October 27, 2009 / 11:58 AM / 10 years ago

UPDATE 3-Astellas, Medivation in prostate-cancer drug pact

* Astellas to pay $110 mln up front

* Medivation eligible for $655 mln in milestone payments

* Medivation shares up 2 percent (Adds company comment, updates share activity)

By Toni Clarke

BOSTON, Oct 27 (Reuters) - Japanese drugmaker Astellas Pharma Inc (4503.T) has agreed to license an experimental prostate cancer drug from U.S. biotech Medivation Inc <MDVN.O, sending Medivation’s shares up 2 percent.

Medivation will receive an up-front payment of $110 million, and may receive as much as $655 million more if the drug, known as MDV3100, reach various milestones.

The companies will jointly commercialize the drug in the United States. Astellas will market it outside the United States and pay Medivation tiered double-digit royalties on ex-U.S. sales.

The drug is in late-stage, or Phase III, development in men with advanced prostate cancer who have failed to improve with other treatments.

Astellas, which is Japan’s second-largest drugmaker, needs new products to offset the impact of patent expirations on key products such as Flomax for enlarged prostate, and Vesicare for over-active bladder.

The deal follows Johnson & Johnson’s (JNJ.N) acquisition of Cougar Biotechnology Inc and its experimental prostate cancer drug abiraterone acetate, which is late-stage development.

Medivation’s drug is initially being tested in men whose cancer worsens despite treatment with drugs that curtail the body’s production of testosterone, the male hormone that fuels prostate cancer.

David Hung, Medivation’s chief executive officer, said the drug stops progression of the disease in a significant number of patients who have failed to respond to Lupron and Casodex, two mainstays of prostate cancer therapy, or chemotherapy.

Last year, Pfizer Inc (PFE.N), the world’s largest drugmaker, agreed to license San Francisco-based Medivation’s experimental Alzheimer’s disease drug Dimebon. Medivation will receive 40 percent of U.S. profits and an undisclosed royalty on overseas sales.

Medivation’s shares rose 2 percent to $26.62 in early trading on Nasdaq.

Reporting by Toni Clarke and Lewis Krauskopf; Editing by Derek Caney, Dave Zimmerman

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