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Executives

Anne Bowdidge - Senior Director of Investor Relations

David T. Hung - Chief Executive Officer, President and Executive Director

C. Patrick Machado - Chief Financial Officer, Principal Accounting Officer, Chief Business Officer and Secretary

Cheryl Cohen - Chief Commercial Officer

Lynn Seely - Chief Medical Officer and Senior Vice President

Analysts

Y. Katherine Xu - William Blair & Company L.L.C., Research Division

Yaron Werber - Citigroup Inc, Research Division

Lee Kalowski - Crédit Suisse AG, Research Division

Geoffrey C. Porges - Sanford C. Bernstein & Co., LLC., Research Division

Anupam Rama - JP Morgan Chase & Co, Research Division

Kimberly Lee - Janney Montgomery Scott LLC, Research Division

Biren Amin - Jefferies & Company, Inc., Research Division

Raghuram Selvaraju - Aegis Capital Corporation, Research Division

Howard Liang - Leerink Swann LLC, Research Division

Jason Kolbert - Maxim Group LLC, Research Division

Andrew Peters - UBS Investment Bank, Research Division

Ying Huang - Barclays Capital, Research Division

David Miller

Medivation (MDVN) Q4 2012 Earnings Call February 28, 2013 4:30 PM ET

Operator

Good day, everyone, and welcome to Medivation's Scheduled Conference Call. This call is being recorded. [Operator Instructions] I would now like to turn the call over to Anne Bowdidge, Senior Director of Investor Relations. Please go ahead.

Anne Bowdidge

Thank you for joining us. With me today is Patrick Machado, Chief Business and Financial Officer; and Cheryl Cohen, Chief Commercial Officer. Also on the call from Medivation but participating remotely are Dr. 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 XTANDI commercialization; the potential XTANDI regulatory approvals in other markets 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; therapeutic potential and safety profiles of our product candidates; our collaboration; our future opportunities and milestones; financial guidance for 2013; and the 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 fact 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 Medivation. David?

David T. Hung

Thanks, Anne. 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 full quarter post-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's exciting to listen to the enthusiasm that is building around XTANDI and see data presentations that fully support our belief that enzalutamide will play an important role in the current and future treatment of this disease.

I'm proud of the progress we've made, given that just 6 months ago, on August 31, 2012, the U.S. FDA approved XTANDI 3 months prior to our PDUFA date for the treatment of patients with metastatic castration-resistant prostate cancer, who have previously received docetaxel. This approval was based on our Phase III AFFIRM data that showed XTANDI produced a 4.8 month advantage in meeting overall survival compared with placebo.

Even with this advanced time line, Medivation's sales reps began promoting XTANDI in the field on the first business day following approval, and the product was 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 had also made significant progress, expanding XTANDI to worldwide presence. The European Medicines Agency accepted for review the enzalutamide marketing authorization application submitted by Astellas for the treatment of men with metastatic castration-resistant prostate cancer, who received docetaxel. We look forward to hearing a decision on the application this year. Astellas has also submitted marketing applications to regulatory authorities in South Korea, Canada and Brazil in patients with post-chemo metastatic CRPC.

Looking ahead now to future growth opportunities, I wanted to provide an update on our plans for expanding enzalutamide development further upstream into earlier prostate cancer disease states. As you are aware, there are 2 large patient populations upstream of the population we are 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, patients with hormone-naïve prostate cancer.

We believe that advancing enzalutamide development upstream of the PREVAIL population constitutes 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 facts that the studies required to obtain registration in these upstream populations involve significant time, cost and clinical and regulatory risk. I'd like to take a moment to elaborate on these considerations in a bit more detail.

We believe that a separate Phase III trial will be required to support registration of enzalutamide in each of these upstream patient populations. The critical question for these trials is whether regulators will allow approval based on nonsurvival endpoints, such as progression of metastasis-free survival. There is no clear regulatory precedent on this question. Furthermore, even if nonsurvival endpoints were acceptable to regulator, the Phase III trials required to demonstrate these sophistically significant benefit on these endpoints would be long and expensive. Assuming progression on metastasis-free survival as the sole primary endpoint, we estimate that each Phase III study would cost between $150 million to $200 million, and that the time from the first patient enrolled until commercial launch would be between 5 and 7 years.

These costs and time estimates would, of course, be much larger if regulatory bodies require an overall survival as a condition of approval. These Phase III trials would also entail significant clinical risk, specifically, the risk of patient in the control arm leaving the trial based on rising PSA levels before a progression event had occurred and taking one or more subsequent treatments that could delay -- that delay progression. This costs of risk could make it difficult or impossible to show a sophistically significant benefit, even if the drug being studied is, in fact, biologically active.

Given these facts, we and our partner Astella are taking a strategic and deliberative approach, ensuring that we make the best possible decisions regarding upstream development of enzalutamide, based on the opportunities and risks that we face in giving full consideration to the competitive landscape. This is an ongoing process involving discussions between our companies at the highest level, as well as subsequent interactions with regulators.

Because we believe upstream indications [indiscernible] a significant growth opportunity for enzalutamide, we and Astellas have both approved a 2013 collaboration budget that includes funding for enzalutamide development, including registrational development upstream of our PREVAIL population. We have not yet made final decisions on which specific studies to conduct and when. We will keep you posted as our plans coalesce.

With that overview, I will now turn the call over to Pat, who will review the fourth quarter and year-end financial results.

C. Patrick Machado

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 full 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' internal accounting policies consistently applied. The largest component of gross to net deductions is legally mandated rebates and discounts to government payers.

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. Payers have also responded very favorably to XTANDI to date. At 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. $71.5 million in XTANDI net sales reported by Astellas for 2012 represents more than 9,300 prescriptions generated from more 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 precedent seen with ZYTIGA plus prednisone. We believe the prescriber mix XTANDI has experienced to date is due to 2 primary factors. First, we believe urologists generally limit their prescriptions to on-label indications without regard to compendia listings. And second, because our prelaunch physician profiling indicated that fewer than 1/4 of high volume urologists see post-chemo patients, we have confined our urologist sales calls to that minority group.

Turning to Medivation's financial performance. Collaboration revenue for the fourth fiscal quarter and full year were $37.2 million and $181.7 million, respectively. As a reminder, Medivation's collaboration revenue consists of 3 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 costs, profits 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 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, pertains all XTANDI profit and losses and pays Medivation-tiered loyalties 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 Form 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 noncash 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 noncash 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 a 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 sharing payments from Astellas to be between $285 million and $300 million, approximately $29 million of which consists of noncash 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 David.

David T. Hung

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'd like to update you on our progress in ongoing trials to develop enzalutamide earlier in the prostate cancer disease spectrum and also in breast cancer. The trial that is furthest along in clinical development is PREVAIL, our Phase III trial in metastatic pre-chemo patients. In May 2012, we completed targeted enrollment of approximately 1,700 patients, and we are currently following these patients. The co-primary endpoints in this trial are overall survival and radiographic progression-free survival.

As we did with AFFIRM, we retained the latitude to review our interim analysis plan to maximize our likelihood of success given all available data. We also continue to enroll patients in our 2 clinical trials that are comparing the effect of enzalutamide head to head versus bicalutamide, the most commonly used antiandrogen. The STRIVE trial is enrolling approximately 400 men with either metastatic or nonmetastatic 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 our Phase II open-label study, evaluating enzalutamide in 67 hormone-naïve patients. The primary endpoint of the study was PSA response, defined as a reduction in PSA level of at least 80% after 25 weeks of treatment. The Phase II data presented at ASCO GU showed that the 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 these upstream patient populations.

In addition to the Phase II hormone-naïve data, we also presented a post hoc analysis of the Phase III AFFIRM trial evaluating the survival impact of baseline corticosteroid use in men. This abstract was also selected for an oral session in GU ASCO, and was presented by Dr. Howard Scher, the Chief of Genitourinary Oncology Service of Memorial-Sloan Kettering Cancer 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're also continuing to enroll patients in our Phase I 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 II development.

We also recently expanded our Board of Directors with the election of Kate Farberg, who is also assuming 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 and 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 in men with metastatic castration-resistant prostate cancer, who have previously received docetaxel and advancing enzalutamide development in earlier prostate cancer disease indications and in new areas, such as breast cancer, where medical need remains high. This has been a transformational time for Medivation, and we appreciate your continued support.

I'll 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 will quarterback the Q&A session.

Question-and-Answer Session

Operator

[Operator Instructions] Our first question is from the line of Katherine Xu from William Blair.

Y. Katherine Xu - William Blair & Company L.L.C., Research Division

I'm just wondering, in terms of the gross to net conversion, besides the rebates and discounts, did you factor into, let's say, the foundation money that you donated to? And then could you comment on any doughnut hole or patient assistance problems or nonproblems that you encounter? Recently, we saw general ZYTIGA sales coming down for the first quarter since launch. And then do you think you would -- you encountered similar problems sometime down the road?

C. Patrick Machado

So Katherine, this is Pat. I'll take the first part on the gross to net and then I'll ask Cheryl to speak to the doughnut hole. As I mentioned in the prepared comments, the largest components of the gross to net deduction are the various discounts that we're required to offer to government payers. Some of the patient assistance is included in gross to net. Other of it is included as an operating expense, so it's a little bit different. And Cheryl can speak to the doughnut hole.

Cheryl Cohen

Yes. We're not going to be giving guidance on the first quarter currently today. But I can comment that it is common with specialty products, infusion and oral to have a transition in the first quarter in the January, February time frame so that patients can get through the doughnut hole. We are 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 L.L.C., Research Division

Then do you see -- so for JNJ, for the quarter that is coming down that's about 1.5 years since launch? So do you foresee any problems with you guys as well something along that line?

C. Patrick Machado

So Katherine, it's Pat. We are 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, doughnut 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 not in the position to give any guidance at this point.

Operator

Our next question comes from the line of Yaron Werber from Citi.

Yaron Werber - Citigroup Inc, Research Division

Okay, great. I have 2 questions, David. Just give us a little bit of sense, I think there's honestly a lot of confusion in -- among investors and just among Wall Street, in general, about the "pre-chemo" market and I was hoping you can help us understand maybe the difference between this sort of the premetastatic market, the M0 market and the sort of the pre-chemo market in the metastatic segment. Because I don't think -- it sounds like there's a lot of confusion as to whether this is 2 distinct markets or whether this is 1 market that we should lump all of it? And then, secondly, I don't know if you can, but any color you can give us or information on how many patients are in the metastatic segment? And then how many med-- patients do you think sort of in the M0 segment so we can really kind of maybe put to bed once and for all this issue because I think JNJ has really kind of confused this also.

David T. Hung

Pat you want to..

C. Patrick Machado

David, you may want take that?

David T. Hung

Go ahead, Pat.

C. Patrick Machado

So this is obviously a topic that there's 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 a patient has started to progress on Lupron, which defines the beginning of castration-resistant prostate cancer. And according to IMS Health, there's just over 600,000 Casodex strips written per year in the U.S. So that, to us, is the most comprehensive data point that exists upon which to start to attempt to quantitate that patient population. Now 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 I, II program, we've seen a roughly fourfold elevation in time to progression in pre-chemo patients as opposed to postchemo patients. Whether that translates into a longer time on treatment in PREVAIL, we'll 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 postchemo. 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 practive because generally speaking, there's no reason to do that. So the Casodex numbers almost certainly reflect a mix of those 2 patient groups. And I think the question of what is going to be required in order to access that full population, in many respects, is going to come down to a reimbursement question. And I think it's going to come down to a question of if an agent has a label in metastatic pre-chemo, are payers going to impose prior authorization or other requirements that a 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 patients reason to do that? Part of our strategy in pushing XTANDI as aggressively as we can into that population is the strive in, in TERRAIN studies. If you 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 in a large well-controlled Phase II trials, that will provide additional evidence, which helps push us as far upstream as we possibly can.

Yaron Werber - Citigroup Inc, Research Division

And then if you don't mind, just to follow up. You guys recently announced that you provided some funding to to CDF or the Chronic Disease Fund. Can you -- and there's some I think some confusion as to what happened with JNJ in Q4, where they got hit with some of retrospective payment to their distributors. Can you give us a little bit of sense, is there a shortfall in funding that help patients and support groups in prostate cancer? Or what's going on? That's my last question.

C. Patrick Machado

Cheryl, do you want to take that?

Cheryl Cohen

Yes. I can't comment on JNJ 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 doughnut 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

Our next question is from the line of Lee Kalowski from Crédit Suisse.

Lee Kalowski - Crédit Suisse AG, Research Division

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 Cohen

Look, I can't speculate on Q1, but I can tell you in Q4 that we, of course, our approved indication is in postchemo and that's where we're promoting. But there was use of XTANDI in the pre-chemo space. Of course, it's up to the physician and patient to determine what's the best treatment option for them.

Lee Kalowski - Crédit Suisse AG, Research Division

Right. And David, can I just ask for a little bit of clarity of what you are saying about the budget approval with Astellas. Is it your expectation that you're going to launch a Phase III study registrational moving earlier? Do you expect to start that study? Do you expect patients to be in the clinic in Phase III in 2013?

David T. Hung

We'll be giving you more detail about that program on a future call. But all that we want to convey with that we are solely aware of the commercial potential of these upstream indications, but we're also cognizant of the risks and costs and times associated with these studies done to make the most thoughtful decision that we obviously are involved in very high level discussions with Astellas. And together, we'll be jointly announcing our program plans.

C. Patrick Machado

And I think Lee, it's Pat, 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 a registrational development. So the funding is in place.

Lee Kalowski - Crédit Suisse AG, Research Division

So what is that funding for then if it's not for the trial itself?

C. Patrick Machado

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're going to start just yet. Those are still works in progress.

Operator

Our next question is from the line of Geoffrey Porges from Bernstein.

Geoffrey C. Porges - Sanford C. Bernstein & Co., LLC., Research Division

So one quick question for Pat, and then a second one, I'll ask them together. Pat, if you can comment on the 600,000 anti-androgen prescriptions, do you have any sense of what proportion are M0 and M1? And then it's probably also a question for David. Enzalutamide is currently priced as a significant premium to ZYTIGA. And my question is whether the pricing today is reflective of a 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're going forward into an indication, where you might have 4x longer durations and 2x to 3x larger patient population? Is that the pricings that you've set today? Or is that something that you are still contemplating?

C. Patrick Machado

So Jeff, this is Pat. I can take the first one and then I'll pass the pricing question to Cheryl. With respect to the 600,000 scripts for Casodex each year there are no data that we're aware of that split that out between M1 and M0, just again because it's our understanding that a large group of those patients aren't scanned as part of our 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 has either been surgically removed or radiated, whether or not they all have imageable diseases is a data point that to our knowledge doesn't exist. And Cheryl can take the pricing question.

Cheryl Cohen

Yes. Thank you, Pat. Just to reiterate the pricing strategy, when we put the price in place, it was definitely based off of our postchemo product profile and our overall survival benefit, and we feel that it was a appropriately priced. Going forward, obviously, there's a lot of strategic things that we're looking at that you stated, such as 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

Our next question is from the line of Geoff Meacham from JPMorgan.

Anupam Rama - JP Morgan Chase & Co, Research Division

This is Anupam Rama in for Geoff Meacham. I just wanted to follow up on a question before about the upstream beyond PREVAIL trial. I think you outlined that $100 million and $150 million for these trials, and some of that has 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

Well, Anupam, this is Pat. The estimate that we cited for the Phase III trials was $150 million to $200 million each for each of the Phase IIIs. 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 in [indiscernible] while it's for milestone payments puts us in a very comfortable position with respect to cash moving forward.

Operator

Our next question is from the line of Kim Lee from Janney Capital.

Kimberly Lee - Janney Montgomery Scott LLC, Research Division

Just a couple of questions. First one, I guess for Pat, does the guidance that you've provided for 2013 include a registrational development in the upstream pre-chemo setting?

C. Patrick Machado

Yes.

Kimberly Lee - Janney Montgomery Scott LLC, Research Division

Okay. So it does assume potential initiation then of these earlier studies?

C. Patrick Machado

Yes, it does.

Kimberly Lee - Janney Montgomery Scott LLC, Research Division

Okay, thanks for that clarity. And then can you remind us the number of sales reps that Medivation has targeting with the specialists, the number, I guess, internally as 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 Cohen

Sure. We currently have 60 sales representatives throughout the United states. 150 total, including the effort with Astellas. And we are calling on urologists and oncologists, and we're 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

Our next question is from the line of Biren Amin.

Biren Amin - Jefferies & Company, Inc., Research Division

Just on the early line Phase III trials, have you had discussions with the FDA, EMEA? And if so, I guess, what input could you share with us?

C. Patrick Machado

Lynn, do you want to take that one?

Lynn Seely

Sure. Yes, we've been discussing. Today, we are very committed to Phase III development in the earlier prostate cancer space, and these are novel clinical trial designs with novel registration endpoints and it's the sort of thing that you want to do very thoughtfully and strategically. And of course, with key interaction with regulators, and we are 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 it, we want to get it right.

Biren Amin - Jefferies & Company, Inc., Research Division

And then, I guess, just a question on the EU review for XTANDI in the chemo refractory setting. Could you tell us if the company has ever received day 120 questions?

C. Patrick Machado

Lynn?

Lynn Seely

Sure. Yes. As you know, we have filed for European approval and we are marching through the process, which is in a very standard fashion, day 120, day 150, day 180 questions and comments and that's moving as it is expected.

Biren Amin - Jefferies & Company, Inc., Research Division

Okay. 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 or ZYTIGA naive patients versus ZYTIGA refractory patients? And also, are you seeing a difference in terms of treatment duration between the 2 groups?

Cheryl Cohen

Okay. This is Cheryl. First of all, we have seen use in patients that are naïve to ZYTIGA and have been on ZYTIGA. We're not going to be disclosing the percentage. And then your second question?

Biren Amin - Jefferies & Company, Inc., Research Division

Second question was treatment duration between the 2 groups.

Cheryl Cohen

Oh. Yes, the duration, we're not commenting. It's too early in the launch to have a clear understanding of duration.

Operator

Our next question is from the line of Ram Selvaraju from Aegis Capital.

Raghuram Selvaraju - Aegis Capital Corporation, Research Division

Two things. Firstly, I 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, Arimidex, Aromasin, Femara, 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?

C. Patrick Machado

David, do you want to take that?

David T. Hung

I don't -- I mean, the breast cancer market is fairly substantial just judged by the sales of agents in breast cancer. So I don't have specific numbers to quote you on the size of the population. But one thing that I should point out is that given the negative reaction of our drug, which we're still trying to further elucidate, we do know that enzalutamide blocks the androgen receptor, and as we've previously stated the andro receptors are expressed in 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 signal is going to be and at what patient population. But given the methods of blocking AR as well as estrogen signaling, we think that there's a potential to enzalutamide value in this significant population of patients. The question is really how do you get there from a regulatory standpoint? Because given the fact that this is an experimention, obviously, as you will see from our clinical trial in breast cancer we're treating patients who have failed 2 hormonal therapies. And then the question really is after the failure of 2 hormonal therapies, how many of those patients feel dependent on either androgen or estrogen signaling for progression. And then once we get a handle on that, we're going to try to move, obviously, upstream of that.

Raghuram Selvaraju - Aegis Capital Corporation, Research Division

Okay. And how does that relate specifically to the Phase I study that's currently ongoing in terms of the patients in that study and their prior treatment history? How many hormonal therapies have they failed? And can you disclose what specific hormonal therapies they were previously on?

C. Patrick Machado

Lynn, do you want to answer that?

Lynn Seely

Sure. Sure. So the Phase I study is a safety and pharmacokinetic study, which is enrolling. Initially, we enrolled patients that have failed 2 lines of chemotherapy. And as data have increased, we have increased the size of that Phase I study, so that we can explore a broader range of patient population and get some additional pharmacokinetic data. So the goal of trial is really to enable a very strong and broad Phase 2 program, and things are progressing nicely in that regard.

Raghuram Selvaraju - Aegis Capital Corporation, Research Division

Okay. And 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

Sure, Ram. This is Pat. So high level, there were 2 categories of claims in the case, some contract claims and some fraud claims. The 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 that 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

Our next question is from the line of Howard Liang from Leerink Swann.

Howard Liang - Leerink Swann LLC, Research Division

I have one commercial question and one clinical question. On the commercial question, can you give us some color on how much prechemo use there is after the compendium listing in December?

C. Patrick Machado

Cheryl?

Cheryl Cohen

Yes, this is Cheryl. Howard, we're not going to be disclosing any percentages on the prechemo use, but just to let you know, there has been use in both preimposed. But as you know, our indication is in postchemo, and that's where we're promoting.

C. Patrick Machado

And 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, urologists, generally, are not. So we would expect the real gateway to substantial utilization by urologists to be the actual label.

Howard Liang - Leerink Swann LLC, Research Division

Okay, great. Regarding a new study, I don't think I heard you mention a combination study, which I think you talked about previously. Does that mean that there's less priority compared to the M0 trials?

C. Patrick Machado

Lynn, do you want take that?

Lynn Seely

Sure. No, I don't think you should assume there's less priority. I think we are very interested in fully exploring the potential of enzalutamide, and this includes moving earlier with, which is, we all agree, is 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 are certainly plans and work in effort in that regard as well.

Howard Liang - Leerink Swann LLC, Research Division

Great. If I could slip in one more question, between TERRAIN and STRIVE, which one shall we expect data first? And can we see data this year?

C. Patrick Machado

So Howard, we need...

Lynn Seely

So I...

C. Patrick Machado

Go ahead, Lynn.

Lynn Seely

Just to remind everybody, TERRAIN is a trial that is enrolling metastatic patients in Europe. STRIVE is a trial, which is enrolling both metastatic and nonmetastatic patients, primarily in the U.S. And I think Astellas' operationalizing the TERRAIN trial, and will be giving guidance on that. Our trial, which is the STRIVE trial in the U.S., has only recently begun enrollment, and we haven't given guidance on either trials about when the data will be available.

Operator

Our next question comes from the line of Jason Kolbert from Maxim Group.

Jason Kolbert - Maxim Group LLC, Research Division

I'd just like to go back to one of the questions that Yaron was asking about and a little bit of a volatility in the stock today. I think people are trying to understand what the real driver is going to be in 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

So Jason, this is Pat. We are sitting here today with a 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 seen largely by urologists, and urologist are physicians who are typically confined in their prescribing patterns doing label indications. 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 LLC, Research Division

All right. Me, too. And that's I was kind of confounded by a survey that was published today that seem to be create some volatility. I just didn't think it makes sense, but thank you for clarifying.

Operator

Our next question is from the line of Matthew Roden from UBS.

Andrew Peters - UBS Investment Bank, Research Division

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, is what percentage would that reflect of kind of the accounts in prescribers that you had targeted ahead of the launch? And then related, was the additional funding to the CDF in response to kind of realtime 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 Cohen

Yes, I'll answer CDF one first. As I mentioned earlier, there's patients, especially in the Medicare population, that are on all these therapies that need help. So we are continuing to fund that, and we're continuing to support them because access is critical. And this wasn't driven through the specialty pharmacy. This is just a fact of what Medicare is and Medicare reimbursement that these patients transition from 2012 to 2013 and have to go through that doughnut hole again. And 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 filled by more than 1,600 prescribers and more than 300 institutional accounts, 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 where physician 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'll continue to increase those prescribers over time.

Andrew Peters - UBS Investment Bank, Research Division

Okay. And 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 payers to kind of see what they would be looking for in terms of what's a clinically meaningful benefit across some of these kind of surrogate endpoints?

Cheryl Cohen

Yes, this is Cheryl. We always consider payers as a really important key stakeholder in decision-making, and we continually get their input through market research.

Operator

Our next question comes from the line of Ying Huang from Barclays.

Ying Huang - Barclays Capital, Research Division

I have 3. 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 III upstream trials? And then number two, can you provide us any data in terms of what's the percent of patients on therapy with XTANDI are receiving this kind of patient assistance? And then lastly, you mentioned that urologists write about less than 2% of all scripts in 2012. I was wondering can you disclose in terms of roughly a breakdown between your detailing effort towards oncologists and urologists? What are the breakdown in terms of the offset?

C. Patrick Machado

Ying, this is Pat. On the first one, as Lynn mentioned, we've got some complicated issues to be worked through with respect to the upstream studies. One of them involves discussions with regulators. We're involved in these discussions, but we're not going to divulge any of the substantive contents of these discussions at this particular point in time. And then with respect to your second 2 questions on percent of patients getting assistance and our detailed efforts, I'll turn that one to Cheryl.

Cheryl Cohen

Yes. So the detail effort, as I mentioned earlier, we are calling and targeting both urologists 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 indication in postchemo. And then the percent of patients that require assistance, that's a difficult one to put our arms around because there's 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 Capital, Research Division

If I may 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 the script for XTANDI here?

C. Patrick Machado

When we get the label.

Ying Huang - Barclays Capital, Research Division

For prechemo?

C. Patrick Machado

Yes.

Operator

Our next question is from the line of David Miller from Biotech Stock.

David Miller

The first question I have is, do you expect to have PREVAIL data this year?

C. Patrick Machado

So David, this is Pat. We have not guided on PREVAIL. I think we've consistently explained that, at this point, we're very focused on competition, and we want to keep those cards very close to our vest because we think all those data are going to put us in a very strong position competitively and that it's best for the business to keep that to ourself.

David Miller

Okay, understood. I had a lot of questions on the conference call today about the Kalen [ph] survey and without providing my opinion on whether that was worthwhile. Certainly, my discussion 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. And 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 preidentified 25% of urologists who do treat postchemo?

C. Patrick Machado

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 the label is the PREVAIL data. Now we were left with a pretty substantial opportunity once the 302 data read out and what we saw what their results were. I think that leaves a lot of opportunity for us to achieve a superior result 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 I haven't heard anyone ask it yet, which is, if you're faced with the choice between 2 agents, all else is equal except one requires steroids and the other doesn't, which are you going to pick? And I think the answer to that question would be very, 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 onco -- a urology product that was tailor made for patients and prescribers in that population, and that continues to be our view.

David Miller

For the record, that's how we asked the question. That's why we know.

C. Patrick Machado

Thank you. Maybe you could publish your results.

David Miller

And I just want to follow up on that a little bit. Just to make sure I hear what you're saying is, is that you and 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

So Lynn and Cheryl,let me ask Cheryl to [indiscernible] this one.

David Miller

How does that 25%...

Cheryl Cohen

Yes. Let me just kind of put it 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's written from about 3,000 urologists, and we're calling on 2,000 of them. So we are in the right account. We are focusing in the right customer and delivering our post-chemo message.

Operator

Our next question is a follow-up from the line of Geoffrey Porges from Bernstein.

Geoffrey C. Porges - Sanford C. Bernstein & Co., LLC., Research Division

It's 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? Or is that something you'd envisaged in the future?

C. Patrick Machado

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

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

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