But that's the option he has chosen. This morning the company announced it's doing a Dimebon deal with Pfizer. On the conference call, Dr. Hung said there was a bidding war, that there were "multiple highly attractive offers from major global pharmaceutical companies." But in the end he went with PFE, in part, due to the point he made during our interview.
Pfizer already sells the Alzheimer's market-leading drug Aricept and Dr. Hung believes the world's biggest drug company has "exceptional commercialization resources and the ability to reach primary care physicians (the broad base of prescribers he cited in our interview)." Not to mention the cash. Pfizer's giving MDVN $225 million up front. And another half-a-billion bucks if/when the Food and Drug Administration approves Dimebon. On top of that, MDVN would get 40 percent of the profits. That's why the stock, which has more than doubled this year, is up big on the news (although it's already well off of its earlier highs).
For Pfizer, of course, that's petty cash. For Medivation, it's transformational. Miller Tabak healthcare analyst, Les Funtleyder, writes in a research note to clients this morning, "(Pfizer) showing signs of life....This deal looks like a positive risk-reward opportunity for PFE. (But) PFE needs to continue to be aggressive if it is to compensate for the major revenue cliff in the next few years." He's referring to Lipitor going generic. And Funtleyder cautions investors from getting too excited. "Alzheimer's is a tricky indication to treat if for no other reason medicine (as in the field of medicine) does not fully understand the disease." Myriad Genetics and Neurochem are among the recent casualties. And the jury's still out on Wyethand Elan'sdrug.
P.S. Blog reader Mario Cavallini was kind enough to email me to let me know that he, too, had spotted the Eli Lilly "Coming Soon" ad for Effient on the "New England Journal of Medicine" website that I blogged about yesterday. But he went even further, refreshing the homepage on his own and sending me a screengrab of the ad which had been moved from a banner above the masthead to the left margin.
Questions? Comments? Pharma@cnbc.com