Medivation, Inc. (MDVN) recently announced that it intends to reduce its workforce by 20% or 23 people to save costs and focus its resources towards research and development activities related to dimebon and MDV3100.

Medivation also announced the departure of its senior vice president of clinical development and the vice president of commercial development. The company said that it is no longer looking for a new Chief Financial Officer (CFO) as this post will be filled by the current Chief Business Officer (CBO).

Medivation’s workforce reduction announcement comes on the heels of disappointing phase III results reported earlier this month on its lead pipeline candidate, dimebon. Dimebon, which is being developed for Alzheimer’s disease in collaboration with Pfizer, Inc. (PFE), failed to achieve both its primary and secondary endpoints in a phase III study (CONNECTION).

Dimebon was the most advanced pipeline candidate at Medivation, which has no marketed products in its portfolio. The successful development of dimebon would have been a major boost for the company. In addition to the Alzheimer’s indication, Medivation is also studying dimebon for Huntington’s disease.

Going forward, Medivation intends to focus on the further analysis of the CONNECTION data, which will help determine future development plans for the candidate. Dimebon is currently being studied in combination with Pfizer’s Aricept for the treatment of mild-to-moderate Alzheimer’s. Positive results from this study could allow the companies to push for approval of the product as a combination therapy.

Dimebon is also in another study which is being conducted in Huntington disease patients.

We currently have a Neutral recommendation on Medivation. The high profile phase III failure was a major setback for the company. Medivation could suffer another blow if Pfizer decides to pull out from the collaboration agreement for dimebon.

We note that Pfizer already has another Alzheimer’s candidate, bapineuzumab, in its portfolio that is being developed with Elan Corp (ELN) and Johnson & Johnson (JNJ). As such, Pfizer may decide to focus its efforts towards the development of bapineuzumab.
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