DESCRIPTION OF BUSINESS

9 Months Ended

Sep. 30, 2012

DESCRIPTION OF BUSINESS

NOTE 1 — DESCRIPTION OF BUSINESS

Medivation, Inc. (the “Company” or “Medivation”) is a biopharmaceutical company focused on the rapid development of novel therapies to treat serious diseases for which there are limited treatment options. Together with its collaboration partner, Astellas Pharma, Inc., or Astellas, the Company is marketing XTANDI^® (enzalutamide) capsules, formerly known as MDV3100, in the United States for treatment of men with metastatic castration-resistant prostate cancer, or mCRPC, who have previously received docetaxel. A European marketing application submitted for this indication is currently under review by the European Medicines Agency, or EMA. Together with Astellas, the Company is also conducting multiple trials of enzalutamide in earlier prostate cancer disease states, including the Phase 3 PREVAIL trial in men with mCRPC who have not received chemotherapy, and in breast cancer.

In October 2009, the Company entered into a collaboration agreement with Astellas, or the Astellas Collaboration Agreement, pursuant to which it is collaborating with Astellas to develop and commercialize XTANDI globally. Under the agreement, decision making and economic participation differs between the U.S. market and the ex-U.S. market. In the United States, decisions are generally made by consensus, pre-tax profits and losses are shared equally, and, subject to certain exceptions, development and commercialization costs (including cost of goods sold and the royalty on net sales payable to The Regents of the University of California, or UCLA, under the Company’s XTANDI license agreement) are also shared equally. The primary exceptions to equal cost sharing in the U.S. market are that each party bears its own commercial full-time equivalent personnel, or FTE, costs, and that development costs supporting regulatory approvals in both the United States and either Europe or Japan are borne one-third by the Company and two-thirds by Astellas. The Company and Astellas are co-promoting XTANDI in the U.S. market, with each company providing half of the sales and medical affairs effort in support of the product. Both the Company and Astellas are entitled to receive a fee for each qualifying detail made by their respective sales representatives. Outside the United States, decisions are generally made by Astellas and all development and commercialization costs (including cost of goods sold and the royalty on net sales payable to UCLA) are borne by Astellas. Astellas retains all ex-U.S. profits and losses, and pays the Company a tiered, double-digit royalty on net ex-U.S. sales. Astellas has sole responsibility for promoting XTANDI outside the United States, and for recording all XTANDI sales both inside and outside the United States.

In January 2012, the Company’s former collaboration partner Pfizer, Inc., or Pfizer, exercised its right to terminate the Company’s collaboration agreement for the development and commercialization of dimebon for the treatment of Alzheimer’s disease and Huntington disease, due to negative Phase 3 trial results in both indications. The Company and Pfizer discontinued development of dimebon for all indications in January 2012, and completed the wind down of their respective remaining collaboration activities in the third quarter of 2012.

On August 31, 2012, the U.S. Food and Drug Administration, or FDA, approved XTANDI for the treatment of men with mCRPC who have previously received docetaxel. This was the first marketing approval for XTANDI anywhere in the world. The Company and Astellas commenced commercial sales of XTANDI in the U.S. on September 13, 2012. The Company did not generate any collaboration revenue attributable to U.S. XTANDI sales until the quarter ended September 30, 2012, and such revenue to date has been minimal. The Company has funded its operations primarily through public offerings of its common stock, the issuance of convertible debt and from the up-front, development milestone and cost-sharing payments under its Collaboration Agreement with Astellas and its former collaboration agreement with Pfizer. The Company has incurred cumulative net losses of $259.9 million through September 30, 2012, and expects to incur substantial additional losses as it continues to finance the commercialization of XTANDI in the U.S. market, clinical and preclinical studies of XTANDI and potential future product candidates, and its corporate overhead costs. The Company does not know when, or if, XTANDI will become profitable in the U.S. market, will be approved for sale in the U.S. market for any indication other than treatment of men with mCRPC who have received docetaxel, or will be approved for sale in any other market for any indication.