Article Excerpt:
TWST: What is Medivation?Mr. Hung: When we started Medivation two years ago, we decided to create a new business model that was somewhat different from that of the larger pharmaceutical and medical device companies, but which we believed, based upon our experience at our last two previous biomedical companies, would offer us three things: 1) the most favorable risk/reward environment to create truly innovative and successful breakthrough medical products, 2) the most attractive ROI possibilities for our investors, and 3) a model that maximizes our competitive advantages over Big Pharma. If you look at drug development in general, there are three important inflection points in value creation in healthcare companies. The first comes at the interface between the preclinical and clinical stages, the second comes at the end of Phase II, which is when you see the first proof of human efficacy, and the third is at the end of Phase III when you get your drug registered. The problem with the first inflection point is that oftentimes, although the absolute percentages of value increase at that point are large, the absolute dollars are relatively small. If you look at the large inflection point of Phase III trials, even though the absolute dollars can be very, very large, the actual ROI can be less significant. We think that Phase II offers really a very good balance between absolute dollars and ROI for investors, so we have chosen to focus on that as an exit point. Our business strategy is to acquire potential breakthrough medical technologies that have reached the late preclinical stage of development, and then to in- license those programs and develop them as quickly as we can through first proof of human efficacy (the end of Phase II). At that point, our business model calls for us to either partner or sell those programs to larger pharmaceutical or medical device companies. But there are several caveats to our strategy. Our main reluctance to enter into Phase III studies is because in many cases those trials can be extremely long and very expensive. But if we can find indications that present modest costs and reasonable time frames for Phase III trials, we may very well undertake those ourselves. So even though our business model in general does call for us to exit at Phase II by selling or partnering our programs, we certainly will consider taking programs through Phase III development if we decide the timelines and costs associated with doing so are reasonable. If you look at our current pipeline at Medivation, we have three programs. The first is focused on a small molecule called Dimebon for the treatment of Alzheimer's disease. The second program is focused on the same molecule, Dimebon, for the treatment of Huntington's disease. The third program is a new series of small molecules that we call the MDV300 series for the treatment of hormone-refractory prostate cancer. Two out of the three programs that we have target orphan drug indications. There are some pretty favorable features attached to developing orphan drugs, which include priority review, fast track approval, and premium pricing, so depending on how the public markets value our programs compared to a potential acquirer or partner, we will choose to either do those programs ourselves or sell or partner those programs.
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