 2015 compared with $79.3 million for the same period in 2014.

Selling, general and administrative (SG&A) expenses for the third quarter of 2015 were $75.8 million on a GAAP basis compared with $63.2 million for the same period in 2014. Non-GAAP SG&A expenses for the third quarter of 2015 were $58.8 million, compared with $47.5 million for the same period in 2014. The increase in non-GAAP SG&A expenses primarily relates to higher sales, marketing, administrative expenses, higher royalties to UCLA and higher personnel-related costs (excluding stock-based compensation).

Research and development (R&D) expenses for the third quarter of 2015 were $45.9 million on a GAAP basis compared with $45.4 million for the same period in 2014. Non-GAAP R&D expenses for the third quarter of 2015 were $40.0 million, compared with $31.8 million for the same period in 2014. The increase in non-GAAP R&D expenses primarily relates to higher pidilizumab (MDV9300) costs, higher facilities and information technology costs and higher personnel-related costs (excluding stock-based compensation).

At September 30, 2015, cash and cash equivalents were $488.9 million, compared with $502.7 million at December 31, 2014. During the third quarter, we completed the redemption of the 2017 Convertible Notes, utilizing $167.8 million of cash. In October 2015, we utilized $410.0 million in cash to fund an upfront payment to BioMarin Pharmaceutical Inc., for the acquisition of talazoparib (MDV3800).

Enzalutamide Development Program

Reported updated data in September 2015 from a Phase 2 trial evaluating the investigational use of enzalutamide as a single agent for the treatment of advanced androgen receptor positive, triple-negative breast cancer at the 2015 European Cancer Congress.

Recent Corporate Developments

Closed the acquisition, on October 6, 2015, for all worldwide rights to talazoparib, an orally-available poly ADP ribose polymerase (PARP) inhibitor. In connection with the closing, Medivation made an up-front payment of $410.0 million to BioMarin in the fourth quarter of 2015. All other amounts to be paid to BioMarin in connection with this transaction will be subject to the successful achievement of certain regulatory and sales-based milestones and royalties relating to talazoparib.

Effected a two-for-one stock split in the form of a stock dividend on Medivations common stock, pursuant to which stockholders of record on August 13, 2015, received an additional share of common stock for each share they held as of the record date. Approximately 81.7 million common shares were issued as a result of the stock dividend in mid-September. Medivations common stock began trading on a post-dividend basis on the NASDAQ Global Select Market at the opening of trading on September 16, 2015.

Entered into a Credit Agreement with JPMorgan Chase Bank, N.A., as administrative agent, and the lenders, providing for a one-year $75.0 million revolving loan facility. On September 17, 2015, Medivation executed a borrowing of $75.0 million under the Revolving Credit Facility, which was scheduled to mature on March 17, 2016. On October 23, 2015, Medivation entered into an amendment and restatement of the credit agreement providing for a five-year $300.0 million revolving loan facility and an uncommitted accordion facility subject to the satisfaction of certain conditions. On October 23, 2015, Medivation borrowed $75.0 million under the amended revolving credit facility, which was used to repay the $75.0 million outstanding under the original credit agreement.

Announced the appointment of Mohammad Hirmand, M.D., as interim chief medical officer following the retirement of Lynn Seely, M.D.

MEDIVATION, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except share and per share data)

(unaudited)

ASSETS

Current assets:

Cash and cash equivalents

488,944

502,677

Receivable from collaboration partner

277,612

184,737

Deferred income tax assets

22,353

21,987

Prepaid expenses and other current assets

15,946

12,264

Restricted cash

Total current assets

805,785

721,868

Property and equipment, net

49,018

41,161

Intangible assets

101,000

Deferred income tax assets, non-current

35,628

15,176

Restricted cash, net of current

12,206

11,562

Goodwill

10,000

Other non-current assets

10,852

Total assets

1,020,594

911,619

LIABILITIES AND STOCKHOLDERS EQUITY

Current liabilities:

Accounts payable, accrued expenses and other current liabilities

132,258

106,128

Borrowings under Revolving Credit Facility

75,000

Contingent consideration

Deferred revenue

Current portion of build-to-suit lease obligation

Current portion of Convertible Notes, net of unamortized discount of $ and $1 at September 30, 2015 and December 31, 2014, respectively

Total current liabilities

217,493

119,652

Convertible Notes, net of unamortized discount of $ and $36,598 at September 30, 2015 and December 31, 2014, respectively

222,140

102,799

96,000

Build-to-suit lease obligation, excluding current portion

16,905

18,711

Other non-current liabilities

11,729

Total liabilities

348,926

462,320

Commitments and contingencies

Stockholders equity:

Preferred stock, $0.01 par value per share; 1,000,000...


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