Master dealmaker? Medivation CEO David Hung’s overzealous PARP assault falls flat

The view from Endpoints

Medivation doesn’t look any further ahead now that the CEO is publicly defending the asset like a dog defends a bone

John Carroll, Editor

John Carroll, Editor

Back when David Hung was building Medivation as a pipeline company, he persuaded Pfizer to fork over $225 million as an upfront to partner on dimebon, a Russian antihistamine that had shown some activity for Alzheimer’s in early studies. Dimebon went on to become an embarrassing fiasco, failing two expensive Phase III studies. And I can recall Hung discounting the significance of the program to his company when he was between late-stage flops. After all, he told me, Pfizer had paid for that work already.

Hung and Medivation went on to glory with Xtandi, and the CEO clearly never lost the ability to tout early data and look for an edge wherever he can find it. He is widely regarded as one of the best dealmakers in the business, and now that he’s bargaining over the sale of his company with Sanofi and likely Pfizer, Celgene and others, he’s pulling out all the stops to go for the highest possible price he can get – and then some.

That win-at-all-costs mentality was on display Wednesday evening, as Hung went to work on the one asset he has with a wildly uncertain value: Medivation’s PARP inhibitor talazoparib. Taking a fragment of data, he claimed that talazoparib was clearly the best of four contenders, far surpassing Tesaro’s niraparib, AstraZeneca’s Lynparza (olaparib) and AbbVie’s veliparib.

Talazoparib, he told analysts on a call, is a “multibillion-dollar opportunity.”

The drug, he explained, is a PARP trapper, far better at destroying cancer cells that an enyzme inhibitor. There was more. Lots more. And he went far beyond the company’s first stab at highlighting the drug’s special potential.

David Hung, Medivation CEO

David Hung, Medivation CEO

The other drugs failed to measure up, he said. There were safety issues and so on. He said everything possible that could build up the value of talazoparib as the “best-in-class” opportunity in a developing $30 billion market. And he made a short attack on the competition as sorry, second-raters.

Here’s the full PowerPoint presentation.

Bottom line: If Sanofi execs think they can get that drug for a $3 CVR, they have to be dreaming.

Medivation got this drug just a year ago, paying out $410 million upfront. That’s a significant amount, and it successfully focused a lot of attention as the top prospect in the clinic. It certainly warrants more than the passing mention reserved for pidilizumab, the PD-1 drug that embarrassingly proved not to be a PD-1 drug. The FDA temporarily halted work on a trial so regulators could get a better fix on the drug. (Medivation’s attitude: Hey, it works somehow, so it’s important.)

The CEO is in the fight of his professional career. With the company in play, the best outcome for Hung here is that somebody pays a record price for his assets. And he’ll say anything to make that happen.

The PARP war, though, is far from over. Medivation’s stock is up just a few cents this morning. These bidders can assess the value of a Phase III prospect as well as anyone. And Medivation doesn’t look any further ahead now that the CEO is publicly defending the asset like a dog defends a bone. If anything, he may have damaged his case by going overboard on the zealous assault.

— John Carroll @JohnCendpts

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