So what: In December 2014, Medivation acquired rights to MDV9300, which was believed to be a PD-1 inhibitor that works similarly to Merck & Co.'s (NYSE:MRK) Keytruda and Bristol-Myers Squibb's (NYSE:BMY) Opdivo, from CureTech.
In December 2015, Medivation initiated a phase 2 study of MDV9300 in relapsed or refractory large B cell lymphoma (DLBCL) and suggested that if the trial is successful, then a big unmet need could lead to the FDA considering an accelerated approval.
However, on Jan. 25, Medivation filed an 8-K with the SEC because it concluded that MDV9300 isn't a PD-1 targeting therapy after all.
Medivation doesn't yet know how MDV9300 works and it's knee-deep in trying to figure it out, but unfortunately, the FDA has placed a partial clinical hold on the DLBCL trial that will keep patients from being enrolled in the study until that happens.
Now what: The revelation is important because MDV9300 is a key part of Medivation's strategy to diversify its revenue beyond its top-selling prostate cancer drug, Xtandi.
Xtandi, which saw global sales grow to $547 million in the fourth quarter, has been winning market share away from Johnson & Johnson's (NYSE:JNJ) multibillion per year Zytiga, but Johnson & Johnson is developing a new prostate cancer drug that could eventually slow demand for Xtandi and as a result, pressure is building on Medivation to usher new drugs to market.
Given MDV9300 is in a holding pattern, hope shifts to MDV3800, a PARP-inhibitor that Medivation acquired from BioMarin (NASDAQ:BMRN) last fall. A phase 3 trial studying MDV3800 in advanced breast cancer patients with BRCA mutations is expected to wrap up in June, so investors might want to keep a close eye on Medivation's press releases this summer.
Todd Campbell has no position in any stocks mentioned. Todd owns E.B. Capital Markets, LLC. E.B. Capital's clients may have positions in the companies mentioned. The Motley Fool recommends BioMarin Pharmaceutical and Johnson & Johnson. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.