Biotech stocks have been a fabulous to place your money in the last ten years. Most of us who have bought Medivation (MDVN) ten years ago who saw the potential for this company and its leadership when it was under a dollar a share has done well. Those of us, who bought shares early on can boast of massive gains today even though the stock peaked back in 2015. Since its old highs MDVN has pulled back although now it is retracing back up. MDVN has the potential to go past the old highs in 2015 based on new drugs that are in their clinical trials now, with prospects of those drugs to be released later this year on approval of the FDA.
Just recently in mid-December Medivation started to make a comeback on the charts, particularly on December 21st when Medivation had a pivotal point in their clinical trial with MDV9300 (pidlizumab) announced their initiation of phase 2 in the clinical trial which involves 180 patients as the doctors will evaluate the safety and effectiveness of the MDV9300 itself. This announcement made the stock surge 5.7% that day during trading.
MDV9300 has been in an ongoing in clinical trials to diffuse large B-cell lymphoma. There is a strong probability of a positive outcome in this trial as the medication has the potential to support registration for both U.S. and European Union markets sometime in 2016.
Despite other drugs that have been incorporated into the chemo immunotherapy, there have been other treatment options for patients that have relapsed with this cancer and one that looks promising on the horizon is that of MDV9300.
With the data that has been provided already the MDV9300 is associated with enhanced maturation and survival of T lymphocytes that has a strong probability of improving adaptive immunity along with activating the immune system that naturally attacks cancer cells. David Hung, M.D., president and CEO of Medivation has stated “Such broad effects on both sides of the immune response are not widely reported with the checkpoint inhibitors and may differentiate pidlizumab from other agents in the complex immune oncology landscape.”
Medivation is a Solid Investment for 2016
Medivation that develops and commercializes medical therapies to treat serious illnesses has a higher price/book ratio of (13.49) versus its peers who have a median of (4.63). MDVN has a high rate of return based on its successful operating model with high net profit’s margins and asset returns. The debt of Medivation is relatively low around 1.89 percent of its enterprise value compared to that of the average biotech company that has around 25 percent debt. Since the low debt level, Medivation has the ability to raise additional capital to borrow quickly if need be. With low debt, prospective outlook on growth and new drugs making headlines, Medivation makes it a lucrative opportunity for investors this 2016.