Medivation shares fall on new Dimebon timeline

The stock fell $2.27, or 12.2 percent, to $16.43 in morning trading. Shares have traded between $11.53 and $34.40 over the last 52 weeks.

In a conference call late Monday with investors, the San Francisco-based company said it expects to file a regulatory application with the Food and Drug Administration in 2011 under its partnership with Pfizer Inc. Prior to the partnership, the company was guiding for a 2010 regulatory filing.

The conference call followed the report of a wider third-quarter loss. During the third quarter, Medivation said it lost $20.5 million, or 68 cents per share, compared with a loss of $9.4 million, or 34 cents per share, during the same period a year prior. The company had no revenue in either period.

Analysts surveyed by Thomson Reuters expected a loss of 59 cents per share.

"The third quarter represented another quarter of significant achievement and progress and was capped with the signing of our partnering agreement with Pfizer for Dimebon," said Medivation President and Chief Executive Dr. David Hung. "This collaboration not only gives us access to a world-class partner capable of maximizing global commercialization, but also provides significant funding allowing us to invest in all of our clinical programs and actively pursue other drug candidates."

The companies plan on expanding development of Dimebon to include a new late-stage study, starting in 2009.

Leerink Swann & Co. analyst William Tanner reaffirmed a "Outperform" rating, citing the new development strategy.

"Departure from the original strategy makes sense to us, as the former may have been best suited for a biotech company with limited financial resources," he said, in a note to investors. "The new strategy, with a more comprehensive clinical data set available at launch, should provide the opportunity for broader-based commercialization at the outset."

That strategy is even more beneficial considering the drug would likely be up against generic versions of Pfizer's Aricept by the time it reaches the market, he added.