Medivation Inc MDVN
Q4 2012 Earnings Call Transcript
Transcript Call Date 02/28/2013

Operator: Good day, everyone and welcome to Medivation's Scheduled Conference Call. This call is being recorded. At the end of the Company's prepared remarks, we will open the call for questions and will provide specific instructions at that point.

I'd now like to turn the call over to Anne Bowdidge, Senior Director of Investor Relations. Please go ahead.

Anne Bowdidge - Senior Director, Investor Relation: Thank you for joining us. With me today is Patrick Machado, Chief Business and Financial Officer; Cheryl Cohen, Chief Commercial Officer. Also on the call from Medivation participating remotely are David Hung, President and CEO; and Dr. Lynn Seely, Chief Medical Officer. We issued a press release earlier today that you can find on our website at www.medivation.com.

Before we begin, I'd like to remind you that various remarks that we make on this call contain forward-looking statements that are made under the Safe Harbor provisions of the Securities laws, including statements regarding expanded commercialization, the potential XTANDI regulatory approvals in other markets and for other indications and the timing thereof.

The continued clinical development and regulatory approval of enzalutamide and the timing thereof, potential future clinical trial events or results, the therapeutic potential and safety profiles of our product candidates, our collaboration, our future opportunities and milestones, financial guidance for 2013 and operating expenses and capital expenditures.

In addition to our prepared remarks, we may make forward-looking statements in response to questions, including, for example, statements regarding our current and potential future collaborations, and our future financial position and results.

Any statements made in this call that are not statements of historical facts may be deemed to be forward-looking statements. Forward-looking statements involve risks and uncertainties that could cause Medivation's actual results to differ significantly from those projected.

All forward-looking statements made during this call are based on information available to us as of today, and we assume no obligation to update these statements as a result of future events or otherwise.

With that, I'll turn the call over to Dr. David Hung, President and CEO of Medication. David?

David Hung, M.D. - President, CEO and Director: Thanks, Ann. Thank you all for joining us today. Let me start by saying that I am pleased with the strong initial uptake of our first product XTANDI reporting $57.4 million in sales in the first fourth quarter (towards) launch. XTANDI has quickly emerged as an important new option for the treatment of patients with metastatic castration-resistant prostate cancer who have previously received docetaxel.

It is exciting to listen to the enthusiasm that is building around XTANDI and see data presentation that fully support our belief that enzalutamide will play an important role in the current and future treatment of this disease. I am proud of the progress we have made given that just six months ago on August 31, 2012 the U.S. FDA approved XTANDI three months prior to our PDUFA date for the treatment of patients with metastatic castration-resistant prostate cancer who have received docetaxel.

This approval was based on our Phase 3 AFFIRM data that showed XTANDI produced a 4.8 month advantage in meeting overall survival compared to placebo. Even with this advanced timeline, Medivation and Astellas sales reps began promoting XTANDI in the field on the first business day following approval and the product is available for shipment to our specialty pharmacies and specialty distributors on September '13.

In addition to the milestones we reached in the U.S., our partner Astellas has also made significant progress expand the XTANDI's worldwide presence. The European Medicines Agency accepted to review the enzalutamide marketing authorization application submitted by Astellas for the treatment of men with metastatic castration-resistant prostate cancer who have received docetaxel. We look forward to hearing a decision on the application this year. Astellas has also submitted marketing applications for authorities in South Korea, Canada and Brazil in patients with post-chemo metastatic CRPC.

Looking ahead now to the future growth opportunities. I wanted to provide an update on our plans for expanding enzalutamide development further upstream and to earlier prostate cancer disease dates. As you are aware, there are two large patient populations upstream of the population, we're studying in our ongoing PREVAIL trial. First patients with non-metastatic often referred to as M0 castration resistant prostate cancer and second even further upstream paced with hormone-naive prostate cancer.

We believe that advancing enzalutamide development upstream of the PREVAIL population constitute a significant growth opportunity. Pursuing that goal therefore is a critical corporate objective of our Company. At the same time, however, we are mindful of the fact that the studies required to obtain registration in these upstream populations involve significant time, cost and critical and regulatory risks. I'd like to take a moment to elaborate on these considerations in a bit more detail.

We believe that a separate Phase 3 trial would be required to support registration of enzalutamide in each of these upstream patient populations. A critical question for these trials – for the regulators will allow approval based on non-survival endpoints, such as progression for metastasis free-survival. There is no clear regulatory precedent on this question.

Furthermore, even if non-survival endpoints were acceptable to regulators, the Phase 3 trials required to demonstrate a statistically significant benefit on these endpoints would be long and expensive. Assuming, progression on the metastasis free survival as a sole primary endpoint, we estimate that each Phase 3 study would costs between $150 million to $200 million and at the time from first patient enrolled until commercial launch would be between five and seven years.

These costs and time estimates would, of course, be much larger if regulatory bodies require overall survival as a condition of approval. These Phase 3 trials would also entail significant critical risks, specifically the risk of patients in the control ARM leaving the trial based on rising PSA levels before the progression events had occurred and taking one or more subsequent treatments that could delays the late progression.

This cross-over risk could make it difficult or impossible to show that the statistically significant benefit either the drug being studied is in fact biologically active. Given these facts we and our partner Astellas are taking a strategic and deliberative approach to ensuring that we make the best possible decisions regarding upstream development of enzalutamide.

Based on the opportunities and risks that we faced and giving full consideration to the competitive landscape. This is an ongoing process involving discussion between our companies at the highest level as well as substantive interactions with regulators. Because we believe upstream indications comped at a significant growth opportunity for enzalutamide, we and Astellas has both approved a 2013 collaboration budget that includes funding for enzalutamide development including legislation of development, upstream about PREVAIL population. We have not yet made final decisions on quick specific studies to conduct and when, but we will keep you posted as our plan (indiscernible).

With that overview, I'll now turn the call over to Pat, who will review the fourth quarter and yearend financial results.

C. Patrick Machado, J.D. - Chief Business Officer and CFO: Thanks, David and good afternoon, everyone. As David mentioned, net sales of XTANDI for the quarter as reported by Astellas were $57.4 million, all of which were in the U.S. This represents the first four quarter of XTANDI sales following its availability for shipment on September 13, 2012.

For the full year, net U.S. XTANDI sales as reported by Astellas were $71.5 million. Under our collaboration agreement gross to net deductions are determined in a manner consistent with Astellas's internal accounting policies consistently applied. The largest component of gross to net deductions is legally mandated rebates and discounts to government payors.

We continue to see a very positive market response to XTANDI's launch. From a prescriber perspective our market research continues to show a high level of aided awareness of XTANDI among both oncologists at 90% and urologists at 81%. Our sales representatives continue to enjoy ready access to prescribers. According to our market research between 40% to 50% of metastatic CRPC product details to oncologists in the fourth quarter were for XTANDI. Payors have also responded very favorably to XTANDI to-date. By the beginning of 2013, more than 98% of both Medicare and commercial insurance plans were covering XTANDI.

Since our last quarterly call, this past November, we have begun to receive sufficient data from our distribution partners to begin giving some color on how XTANDI is being used. The $71.5 million in XTANDI net sales reported by Astellas for 2012 represents more than 9,300 prescriptions generated from than 1,600 individual prescribers and more than 300 institutional accounts.

As anticipated, our prescriber mix to-date consists almost exclusively of oncologists. Urologists were responsible for less than 2% of XTANDI prescriptions written during 2012. XTANDI's overwhelmingly oncologist prescriber mix is in line both with our internal expectations and with the precedence seen with Zytiga plus prednisone. We believe the prescriber mix XTANDI has experience to-date is due to two primary factors.

First, we believe urologists generally limit their perceptions to on-label indications without regard to compendia listing. Second, because our prelaunch physician profiling indicated that fewer than a quarter of high volume urologists see post-chemo patients we have confined our urologists sales calls to that minority group.

Turning to Medivation's financial performance; collaboration revenue for the fourth fiscal quarter and full year was $37.2 million and $181.7 million, respectively. As a reminder, Medivation's collaboration revenue consists of three components revenue attributable to U.S. XTANDI sales, revenue attributable to ex-U.S. XTANDI sales, and revenue attributable to upfront and milestone payments.

The first part of our collaboration revenue is revenue attributable to U.S. XTANDI sales. You will recall that in the U.S. we share XTANDI cost, profit and losses with Astellas. Our collaboration revenue attributable to U.S. XTANDI sales in each period will equal half of the U.S. XTANDI net sales reported by Astellas. For the fourth quarter fiscal quarter and full year 2012 our collaboration revenue attributable to U.S. XTANDI sales was $28.7 million and $35.8 million, respectively.

The second part of our collaboration revenue is revenue attributable to ex-U.S. XTANDI sales. Outside the U.S. Astellas bears all XTANDI costs, retains all XTANDI profits and losses and pays Medivation tiered royalties ranging from the low-teens to the low 20s on ex-U.S. sales. Our collaboration revenue attributable to ex-U.S. XTANDI sales consists of royalties we may receive from Astellas on sales of XTANDI outside the U.S. We have not recognized any revenue attributable to ex-U.S. XTANDI sales to-date.

The third part of our collaboration revenue is revenue attributable to upfront and milestone payments. For the fourth quarter and full year 2012 our collaboration revenue attributable to upfront and milestone payments was $8.5 million and $145.9 million, respectively. The full year figure includes the accelerated recognition of the remaining $72 million of the upfront payment we received in 2008 under our former collaboration with Pfizer, which was terminated in January 2012 and $45 million in development milestone payments we earned under our collaboration agreement with Astellas.

We remain eligible to earn up to 277 million in additional development milestone payments and up to $320 million in sales milestone payments under our Astellas collaboration agreement. We have included a detailed breakout of the amounts and triggers of the development milestone payments in our annual report on 10-K that we filed today with the SEC.

Total operating expenses for the fourth quarter were $63.9 million compared with total operating expenses of $26.9 million for the same period in 2011. These figures include non-cash stock-based compensation expense of $6.2 million in the fourth quarter of 2012, compared with $3.4 million in the prior year period.

Total operating expenses for the full year 2012 were $207.9 million compared with total operating expenses of $103.3 million for 2011. These figures include non-cash stock-based compensation expense of $23.7 million in 2012 compared with $13.9 million in 2011.

We reported a net loss for the fourth quarter of $31.7 million or $0.43 per share, compared with a net loss of $10.9 million or $0.15 per share for the prior year period. For the full fiscal year, our net loss was $41.3 million or $0.56 per share, compared with $38.8 million or $0.56 per share for 2011. The per share numbers reflect the 2 for 1 forward split of our common stock that we implemented on September 21, 2012. At December 31, 2012, we had cash, cash equivalents and short-term investments of $296.2 million.

I'd like to conclude with guidance for 2013. We currently expect 2013 operating expenses net of cost showing payments from Astellas to be between $285 million and $300 million, approximately $29 million of which consists of non-cash stock-based compensation expense. We also expect to incur capital expenditures of approximately $7 million in 2013.

With that, I'll now turn the call back over to Dave.

David Hung, M.D. - President, CEO and Director: Thanks Pat. This has been an exciting time for Medivation and in many ways marks just the beginning for us. While we're pleased with the strong initial sales of XTANDI we continue to look ahead at the potential opportunity for enzalutamide that lies earlier in the disease continuum in pre-chemo patients. Now I would like to update you on our progress in on ongoing trial to develop enzalutamide earlier in the prostate cancer disease spectrum, and also on breast cancer.

The trial that is further for long in clinical development is PREVAIL, our Phase 3 trial in metastatic pre-chemo patients. In May 2012, we completed targeted enrollment of approximately 1,700 patients and we're currently following these patients. The core primary endpoints in this trial are overall survival and radiographic progression-free survival. As we did with AFFIRM, we retain the latitude to review our interim analysis plan to maximize our likelihood of success given all available data.

We also continued to enroll patients in our two clinical trials that are comparing the effective enzalutamide head-to-heard versus bicalutamide, the most commonly used anti-androgen. The STRIVE trial is enrolling approximately 400 men with either metastatic or non-metastatic disease, primarily in the U.S. The TERRAIN trial is enrolling approximately 370 men with metastatic disease, primarily in Europe.

On February 14, at ASCO GU, we presented data from Phase 2 open-label study evaluating enzalutamide in 67 hormone-naive patients. The primary endpoint of the study was PSA response, defined as a reduction in PSA levels of at least 80% after 25-weeks of treatment.

The Phase 2 data presented at ASCO GU showed that use of enzalutamide resulted in a PSA response rate in 93% of patients and in these patients the median PSA reduction was 99.6%. Common adverse events seen in the study were mostly Grade 1 or 2 and included gynecomastia, fatigue, nipple pain and hot flush. We are extremely pleased with this very high PSA response rate in this upstream patient population.

In addition to the Phase 2 hormone-naive, we also presented a post-hoc analysis of the Phase 3 AFFIRM trial evaluating the survival impact of baseline of corticosteroid use in men. This abstract was also selected for an (oral question) at GU ASCO and was presented by Dr. Howard Scher, the Chief of Genitourinary Oncology Service of Memorial Sloan-Kettering Cancer Center and co-principal investigator of the AFFIRM trial, where he showed an association between prednisone and negative patient outcomes in AFFIRM. While these data are preliminary we find it extremely intriguing.

We are also continuing to enroll patients in our Phase 1 study evaluating the safety and tolerability of enzalutamide in breast cancer. The study includes a dose escalation stage followed by an expansion where women with andro receptor positive breast cancer will be enrolled. If the safety data are acceptable, our next step would be to advance into Phase 2 development.

We also recently expanded our Board of Directors with the election of Kate Falberg who has also assumed the chair of our Audit Committee. Kate is the current CFO at Jazz Pharmaceuticals and the former CFO at Amgen. And thus will bring extremely valuable experience, expertise to Medivation as we move into the next phase of our Company's growth.

Over the remainder of the year, we will be focused primarily on the following; continuing the commercial expansion of XTANDI (amend) with metastatic castration resistant prostate cancer who have previously received docetaxel and advancing its enzalutamide development in earlier prostate cancer disease indications and in new areas such as breast cancer for medical need remains high. This has been a transformational time for Medivation and we appreciate your continued support.

I will now turn the call over to the conference coordinator to open the call up for Q&A, and because I am calling in from a remote line Pat Machado in Q&A session.

Transcript Call Date 02/28/2013

Operator: Y. Katherine Xu, William Blair & Company.

Y. Katherine Xu - William Blair & Company: I am just wondering in terms of the gross to net conversion, besides the rebates and discount, did you factor into, I'd say, the foundation money that you donated to and then could you comment on any donut hole or patients assistance problems or lung problems that you encountered? Recently, we saw at J&J, Zytiga sales coming down for the first quarter since launch, and then do you think you were encountered similar problems some time down the road?

C. Patrick Machado, J.D. - Chief Business Officer and CFO: Katherine, this is Pat, I'll take the first part on the gross to net and I'll Cheryl to speak to the donut hole. As I mentioned in the prepared comments, the largest components of the gross to net deduction of the various discounts that we're required to offer at the government payors. Some of the patient assistance is included in gross to net other of that is included as an operating expense, so it's a little bit different. Cheryl can speak to the donut hole?

Cheryl L. Cohen - Chief Commercial Officer: We're not going to be giving guidance on the first quarter currently today, but I can't comment that it is coming with specialty products infusion and oral to have a transition in the first quarter in a January, February timeframe. So, patients conducted those donut holes. We're absolutely committed to ensuring that patients have access despite these challenges and we have contributed to the foundations and we have other programs in place such as co-pay for the commercial patients.

Y. Katherine Xu - William Blair & Company: Do you see growth for J&J for the quarter that is coming down about year and a half since launch? So, do you foresee any problems as you guys as well as something along that line?

C. Patrick Machado, J.D. - Chief Business Officer and CFO: Katherine, this is Pat. We're not in a position where we can be giving revenue guidance at this point just because we don't have enough data to support perspective statements in that regard. I think as Cheryl pointed out donut hole is an issue across the board for all pharmaceutical companies with large Medicare beneficiary populations and certainly with the post-chemo label we fall into that category, but we're in the position to give any guidance at this point.

Operator: Yaron Werber, Citi.

Yaron Werber - Citi: Two questions, David and just give us a little bit of a sense, I think there is honestly a lot of confusion among investors and just among Wall Street in general about the 'pre-chemo market' and I was hoping you could help us understand maybe the difference between the sort of pre-metastatic market the M0 and the sort of the pre-chemo market in the metastatic segment because I don't think – it sounds like there was a lot of confusion as to whether this is too distinct market or whether this is one market that we should lump all of it? Then, secondly I don't know if you can but any color you can give us the information how many patients are in the metastatic segment and then how many patients are there do you think sort of in the M0 segment, so we can really kind of maybe slip to bed once and for all this issue because I think J&J is really confused us also?

C. Patrick Machado, J.D. - Chief Business Officer and CFO: David do you want to take that?

David Hung, M.D. - President, CEO and Director: So, Yaron I think this is obviously a topic that there has been a lot of attention on recently. We continue to believe that the single fact which is most useful in helping to assess the size of that market is the number of Casodex scripts written annually in the U.S. As you know Casodex is the first-line agent that doctors reach for once the patient has started to progress on Lupron, which defines the beginning of Castration-Resistant Prostate Cancer. According to IMS Health there is just over 600,000 Casodex scripts written per year in the U.S. So that to us is the most comprehensive datapoint that exist upon which to start to attempt to quantitate that patient population. That obviously talks only to the size of the population. I think the other important variable is the time on treatment. We have seen in our earlier Phase 1/2 program we've seen roughly four-fold elevation in time to progression in pre-chemo patients as opposed to post-chemo patients. Whether that translates in a longer time on treatment in PREVAIL we will know when we get the results of that study. But it is safe to say that we expect pre-chemo patients to be on treatment for a longer period of time than post-chemo. Now, the M0 versus M1 that is a bit of a complicating factor so as you know that is largely a regulatory line. Most of the patients we believe who are just coming off Lupron are not typically being scanned for metastatic disease as a standard part of clinical practice because generally speaking there is no reason to do that. So, the Casodex numbers almost certainly reflect the mix of those two patient groups. And I think the question of what is going to be required in order to access that full population. In many respects it is going to come down to a reimbursement question. And I think it is going to come down to a question of if an agent has a label in metastatic pre-chemo our pairs going to impose prior authorization or other requirements that physician show the patient actually has metastatic disease. And if so is that going to change practice patterns and give doctors who are not currently scanning their patient reason to do that. Part of our strategy in pushing XTANDI as aggressively as we can into that population is this STRIVE and TERRAIN study. As you'll recall those are both head-to-head studies against Casodex which is the gold standard and we feel that if we can show head-to-head superiority and large well-controlled Phase 2 trials that will provide additional evidence which helps push us as far upstream as we possibly can.

Yaron Werber - Citi: Just a follow-up, you guys recently announced that you provided some funding to CVS for the chronic disease fund. I think there is some confusion as to what happened with J&J in Q4 whether they got hit with some retrospective payment to their distributors. Can you give us a little sense is there a shortfall in funding that help patients support groups in prostate cancer or what's going on? That's my last question.

David Hung, M.D. - President, CEO and Director: Cheryl, do you want to take that?

Cheryl L. Cohen - Chief Commercial Officer: Yeah. I can't comment on J&J and what happened in their fourth quarter call. But I can tell you as I stated earlier that these foundations are critical to patients that are on therapies that are predominantly in Medicare that rely on these foundations to help them through the donut hole. We sent out a press release because we wanted to show our commitment that we have funded since the beginning of launch and we'll continue to fund because it's important that these patients have access.

Operator: Lee Kalowski, Credit Suisse.

Lee Kalowski - Credit Suisse: Maybe I could ask the question about the pre-chemo market a little bit differently. So, I guess, if we look at what's going on at least from the prescription data that we have. Zytiga looks like it's up about 30% or 40% versus the average for Q4. Cheryl, maybe you could just share some thoughts of what you're seeing in the out in the field. Is there anything different that we might be seeing in the early part of the New Year versus Q4?

Cheryl L. Cohen - Chief Commercial Officer: I can't speculate on Q1 but I can tell you in Q4 that we of course our approved indication is in post-chemo and that's where we're promoting, but there was use of XTANDI in the pre-chemo state. Of course it's up to the physician and patient to determine what's the best treatment option for them.

Lee Kalowski - Credit Suisse: David can I just ask or a little bit of clarity of what you were saying about the budget approval with Astellas, is it your expectation that you're going to launch a Phase 3 study registrational moving earlier, do you expect to start that study do you expect patients to be in the clinic in Phase 3 in 2013?

David Hung, M.D. - President, CEO and Director: We've already given you more detail about that program on our future call, but what we want to convey is that we are fully aware of the commercial potential of these opportune indications overall. So, we're causing them to progress in cost and times associated with these (indiscernible) to make the most profit decision we obviously are involved in very high level discussions with Astellas and together we'll be announcing our program plans.

C. Patrick Machado, J.D. - Chief Business Officer and CFO: I think Lee to pass out the one fact that I would add to what David just said is, we have an approved budget where resources have been satisfied by both companies to accomplish this objective including registrational development. So, the funding is in place.

Lee Kalowski - Credit Suisse: So what is that funding for than if it's not for the trial itself?

C. Patrick Machado, J.D. - Chief Business Officer and CFO: Well, the funding is development funding so it clearly is for studies. We just haven't defined what specifically those are going to be or when they are going to start just yet, those are still works in progress.

Operator: Geoff Porges, Bernstein.

Geoff Porges - Bernstein: So one quick question for Pat and then a second one. If you can comment on the 600,000 anti- androgen prescriptions, do you have any sense of what proportion of M0 and M1 and then it is probably old sort of question today that enzalutamide is (indiscernible) to the significant premium to Zytiga and my question is whether the pricing today is reflected with the value proposition in the post-chemo setting or does it envisage the drugs used in all the earlier settings that you might contemplate, particularly if you are going forward into an indication where you might have four times longer duration and two to three times larger patient population. Is that the pricing that you set today or is that something that you are still contemplating.

C. Patrick Machado, J.D. - Chief Business Officer and CFO: Jeff, this is Pat. I can take the first one and then I will pass the pricing question to Cheryl. With respect to the 600,000 scripts for Casodex each year there are no data that we are aware that split out between M1 and M0 just again because it is hard understating that a large group of those patients aren't scanned as part of regular clinical practice because there is no real reason to do that. So, although they all clearly have at least micro-metastatic disease because their PSA is continuing to rise after their prostate is either being surgically removed or radiated whether or not they all have imigable disease is a datapoint that to our knowledge doesn't exist. And Cheryl can take the pricing question.

Cheryl L. Cohen - Chief Commercial Officer: Thank you, Pat. Just to reiterate the pricing strategy. When we put the price in place it was definitely based off of our post-chemo, product profile and our overall survival benefit and we feel that it was appropriately priced. Going forward obviously there is a lot of strategy things that we are looking at that you stated such duration. But the most important thing we need to see in order to establish price is our prevail data. So, stay tuned on that.

Operator: Geoff Meacham, JPMorgan.

Anupam Rama - JPMorgan: This is Anupam Rama in for Geoff Meacham. Just wanted to follow-up on a question before about the upstream beyond PREVAIL trials. I think you outlined that $100 million and $150 million for these trials and some of that's been budgeted for already, but I'm just wondering, just generally speaking how you feel about your overall cash position going into these budget discussions in future trials?

C. Patrick Machado, J.D. - Chief Business Officer and CFO: So, Anupam, this is Pat. The estimate that we cited for the Phase 3 trials was $150 million to $200 million each for each of the Phase 3s. With respect to balance sheet, as you know, we completed a very successful convertible note offering just under a year ago. We are very comfortable with the balance sheet moving forward and feel that, that along with the revenue opportunities that we have both from sales of XTANDI, as well as from milestones payments have put us in a very comfortable position with respect to cash moving forward.

Operator: Kim Lee, Janney Capital.

Kimberly Lee - Janney Capital: Just a couple questions. First one, I guess, for Pat. Does the guidance that you've provided for 2013 include registrational development in the upstream pre-chemo setting?

C. Patrick Machado, J.D. - Chief Business Officer and CFO: Yeah.

Kimberly Lee - Janney Capital: So, it does assume potential initiation of these earlier studies?

C. Patrick Machado, J.D. - Chief Business Officer and CFO: Yes, it does.

Kimberly Lee - Janney Capital: Then, can you remind us the number of sales reps that Medivation has targeting the specialists, the number, I guess, internally is the number of specialists that you are trying to target in the U.S. and kind of your strategy to increase awareness among these urologists?

Cheryl L. Cohen - Chief Commercial Officer: Sure. We currently have 60 sales representatives throughout the United States a 150 total including the effort with Astellas and we are calling on urologists and oncologists and we are currently right now targeting close to 9,000 physicians a majority of them of course are oncologists and 2,000 of them are urologists.

Operator: Biren Amin, Jefferies.

Biren Amin - Jefferies: Just on the early-line Phase 3 trials have you had discussions with the FDA, EMEA and if so, I guess what input could you share with us?

C. Patrick Machado, J.D. - Chief Business Officer and CFO: Lynn do you want to take that one?

Lynn Seely, M.D. - Chief Medical Officer: Sure. As we've been discussing today, we're very committed to Phase 3 development in the earlier prostate cancer space and these are not whole clinical trial designs, with normal registration endpoints and it's a sort of thing that you want to do very thoughtfully and strategically, and of course, with key interactions with regulators and we're currently discussing and evaluating these trials at a very high level within Medivation Astellas alliance and also having substantive conversations with regulators, because this commercial value is very high, we want to capture and we want to get it right.

Biren Amin - Jefferies: Then I guess just a question for EU review for XTANDI in the chemo refractory setting. Could you tell us if the company has received their 120 questions?

C. Patrick Machado, J.D. - Chief Business Officer and CFO: Lynn?

Lynn Seely, M.D. - Chief Medical Officer: Sure. Yes, as you know we have filed for European approval and we are marching through the process such as in a very standard fashion Day 120, Day 150, Day 180 questions and comments and that's moving in as is expected.

Biren Amin - Jefferies: And I guess just a commercial question. Could maybe, I guess, the company provide breakdown for XTANDI use in the chemo-refractory setting between patients that have received. So, I think na�ve patients versus Zytiga refractory patients and also are you seeing a difference in terms of treatment duration between the two groups?

Cheryl L. Cohen - Chief Commercial Officer: This is Cheryl. First of all we have seen use in patients that are na�ve to Zytiga and have been on Zytiga. We are not going to be disclosing the percentage. And then your second question?

Biren Amin - Jefferies: Second question was treatment duration between the two groups?

Cheryl L. Cohen - Chief Commercial Officer: The duration we are not commenting it is too early in the launch to have a clear understanding of duration.

Operator: Raghuram Selvaraju, Aegis Capital.

Raghuram Selvaraju - Aegis Capital: Two things. Firstly, wanted to ask in sort of an echo of an earlier question. If we look at the breast cancer patient population who are deemed refractory to hormonal therapy, if we look at some of the most widely used hormonal therapy drugs for breast cancer like tamoxifen or arimidex, (indiscernible) things like that. Do you have an idea of what the patient population size is that; A, is receiving those drugs; and B, that is deemed refractory on an annualized basis?

David Hung, M.D. - President, CEO and Director: I don’t, I mean the breast cancer market is fairly substantial just judged by the sales in breast cancer. So, I don't have specific numbers to quote on the size of the population, but one thing that I should point is that given the mechanism action of our drug which we're still trying to further elucidate lose today. We do know that enzalutamide blocks the androgen receptor in and as we've previously stated the androgen receptor is expressing about 70% of breast cancers. But enzalutamide also blocks estrogen signaling and estrogen signaling is important in the vast majority of breast cancer. So, we're still trying to figure out exactly what our signals going to be and what patient population, but given the omeprazole block in AR, as well as signal we think that there is some potential to enzalutamide in a significant population of patients. The question is how do you get there from a regulatory standpoint, because given the fact that this is an experimental agent obviously as you will see from our first critical trial on breast cancer where certain patients who have failed two hormonal therapies and then the question really is after failing of two hormonal therapies how many of those patients have abandoned on either and (indiscernible) signaling progression and then once we get handle on that we're going to try to move obviously upstream of that.

Raghuram Selvaraju - Aegis Capital: How does that relate to specifically to the Phase 1 study that's currently ongoing in terms of the patients in that study and their prior treatment history? How many of our mono therapies have been failed and could you disclose what specific hormonal therapies they were previously on?

David Hung, M.D. - President, CEO and Director: Lynn, you want to answer that?

Lynn Seely, M.D. - Chief Medical Officer: Sure. So, the Phase 1 study is safety and pharmacokinetic study which is in rolling, initially we enrolled patients that have failed two lines of chemotherapy and as they haven’t increased hence increased the size of the Phase 1 study so that we can explore a broader range of patient population and get some additional pharmacokinetic data. So, the goal of this trial is really to enable a very strong and broad Phase 2 program and things are progressing nicely in that regards.

Raghuram Selvaraju - Aegis Capital: Then the final question I had was, can you remind us of the current status of the legal situation versus UCLA and where we might expect Medivation to go from here, following that California Justice's ruling?

C. Patrick Machado, J.D. - Chief Business Officer and CFO: Sure, Ram. This is Pat. So, high level there were two categories of claims in the case some contract claims and some fraud claims trial judge gave a summary judgment decision to UCLA and Aragon on the contract claims in December and January the fraud claims are going to trial we expect to occur probably sometime in Q2 and then after the trial is finished we intend to appeal everything including the summary judgment decisions that were made on the contract claims late last year.

Operator: Howard Liang, Leerink Swann.

Howard Liang - Leerink Swann: I have one commercial question and one clinical question. On commercial question can you give some color on how much pre-chemo use there is after the compendia listing in December?

C. Patrick Machado, J.D. - Chief Business Officer and CFO: Cheryl?

Cheryl L. Cohen - Chief Commercial Officer: Yes, this is Cheryl. Howard, we're not going to be disclosing any percentages on the pre-chemo use, but just like you know that there has been use in both pre and post but as you know our indication is in post-chemo and that's where we're promoting.

C. Patrick Machado, J.D. - Chief Business Officer and CFO: Howard, this is Pat. The other thing that I would comment on there and this was alluded to in the prepared comments, our understanding of practice patterns among urologists is that they are very much on-label prescribers, unlike oncologists who are very accustomed to prescribing based on compendia listing urologist generally or not. So, we would expect the real gateway to substantial utilization by urologist to be the actual label.

Howard Liang - Leerink Swann: Regarding new study, I don't think I heard you mentioned combination study which I think you talked about previously. Does that mean that there is less priority compared to the M0 trial?

Lynn Seely, M.D. - Chief Medical Officer: No, I don't think you should assume there is less priority. I think we are very interested in fully exploring the potential enzalutamide and this includes moving earlier which as we all agree as a very large marketplace but also exploring the potential of extending combination. And so again at this point we haven't disclosed any additional trials but there is certainly plans and working within that regard as well.

Howard Liang - Leerink Swann: Maybe I could slip in one more question between TERRAIN and STRIVE. Which one should we expect data first and could we see data this year?

Lynn Seely, M.D. - Chief Medical Officer: Just to remind everybody TERRAIN is a trial that is enrolling metastatic patients in Europe, starting (indiscernible) trial which is rolling both metastatic and non-metastatic patients, primarily in the U.S. And I think Astellas is operationalizing our TERRAIN trial and will be giving guidance on that. Our trial, which is the STRIVE trial in the U.S. has only recently begun enrolment and we haven't guidance on unit trials about when the data will be available.

Operator: Jason Kolbert, Maxim Group.

Jason Kolbert - Maxim Group: I'd just like to go back to one of the questions that Yaron was asking about a little bit of the volatility on the stock today. I think people are trying to understand what the real driver is going to be on the pre-chemo setting and I understand that it's being used by physicians now. Are you getting a lot of inquiries? How are you dealing with that as physicians start to explore on their own usage in the pre-chemo setting?

C. Patrick Machado, J.D. - Chief Business Officer and CFO: Jason, this is Pat. We are sitting here today with the post-chemo label, so in terms of things that we're focused on that's where all of our promotional effort is directed. As Cheryl mentioned, we have anecdotally seen situations where physicians are using our drug in pre-chemo patients. But our belief has been pretty consistent from the outset which is that pre-chemo patients are seeing largely by urologists and urologists are physicians who typically confine their prescribing patterns to on label indication. So, in terms of material uptake in pre-chemo patients for XTANDI, we would expect the gating item for that to be our approval.

Jason Kolbert - Maxim Group: Alright, me too and that's why I was kind of confounded by a survey that was published today that seem to be create some volatility. I just didn’t think of it, but thank you for clarifying.

Operator: Matthew Roden, UBS.

Andrew Peters - UBS: This is actually Andrew Peters on behalf of Matt. I have a couple of quick commercial questions. First, thanks for giving some color on the number of prescriptions and accounts. In terms of the 300 accounts so far and the 1,600 prescribers, what percentage would that reflect of kind of the accounts in prescribers that you had targeted ahead of the launch? Then related was the additional funding to the CVS in response to kind of real-time demand that you're seeing from the specialty pharmacies or is that more of just a reflection of your continued support for the patients?

Cheryl L. Cohen - Chief Commercial Officer: Yeah, I'll answer the CDF one first, as I mentioned earlier there is patients especially in the Medicare population that are on all these therapies that need help. So, we're continuing to fund that and we're continuing to support them because access is critical. This wasn't driven through the specialty pharmacy this is just the fact of what Medicare and Medicare reimbursement that these patients transition from 2012 to 2013 and have to go through that donut hole again. I'm hoping that all companies recognize how important that foundation is and donate to it. Your second question around the prescriptions, clearly we stated that there was 9,300 prescriptions that were sold by more than 1,600 prescribers and more than institutional talents which obviously are most of the academic and hospitals and we feel really good where that is based on our launch and based on our awareness and have physicians have a high level of awareness for XTANDI. So, we continue to obviously push through all of our targets. We continue to access. We continue to give the product profile and benefits and we feel like we're continuing to increase those prescribers over time.

Andrew Peters - UBS: I guess, just one last question on the earlier-lines of therapy. As you kind of go through your discussions with regulators on, provable endpoints, do you plan to speak with payors to kind of see what they would be looking for in terms of what's clinically meaningful benefit across some of these surrogate endpoints?

Cheryl L. Cohen - Chief Commercial Officer: Yes, this is Cheryl. We always consider payors as a really important key stakeholder in decision-making and we continually get their input through market research.

Operator: Ying Huang, Barclays.

Ying Huang - Barclays: Thanks for taking my questions as well, I have three. Number one, can you clarify if you guys have already had some early discussions with the European and also U.S. FDA regulators in terms of the potential endpoint you really have to use in the Phase 3 upstream trials? Then number two, can you provide us any data in terms of what the percent of patients on therapy with XTANDI are receiving this kind of patient assistance? Then lastly you mentioned that urologist write about less than 2% all scripts in 2012. I was wondering can you disclose in terms of roughly breakdown between your detailing efforts towards oncologists and urologists, what are the breakdown in terms of the (IFS)?

C. Patrick Machado, J.D. - Chief Business Officer and CFO: Ying, this is Pat. On the first one as Lynn mentioned we've got some complicated issues to work through with respect to the upstream studies, one of them involves discussions with regulators. We are involved in these discussions, but we're not going to indulge of the substantive contents of those discussions at this particular point in time. Then with respect to your second two questions on percent of patients getting assistance and our detail efforts, I'll turn for that one to Cheryl.

Cheryl L. Cohen - Chief Commercial Officer: So, the detail effort as I mentioned earlier, we are calling and targeting both urologist and oncologists and we think that both of them are very important and it's a very concentrated market. So, we'll continue those efforts in both specialties with our approved indications in post-chemo. And then the percent of patients that require assistance, that's a difficult one to put our arms around because there is several different ways of looking at patient assistance. One is, obviously through the co-pay foundations through the co-pay assistance and then also our patient assistance program and we're not going to be disclosing that percentage.

Ying Huang - Barclays: If I may, I have a follow-up on this. When do you think you will reach an inflection point where you do see a meaningful number of urologists writing script for XTANDI here?

C. Patrick Machado, J.D. - Chief Business Officer and CFO: When we get the label for pre-chemo.

Operator: David Miller, Biotech Stock.

David Miller - Biotech Stock: The first question I have is, do you expect to have PREVAIL data this year?

C. Patrick Machado, J.D. - Chief Business Officer and CFO: So, David, this is Pat. We've not guided on PREVAIL. I think we've consistently explained it. At this point, we're very focused on competition and we want to keep those cards very close to our vest because we think those data are going to put us in a very strong position competitively and fit us best for the business to keep that to ourselves.

David Miller - Biotech Stock: Had a lot of questions on the conference call today about the (Cohen) survey and without providing my opinion on whether that was worthwhile. Certainly, my discussions with the urologists that do treat post-chemo patients, the experience at ASCO GU, the experience was exactly the opposite of where they were all – 100% of them were preferring XTANDI to Zytiga. Your prepared remarks provided some insight into this, but can you provide some additional color about whether you are thinking of expanding your urology detailing efforts beyond that pre-identified 25% of urologists who do treat post-chemo?

C. Patrick Machado, J.D. - Chief Business Officer and CFO: So, I think again, it's going to come back to the same answer that just was given to Ying's last question, right. The key is the label. The key to label is the PREVAIL data. We were left with the pretty substantial opportunity once 302 data readout and we saw what their results were. I think that leaves a lot of opportunity for us to achieve superior results from an efficacy point of view and to obtain approval in pre-chemo. We think that will be the point in time when we will really make a concerted charge towards the urology population. With respect to the competitive differentiation, I think the question people should be asking urologists and since I haven't heard anyone ask it yet, which is, if you are faced with the choice between two agents all else is equal except one requires steroids and the other doesn't, which are you are going to pick? I think the answer to that question would be very, very one sided. I think if you add on top of that, the agent that doesn't have steroids potentially has a superior safety and efficacy profile. It gets even more lopsided. So, we remain very comfortable with our likely competitive differentiation in the urology space. We have always viewed this to be an urology product that was tailor-made for patients and prescribers in that population and that continues to be our view.

David Miller - Biotech Stock: I'll further echo that's how we ask the question that's why we know, if you publish your results, and I just want to follow-up on that a little bit to make sure I hear what you're saying is that you and the Astellas really aren't going to spend a lot of sales detailing hours on urologists until you have the label, is that a pretty fair characterization?

C. Patrick Machado, J.D. - Chief Business Officer and CFO: So, let me ask Cheryl to kind of comment on it.

Cheryl L. Cohen - Chief Commercial Officer: Yeah. Let me just kind of put in context because I don't want you to think that we're not calling on a majority of the urologists that currently are using bicalutamide because we are. If you look at the 600,000 scripts of bicalutamide that's written today it is written from about 3,000 urologists and we are calling on 2,000 event. So, we are in the right account, we are focusing the right customer and delivering our post-chemo message.

Operator: Geoff Porges, Bernstein.

Geoff Porges - Bernstein: It is just a quick technical question. Pat, are you going to release your data to IMS and other syndicated providers, so we can sort of see what's going on. Is that something you'd envisage in the future?

C. Patrick Machado, J.D. - Chief Business Officer and CFO: No. The agreements in place with the channel partners include a block on sharing those data and we don't expect that to change.

Operator: Thank you. Ladies and gentlemen, this does conclude the Medivation call. Thank your participation in today's conference. You may all disconnect. Have a great rest of the day.