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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549





Form 10-KSB







|x | ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|- | ------------------------------------------------------------------------------

For the fiscal year ended December 31, 2007



| ̈ | TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|- | ----------------------------------------------------------------------------------

For the transition period from                      to

Commission file
number 001-32836





Medivation, Inc.

(Name of small
business issuer in its charter)







|                                                               |  |                                     
|-------------------------------------------------------------- |  | ------------------------------------
|Delaware                                                       |  | 13-3863260                          
|(State or other jurisdiction of incorporation or organization) |  | (I.R.S. Employer Identification No.)
|                                                               | 
|201 Spear Street, 3rdFloor San Francisco, California 94105     |  | 94105                               
|(Address of principal executive offices)                       |  | (Zip Code)                          

(415) 543-3470

(Issuers telephone number)





Securities registered under
Section 12(b) of the Exchange Act:



|                                        |  |                                          
|--------------------------------------- |  | -----------------------------------------
|Title of each class                     |  | Name of each exchange on which registered
|Common Stock, par value $0.01 per share |  | Nasdaq Global Market                     

Securities registered under Section 12(g) of the Exchange Act: None

Check whether the issuer is not required to file reports pursuant to Section 13 or 15(d) of the Exchange Act:      ̈

Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the
Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days:    Yes  x    No   ̈

Check if there is no disclosure of
delinquent filers in response to Item 405 of Regulation S-B contained in this form, and no disclosure will be contained, to the best of registrants knowledge, in definitive proxy or information statements incorporated by reference in Part
III of this Form 10-KSB or any amendment to this Form 10-KSB:      ̈

Indicate by
check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act):    Yes:   ̈    No  x

State issuers revenues for its most recent fiscal year: $0

State the aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common
equity was sold, or the average bid and asked price of such common equity, as of February 14, 2008: $149,844,811

State the number of shares
outstanding of each of the issuers classes of common equity, as of the latest practicable date: As of February 14, 2008, there were outstanding an aggregate of 28,837,290 shares of Common Stock, par value $0.01 per share

DOCUMENTS INCORPORATED BY REFERENCE

Certain portions of the Definitive Proxy Statement with respect to the 2008 Annual Meeting of Stockholders of Medivation, Inc., to be filed pursuant to Rule 14a-101 on Schedule 14A with the Securities and Exchange Commission (the
Commission) within 120 days after the close of the fiscal year ended December 31, 2007 (the Definitive Proxy Statement), have been incorporated by reference in Part III of this Annual Report on Form 10-KSB
of Medivation, Inc. (the Report).

Transitional Small Business Disclosure Format (Check
one):    Yes   ̈    No  x









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TABLE OF CONTENTS



|            |  |                                                                                                                                       |  |     
|----------- |  | ------------------------------------------------------------------------------------------------------------------------------------- |  | ----
|            |  |                                                                                                                                       |  | Page
|            |  |                                                                                                                                      
|PART I      |  |                                                                                                                                       |  |     
|Item 1.     |  | DESCRIPTION OF BUSINESS                                                                                                               |  | 4   
|Item 2.     |  | DESCRIPTION OF PROPERTY                                                                                                               |  | 17  
|Item 3.     |  | LEGAL PROCEEDINGS                                                                                                                     |  | 17  
|Item 4.     |  | SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS                                                                                   |  | 17  
|            |  |                                                                                                                                      
|PART II     |  |                                                                                                                                       |  |     
|Item 5.     |  | MARKET FOR COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND SMALL
BUSINESS ISSUER PURCHASES OF EQUITY SECURITIES                        |  | 18  
|Item 6.     |  | MANAGEMENTS DISCUSSION AND ANALYSIS OR PLAN OF
OPERATION                                                                             |  | 18  
|Item 7.     |  | CONSOLIDATED FINANCIAL STATEMENTS                                                                                                     |  | 32  
|Item 8.     |  | CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE                                                  |  | 50  
|Item 8A(T). |  | CONTROLS AND PROCEDURES                                                                                                               |  | 50  
|Item 8B.    |  | OTHER INFORMATION                                                                                                                     |  | 50  
|            |  |                                                                                                                                      
|PART III    |  |                                                                                                                                       |  |     
|Item 9.     |  | DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS, CONTROL PERSONS AND CORPORATE GOVERNANCE; COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT |  | 51  
|Item 10.    |  | EXECUTIVE COMPENSATION                                                                                                                |  | 51  
|Item 11.    |  | SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS                                        |  | 51  
|Item 12.    |  | CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR
INDEPENDENCE                                                             |  | 51  
|Item 13.    |  | EXHIBITS                                                                                                                              |  | 51  
|Item 14.    |  | PRINCIPAL ACCOUNTANT FEES AND SERVICES                                                                                                |  | 53  
|            | 
|SIGNATURES  |  | 54                                                                                                                                   



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FORWARD-LOOKING STATEMENTS

This Report includes forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934 (the Exchange
Act). All statements other than statements of historical facts contained in this Report, including statements regarding our anticipated future clinical and regulatory milestone events, future financial position, business strategy and plans
and objectives of management for future operations, are forward-looking statements. The words believe, may, will, estimate, continue, anticipate, intend,
expect and similar expressions, as they relate to us, are intended to identify forward-looking statements. Such forward-looking statements include, without limitation, statements regarding the anticipated start dates, durations and
completion dates of our ongoing and future clinical studies, statements regarding the anticipated designs of our future clinical studies, statements regarding our anticipated future regulatory submissions, and statements regarding our anticipated
future cash position. We have based these forward-looking statements largely on our current expectations and projections about future events, including the responses we expect from the U.S. Food and Drug Administration (FDA) and other regulatory
authorities, and financial trends that we believe may affect our financial condition, results of operations, business strategy, preclinical and clinical trials and financial needs. These forward-looking statements are subject to a number of risks,
uncertainties and assumptions described in Managements Discussion and Analysis or Plan of Operation and elsewhere in this Report. These risks are not exhaustive. Other sections of this Report include additional factors which could
adversely impact our business and financial performance. Moreover, we operate in a very competitive and rapidly changing environment. New risk factors emerge from time to time and it is not possible for our management to predict all risk factors,
nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements. You should not rely upon
forward-looking statements as predictions of future events. We cannot assure you that the events and circumstances reflected in the forward-looking statements will be achieved or occur and actual results could differ materially from those projected
in the forward-looking statements. We assume no obligation to update or supplement forward-looking statements.



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PART I



|Item 1. | Description of Business.
|------- | ------------------------

The Company

We are a biopharmaceutical company with small molecule drugs in clinical development to treat three large, unmet medical needsAlzheimers
disease, Huntingtons disease and hormone-refractory prostate cancer. Our strategy is to identify promising product candidates, to develop them in a rapid, cost-effective manner, and to seek development and/or commercialization partners as
appropriate to complement our internal efforts.

Our Pipeline

Dimebon in Alzheimers Disease and Huntingtons Disease.Our lead product candidate, Dimebon, has successfully completed the first of two pivotal trials required to seek marketing approval in
the United States for mild-to-moderate Alzheimers disease. We plan to begin our second, confirmatory pivotal Phase 3 Alzheimers disease trial in the second quarter of 2008. We are also studying Dimebon in an ongoing Phase 2
clinical trial in patients with mild-to-moderate Huntingtons disease. Dimebon has been shown to inhibit the death of brain cells (neurons) in preclinical models of Alzheimers disease and Huntingtons disease, making it a novel
potential treatment for these and potentially other neurodegenerative diseases. Based on preclinical experiments we have conducted, we believe that Dimebon operates through a novel mitochondrial mechanism of action.

MDV3100 in Hormone-Refractory Prostate Cancer. Our proprietary compound MDV3100 is currently in a Phase 1-2 clinical trial in
approximately 100 patients with hormone-refractory prostate cancer. MDV3100 is the lead clinical development candidate from a library of approximately 170 small molecules licensed by Medivation. These molecules were rationally designed to treat
hormone-refractory prostate cancer by modulating the androgen receptor (AR) in a different manner from currently approved AR antagonist drugs, which generally are ineffective in treating prostate cancers that have become hormone-refractory.

New Product Candidates. We remain actively engaged in identifying new product candidates, both internally and externally, to
further expand our pipeline of product candidates. Our internal pipeline expansion efforts are focused on the development of novel second generation Dimebon analogs.

Our Corporate Structure

We have formed separate subsidiaries to hold the product candidates we are
developing. Our subsidiary Medivation Neurology, Inc. holds our Dimebon technology, and our subsidiary Medivation Prostate Therapeutics, Inc. holds our MDV300 series technology.

Our History and Historical Financial Information

We are a corporation formed in Delaware in October
1995, under our former name Orion Acquisition Corp. II, to identify and consummate a business combination. Medivation Neurology, Inc. was formed in Delaware in September 2003 to acquire and develop Dimebon. On December 17, 2004, Medivation
Neurology, Inc. became our subsidiary pursuant to a merger. Medivation Prostate Therapeutics, Inc. was formed in Delaware as our subsidiary to acquire and develop our MDV300 series technology.

Based on the accounting treatment of the December 17, 2004 merger, the financial statements, notes thereto and other financial information contained
in this Report for periods prior to December 17, 2004 reflect only the operations of Medivation Neurology, Inc. All such information for periods after December 17, 2004 reflects the operations of Medivation and our subsidiaries, on a
consolidated basis.



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Our Dimebon Program

Preclinical Rationale for Development

Our decision to begin clinical development of Dimebon for Alzheimers
disease and Huntingtons disease, and to investigate potential clinical development of Dimebon for other neurological indications, was based in part on the following data.

Potential Neuroprotective Activity

In preclinical experiments, Dimebon demonstrated neuroprotective activity in models relevant to Alzheimers disease and Huntingtons disease. The ß-amyloid protein is a known neurotoxin that is widely believed to contribute
to the neurofibrillary tangles and plaques that characterize Alzheimers disease. When neurons are exposed to the ß-amyloid protein in vitro, a significant portion of them die. Dimebon has been shown to inhibit this ß-amyloid
induced neuron death in vitro. In addition, as described in more detail below under Performance in Animal Models of Disease, in a transgenic Drosophila (fruit fly) model of Huntingtons disease, Dimebon has been shown
to protect photoreceptor neurons against death induced by the human gene encoding the huntingtin protein, an abnormal protein widely believed to cause Huntingtons disease.

Mechanism of Action

Based on
preclinical research that we have conducted, we believe that Dimebon is exerting its activity through a novel mechanism of action involving blockade of mitochondrial pores. Mitochondria are intracellular structures that are responsible for
generating energy within all cells. Mitochondria are surrounded by a membrane which contains pores through which substances can pass between the mitochondria and the surrounding cell. Mitochondrial pore opening has been associated in the published
literature with the death of neurons. For example, a review article published in 2003 in The Journal of Physiology and Biochemistry (Jordan J. et al., Mitochondrial control of neuron death and its role in neurodegenerative
disorders) reports that opening mitochondrial pores can lead to neuron death by allowing excess calcium to flow between the cytoplasm (the area of the cell surrounding the mitochondria) and the mitochondria, and by allowing so-called
suicide factors (substances which induce cells to kill themselves) to escape from the mitochondria into the cytoplasm. Preclinical data generated to date suggest that Dimebon may reduce permeability of the mitochondrial membrane, whether
by means of blocking mitochondrial pores or through some other mechanism, which may protect neurons from dying.

Performance in
Animal Models of Disease

Active Avoidance Model of Alzheimers Disease. In this model, a rat is housed in a
two-chambered box with an overhead light in each chamber. A few seconds after the overhead light in a chamber is turned on, an electrical shock is transmitted to the floor beneath the light. The rat quickly learns to move to the adjacent,
non-electrically charged chamber as soon as the overhead light is turned on. The rats in this study were given a neurotoxin that appears to impair their cognition and memory. The impaired rats were then treated with either control vehicle (saline),
Dimebon or tacrine (the first drug approved by the U.S. Food and Drug Administration (FDA) to treat Alzheimers disease, but now rarely used), and tested for their ability to avoid electrical shock, as well as for time required to move to the
non-electrically charged chamber of the box. Dimebon performed comparably or superior to tacrine in this experiment.

Morris Water
Maze Model of Alzheimers Disease. In this model, a rat swims in a five-foot diameter vat of water containing a small submerged platform which the swimming rat cannot see. An overhead video camera tracks the rats swimming path,
which is digitized, mapped and measured. The rat swims randomly in the vat of water with no place to rest until it finds the submerged platform. The rat is trained to find the platform and once it does and remembers the location of the platform, the
route that the rat takes from its starting place to the platform becomes more direct and less random. Control rats eventually learn and remember the location of the platform and swim in a fairly direct route to the platform.



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In these experiments, rats received injections of
neurotoxin, followed by treatment with placebo, Aricept® , Namenda® or Dimebon for approximately three and one-half weeks.
Aricept and Namenda are the two leading Alzheimers disease drugs on the market. For approximately the first one and one-half weeks of treatment, the rats were trained to find the submerged platform. Training was then stopped, and assessments
of memory were made at approximately two and four weeks. Placebo-treated rats did not learn or remember the location of the platform and swam randomly. By contrast, rats treated with Aricept, Namenda or Dimebon all showed comparable improvement in
their ability to learn and remember the platforms location, as indicated by a more direct (less random) swimming pattern to the submerged platform. After drug treatment was discontinued at the end of approximately three and one-half weeks,
rats treated with Aricept appeared to forget the location of the submerged platform, as evidenced by their swimming pattern becoming more random and less direct, while rats treated with Namenda or Dimebon continued to remember the location.

Drosophila (Fruit Fly) Model of Huntingtons Disease. The gene responsible for Huntingtons disease was discovered
in 1993. This discovery allowed scientists to develop transgenic animal models of Huntingtons diseasemodels in which the animals have been genetically engineered to express the human Huntingtons disease gene. One such model is the
Drosophila (fruit fly) model. Insertion of the human Huntingtons disease gene into the Drosophila induces many of the pathological and clinical signs of Huntingtons disease seen in humans. In this experiment, Dimebon was
administered to one group of transgenic flies in their food for a period of seven days, while the second group of transgenic flies did not receive Dimebon. At the end of this period, the eyes of each group of flies were examined under a microscope,
and the numbers of functioning photoreceptors were counted. Dimebon was found to protect these photoreceptors against the neuronal death associated with Huntingtons disease in a dose dependent manner.

First Clinical IndicationAlzheimers Disease

Alzheimers Disease

Alzheimers disease, the leading cause of dementia, is
characterized by the progressive loss of memory, thinking and ability to perform activities of daily living (bathing, feeding, self-care, etc.), as well as significant behavioral disturbances (agitation, aggression, delusions, hallucinations, etc).
There is currently no cure. According to the Alzheimers Association and the American Health Assistance Foundation:



| |  |  | Alzheimers disease currently affects approximately 4.5 million people in the U.S., including as many as 10% of people aged 65 and older and nearly 50% of
those aged 85 and older.
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Worldwide, Alzheimers disease affects 18 million people, and that number is expected to reach 34 million by 2025.
| | - |  | ------------------------------------------------------------------------------------------------------------------



| |  |  | There are 350,000 new diagnoses of Alzheimers disease, and 59,000 Alzheimers disease deaths, per year in the U.S.
| | - |  | -------------------------------------------------------------------------------------------------------------------



| |  |  | Following initial diagnosis, patients live 8 years on average, but may live up to 20 years with the disease.
| | - |  | ------------------------------------------------------------------------------------------------------------



| |  |  | Total annual expenditures on Alzheimers disease in the U.S. exceed $100 billion annually, and the average lifetime cost per Alzheimers disease patient
is $174,000.
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------



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There are only four commonly-used drugs that the FDA has approved for the treatment of Alzheimers
disease. Although the precise mechanism of action of these four drugs is unknown, three of them are believed to inhibit cholinesterase, and one is believed to inhibit the NMDA-receptor. These four drugs and their respective marketers, FDA approval
dates (as listed in the FDAs on-line edition of its Orange Book) and postulated mechanisms of action (as appearing in the package inserts for these drugs) are set forth in the following table.



|                          |  |                             |  |                   |  |                          
|------------------------- |  | --------------------------- |  | ----------------- |  | -------------------------
|Drug (Trade Name/Generic) |  | Marketed by                 |  | FDA Approval Date |  | Postulated Mechanism     
|Aricept® (donepezil)      |  | Pfizer Inc./Eisai Co., Ltd. |  | November 25, 1996 |  | Cholinesterase inhibition
|Exelon® (rivastigmine)    |  | Novartis AG                 |  | April 21, 2000    |  | Cholinesterase inhibition
|Razadyne® (galantamine)   |  | Johnson & Johnson           |  | February 28, 2001 |  | Cholinesterase inhibition
|Namenda® (memantine)      |  | Forest Laboratories, Inc.   |  | October 16, 2003  |  | NMDA-receptor inhibition 

According to IMS Health, the worldwide
market for Alzheimers disease therapies currently exceeds $5 billion, with the largest selling cholinesterase inhibitor, Aricept, generating $2.7 billion of those sales. Exelon, the second largest-selling cholinesterase inhibitor, generates
more than $600 million in global sales for Novartis AG, while Forest Laboratories, Inc.s NMDA-receptor antagonist Namenda generates sales exceeding $1.2 billion. All four of these drugs are expected to lose patent protection in the United
States and Europe between 2008 and 2012, and it is likely that they will face lower-priced generic competition at that time.

First
Pivotal Clinical Trial

We completed our first pivotal Alzheimers disease trial in 2006. This randomized, double-blinded,
placebo-controlled clinical trial enrolled 183 patients with mild-to-moderate Alzheimers disease at 11 sites in Russia. Patients were randomized to two treatment groupsone of which received Dimebon three times per day and the other of
which received placeboand were not permitted to take any other Alzheimers disease drugs during the trial. We used five clinical endpoints in this trial to assess Dimebons effects on all of the primary aspects of Alzheimers
diseasememory, thinking, activities of daily living (bathing, feeding, self-care, etc), behavior (agitation, aggression, delusions, hallucinations, etc.) and overall clinical function. Patients were treated for six months, and those who
completed the initial six months of treatment were offered the opportunity to continue treatment for an additional six months on a blinded basis in the same treatment group to which they originally were randomized.

Dimebon caused statistically significant improvement over placebo on all five clinical endpoints after six months and a full year of treatment.
Particularly high levels of statistical significance were achieved after both six months and a full year of treatment on both of the two endpoints used by the FDA to approve drugs for mild-to-moderate Alzheimers diseasethe
Alzheimers Disease Assessment Scale-cognitive subscale (ADAS-cog) (p<0.0001 at both six months and one year) and the Clinicians Interview Based Impression of Change-plus caregiver interview (CIBIC-plus) (p<0.0001 at six months and
p=0.006 at one year). These levels of significance are many times better than that required to obtain marketing approval (p<0.05). Dimebons benefits over placebo were seen very quickly after treatment began, reaching statistical
significance on four of the five clinical endpoints, including both the ADAS-cog and the CIBIC-plus, after only twelve weeks of therapy. Compared to their starting scores at the beginning of the trial, Dimebon-treated patients were significantly
better on all five endpoints after six months of treatment and remained stabilized on all five clinical endpoints after a full year of treatment. By contrast, scores of the placebo-treated patients declined from their starting levels on all five
endpoints after both six months and a full year of treatment. The overall benefit seen in Dimebon-treated patients compared to placebo-treated patients continued to increase in magnitude over the course of the trial. The mean drug-placebo difference
on the ADAS-cog increased from 4.0 points at six months to 6.9 points at one year, while that on the CIBIC-plus increased from 0.6 points at six months to 0.8 points at one year. The clinical relevance of these data was evaluated by independent
assessment, including caregiver interviews, which confirmed improvement or stabilization in 81% and 70% of Dimebon-treated patients after six months and a full year of treatment, respectively.



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Dimebon was well tolerated throughout the entire one year treatment period. There were fewer serious
adverse events in Dimebon-treated patients than in placebo-treated patients after both six months and a full year of treatment, and this difference reached statistical significance after one year of treatment (p=0.03). The most frequently occurring
adverse events in the Dimebon-treated patients were dry mouth (13.5% and 18.0% incidence after six months and one year of treatment, respectively) and depression/depressed mood (13.5% and 14.6% incidence after six months and one year of treatment,
respectively). Depression/depressed mood reflected reports from patients and their caregivers, not clinical diagnoses of depression. Furthermore, the reported depression/depressed mood was generally mild and did not cause any of the affected
patients to discontinue participation in the trial. Nausea, vomiting and diarrhea, the most prevalent side effects associated with the currently marketed Alzheimers disease drugs, occurred in fewer than 3% of the Dimebon-treated patients after
both six months and one year of treatment.

We are not aware of any published Alzheimers disease study in which a drug has achieved
statistically significant benefits of the breadth, size and duration of those seen in our first pivotal clinical trial of Dimebon.

In
January 2008, the FDA informed us that this trial can be used as one of the two pivotal studies required to support the approval of Dimebon to treat mild-to-moderate Alzheimers disease, as long as a significant portion of the sites in our
confirmatory pivotal Phase 3 trial are located in the United States. However, as is typically the case at this stage of the regulatory review process, the FDA has not yet performed an in-depth review of our preclinical and clinical data, so its
views remain subject to change.

We offered all patients in this trial who completed a full year of treatment, including placebo patients,
the opportunity to receive Dimebon on an open-label basis for at least an additional six months (for a total duration of treatment of at least 18 months). We plan to report 18-month data on the 104 patients who enrolled in the open-label extension,
50 of whom were randomized to placebo for the first year of treatment, at a major medical meeting in the third quarter of 2008.

Confirmatory Pivotal Phase 3 Clinical Trial

We plan to begin a confirmatory pivotal Phase 3 Alzheimers
disease clinical trial in the second quarter of 2008. The objective of this trial is to confirm the results seen in our first pivotal trial. Our confirmatory pivotal trial will enroll approximately 525 patients with mild-to-moderate Alzheimers
disease at sites in the United States, Europe and South America. We expect to include between 60-80 sites, approximately 35-50% of which will be located in the United States. Patients will be randomized to one of three treatment groups: the same
dose of Dimebon studied in our first pivotal trial, a lower dose of Dimebon, and placebo. Patients will be treated for six months and may not be taking any other Alzheimers disease drugs during the trial. After completing six months of
treatment, all patientsincluding placebo patientswill be offered the opportunity to receive Dimebon in an open-label extension of at least six months. The primary endpoints in our confirmatory pivotal Phase 3 trial will be the
ADAS-cog and the CIBIC-plus. As in our first pivotal trial, dosing frequency in this trial will be three times per day. We expect to complete this trial in 2010. However, we caution you that this is a forward-looking statement, and is subject to
significant risk and uncertainty, including the risk that we may not be able to enroll patients into a monotherapy trial as quickly as we anticipate or in the numbers that we require.

Marketing-and Reimbursement-Focused Clinical Trials

In addition to our confirmatory pivotal Phase 3 trial, we plan to conduct other Alzheimers disease clinical trials for marketing and reimbursement purposes, and to comply with applicable regulatory guidance
that we provide a safety database of approximately 1,500 patients as part of our marketing application for Dimebon. In the second quarter of 2008 we plan to begin the first of these trialsa 20-patient Phase 1 trial to evaluate the safety
and tolerability of Dimebon when given to Alzheimers disease patients who are also taking Aricept, the leading Alzheimers disease treatment on the market. Patients will be dosed in this trial for up to four months. We expect to complete
this trial in the third quarter of 2008. If this trial is positive, we intend to conduct longer-



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term Alzheimers disease trials of Dimebon in combination with Aricept. In addition, we are considering studies of Dimebon in patients with more severe
Alzheimers disease and in patients with other neurodegenerative diseases, as well as studies designed to further explore Dimebons potential as a disease modifying Alzheimers disease treatment and to address specific regulatory and
pricing requirements in Europe.

Application for Marketing Approval

If the results of our upcoming confirmatory pivotal Phase 3 trial and other required studies are supportive, we expect to apply in 2010 for
Alzheimers disease marketing approval in the U.S. and Europe. However, we caution you that this is a forward-looking statement, and is subject to significant risk and uncertainty, including the risks that we will not be able to complete any
required studies on time, that the results of any completed studies will not be supportive of approval, and that the FDA or comparable foreign regulatory agencies may require us to conduct additional studies beyond those we presently anticipate will
be required.

Second Clinical IndicationHuntingtons Disease

Huntingtons Disease

Huntingtons disease is a fatal neurological disorder characterized clinically by involuntary movements, loss of cognitive function and a wide spectrum of behavioral disorders. Common motor symptoms include chorea (involuntary writhing
and spasming), clumsiness and progressive loss of the abilities to walk, speak and swallow. Cognitive symptoms include loss of intellectual speed, attention and short-term memory. Behavioral symptoms span the range of changes in personality,
depression, irritability, emotional outbursts and apathy. Huntingtons disease is known to be caused by a specific genetic mutation, which results in degeneration of neurons in many different regions of the brain. This degeneration is
particularly focused in neurons located in the basal ganglia, structures deep within the brain that control many important functions, including coordinating movement, and also in neurons on the outer surface of the brain or cortex, which controls
thought, perception and memory.

There are no FDA-approved therapies to treat Huntingtons disease, and the disease is invariably
fatal. Everyone who carries at least one copy of the Huntingtons disease mutation and lives long enough will develop the disease. Symptoms generally begin between the ages of 30 and 45, but have been reported to appear as early as two years of
age. Death usually occurs between 10 and 20 years after the onset of symptoms, making Huntingtons disease not only a devastating but also a protracted illness. According to information on the website of the Hereditary Disease Foundation
(www.hdfoundation.org), in the United States alone approximately 30,000 patients currently suffer from Huntingtons disease, and an additional 150,000 are genetically at risk for developing it. The Huntingtons Disease Society of America
estimates that the prevalence of Huntingtons disease in the U.S. population is approximately 1 in 10,000 persons, as stated on its website (www.hdsa.org).

Phase 2 Clinical Trial

We are currently conducting a randomized, double-blinded,
placebo-controlled Phase 2 clinical study of Dimebon in Huntingtons disease patients in collaboration with the Huntington Study Group, a network of more than 250 experienced clinical trial investigators, coordinators and consultants from
more than 60 academic and research institutions throughout the United States, Canada, Europe and Australia. In this study, approximately 90 patients will be treated for a period of three months to evaluate the safety and preliminary efficacy of
Dimebon as a treatment for Huntingtons disease. The primary efficacy endpoint in the trial is the Unified Huntingtons Disease Rating Scale, a composite assessment tool that evaluates the impact of Huntingtons disease on cognition,
motor function, behavior, overall function and level of independence. We expect to complete this Phase 2 study in the second quarter of 2008.



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Subsequent Development Plans

If the results of our ongoing Phase 2 clinical trial are supportive, we intend to begin global Phase 3 clinical studies in Huntingtons disease
in 2008 with a view to seeking U.S. and European marketing approval for Huntingtons disease in 2009. However, we caution you that these are forward-looking statements, and are subject to significant risk and uncertainty, including the risks
that we will not be able to complete any required studies on time, that the results of any completed studies will not be supportive of approval, and that the FDA or comparable foreign regulatory agencies may require us to conduct additional studies
beyond those we presently anticipate will be required.

Potential Orphan Drug Designation

Under the Orphan Drug Act, the FDA may grant orphan drug designation to drugs intended to treat a rare disease or condition, which is generally a disease
or condition that affects fewer than 200,000 individuals in the United States. Huntingtons disease is specifically mentioned in the Orphan Drug Act as an example of an orphan indication, and the FDA previously has granted orphan drug
designation to other drugs in development to treat Huntingtons disease. We therefore believe that Dimebon qualifies for orphan drug designation for treating Huntingtons disease. If a product that has orphan drug designation subsequently
receives FDA approval for the disease for which it has such designation, the product is entitled to orphan drug exclusivity, i.e., the FDA may not approve any other applications to market the same drug for the same disease, except in very limited
circumstances, for seven years. Orphan drug designation does not shorten the duration of the regulatory review or approval process.

Potential Fast Track Status and Priority New Drug Application (NDA) Review

The FDA provides several options to
facilitate development of drugs for serious, life-threatening diseasesfast track status and priority NDA reviewthat we believe may be available for our Huntingtons disease program.

The FDAs fast-track program is intended to facilitate the development and expedite the review of drugs that are intended for the treatment of a
serious or life-threatening condition for which there is no effective treatment and demonstrate the potential to address unmet medical needs for the condition. We believe Huntingtons disease meets the conditions for fast-track designation. If
fast-track designation is obtained, the FDA may initiate review of sections of an NDA before the application is complete. This rolling review is available if the applicant provides a schedule for the submission of the remaining information and pays
applicable user fees. Fast-track designation may be withdrawn by the FDA if it believes the designation is no longer supported by data emerging in the clinical trial process.

In some cases, a fast-track designated product may also qualify for priority review under FDA policies. A product is eligible for priority review, or
review within a 6-month timeframe from the time an NDA is accepted for filing, if the product provides a significant improvement compared to marketed products in the treatment, diagnosis or prevention of a disease. A fast-track designated product
would ordinarily meet the FDAs criteria for priority review. We cannot guarantee that any of our product candidates will receive a priority review designation, or if a priority designation is received, that review or approval, if any, will be
faster than conventional FDA procedures.

Other Potential Indications

Based on the data described above, we believe that a scientific and clinical rationale exists for exploring the potential of Dimebon to treat other human
neurological diseases in addition to Alzheimers disease and Huntingtons disease. We thus intend to conduct additional studies of Dimebon to explore its potential efficacy in other neurological indications.



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Potential Second Generation Molecules

We are actively engaged in research to identify second generation molecules that can potentially improve upon the properties of Dimebon. This ongoing
research is directed primarily to rational design and synthesis of novel Dimebon analogs. We have filed for patent protection on numerous novel compounds. The ultimate objective of this research is to identify the most promising second generation
molecule to advance to formal preclinical and clinical development.

Our MDV300 Series Prostate Cancer Program

Our subsidiary Medivation Prostate Therapeutics, Inc. (MPT) owns an exclusive, worldwide commercial license to a series of novel small molecules, referred
to as the MDV300 series compounds. In in vitro and in vivo studies, these compounds have demonstrated promising results, including the ability to inhibit the growth of human hormone-refractory prostate cancer cells implanted into mice.
Our lead development candidate from the MDV300 series is a molecule we refer to as MDV3100.

Prostate Cancer Statistics

According to the American Cancer Society, prostate cancer is the most commonly diagnosed cancer among men in the United States,
other than skin cancer. The American Cancer Society estimates that approximately 219,000 new cases of prostate cancer were diagnosed, and approximately 27,000 men died of prostate cancer, in the United States alone during 2007. Prostate cancer is
thus the second-leading cause of cancer death in men in the United States, after lung cancer.

Metastatic Prostate CancerThe
Hormone-Sensitive and Hormone-Refractory States

Metastatic prostate cancer is cancer that has spread beyond the prostate and
surrounding tissues into distant organs and tissues. The majority of men who die from prostate cancer die from the consequences of metastatic disease. According to the National Cancer Institute, the median survival of patients with prostate cancer
that has metastasized to distant organs is usually one to three years, and most such patients will die of prostate cancer. Metastatic prostate cancer is generally divided into two states: the hormone-sensitive state and the hormone-refractory state.

The Hormone-Sensitive State. Testosterone and other male sex hormones, known collectively as androgens, can fuel
the growth of prostate cancer cells. Androgens exert their effects on prostate cancer cells by binding to and activating the androgen receptor, which is expressed in prostate cancer cells. When they first metastasize to distant sites, most prostate
cancers depend on androgens for growth. These prostate cancers are known as hormone-sensitive cancers.

Accordingly, the leading therapies currently used for the treatment of metastatic prostate cancer are focused on diminishing, or antagonizing, the effects of androgens on prostate cancer cells. This effect
is achieved through two separate approaches. The first approach uses drugs known as anti-androgens, which directly block the interaction of androgens with the androgen receptor. Casodex ® (bicalutamide), sold by AstraZeneca PLC, is the largest selling of these drugs, with global annual sales of more than $1.3 billion in 2007 according to the public disclosures of AstraZeneca PLC. The second approach
is to reduce the amount of androgens produced in the body, primarily in the testes. This can be achieved surgically by removal of both testicles (orchiectomy) or through use of drugs known as luteinizing hormone-releasing hormone (LHRH) agonist
drugs, which lower the native production of testosterone in the testicles (sometimes called chemical castration). Anti-androgens and LHRH agonists often are given in combination therapy, an approach known as a combined androgen
blockade. However, because these therapies operate by reducing the ability of androgens to fuel the growth of prostate cancer cells, they generally are effective only on prostate cancers which remain hormone-sensitivei.e., those which
still depend on androgens for growth.



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The Hormone-Refractory State. Most metastatic prostate cancer initially is
hormone-sensitive and thus responds to hormonal therapies. However, according to a study published in the October 7, 2004 issue of The New England Journal of Medicine, virtually all hormone-sensitive metastatic prostate cancer undergoes
changes that convert it from being dependent on androgens for growth to becoming androgen-independent in a median of 18-24 months after initiation of hormonal therapy. Prostate cancer in this state is known as hormone-resistant or
hormone-refractory prostate cancer (HRPC). The switch from the hormone-sensitive to the hormone-refractory state following initiation of hormonal therapy is generally determined based on either rising levels of prostate-specific antigen
(PSA) or documented disease progression as evidenced by imaging tests or clinical symptoms. Metastatic prostate cancer that has become hormone-refractory is extremely aggressive; these patients have a median survival of only 10 to 16 months.

A primary reason that HRPC is so deadly is that it is difficult to treat. HRPC no longer responds to hormonal therapies that are effective
in the hormone-sensitive state. To further complicate the situation, due to biological changes in prostate cancer that has entered the hormone-refractory state, drugs that initially block the androgen receptor and inhibit growth of hormone-sensitive
prostate cancer may have precisely the opposite effect and start to fuel the growth of HRPC. Agents are clearly needed to improve the treatment options for patients with HRPC.

Switch from the Hormone-Sensitive to the Hormone-Refractory State

One of the factors that historically hindered the development of drugs to treat HRPC was that the
cause of the switch from the hormone-sensitive to the hormone-refractory state was not known. This problem recently was addressed by Dr. Charles Sawyers and his colleagues at the Howard Hughes Medical Institute and the University of California,
Los Angeles, who discovered that one of the important mechanisms by which prostate cancer cells switch from the hormone-sensitive to the hormone-refractory state appears to be through overexpression of the androgen receptor. In the published results
of experiments comparing gene expression in hormone-sensitive and hormone-refractory prostate cancer cells, published in the January 1, 2004 issue of Nature Medicine, Dr. Sawyers and his colleagues reported that an increase in
androgen receptor expression was the only gene change consistently associated with hormone-refractory disease. In a series of experiments, scientists showed (as expected) that activation of the androgen receptor in hormone-sensitive human prostate
cancer cell lines was inhibited by current androgen receptor blockers, including Casodex. However, when the prostate cancer cell lines were genetically engineered to overexpress the androgen receptor (converting them from the hormone-sensitive to
the hormone-refractory state), not only did Casodex fail effectively to inhibit the androgen receptor in these cells, but in some cases it became a stimulant of the androgen receptor. Androgen receptor activation is correlated with the growth of
prostate cancer. This finding is consistent with the published human clinical experience with Casodex in HRPC.

The MDV300 Series
Compounds

The MDV300 series compounds, a series of approximately 170 small molecules, were synthesized based on the discovery of a
mechanism by which prostate cancer shifts from the hormone-sensitive to the hormone-refractory state. These molecules bind the androgen receptor, the same target bound by Casodex and other marketed drugs for metastatic prostate cancer, but do so in
a manner designed to render them effective in treating cancers that have become refractory to currently used drugs.

Preclinical Data

Experiments Using Human HRPC Cells. In these experiments, human HRPC cell lines were created by engineering cultured
human prostate cancer cells to overexpress the androgen receptor. Both MDV300 series compounds and Casodex were then tested in these human HRPC cells. The impact of these drugs on four endpoints of potential interest in treating HRPC was
measuredthe degree to which they activated the androgen receptor, affected the expression of PSA, inhibited the growth of human HRPC cells, and inhibited the growth of



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tumors due to human HRPC cells that had been implanted into mice. MDV300 series compounds showed promising effects in these experiments while Casodex, as
would be expected based on its known limited efficacy in treating HRPC, did not. In our opinion, the results of these experiments provide a scientific rationale for considering MDV300 series compounds as potential therapeutic agents for HRPC.

Experiments Using Human Hormone-Sensitive Prostate Cancer Cells. These experiments used human prostate cancer cell lines
that had not been engineered to overexpress the androgen receptor, and thus remained in the hormone-sensitive state. Both MDV300 series compounds and Casodex were tested in these human hormone-sensitive prostate cancer cells for their ability to
inhibit cell growth. As expected based on its demonstrated efficacy in treating hormone-sensitive prostate cancer, Casodex inhibited cell growth in these experiments. Significantly, however, MDV300 series compounds also inhibited the growth of these
hormone-sensitive prostate cancer cellscomparably to, and in certain cases better than, Casodex. In our opinion, the results of these experiments provide a scientific rationale for considering MDV300 series compounds as potential therapeutic
agents for hormone-sensitive prostate cancer as well as for HRPC.

Rationale for Further Development

We believe that the MDV300 series compounds show promise as potential prostate cancer therapeutics for several reasons. First, we believe that the data
described above, which were generated using human prostate cancer cell lines, suggest that these drugs may have clinical activity in HRPC, an indication for which a large unmet medical need presently exists. Second, the performance of Casodex in
these experimentssuggesting limited efficacy in treating HRPCis consistent with what has been seen previously in clinical practice. This factor increases our confidence that the human HRPC cell lines used in these experiments may be
predictive of actual human HRPC. Third, unlike in most cancers, in prostate cancer there is a widely used surrogate marker of tumor growthPSA. By monitoring PSA levels in our early clinical trials, we believe we will be able to obtain
indications of any potential efficacy earlier than would be the case in other cancers lacking such surrogate markers. In prostate cancer patients, PSA levels are used as a proxy to track tumor growth. We believe this will improve the efficiency of
the development process and reduce the risk profile by accelerating the determination of the clinical activity and optimum doses of our selected compounds. Finally, the performance of MDV300 series compounds in these experiments suggests not only
potential efficacy in treating HRPC but also potential efficacy in treating hormone-sensitive prostate cancer, which is known to be sensitive to agents that block the androgen receptor. Based upon preclinical modeling, the compound MDV3100 was
selected as the lead compound for clinical development.

Phase 1-2 Clinical Trial and Subsequent Development Plans

We are conducting an open-label Phase 1-2 clinical trial of MDV3100, the lead development candidate from our MDV300 series
compounds, in patients with HRPC. The trial is being conducted at several clinical sites in the United States, including Memorial Sloan-Kettering Cancer Center in New York. The study is enrolling patients in up to seven dose groups of three patients
each at escalating doses, with each group continuing treatment for at least three months barring any safety issues. Enrollment has been completed for the first four dose groups, and a maximum tolerated dose has not yet been defined. The study
endpoints include safety, tolerability, pharmacokinetics, effects on serum PSA levels and disease progression.

In November 2007, we
announced early PSA data from the two lowest dose groups in this clinical trial. Patients in the lowest and second lowest dose groups had completed two and one months of treatment, respectively. MDV3100 reduced serum PSA levels in all patients
enrolled in both dose groups. PSA declines occurred in a dose-dependent manner in these patients. In the lowest dose group, after two months of treatment, PSA levels declined 45 percent to 66 percent. PSA levels in the second lowest dose group
declined 75 percent to 89 percent after the first month of treatment. These PSA reductions are early data from a small number of patients, and we do not yet know whether they will be confirmed at the end of the study. Furthermore, even if



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they are confirmed, we do not know if PSA reductions will correlate with an improvement in overall survival, the standard registration endpoint used in most
pivotal Phase 3 studies for HRPC. Nonetheless, we believe these early data provide encouragement regarding MDV3100s potential as a treatment for HRPC.

The original design of this trial provided for expansion of a single dose group to 20 patients once a maximum tolerated dose was established. However, based on the early tolerability and PSA data, we have obtained
approval to expand additional dose groups. Enrollment in these expansion groups, which include both patients who are chemotherapy naïve and patients who have failed chemotherapy, is underway. Given these expansions, we expect to enroll
approximately 100 patients in this trial. We expect to complete the study in 2008. If these results are positive, we plan to seek FDA agreement in 2008 to enter pivotal Phase 3 registration studies in HRPC and to expand clinical
development to include the much larger population of patients with hormone-sensitive prostate cancer. However, we caution you that these are forward-looking statements and are subject to significant risk and uncertainty, including the risks that we
will not be able to complete our ongoing Phase 1-2 study on time and that the FDA will require us to conduct additional studies prior to entering Phase 3.

Intellectual Property

As of December 31, 2007, we owned issued patents in the United States and
Europe claiming the use of Dimebon and certain related compounds to treat neurodegenerative diseases, an issued patent in the United States claiming the use of Dimebon to treat Alzheimers disease, and issued foreign counterpart patents in
Canada and Hong Kong. The U.S. and European patents expire in October 2016. However, if we succeed in receiving regulatory approval to sell Dimebon, under current laws our U.S. and European patent protection for Dimebon for the first approved
indication may be eligible for extension for up to five additional years. We also own multiple pending patent applications claiming, among other things, the use of Dimebon to treat Huntingtons disease and other indications, and numerous novel
second generation Dimebon analogs. We own all of the above Dimebon intellectual property and have full control over prosecution and enforcement against potential infringers. In addition, we have an exclusive license to multiple pending patent
applications covering the MDV300 series compounds, including our lead development candidate MDV3100, and their uses in the treatment and prevention of disease. We intend to prosecute all of our owned intellectual property, and request that our
licensors prosecute all of our licensed intellectual property, in the United States, Europe and other jurisdictions that we deem appropriate.

We require our employees and consultants to execute non-disclosure and proprietary rights agreements at the beginning of employment or consulting arrangements with us. These agreements generally acknowledge our exclusive ownership of all
inventions and intellectual property, including, but not limited to patents, developed by the individual during the course of his or her work with us and require that all proprietary information disclosed to the individual remain confidential. We
intend to enforce vigorously our intellectual property rights if infringement or misappropriation occurs.

Competition

The biopharmaceutical industry is intensely competitive in general. Furthermore, our business strategy is to target large unmet medical needs, and those
markets are even more highly competitive. For example, there are four drugs currently marketed to treat Alzheimers disease. These drugs are all dosed once or twice per day, while Dimebon was dosed three times per day in our first pivotal
clinical trial and also will be dosed three times per day in our upcoming confirmatory Phase 3 pivotal clinical trial. This difference in dosing regimen may make Dimebon less competitive than alternative Alzheimers disease drugs if Dimebon
receives marketing approval based on a thrice per day dosing regimen. In addition, all four currently approved Alzheimers disease drugs are expected to lose patent protection prior to, or shortly after, Dimebons potential launch. Such
loss of patent protection would likely result in the entry of generic competition for, and significant reductions in the



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commercial pricing of, those approved drugs. This development would put significant competitive pressure on the prices we or our potential partners could
charge for Dimebon should it ever be approved. Companies marketing currently approved Alzheimers disease therapeutics include some of the worlds largest and most experienced pharmaceutical companies, such as Pfizer Inc., Novartis AG and
Johnson & Johnson. There are also dozens of additional small molecule and recombinant protein candidates in development targeting the clinical indications we are pursuing, particularly Alzheimers disease and HRPC, including compounds
already in Phase 3 clinical trials. One or more such compounds may be approved in each of our target indications before any of our product candidates could potentially be approved. Most, if not all, of these competing drug development programs
are being conducted by pharmaceutical and biotechnology companies with considerably greater financial resources, human resources and experience than ours. Any of our product candidates that receives regulatory approval will face significant
competition from both approved drugs and from any of the drugs currently under development that may subsequently be approved. Bases upon which our product candidates would have to compete successfully include efficacy, safety, price and
cost-effectiveness. In addition, our product candidates would have to compete against these other drugs with several different categories of decision makers, including physicians, patients, government and private third-party payors, technology
assessment groups and patient advocacy organizations. Even if one of our product candidates is approved, we cannot guarantee that we or any of our potential partners will be able to compete successfully on any of these bases. Any future product
candidates that we may subsequently acquire will face similar competitive pressures. If we or our potential partners cannot compete successfully on any of the bases described above, our business will not succeed.

Manufacturing

Dimebon

The Dimebon tablets and matching placebos we used in our first pivotal Alzheimers disease clinical trial were produced by a Russian company that is
licensed by the Russian government to manufacture Dimebon tablets for human use in Russia and that engaged in such manufacture for several years. The Dimebon tablets and matching placebos used in all of our other clinical trials in both
Alzheimers disease and Huntingtons disease were manufactured in the United States under conditions complying with U.S. current good manufacturing practices (cGMP).

We are currently refining our manufacturing process for Dimebon to avoid use of a chemical that is difficult to source and handle, thus rendering it
suboptimal for commercial-scale manufacturing. This process development and associated scale-up work is underway, and we do not expect manufacturing-related issues to delay any of our planned development milestones described in
Managements Discussion and Analysis or Plan of Operation, including our goal of starting our confirmatory pivotal Phase 3 Alzheimers disease clinical trial in the second quarter of 2008. However, we caution you that this
is a forward-looking statement and that we cannot guarantee that we will be able to complete this work on a timely basis or at all.

MDV3100

The MDV3100 being used in our ongoing Phase 1-2 clinical trial in HRPC was manufactured under
cGMP-compliant conditions in the United States. Based on currently available information, we believe that the existing process for manufacturing MDV3100 is suitable for scale-up to commercial-scale on a cost-effective basis. However, we caution you
that this is a forward-looking statement and that we cannot guarantee that we will be able to complete this work on a timely basis or at all.

Scientific and Clinical Advisory Board

We maintain a Scientific and Clinical Advisory Board comprised of scientists and
physicians with experience relevant to our company and our product candidates. Members of our Scientific and Clinical Advisory Board have agreed to consult and advise us in their respective areas of expertise. We have placed special



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emphasis on identifying members of our Scientific and Clinical Advisory Board with expertise in the treatment of the clinical indications targeted by our
programs. Our Scientific and Clinical Advisory Board consists of the following members:

Paul Aisen, M.D. Dr. Aisen is a
Professor in the Department of Neurosciences at the University of California, San Diego, and the National Institute on Aging-appointed director of the Alzheimers Disease Cooperative Study. Dr. Aisen was one of the first Alzheimers
disease clinical trialists in the United States, and was an investigator in the pivotal FDA registration studies for Namenda. Dr. Aisen received his M.D. from Columbia University, College of Physicians and Surgeons.

Sergey Bachurin, Ph.D., D.Sc., Prof. Dr. Bachurin is the Director of the Institute of Physiologically Active Compounds in Chernogolovka,
Russia, and a member of the Russian Academy of Sciences. Dr. Bachurin has served as a visiting scholar at several U.S. academic research centers, including the University of California, San Francisco, Tufts University and St. Elizabeths
Medical Center. Dr. Bachurin holds a Ph.D. in Chemical Catalysis and a D.Sc. in Biochemistry from Moscow State University. In addition, Dr. Bachurin holds a Professor degree in Bioorganic Chemistry from the Institute of Physiologically
Active Compounds.

Rachelle Doody, M.D., Ph.D. Dr. Doody is a Professor of Neurology, the Effie Marie Cain Chair in
Alzheimers Disease Research, and the Director of the Alzheimers Disease and Memory Disorder Center at Baylor College of Medicine. Dr. Doody participated in the development of CIBIC-plus, one of the primary cognitive assessment
endpoints that the FDA has used for the currently approved Alzheimers disease drugs. Dr. Doody has worked on clinical studies for all of the FDA-approved cholinesterase inhibitors for Alzheimers disease. Dr. Doody received her
M.D. from Baylor College of Medicine and holds a M.A. and Ph.D. in Cognitive Anthropology from Rice University.

Michael E. Jung,
Ph.D. Dr. Jung is a Distinguished Professor of Chemistry at the University of California, Los Angeles, where his research focuses on the development of new synthetic methods and the total synthesis of biologically interesting natural
products. Dr. Jung has authored more than 240 scientific publications, and is a named inventor on multiple issued patents and pending patent applications. He holds a B.A. from Rice University and a Ph.D. in Chemistry from Columbia University.

Benjamin Lewin, Ph.D. Dr. Lewin is the founding editor of Cell, a leading international journal in the field of biology
and, until 1999, also served as the Chief Executive Officer of Cell Press, the publisher of Cell. Dr. Lewin holds a M.Sc. from the University of London, and a M.A. and a Ph.D. from the University of Cambridge. Dr. Lewin also has
authored multiple books and scientific publications in the field of genetics.

Charles Sawyers, M.D., Ph.D. Dr. Sawyers is Chair of the Human Oncology and Pathogenesis Program, and holds the Marie-Josee and Henry R. Kravis Chair at Memorial Sloan-Kettering Cancer Center in New York. Dr. Sawyers
work focuses on how signaling pathway abnormalities in cancer cells can be exploited as targets for new cancer drugs. Dr. Sawyers played a key role in the clinical development of Gleevec® (imatinib), which targets the molecular cause of chronic myeloid leukemia with minimal side effects, as well as in the invention of our MDV300 series compounds. Dr. Sawyers holds an M.D. from The Johns Hopkins University and is a Howard
Hughes Medical Investigator.

Marc A. Shuman, M.D. Dr. Shuman is Professor of Medicine and Urology at the University of
California, San Francisco, and Co-Leader of the Prostate Cancer Program at the UCSF Helen Diller Family Comprehensive Cancer Center. Dr. Shuman also serves as Clinical Director of the California Institute for Quantitative Biosciences.
Dr. Shuman is a member of the American Society of Clinical Investigation and the Association of American Physicians, and has published extensively in the field of prostate cancer. Dr. Shuman received his M.D. from the Thomas Jefferson
Medical College and clinical training at the University of Pennsylvania and Washington University in St. Louis.



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Roger Tung, Ph.D. Dr. Tung is the president and chief executive officer of Concert
Pharmaceuticals. He has more than twenty years of experience in scientific and scientific management positions at the Squibb Institute for Medical Research, Merck Research Laboratories and Vertex Pharmaceuticals Incorporated. Prior to joining
Concert, he served as vice president, drug discovery, of Vertex Pharmaceuticals Incorporated. He discovered two of Vertexs currently marketed products, and is an inventor on multiple issued U.S. patents. Dr. Tung holds a Ph.D. in
Pharmaceutical Chemistry from the University of Wisconsin-Madison.

Pablo Valenzuela, Ph.D. Dr. Valenzuela is a Professor of
Biochemistry at the Universidad Andres Bello in Santiago, Chile. Dr. Valenzuela has founded several companies, including Chiron Corporation, a major biotechnology company that was acquired by Novartis AG, and Chilean biotechnology companies
Bios-Chile Ingenieria Genetica SA, Austral Biologicals and Algisa SA. He also founded, and serves as the Director of, Fundacion Ciencia para la Vida, a private, non-profit foundation promoting the adoption and use of science-based innovation by
Chilean companies. Dr. Valenzuela holds a Ph.D. in Biochemistry from Northwestern University.

Employees

As of December 31, 2007, we had 28 employees, all but one of whom were full-time.



|Item 2. | Description of Property.
|------- | ------------------------

We currently lease approximately 16,600 square feet of office space located at 201 Spear Street, 3rdFloor, San Francisco,
California 94105 for all of our operations. We also lease 5,700 square feet of office space located at 55 Hawthorne Street, Suite 610, San Francisco, California 94105, our former office location. We have sub-leased the Hawthorne Street space to a
third party. The telephone number at our office is (415) 543-3470.



|Item 3. | Legal Proceedings.
|------- | ------------------

The company is not a party to
any material pending legal proceedings.



|Item 4. | Submission of Matters to a Vote of Security Holders.
|------- | ----------------------------------------------------

No matter was submitted during the fourth quarter of the fiscal year ended December 31, 2007 to a vote of security holders through the solicitation of proxies or otherwise.



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PART II



|Item 5. | Market for Common Equity, Related Stockholder Matters and Small Business Issuer Purchases of Equity Securities.
|------- | ---------------------------------------------------------------------------------------------------------------

Common Stock Prices

Our common stock began trading on
the Nasdaq Global Market under the symbol MDVN on March 20, 2007. Our common stock was traded on the American Stock Exchange under the symbol MDV from March 15, 2006 until March 19, 2007, and prior to that was
quoted on the OTC Bulletin Board under the symbol MDVN.OB. The following table sets forth on a per share basis the high and low sales prices of our common stock as reported on the Nasdaq Global Market from March 20, 2007 through
December 31, 2007 and on the American Stock Exchange from March 15, 2006 through March 19, 2007, and the high and low bid prices of our common stock as reported on the OTC Bulletin Board from January 1, 2006 through
March 14, 2006:



|                                  |  |      |       |     |   |      
|--------------------------------- |  | ---- | ----- | --- | - | -----
|                                  |  | High |       | Low
|Year ended December 31, 2007      |  |      |       |     |   |      
|January 1, 2007 to March 19, 2007 |  | $    | 20.50 |     | $ | 12.50
|March 20, 2007 to March 31, 2007  |  | $    | 19.75 |     | $ | 17.28
|Second quarter                    |  | $    | 21.85 |     | $ | 15.84
|Third quarter                     |  | $    | 22.08 |     | $ | 16.26
|Fourth quarter                    |  | $    | 25.06 |     | $ | 12.78
|Year ended December 31, 2006      |  |      |       |     |   |      
|January 1, 2006 to March 14, 2006 |  | $    | 5.00  |     | $ | 2.40 
|March 15, 2006 to March 31, 2006  |  | $    | 4.45  |     | $ | 3.83 
|Second quarter                    |  | $    | 5.92  |     | $ | 3.80 
|Third quarter                     |  | $    | 9.50  |     | $ | 3.95 
|Fourth quarter                    |  | $    | 18.87 |     | $ | 9.00 

According to the records of our transfer agent, American Stock Transfer & Trust Company,
as of February 14, 2008, we had 70 holders of record of common stock.

The source of the information provided in the table above for
period from January 1, 2006 through March 14, 2006 is the OTC Bulletin Board, Trade and Quote Summary Report, and represents prices between dealers without adjustments for retail markups, markdowns or commissions, and may not represent
actual transactions.

Recent Sales of Unregistered Securities

None.



|Item 6. | Managements Discussion and Analysis or Plan of Operation
|------- | ---------------------------------------------------------

The following discussion should be read in conjunction with our audited consolidated financial statements and notes thereto for the fiscal year ended December 31, 2007, included elsewhere in this Report. The
following Managements Discussion and Analysis or Plan of Operation contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of
1934. We intend that these forward-looking statements be subject to the safe harbors created by those provisions. Forward-looking statements are generally written in the future tense and/or are preceded by words such as may,
should, forecast, could, expect, suggest, believe, anticipate, intend, plan, or other similar words. The forward-looking statements contained
in this Report involve a number of risks and uncertainties, many of which are outside of our control. Factors that could cause actual results to differ materially from projected results include, but are not limited to, those discussed in Risk
Factors elsewhere in this Report. Readers are expressly advised to review and consider those Risk Factors, which include risks associated with (1) our ability to successfully conduct clinical and preclinical trials for our product
candidates,



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(2) our ability to obtain required regulatory approvals to develop and market our product candidates, (3) our ability to raise additional
capital on favorable terms, (4) our ability to execute our development plan on time and on budget, (5) our ability to obtain commercial partners, (6) our ability, whether alone or with commercial partners, to successfully
commercialize any of our product candidates that may be approved for sale, and (7) our ability to identify and obtain additional product candidates. Although we believe that the assumptions underlying the forward-looking statements contained in
this Report are reasonable, any of the assumptions could be inaccurate, and therefore there can be no assurance that such statements will be accurate. In light of the significant uncertainties inherent in the forward-looking statements included
herein, the inclusion of such information should not be regarded as a representation by us or any other person that the results or conditions described in such statements or our objectives and plans will be achieved. Furthermore, past performance in
operations and share price is not necessarily indicative of future performance. We disclaim any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

The Company

We are a
biopharmaceutical company with small molecule drugs in clinical development to treat three large, unmet medical needsAlzheimers disease, Huntingtons disease and hormone-refractory prostate cancer. Our strategy is to identify
promising product candidates, to develop them in a rapid, cost-effective manner, and to seek development and/or commercialization partners as appropriate to complement our internal efforts.

Our Pipeline

Dimebon in Alzheimers
Disease and Huntingtons Disease

Our lead product candidate, Dimebon, has successfully completed the first of two pivotal
trials required to seek marketing approval in the United States for mild-to-moderate Alzheimers disease. We plan to begin our second, confirmatory pivotal Phase 3 Alzheimers disease trial in the second quarter of 2008. We are also
studying Dimebon in an ongoing Phase 2 clinical trial in patients with mild-to-moderate Huntingtons disease. Dimebon has been shown to inhibit the death of brain cells (neurons) in preclinical models of Alzheimers disease and
Huntingtons disease, making it a novel potential treatment for these and potentially other neurodegenerative diseases. Based on preclinical experiments we have conducted, we believe that Dimebon operates through a novel mitochondrial mechanism
of action.

MDV3100 in Hormone-Refractory Prostate Cancer

Our proprietary compound MDV3100 is currently in a Phase 1-2 clinical trial in approximately 100 patients with hormone-refractory prostate cancer.
MDV3100 is the lead clinical development candidate from a library of approximately 170 small molecules licensed by Medivation. These molecules were rationally designed to treat hormone-refractory prostate cancer by modulating the androgen receptor
(AR) in a different manner from currently approved AR antagonist drugs, which generally are ineffective in treating prostate cancers that have become hormone-refractory.

New Product Candidates

We remain actively engaged in identifying new product candidates, both
internally and externally, to further expand our pipeline of product candidates. Our internal pipeline expansion efforts are focused on the development of novel second generation Dimebon analogs.



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Our Current Development Plan and Milestones

Our current development plan for our Alzheimers disease, Huntingtons disease and hormone-refractory prostate cancer programs, and the
presently estimated timeline for each development milestone, are as follows:



|                                    |  |                                                                    |  |                |  |                
|----------------------------------- |  | ------------------------------------------------------------------ |  | -------------- |  | ---------------
|Program                             |  | Development Milestone                                              |  | EstimatedStart |  | EstimatedFinish
|Alzheimers disease:                |  | Phase 1 combination tolerability trial (+ Aricept)                 |  | Q2 2008        |  | Q3 2008        
|                                    |  | Confirmatory pivotal Phase 3 trial                                 |  | Q2 2008        |  | 2010           
|                                    |  | Report 18-month open-label extension data from first pivotal trial |  | Q3 2008        |  |                
|                                    |  | Apply for U.S. and European marketing approval                     |  | 2010           |  |                
|                                    |  |                                                                    | 
|Huntingtons disease:               |  | Phase 2 clinical trial                                             |  | In progress    |  | Q2 2008        
|                                    |  | Phase 3 clinical trials                                            |  | 2008           |  | 2009           
|                                    |  | Apply for U.S. and European marketing approval                     |  | 2009           |  |                
|Hormone-refractory prostate cancer: |  | Phase 1-2 clinical trial (U.S.)                                    |  | In progress    |  | 2008           
|                                    |  | Seek FDA agreement to begin Phase 3 clinical trials                |  | 2008           |  |                

Based on presently available information, our management believes that achievement of the above
development milestones relating to our existing product candidates by the estimated dates set forth above is a reasonably achievable goal. However, both our proposed development milestones and their estimated start and finish dates are
forward-looking statements, and as such are subject to significant risk and uncertainty. We caution you that the development of pharmaceutical product candidates like ours is subject to high levels of risk, including risks presented by subsequent
developments that are unforeseen or unforeseeable, as well as risks that are entirely outside of our control, including the risk of unfavorable results in any of our ongoing or planned preclinical and clinical studies. We also caution you that none
of our product candidates has received marketing approval, that significant additional human and animal testing is required to obtain such approval, and we cannot assure you that any required testing will be completed successfully or in a timely
manner. As is typically the case at this stage of the regulatory review process, neither the FDA nor any comparable foreign regulatory agencies has performed an in-depth review of any of our preclinical and clinical data. Thus, any views previously
expressed by the FDA, including the view that our previously completed Alzheimers disease trial in Russia can be used as one of our two pivotal trials required to seek marketing approval as long as a significant proportion of the sites in our
upcoming confirmatory Phase 3 trial are located in the United States, remain subject to change. Any changes in those views could preclude us from meeting the above development milestones. We also face the risk that the FDA and/or comparable
foreign regulatory agencies will deny, or impose burdensome conditions on, any of our future requests to begin clinical studies, or require us to conduct additional studies not listed above. We thus cannot guarantee that we will be able to complete
any of our projected milestone events, or that any of them that we do achieve will be on time or on budget.

Liquidity and Capital Resources

We have incurred cumulative net losses of $60.2 million through December 31, 2007, and we expect to incur substantial and
increasing additional losses in the future as we expand our research and development activities. Total operating expenses increased by approximately 110% to $33.8 million in the year ended December 31, 2007 from $16.1 million in the prior year.
Operating expense increases were driven primarily by expansion of preclinical and clinical development in the year ended December 31, 2007, including the initiation of our ongoing Phase 2 clinical trial of Dimebon in Huntingtons
disease and our ongoing Phase 1-2 clinical trial of MDV3100 in hormone refractory prostate cancer, manufacture of additional Dimebon to supply our upcoming confirmatory pivotal Phase 3 clinical trial, development of potential second
generation Dimebon analogs, headcount expansion from 9 employees at December 31, 2006 to 28 employees at December 31, 2007, and associated increases in facilities and other infrastructure costs. We expect total operating expenses in 2008
to increase significantly beyond 2007 levels, due primarily to further expansion of Dimebon and MDV3100 development,



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including our upcoming confirmatory pivotal Phase 3 trial of Dimebon in Alzheimers disease and the expanded dosing groups in our ongoing
Phase 1-2 trial of MDV3100 in hormone-refractory prostate cancer.

We report expenses that are allocable specifically to individual
research and development projects in the income statement line item titled Preclinical and clinical studies. To date, we have been engaged in two major research and development projects: the development of Dimebon for Alzheimers
disease and Huntingtons disease, and the development of MDV3100 for hormone-refractory prostate cancer. The percentages of our preclinical and clinical studies expense for the years ended December 31, 2007 and 2006, and for the period
from inception (September 4, 2003) to December 31, 2007, attributable to each of our research and development projects are as follows:



|        |  |                          |   |  |                          |   |  |                                          |  
|------- |  | ------------------------ | - |  | ------------------------ | - |  | ---------------------------------------- | -
|Project |  | Year endingDec. 31, 2007 |   |  | Year endingDec. 31, 2006 |   |  | Inception (Sep. 4, 2003)to Dec. 31, 2007 |  
|Dimebon |  | 80                       | % |  | 62                       | % |  | 76                                       | %
|MDV3100 |  | 19                       | % |  | 36                       | % |  | 23                                       | %
|Other   |  | 1                        | % |  | 2                        | % |  | 1                                        | %
|Total   |  | 100                      | % |  | 100                      | % |  | 100                                      | %

We have not generated any revenue from operations to date, and do not expect to generate revenue
for several years, if ever. All of our operations to date have been funded through the sale of our debt and equity securities, and we expect this to continue to be the case for the foreseeable future.

In September 2007, we obtained a committed equity line of credit under which we may sell up to $100 million of our common stock to Azimuth
Opportunity, Ltd. (Azimuth). We will determine, at our sole discretion, the timing and dollar amount of all draws under this facility, subject to certain conditions. The number and price of shares sold in each draw are determined by a contractual
formula designed to approximate fair market value, less a discount of 4.656.15 percent. We are not required to sell any shares if the contractual formula produces a price below a floor price set by us in our discretion. In the fourth quarter
of 2007, we sold $21.3 million of common stock to Azimuth under this facility, raising net proceeds of $21.0 million and leaving us with $78.8 million in remaining capacity under the facility. We may draw on that remaining capacity at our discretion
during the term of the facility, which expires on April 1, 2009.

As of December 31, 2007, we had cash, cash equivalents and
other current assets of $44.2 million, accounts payable and other current liabilities of $4.0 million, and no long-term debt. We expect these resources, plus the remaining capacity under our committed equity line of credit with Azimuth, will be
sufficient to fund the presently budgeted costs of executing our development plan through December 31, 2008. However, we caution you that this is a forward-looking statement and is subject to significant risk and uncertainty, and that we may
require additional financing sooner than expected for any of a number of reasons, including without limitation if we were to incur significant delays or cost overruns in the execution of our development plan or if we were to expand our portfolio to
include new product development programs. Potential reasons for significant delays or cost overruns on our existing programs could include, without limitation, requirements by the FDA or other regulatory agencies that we perform additional
preclinical or clinical studies not presently contemplated or that we repeat or otherwise supplement preclinical or clinical studies already performed, any unforeseen technical or operational difficulties in the manufacture or testing of our product
candidates, or any of the other risks and uncertainties listed under Risk Factors. Because of these risks and uncertainties, many of which are largely outside of our control, we are unable to give additional forward-looking financial
guidance, beyond that provided above, on the future costs required to execute our development plan. We may be unable to obtain, on acceptable terms or at all, any additional financing required to execute our development plan through
December 31, 2008 or beyond. If we are unable to do so, we will be unable to continue development of our product candidates.



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As of December 31, 2007, we had 28 employees, all but one of whom were full-time. We expect our
headcount to increase significantly in 2008 to staff our expanded clinical development work, our expanded Dimebon commercial development activities, and the infrastructure required to support those tasks.

We do not expect to purchase or sell any plant or significant equipment for the foreseeable future.

Risk Factors

Our business and prospects are subject
to the following material risks described below. The risks and uncertainties described below are not the only ones we face. Additional risks and uncertainties not presently known to us, or that we currently believe to be immaterial, may also
adversely affect our business.

Risks Related to our Business

We have incurred net losses since inception, expect to incur increasingly large losses in the future as we expand our development activities, and may
never achieve revenues or profitability. We are a development stage company and have never recognized any revenue from the sale of products or any other source. We have not completed development of any of our product candidates, and do not
expect that any of our present or future product candidates will be commercially available for a number of years, if at all. We have incurred losses since inception and expect to continue to incur substantial and increasing losses for the
foreseeable future as we increase our spending to finance clinical and preclinical studies of our existing product candidates, the evaluation, acquisition and development of additional product candidates, additional headcount, and the costs
associated with operating as a public company. Our operating losses have had, and will continue to have, an adverse impact on our working capital, total assets and stockholders equity. We do not know when or if we will ever generate revenue or
become profitable because of the significant uncertainties with respect to our ability to generate revenue from any of our current or future product candidates.

Because we depend on financing from third parties for our operations, our business may fail if such financing becomes unavailable or is offered on commercially unreasonable terms. To date, we have financed all
of our operations through borrowings and the sale of our equity securities. We will require significant additional capital to develop our existing product candidates, and to acquire and develop other product candidates. Our future capital
requirements will depend on many factors, including:



| |  |  | the scope and results of our preclinical and clinical trials;
| | - |  | -------------------------------------------------------------



| |  |  | whether we experience delays in our preclinical and clinical development programs, or slower than anticipated product development;
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------



| |  |  | whether we identify other product candidates that we wish to acquire, and the costs of acquiring and developing those product candidates;
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------



| |  |  | whether we are able to enter into collaborative partnerships with regard to any of our product candidates, and the terms of any such collaboration;
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | the timing and requirements of, and the costs involved in, conducting studies required to obtain regulatory approvals for our product candidates from the FDA and
comparable foreign regulatory agencies;
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | the availability of third parties to perform the key development tasks on our product candidates, including conducting preclinical and clinical studies and
manufacturing the products to be tested in those studies, and the associated costs of those services;
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | the availability and cost of raw materials required to manufacture products for testing in our preclinical and clinical studies; and
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------



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| |  |  | the costs involved in preparing, filing, prosecuting, maintaining, defending the validity of, and enforcing, patent claims and other patent-related costs, including
litigation costs and the results of such litigation.
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

We may not be able to obtain additional financing when we need it
on acceptable terms or at all. If we cannot raise funds on acceptable terms, we may not be able to develop or enhance our product candidates, acquire or develop additional product candidates or respond to competitive pressures or unanticipated
requirements. For these reasons, any inability to raise additional capital when we require it would seriously harm our business.

Our
business strategy depends on our ability to identify and acquire additional product candidates which we may never acquire or identify for reasons that may not be in our control, or are otherwise unforeseen or unforeseeable to us. A key component
of our business strategy is to diversify our product development risk by identifying, acquiring and developing additional product candidates. However, we may not be able to identify other promising technologies. In addition, the competition to
acquire promising biomedical technologies is fierce, and many of our competitors are large, multinational pharmaceutical, biotechnology and medical device companies with considerably more financial, development and commercialization resources and
experience than we have. Thus, even if we succeed in identifying promising technologies, we may not be able to acquire rights to them on acceptable terms or at all. If we are unable to identify and acquire new technologies, we will be unable to
diversify our product risk. We believe that any such failure would have a significant negative impact on our prospects because the risk of failure of any particular development program in the pharmaceutical field, including that of our existing
programs, is high.

Because we depend on our management to oversee the execution of development plans for our existing product
candidates and to identify and acquire promising new product candidates, the loss of any of our managers would harm our business. Our future success depends upon the continued services of our executive officers. We are particularly dependent on
the continued services of David Hung, M.D., our president and chief executive officer and a member of our board of directors. Dr. Hung identified all of our existing product candidates for acquisition, and has primary responsibility for
identifying and evaluating other potential product candidates. We believe that Dr. Hungs services in this capacity would be difficult to replace. None of our executive officers is bound by an employment agreement for any specific term,
and they may terminate their employment at any time. In addition, we do not have key person life insurance policies covering any of our executive officers. The loss of the services of any of our executive officers could delay the
development of our existing product candidates, and delay or preclude the identification and acquisition of new product candidates, either of which events could harm our business.

Our reliance on third parties for the operation of our business may result in material delays, cost overruns and/or quality deficiencies in our
development programs. We rely on outside vendors to perform key product development tasks, such as conducting preclinical and clinical studies and manufacturing the product candidates to be tested in those studies. In order to manage our
business successfully, we will need to identify, engage and properly manage qualified external vendors who will perform these development activities. For example, we need to monitor the activities of our vendors closely to ensure that they are
performing their tasks correctly, on time, on budget and in compliance with strictly enforced regulatory standards. Our ability to identify and retain key vendors with the requisite knowledge is critical to our business and the failure to do so
could have a material adverse impact on our business. Because all of our key vendors perform services for other clients in addition to us, we also need to ensure that they are appropriately prioritizing our projects. If we fail to manage our key
vendors well, we could incur material delays, cost overruns or quality deficiencies in our development programs, as well as other material disruptions to our business.



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Risks Related to our Product Development Candidates

Our product candidates require extensive, time consuming and expensive preclinical and clinical testing to establish safety and efficacy. We may never
attract partners for our technologies or receive marketing approval in any jurisdiction. The research and development of pharmaceuticals is an extremely risky industry. Only a small percentage of product candidates that enter the development
process ever receive marketing approval. Except for Dimebons approval in Russia as an antihistamine, which is not a commercially attractive opportunity for us, none of our product candidates is currently approved for sale anywhere in the
world, and none of them may ever receive such approval. The process of conducting the preclinical and clinical testing required to establish safety and efficacy and obtain marketing approval is expensive, uncertain and takes many years. If we are
unable to complete preclinical or clinical trials of any of our current or future product candidates, or if the results of these trials are not satisfactory to convince regulatory authorities or potential partners of their safety or efficacy, we
will not be able to attract partners or obtain marketing approval for any products. Furthermore, even if we or our potential partners are able to obtain marketing approvals for any of our product candidates, those approvals may be for indications
that are not as broad as desired, or may contain other limitations that would adversely affect our ability to generate revenue from sales of those products. If this occurs, our business will be materially harmed and our ability to generate revenue
will be severely impaired.

Positive results in any of our clinical trials, including our first pivotal clinical trial of Dimebon in
Alzheimers disease, may not be predictive of future clinical trial results. Even where we achieve positive results in clinical trials, including our first pivotal clinical trial of Dimebon in Alzheimers disease conducted in Russia,
we do not know whether those results will be predictive of success in subsequent clinical trials, including our upcoming Phase 3 Alzheimers disease clinical trial in the United States, Europe and South America. Product candidates in
clinical trials, including Phase 3 clinical trials, often fail to show the desired safety and efficacy traits despite having progressed successfully through prior stages of preclinical and clinical testing. In addition, we do not know whether
early results from any of our ongoing clinical trials, including the early results of our Phase 1-2 clinical trial of MDV3100 in hormone-refractory prostate cancer, will be predictive of final results of any such trial.

Our industry is highly regulated by the U.S. Food and Drug Administration (FDA) and comparable foreign regulatory agencies. We must comply with
extensive, strictly enforced regulatory requirements in order to develop and seek marketing approval for any of our product candidates. Before we or our potential partners can obtain regulatory approval for the sale of our product candidates,
they must be subjected to extensive preclinical and clinical testing to demonstrate their safety and efficacy for humans. The preclinical and clinical trials of any product candidates that we develop must comply with regulation by numerous federal,
state and local government authorities in the United States, principally the FDA, and by similar agencies in other countries. In the case of our pharmaceutical product candidates, we will be required to obtain and maintain an effective
investigational new drug application to conduct human clinical trials in the United States and must obtain and maintain regulatory approval before proceeding to successive phases of our clinical trials. Similar regulatory requirements apply to
medical devices, and may become relevant to us should we acquire any medical device product candidates. Securing FDA approval requires the submission of extensive preclinical and clinical data and supporting information for each therapeutic
indication to establish the product candidates safety and efficacy for its intended use. It takes years to complete the testing of a new drug or medical device, and development delays and/or failure can occur at any stage of testing. For
example, in February 2006 the FDA required us to conduct additional rat toxicology studies prior to starting our ongoing clinical trial of Dimebon in Huntingtons disease patients, which requirement increased development costs and slowed
development. Similarly, any of our present and future clinical trials may be delayed or halted due to any of the following:



| |  |  | any preclinical test or clinical trial may fail to produce safety and efficacy results satisfactory to the FDA or foreign regulatory authorities;
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | preclinical and clinical data can be interpreted in different ways, which could delay, limit or prevent regulatory approval;
| | - |  | ----------------------------------------------------------------------------------------------------------------------------



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| |  |  | negative or inconclusive results from a preclinical test or clinical trial or adverse medical events during a clinical trial could cause a preclinical study or
clinical trial to be repeated or a program to be terminated, even if other studies or trials relating to the program are successful;
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | the FDA or foreign regulatory authorities can place a clinical hold on a trial if, among other reasons, it finds that patients enrolled in the trial are or would be
exposed to an unreasonable and significant risk of illness or injury;
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | the FDA might not approve the clinical processes or facilities that we utilize, or the processes or facilities of our consultants, including without limitation the
vendors who will be manufacturing drug substance and drug product for us or any potential collaborators;
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | any regulatory approval we or any potential collaborators ultimately obtain may be limited or subject to restrictions or post-approval commitments that render the
product not commercially viable; and
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | we may encounter delays or rejections based on changes in FDA policies or the policies of foreign regulatory authorities during the period in which we develop a
drug or the period required for review of any new drug application.
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Enrollment of patients in clinical trials is
often an expensive and time-consuming process, and could result in significant delays, cost overruns, or both, in our product development activities. We may encounter delays in enrolling a sufficient number of patients to complete our clinical
trials. Patient enrollment depends on many factors, including the size of the patient population, the nature of the trial protocol, the proximity of patients to clinical sites and the eligibility criteria for the study. In particular, we intend to
conduct monotherapy studies of Dimebon in Alzheimers disease patientsstudies in which patients in the placebo group do not receive treatment with any approved Alzheimers disease drugs. Because approved Alzheimers
disease drugs are widely available in the United States and Europe, we believe that patient accrual in Dimebon monotherapy studies, including our upcoming confirmatory pivotal Phase 3 trial of Dimebon in Alzheimers disease, may be
particularly time-consuming. Delays in planned patient enrollment may result in increased costs, program delays or both, which could have a harmful effect on our ability to develop Dimebon or any other product candidates. In addition, if we are
delayed in reaching, or are unable to reach, product development milestones we may be unable to comply with requirements in our present and future license agreements, which could result in partial or total loss of our license rights.

We have not yet partnered any of our product development candidates with third party collaborators, and we cannot control whether we will be able to
do so on favorable terms or at all. Our business strategy relies in part on potentially partnering successful product development candidates with larger pharmaceutical, biotechnology or medical device companies to complement our internal
development and commercialization efforts. For example, because Alzheimers disease is a large market requiring a large primary care sales force, we expect to seek a commercial partner for Dimebon in that indication. We also expect to seek
ex-US commercial partners for our product candidates. We may also be required to enter into collaborative relationships to complement our internal efforts, whether in research and development, manufacturing or commercialization, and/or to generate
necessary financing. We have not entered into any such collaborations to date. It may be difficult for us to find third parties that are willing to enter into such transactions on acceptable economic terms or at all. We also will be competing with
many other companies as we seek partners for our product candidates, and we may not be able to compete successfully against those other firms. If we are not able to enter into collaboration transactions for our product development candidates, we
would be required to undertake and fund further development, clinical trials, manufacturing and commercialization activities solely at our own expense and risk. If we are unable to finance and/or successfully execute those expensive activities, our
business and prospects would be materially and adversely harmed for that reason.

If we enter into collaboration transactions, we will
be dependent upon our partners, and we may be unable to prevent them from taking actions that may be harmful to our business or inconsistent with our business strategy. Any collaboration agreements we may enter into with respect to our product
development candidates are likely to provide us with little or no control over the activities of our partners. For example, future partners, if



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any, are likely to have the right to terminate the collaboration at their option. Our partners may decide to terminate a development program under
circumstances where we might have continued such a program, or may be unable or unwilling to pursue ongoing development and commercialization activities as quickly as we would prefer. Any partner may be unwilling or unable to fulfill its obligations
to us, including its development and commercialization responsibilities in respect of our product candidates. Our partners will likely have significant discretion in determining the efforts and level of resources that they dedicate to the
development and commercialization of our product candidates relative to their other products and product candidates. In addition, our collaborators may develop and commercialize, either alone or with others, products and services that are similar to
or directly competitive with the products that are the subject of the collaboration with us.

We expect that the financial returns to us in
any collaboration agreement would depend in large part on the achievement of development and/or commercialization milestones on, and royalties, co-promotion fees or other payments based upon sales of, our product candidates. Therefore, our success,
and any associated financial returns to us and our investors, will depend on the ability of any of our future collaborators to obtain and maintain regulatory approvals from the FDA and other foreign regulatory agencies and successfully commercialize
our product candidates. We may also be dependent on our collaborators for the commercial scale manufacture, distribution, sales, marketing and reimbursement of our product candidates. These collaborators may not be successful. If any future
collaborator terminates its collaboration with us or fails to perform or satisfy its obligations to us, the development, regulatory approval or commercialization of our product candidate would be delayed or may not occur and our business and
prospects could be materially and adversely affected for that reason.

If our product candidates cannot be manufactured in a
cost-effective manner and in compliance with current good manufacturing practices and other applicable regulatory standards, they will not be commercially successful. All pharmaceutical and medical device products in the U.S., Europe and other
countries must be manufactured in strict compliance with current good manufacturing practices (cGMP) and other applicable regulatory standards. Establishing a cGMP-compliant process to manufacture pharmaceutical and medical device products involves
significant time, cost and uncertainty. Furthermore, in order to be commercially viable, any such process would have to yield product on a cost-effective basis, using raw materials that are commercially available on acceptable terms. We are
currently refining our manufacturing process for Dimebon to avoid use of a chemical that is difficult to source and handle, thus rendering it suboptimal for large-scale manufacturing. This process development associated scale-up work is underway,
and we do not anticipate any manufacturing-related issues to delay any of our planned development milestones described in Managements Discussion and Analysis or Plan of Operation. However, we cannot guarantee that we will be able
to complete this work in a timely manner or at all. Furthermore, neither Dimebon nor MDV3100 has been manufactured at commercial-scale under cGMP-compliant conditions. We thus face the risk that commercial-scale cGMP manufacture of Dimebon and/or
MDV3100 would not be possible, on a cost-effective basis or at all, which would materially and adversely affect the value of these programs.

Any of our product development candidates that receive marketing approval will face significant competition from other approved products, including generic products and products with more convenient dosing regimens, and other products in
development. The biopharmaceutical industry is intensely competitive in general. Furthermore, our business strategy is to target large unmet medical needs, and those markets are even more highly competitive. For example, there are four drugs
currently marketed to treat Alzheimers disease. These drugs are all dosed once or twice per day, while Dimebon was dosed three times per day in our first pivotal clinical trial and also will be dosed three times per day in our upcoming
confirmatory Phase 3 pivotal clinical trial. This difference in dosing regimen may make Dimebon less competitive than alternative Alzheimers disease drugs if Dimebon receives marketing approval based on a thrice per day dosing regimen. In
addition, all four currently approved Alzheimers disease drugs are expected to lose patent protection prior to, or shortly after, Dimebons potential launch. Such loss of patent protection would likely result in the entry of generic
competition for, and significant reductions in the commercial pricing of, those approved drugs. This development would put significant competitive pressure on the prices we or our potential partners could charge for Dimebon should it ever be
approved. Companies marketing currently approved Alzheimers disease therapeutics include some of the worlds largest and most experienced pharmaceutical companies, such as Pfizer Inc., Novartis AG and



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Johnson & Johnson. There are also dozens of additional small molecule and recombinant protein candidates in development targeting the clinical
indications we are pursuing, particularly Alzheimers disease and HRPC, including compounds already in Phase 3 clinical trials. One or more such compounds may be approved in each of our target indications before any of our product
candidates could potentially be approved. Most, if not all, of these competing drug development programs are being conducted by pharmaceutical and biotechnology companies with considerably greater financial resources, human resources and experience
than ours. Any of our product candidates that receives regulatory approval will face significant competition from both approved drugs, as well as from any of the drugs currently under development that may subsequently be approved. Bases upon which
our product candidates would have to compete successfully include efficacy, safety, price and cost-effectiveness. In addition, our product candidates would have to compete against these other drugs with several different categories of decision
makers, including physicians, patients, government and private third-party payors, technology assessment groups and patient advocacy organizations. Even if one of our product candidates is approved, we cannot guarantee that we or any of our
potential partners will be able to compete successfully on any of these bases. Any future product candidates that we may subsequently acquire will face similar competitive pressures. If we or our potential partners cannot compete successfully on any
of the bases described above, our business will not succeed.

Any of our product candidates that is eventually approved for sale may not
be commercially successful if not widely-covered and appropriately reimbursed by third-party payors. Third-party payors, including public insurers such as Medicare and Medicaid and private insurers, pay for a large share of health care products
and services consumed in the United States. In Europe, Canada and other major international markets, third-party payors also pay for a significant portion of health care products and services, and many of those countries have nationalized health
care systems in which the government pays for all such products and services and must approve product pricing. Even if approved by the FDA and other regulatory agencies, our product candidates are unlikely to achieve commercial success unless they
are covered widely by third-party payors and reimbursed at a rate which generates an acceptable commercial return for us and any collaborative partner. It is increasingly difficult to obtain coverage and acceptable reimbursement levels from
third-party payors, and we may be unable to achieve these objectives. Achieving coverage and acceptable reimbursement levels typically involves negotiating with individual payors, and is a time-consuming and costly process. In addition, we would
face competition in such negotiations from other approved drugs against which we compete, and the marketers of such other drugs are likely to be significantly larger than us and therefore enjoy significantly more negotiating leverage. This
competition will be particularly intense for Dimebon, if approved to treat Alzheimers disease, because all four currently marketed Alzheimers disease drugs are expected to lose patent protection prior to, or shortly following,
Dimebons potential commercial launch, and thus are likely to be available at generic price levels. Our commercial prospects would be further weakened if payors approved coverage for our product candidates only as second- or later-line
treatments, or if they placed any of our product candidates in tiers requiring unacceptably high patient co-payments. Failure to achieve acceptable coverage and reimbursement levels could materially harm our business.

We may be subject to product liability or other litigation, which could result in an inefficient allocation of our critical resources, delay the
implementation of our business strategy and, if successful, materially and adversely harm our business and financial condition as a result of the costs of liabilities that may be imposed thereby. Our business exposes us to the risk of product
liability claims that is inherent in the development of pharmaceuticals. If any of our product candidates harms people, or is alleged to be harmful, we may be subject to costly and damaging product liability claims brought against us by clinical
trial participants, consumers, health care providers, potential corporate partners or others. We have product liability insurance covering our ongoing clinical trials, but do not have insurance for any of our other development activities. If we are
unable to obtain insurance at an acceptable cost or otherwise protect against potential product liability claims, we may be exposed to significant litigation costs and liabilities, which may materially and adversely affect our business and financial
position. If we are sued for injuries allegedly caused by any of our product candidates, our litigation costs and liability could exceed our total assets and our ability to pay. In addition, we may from time to time become involved in various
lawsuits and legal proceedings which arise in the ordinary course of our business. Any litigation to which we are subject could require significant involvement of our senior management and may divert managements attention from our business and
operations. Litigation costs or an adverse result in any litigation that may arise from time to time may adversely impact our operating results or financial condition.



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Risks Related to Intellectual Property

Intellectual property protection for our product candidates is crucial to our business, and is subject to a significant degree of legal
riskparticularly in the life sciences industry. The success of our business will depend in part on our obtaining and maintaining intellectual property protectionprimarily patent protectionof our technologies and product
candidates, as well as successfully defending these patents against third-party challenges. We and our potential future collaborators will only be able to protect our technologies and product candidates from unauthorized use by third parties to the
extent that valid and enforceable patents or trade secrets cover them. Furthermore, the degree of future protection of our proprietary rights is uncertain because legal means afford only limited protection and may not adequately protect our rights
or permit us or our potential future collaborators to gain or keep our competitive advantage.

The patent positions of life sciences
companies can be highly uncertain and involve complex legal and factual questions for which important legal principles remain unresolved. Further, changes in either the patent laws or in interpretations of patent laws in the United States or other
countries may diminish the value of our intellectual property. Accordingly, we cannot predict the breadth of claims that may be granted or enforced in our patents or in third-party patents that we have licensed. For example:



| |  |  | we or our licensors might not have been the first to make the inventions covered by each of our pending patent applications and issued patents;
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | we or our licensors might not have been the first to file patent applications for these inventions;
| | - |  | ---------------------------------------------------------------------------------------------------



| |  |  | others may independently develop similar or alternative technologies or duplicate any of our technologies;
| | - |  | ----------------------------------------------------------------------------------------------------------



| |  |  | it is possible that none of our pending patent applications or the pending patent applications of our licensors will result in issued patents;
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | our issued patents and future issued patents, or those of our licensors, may not provide a basis for commercially viable products, may not provide us with any
competitive advantages, or may be challenged by third parties and invalidated; and
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | we may not develop additional proprietary technologies or product candidates that are patentable.
| | - |  | -------------------------------------------------------------------------------------------------

Our existing and any future patent rights may not adequately protect any of our product candidates, which could prevent us from ever generating any
revenues or profits. We cannot guarantee that any of our pending or future patent applications will mature into issued patents, or that any of our current or future issued patents will adequately protect our product candidates from competitors.
For example, there is a large body of prior art, including multiple issued patents and published patent applications, disclosing molecules in the same chemical class as our MDV300 series compounds. Since our MDV300 series compounds include
approximately 170 specific molecules, we expect that some members of this series may not be patentable in light of this prior art, or may infringe the claims of patents presently issued or issued in the future. Furthermore, we also cannot guarantee
that any of our present or future issued patents will not be challenged by third parties, or that they will withstand any such challenge. If we are not able to obtain adequate protection for, or defend, the intellectual property position of our
technologies and product candidates, then we may not be able to attract collaborators to acquire or partner our development programs. Further, even if we can obtain protection for and defend the intellectual property position of our technologies and
product candidates, we or any of our potential future collaborators still may not be able to exclude competitors from developing or marketing competing drugs. Should this occur, we and our potential future collaborators may not generate any revenues
or profits from our product candidates.

We could become subject to litigation or other challenges regarding intellectual property
rights, which could divert management attention, cause us to incur significant costs, prevent us from selling or using the challenged technology and/or subject us to competition by lower priced generic products. In recent years, there has been
significant litigation in the U.S. and elsewhere involving pharmaceutical patents and other intellectual



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property rights. In particular, generic pharmaceutical manufacturers have been very aggressive in attacking the validity of patents held by proprietary
pharmaceutical companies, especially if these patents are commercially significant. If any of our present or future product candidates succeed, we may face challenges to our existing or future patents. For example, in the prosecution of our issued
U.S. patents claiming the use of Dimebon and certain related compounds to treat neurodegenerative diseases, including Alzheimers disease, the prior owners missed a filing deadline with the U.S. Patent & Trademark Office (PTO), which
resulted in the patent application being deemed abandoned. The prior owners petitioned the PTO to revive the patent application alleging that missing the deadline was unintentional, and the PTO approved the petition and issued the patent. However,
as with any other decision the PTO makes, this decision could be challenged in subsequent litigation in an attempt to invalidate this issued U.S. patent and any other U.S. patent that may issue based on the same patent application. If a generic
pharmaceutical company or other third party were able to successfully invalidate any of our present or future patents, any of our product candidates that may ultimately receive marketing approval could face additional competition from lower priced
generic products that would result in significant price and revenue erosion and have a material adverse impact on the commercial viability of the affected product candidate(s).

In the future, we may be a party to litigation to protect our intellectual property or as a result of an alleged infringement of others
intellectual property. These claims and any resulting lawsuit, if successful, could subject us to significant liability for damages and invalidation, or a narrowing of the scope, of our proprietary rights. These lawsuits, regardless of their
success, would likely be time-consuming and expensive to litigate and resolve and would divert management time and attention. Any potential intellectual property litigation also could force us to do one or more of the following:



| |  |  | discontinue our products that use the challenged intellectual property; or
| | - |  | --------------------------------------------------------------------------



| |  |  | obtain from the owner of the infringed intellectual property right a license to sell or use the relevant technology, which license may not be available on
reasonable terms, or at all.
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

If we are forced to take any of these actions, our business may be seriously harmed.
Although we carry general liability insurance, our insurance does not cover potential claims of this type.

In addition, our patents and
patent applications, or those of our licensors, could face other challenges, such as interference proceedings, opposition proceedings and re-examination proceedings. Any such challenge, if successful, could result in the invalidation of, or in a
narrowing of the scope of, any such patents and patent applications. Any such challenges, regardless of their success, would likely be time-consuming and expensive to defend and resolve, and would divert management time and attention.

We may in the future initiate claims or litigation against third parties for infringement of our proprietary rights to protect these rights or to
determine the scope and validity of our proprietary rights or the proprietary rights of competitors. These claims could result in costly litigation and the diversion of our technical and management personnel, and we may not prevail in making these
claims.

We may need to obtain licenses of third-party technology that may not be available to us or are available only on commercially
unreasonable terms, and which may cause us to operate our business in a more costly or otherwise adverse manner that was not anticipated. From time to time we may be required to license technology from third parties to develop our existing and
future product candidates. For example, in our industry there are a large number of issued patents and published patent applications with claims to treating diseases generically through use of any product that produces one or more biological
activitiessuch as inhibiting a specific biological target. We are aware of several such issued patents relating to Alzheimers disease, and expect to continue to encounter such patents relating to other diseases targeted by our present
and future product candidates. We have not conducted experiments to analyze whether, and we have no evidence that, any of our product candidates produce the specific biological activities covered in any of the issued patents or published patent
applications of which we are presently aware. We have not sought to acquire licenses to any such patents. In addition, the commercial scale manufacturing processes that we are developing for our product candidates may require licenses to third party
technology. Should we be required to obtain licenses to any third-party



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technology, including any such patents based on biological activities or required to manufacture our product candidates, such licenses may not be available
to us on commercially reasonable terms, or at all. The inability to obtain any third-party license required to develop any of our product candidates could cause us to abandon any related development efforts, which could seriously harm our business
and operations.

We may become involved in disputes with potential future collaborators over intellectual property ownership, and
publications by our research collaborators and scientific advisors could impair our ability to obtain patent protection or protect our proprietary information, which, in either case, could have a significant impact on our business. Inventions
discovered under research, material transfer or other such collaborative agreements may become jointly owned by us and the other party to such agreements in some cases, and the exclusive property of either party in other cases. Under some
circumstances, it may be difficult to determine who owns a particular invention, or whether it is jointly owned, and disputes could arise regarding ownership of those inventions. These disputes could be costly and time consuming, and an unfavorable
outcome could have a significant adverse effect on our business if we were not able to protect or license rights to these inventions. In addition, our research collaborators and scientific advisors generally have contractual rights to publish our
data and other proprietary information, subject to our prior review. Publications by our research collaborators and scientific advisors containing such information, either with our permission or in contravention of the terms of their agreements with
us, may impair our ability to obtain patent protection or protect our proprietary information, which could significantly harm our business.

Trade secrets may not provide adequate protection for our business and technology. We also rely on trade secrets to protect our technology, especially where we believe patent protection is not appropriate or obtainable. However,
trade secrets are difficult to protect. While we use reasonable efforts to protect our trade secrets, our or our potential collaborators employees, consultants, contractors or scientific and other advisors may unintentionally or willfully
disclose our information to competitors. If we were to enforce a claim that a third party had illegally obtained and was using our trade secrets, our enforcement efforts would be expensive and time consuming, and the outcome would be unpredictable.
In addition, courts outside the United States are sometimes less willing to protect trade secrets. Moreover, if our competitors independently develop equivalent knowledge, methods or know-how, it will be more difficult or impossible for us to
enforce our rights and our business could be harmed.

Risks Related to Ownership of our Common Stock

Our stock price may be volatile, and our stockholders investment in our stock could decline in value. The market prices for our securities
and those of other life sciences companies have been highly volatile and may continue to be highly volatile in the future. The following factors, in addition to other risk factors described in this Report, may have a significant impact on the market
price of our common stock:



| |  |  | the receipt or failure to receive the additional funding necessary to conduct our business;
| | - |  | -------------------------------------------------------------------------------------------



| |  |  | the progress and success of preclinical studies and clinical trials of our product candidates conducted by us or our future collaborative partners or licensees, if
any;
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | selling by existing stockholders and short-sellers;
| | - |  | ---------------------------------------------------



| |  |  | announcements of technological innovations or new commercial products by our competitors or us;
| | - |  | -----------------------------------------------------------------------------------------------



| |  |  | developments concerning proprietary rights, including patents;
| | - |  | --------------------------------------------------------------



| |  |  | developments concerning any future collaborations;
| | - |  | --------------------------------------------------



| |  |  | publicity regarding us, our product candidates or those of our competitors, including research reports published by securities analysts;
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------



| |  |  | regulatory developments in the United States and foreign countries;
| | - |  | -------------------------------------------------------------------



| |  |  | litigation;
| | - |  | -----------



| |  |  | economic and other external factors or other disaster or crisis; and
| | - |  | --------------------------------------------------------------------



| |  |  | period-to-period fluctuations in financial results.
| | - |  | ---------------------------------------------------



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We do not intend to pay regular dividends on our common stock for the foreseeable future. We do
not expect for the foreseeable future to pay regular dividends on our common stock. Any future determination to pay dividends on or repurchase shares of our common stock will be at the discretion of our board of directors and will depend upon, among
other factors, our success in completing sales or partnerships of our programs, our results of operations, financial condition, capital requirements, contractual restrictions and applicable law.

Our principal stockholders exert substantial influence over us and may exercise their control in a manner adverse to your interests. Certain
stockholders and their affiliates own a substantial amount of our outstanding common stock. Please refer to Item 11: Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters for more
information. These stockholders may have the power to direct our affairs and be able to determine the outcome of certain matters submitted to stockholders for approval. Because a limited number of persons controls us, transactions could be difficult
or impossible to complete without the support of those persons. Subject to applicable law, it is possible that these persons will exercise control over us in a manner adverse to your interests.

Provisions of our charter documents, our stockholder rights plan and Delaware law could make it
more difficult for a third party to acquire us, even if the offer may be considered beneficial by our stockholders. Provisions of the Delaware General Corporation Law could discourage potential acquisition proposals and could delay, deter or
prevent a change in control. The anti-takeover provisions of the Delaware General Corporation Law impose various impediments to the ability of a third party to acquire control of us, even if a change in control would be beneficial to our existing
stockholders. In addition, Section 203 of the Delaware General Corporation Law, unless its application has been waived, provides certain default anti-takeover protections in connection with transactions between the company and an
interested stockholder of the company. Generally, Section 203 prohibits stockholders who, alone or together with their affiliates and associates, own more than 15% of the subject company from engaging in certain business
combinations for a period of three years following the date that the stockholder became an interested stockholder of such subject company without approval of the board or 662/3% of the independent stockholders. Our board of directors has also adopted a stockholder
rights plan, or poison pill, which would significantly dilute the ownership of a hostile acquirer. Additionally, provisions of our amended and restated certificate of incorporation and bylaws could deter, delay or prevent a third party
from acquiring us, even if doing so would benefit our stockholders, including without limitation, the authority of the board of directors to issue, without stockholder approval, preferred stock with such terms as the board of directors may
determine.



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|Item 7. | Consolidated Financial Statements.
|------- | ----------------------------------

CONSOLIDATED
FINANCIAL STATEMENTS

Financial Statements Index



|                                                                                                                                                                 |  |   
|---------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | --
|Report of PricewaterhouseCoopers LLP, Independent Registered Public Accounting Firm of Medivation, Inc.                                                          |  | 33
|                                                                                                                                                                 | 
|Report of Singer Lewak Greenbaum & Goldstein LLP, former Independent Registered Public Accounting Firm of Medivation, Inc.                                       |  | 34
|                                                                                                                                                                 | 
|Consolidated Balance Sheet as of December 31, 2007                                                                                                               |  | 35
|                                                                                                                                                                 | 
|Consolidated Statements of Operations for the years ended December 31, 2007 and 2006, and for the period from inception (September 4, 2003) to December 31, 2007 |  | 36
|                                                                                                                                                                 | 
|Consolidated Statements of Cash Flows for the years ended December 31, 2007 and 2006, and for the period from inception (September 4, 2003) to December 31, 2007 |  | 37
|                                                                                                                                                                 | 
|Consolidated Statements of Stockholders Equity for the period from inception (September 4, 2003) to December 31, 2007                                           |  | 38
|                                                                                                                                                                 | 
|Notes to Consolidated Financial Statements                                                                                                                       |  | 39



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Report of Independent Registered Public Accounting Firm

To the Board of Directors and Stockholders of

Medivation, Inc.

(a development stage company)

In our opinion, the accompanying consolidated balance sheet and the related consolidated statements of operations, of stockholders equity and of
cash flows present fairly, in all material respects, the financial position of Medivation, Inc. and its subsidiaries (the Company) (a development stage enterprise) at December 31, 2007, and the results of their operations and their
cash flows for the year then ended and, cumulatively, for the period from January 1, 2007 to December, 31, 2007 in conformity with accounting principles generally accepted in the United States of America. These financial statements are the
responsibility of the Companys management. Our responsibility is to express an opinion on these financial statements based on our audits. We did not audit the cumulative totals of the Company for the period from September 4, 2003 (date of
inception) to December 31, 2006, which totals reflect a deficit of $28,456,571 accumulated during the development stage. Those cumulative totals were audited by other auditors whose report, dated February 12, 2007, expressed an unqualified
opinion on the cumulative amounts.We conducted our audit of these statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting
principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

PricewaterhouseCoopers LLP

San Jose, California

February 14, 2008



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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders of

Medivation, Inc.

San Francisco, California

We have audited the consolidated statements of operations, stockholders equity and cash flows of Medivation, Inc. and subsidiaries (a development
stage company) (collectively, the Company) for the year ended December 31, 2006 and for the period from September 4, 2003 (inception) to December 31, 2006. These financial statements are the responsibility of the Companys
management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in
accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In
our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the results of operations and cash flows of Medivation, Inc. and subsidiaries for the year ended December 31, 2006 and for the period from
September 4, 2003 (inception) to December 31, 2006, in conformity with U.S. generally accepted accounting principles.

SINGER LEWAK GREENBAUM &
GOLDSTEIN LLP

Los Angeles, California

February 12, 2007



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MEDIVATION, INC.

(A DEVELOPMENT STAGE COMPANY)

CONSOLIDATED BALANCE SHEET



|                                                                                                                |  |                   |             |  
|--------------------------------------------------------------------------------------------------------------- |  | ----------------- | ----------- | -
|                                                                                                                |  | December 31, 2007 |            
|ASSETS                                                                                                          |  |                   |             |  
|Current assets:                                                                                                 |  |                   |             |  
|Cash and cash equivalents                                                                                       |  | $                 | 43,258,479  |  
|Prepaid expenses and other current assets                                                                       |  |                   | 990,909     |  
|                                                                                                                |  |                   |             |  
|Total current assets                                                                                            |  |                   | 44,249,388  |  
|Property and equipment (net of accumulated depreciation and amortization of $69,474)                            |  |                   | 688,743     |  
|Intellectual property (net of accumulated amortization of $16,673)                                              |  |                   | 58,327      |  
|Other non-current assets                                                                                        |  |                   | 599,601     |  
|                                                                                                                |  |                   |             |  
|Total assets                                                                                                    |  | $                 | 45,596,059  |  
|                                                                                                                |  |                   |             |  
|LIABILITIES AND STOCKHOLDERS EQUITY                                                                            |  |                   |             |  
|Current liabilities:                                                                                            |  |                   |             |  
|Accounts payable                                                                                                |  | $                 | 3,884,995   |  
|Other current liabilities                                                                                       |  |                   | 149,777     |  
|                                                                                                                |  |                   |             |  
|Total current liabilities                                                                                       |  |                   | 4,034,772   |  
|Other non-current liabilities                                                                                   |  |                   | 492,109     |  
|Series A redeemable preferred stock                                                                             |  |                   | 11,000      |  
|                                                                                                                |  |                   |             |  
|Total liabilities                                                                                               |  |                   | 4,537,881   |  
|                                                                                                                |  |                   |             |  
|                                                                                                                | 
|Commitments and contingencies (Note 14)                                                                         |  |                   |             |  
|                                                                                                                |  |                   |             |  
|Stockholders equity:                                                                                           |  |                   |             |  
|Preferred stock, $0.01 par value per share; 1,000,000 shares authorized; no shares issued and outstanding       |  |                   |            |  
|Common stock, $0.01 par value per share; 50,000,000 shares authorized; 28,837,290 shares issued and outstanding |  |                   | 288,372     |  
|Additional paid-in capital                                                                                      |  |                   | 100,969,362 |  
|Deficit accumulated during the development stage                                                                |  |                   | (60,199,556 | )
|                                                                                                                |  |                   |             |  
|Total stockholders equity                                                                                      |  |                   | 41,058,178  |  
|                                                                                                                |  |                   |             |  
|Total liabilities and stockholders equity                                                                      |  | $                 | 45,596,059  |  
|                                                                                                                |  |                   |             |  

SEE ACCOMPANYING NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



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MEDIVATION, INC.

(A DEVELOPMENT STAGE COMPANY)

CONSOLIDATED STATEMENTS OF OPERATIONS



|                                                                                                           |  |                         |             |   |                                                 |   |             |   |  |   |             |  
|---------------------------------------------------------------------------------------------------------- |  | ----------------------- | ----------- | - | ----------------------------------------------- | - | ----------- | - |  | - | ----------- | -
|                                                                                                           |  | Year ended December 31, |             |   | Inception(September 4, 2003)to December 31,2007 |  
|                                                                                                           |  | 2007                    |             |   | 2006                                            |   |            
|Operating expenses:                                                                                        |  |                         |             |   |                                                 |   |             |   |  |   |             |  
|General and administrative:                                                                                |  |                         |             |   |                                                 |   |             |   |  |   |             |  
|Payroll *                                                                                                  |  | $                       | 2,819,931   |   |                                                 | $ | 937,677     |   |  | $ | 4,647,224   |  
|Consulting and other professional fees *                                                                   |  |                         | 4,086,689   |   |                                                 |   | 1,964,819   |   |  |   | 7,952,822   |  
|Other general and administrative                                                                           |  |                         | 2,222,262   |   |                                                 |   | 911,638     |   |  |   | 4,251,064   |  
|                                                                                                           |  |                         |             |   |                                                 |   |             |   |  |   |             |  
|Total general and administrative                                                                           |  |                         | 9,128,882   |   |                                                 |   | 3,814,134   |   |  |   | 16,851,110  |  
|Research and development:                                                                                  |  |                         |             |   |                                                 |   |             |   |  |   |             |  
|Payroll *                                                                                                  |  |                         | 5,321,212   |   |                                                 |   | 1,358,735   |   |  |   | 7,693,780   |  
|Consulting and other professional fees *                                                                   |  |                         | 3,869,029   |   |                                                 |   | 2,306,660   |   |  |   | 8,316,550   |  
|Preclinical and clinical studies                                                                           |  |                         | 14,088,491  |   |                                                 |   | 8,405,044   |   |  |   | 26,658,806  |  
|Other research and development                                                                             |  |                         | 1,355,332   |   |                                                 |   | 261,520     |   |  |   | 1,981,103   |  
|                                                                                                           |  |                         |             |   |                                                 |   |             |   |  |   |             |  
|Total research and development                                                                             |  |                         | 24,634,064  |   |                                                 |   | 12,331,959  |   |  |   | 44,650,239  |  
|                                                                                                           |  |                         |             |   |                                                 |   |             |   |  |   |             |  
|Total operating expenses                                                                                   |  |                         | 33,762,946  |   |                                                 |   | 16,146,093  |   |  |   | 61,501,349  |  
|Loss from operations                                                                                       |  |                         | (33,762,946 | ) |                                                 |   | (16,146,093 | ) |  |   | (61,501,349 | )
|Other income (expense):                                                                                    |  |                         |             |   |                                                 |   |             |   |  |   |             |  
|Interest income                                                                                            |  |                         | 2,022,361   |   |                                                 |   | 785,016     |   |  |   | 2,938,459   |  
|Warrants issued to related party guarantors                                                                |  |                         |            |   |                                                 |   |            |   |  |   | (17,505     | )
|Liquidated damages expense:                                                                                |  |                         |             |   |                                                 |   |             |   |  |   |             |  
|To related parties                                                                                         |  |                         |            |   |                                                 |   |            |   |  |   | (1,102,530  | )
|To other parties                                                                                           |  |                         |            |   |                                                 |   |            |   |  |   | (507,900    | )
|                                                                                                           |  |                         |             |   |                                                 |   |             |   |  |   |             |  
|Total other income (expense)                                                                               |  |                         | 2,022,361   |   |                                                 |   | 785,016     |   |  |   | 1,310,524   |  
|                                                                                                           |  |                         |            
|Loss before provision for income taxes                                                                     |  |                         | (31,740,585 | ) |                                                 |   | (15,361,077 | ) |  |   | (60,190,825 | )
|Provision for income taxes                                                                                 |  |                         | 2,400       |   |                                                 |   | 2,331       |   |  |   | 8,731       |  
|                                                                                                           |  |                         |             |   |                                                 |   |             |   |  |   |             |  
|Net loss                                                                                                   |  | $                       | (31,742,985 | ) |                                                 | $ | (15,363,408 | ) |  | $ | (60,199,556 | )
|                                                                                                           |  |                         |             |   |                                                 |   |             |   |  |   |             |  
|Basic and diluted net loss per share:                                                                      |  | $                       | (1.14       | ) |                                                 | $ | (0.63       | ) |  |   |             |  
|                                                                                                           |  |                         |             |   |                                                 |   |             |   |  |   |             |  
|Weighted average common shares outstanding used in the calculation of basic and diluted net loss per share |  |                         | 27,932,309  |   |                                                 |   | 24,247,522  |   |  |   |             |  
|                                                                                                           |  |                         |             |   |                                                 |   |             |   |  |   |             |  



|* | Includes non-cash stock-based compensation expense. See Note 9(f)
|- | -----------------------------------------------------------------

SEE ACCOMPANYING NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



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MEDIVATION, INC.

(A DEVELOPMENT STAGE COMPANY)

CONSOLIDATED STATEMENTS OF CASH FLOWS



|                                                                                |  |                         |             |   |                                                  |   |             |   |  |   |              |  
|------------------------------------------------------------------------------- |  | ----------------------- | ----------- | - | ------------------------------------------------ | - | ----------- | - |  | - | ------------ | -
|                                                                                |  | Year ended December 31, |             |   | Inception(September 4, 2003) toDecember 31, 2007 |  
|                                                                                |  | 2007                    |             |   | 2006                                             |   |            
|Cash flows from operating activities:                                           |  |                         |             |   |                                                  |   |             |   |  |   |              |  
|Net loss                                                                        |  | $                       | (31,742,985 | ) |                                                  | $ | (15,363,408 | ) |  | $ | (60,199,556  | )
|Adjustments to reconcile net loss to net cash used in operating activities:     |  |                         |             |   |                                                  |   |             |   |  |   |              |  
|Impairment of intellectual property                                             |  |                         |            |   |                                                  |   | 68,238      |   |  |   | 143,238      |  
|Depreciation and amortization                                                   |  |                         | 74,323      |   |                                                  |   | 7,130       |   |  |   | 96,219       |  
|Loss on disposal of property and equipment                                      |  |                         | 6,353       |   |                                                  |   |            |   |  |   | 6,353        |  
|Accretion of discount on securities                                             |  |                         | (69,567     | ) |                                                  |   | (9,028      | ) |  |   | (78,595      | )
|Stock-based compensation                                                        |  |                         | 5,893,473   |   |                                                  |   | 2,448,853   |   |  |   | 9,564,827    |  
|Liquidated damages accrued:                                                     |  |                         |             |   |                                                  |   |             |   |  |   |              |  
|To related parties                                                              |  |                         |            |   |                                                  |   |            |   |  |   | 1,102,530    |  
|To other parties                                                                |  |                         |            |   |                                                  |   |            |   |  |   | 507,900      |  
|Liquidated damages paid:                                                        |  |                         |             |   |                                                  |   |             |   |  |   |              |  
|To related parties                                                              |  |                         |            |   |                                                  |   | (16,120     | ) |  |   | (1,102,530   | )
|To other parties                                                                |  |                         |            |   |                                                  |   | (256,379    | ) |  |   | (507,900     | )
|Warrants issued to related party guarantors                                     |  |                         |            |   |                                                  |   |            |   |  |   | 17,505       |  
|Changes in operating assets and liabilities:                                    |  |                         |             |   |                                                  |   |             |   |  |   |              |  
|Prepaid expenses and other current assets                                       |  |                         | (328,487    | ) |                                                  |   | (360,356    | ) |  |   | (990,909     | )
|Other non-current assets                                                        |  |                         | 12,301      |   |                                                  |   | (36,902     | ) |  |   | (24,601      | )
|Accounts payable                                                                |  |                         | 2,193,148   |   |                                                  |   | 516,550     |   |  |   | 3,884,995    |  
|Other current liabilities                                                       |  |                         | 145,727     |   |                                                  |   | (3,575      | ) |  |   | 149,777      |  
|Other non-current liabilities                                                   |  |                         | 459,392     |   |                                                  |   | 32,717      |   |  |   | 492,109      |  
|                                                                                |  |                         |             |   |                                                  |   |             |   |  |   |              |  
|Net cash used in operating activities                                           |  |                         | (23,356,322 | ) |                                                  |   | (12,972,280 | ) |  |   | (46,938,638  | )
|                                                                                |  |                         |             |   |                                                  |   |             |   |  |   |              |  
|Cash flows from investing activities:                                           |  |                         |             |   |                                                  |   |             |   |  |   |              |  
|Cash balances at closing of December 2004 merger                                |  |                         |            |   |                                                  |   |            |   |  |   | 1,932,406    |  
|Purchase of short-term investments                                              |  |                         | (24,692,213 | ) |                                                  |   | (56,710,394 | ) |  |   | (101,527,411 | )
|Maturities of short-term investments                                            |  |                         | 66,955,932  |   |                                                  |   | 22,775,623  |   |  |   | 101,606,006  |  
|Purchase of long-term and restricted investments                                |  |                         | (575,000    | ) |                                                  |   |            |   |  |   | (575,000     | )
|Purchase of property and equipment                                              |  |                         | (758,217    | ) |                                                  |   |            |   |  |   | (766,980     | )
|Purchase of intellectual property                                               |  |                         |            |   |                                                  |   |            |   |  |   | (225,000     | )
|                                                                                |  |                         |             |   |                                                  |   |             |   |  |   |              |  
|Net cash provided by (used in) investing activities                             |  |                         | 40,930,502  |   |                                                  |   | (33,934,771 | ) |  |   | 444,021      |  
|                                                                                |  |                         |             |   |                                                  |   |             |   |  |   |              |  
|Cash flows from financing actitivies:                                           |  |                         |             |   |                                                  |   |             |   |  |   |              |  
|Issuance of Series B preferred stock                                            |  |                         |            |   |                                                  |   |            |   |  |   | 1,800        |  
|Issuance of convertible notes:                                                  |  |                         |             |   |                                                  |   |             |   |  |   |              |  
|To related party                                                                |  |                         |            |   |                                                  |   |            |   |  |   | 1,250,000    |  
|To other party                                                                  |  |                         |            |   |                                                  |   |            |   |  |   | 600,000      |  
|Principal repayment on notes held by related party                              |  |                         |            |   |                                                  |   |            |   |  |   | (595,861     | )
|Issuance of common stock                                                        |  |                         | 21,250,000  |   |                                                  |   | 50,249,990  |   |  |   | 92,653,185   |  
|Offering costs paid in cash                                                     |  |                         | (451,290    | ) |                                                  |   | (3,498,533  | ) |  |   | (4,639,050   | )
|Class B warrant exercises                                                       |  |                         |            |   |                                                  |   |            |   |  |   | 25,413       |  
|Stock option exercises                                                          |  |                         | 236,312     |   |                                                  |   | 220,937     |   |  |   | 457,609      |  
|                                                                                |  |                         |             |   |                                                  |   |             |   |  |   |              |  
|Net cash provided by financing activities                                       |  |                         | 21,035,022  |   |                                                  |   | 46,972,394  |   |  |   | 89,753,096   |  
|                                                                                |  |                         |             |   |                                                  |   |             |   |  |   |              |  
|Net increase in cash                                                            |  |                         | 38,609,202  |   |                                                  |   | 65,343      |   |  |   | 43,258,479   |  
|Cash and cash equivalents at beginning of period                                |  |                         | 4,649,277   |   |                                                  |   | 4,583,934   |   |  |   |             |  
|                                                                                |  |                         |             |   |                                                  |   |             |   |  |   |              |  
|Cash and cash equivalents at end of period                                      |  | $                       | 43,258,479  |   |                                                  | $ | 4,649,277   |   |  | $ | 43,258,479   |  
|                                                                                |  |                         |             |   |                                                  |   |             |   |  |   |              |  
|Cash paid for interest to related party                                         |  | $                       |            |   |                                                  | $ |            |   |  | $ | 26,859       |  
|Supplemental schedule of non-cash investing and financing activities:*          |  |                         |             |   |                                                  |   |             |   |  |   |              |  
|Shares issued for conversion of convertible notes (including accrued interest): |  |                         |             |   |                                                  |   |             |   |  |   |              |  
|To related party                                                                |  |                         |            |   |                                                  |   |            |   |  |   | 688,955      |  
|To other party                                                                  |  |                         |            |   |                                                  |   |            |   |  |   | 610,776      |  
|Shares issued for placement agent services in the December 2004 financing       |  |                         |            |   |                                                  |   |            |   |  |   | 969,834      |  
|Warrants issued for placement agent services in the December 2004 financing     |  |                         |            |   |                                                  |   |            |   |  |   | 633,149      |  



|* | During the year ended December 31, 2007 and 2006, warrants for 26,835 and 485,677 shares of common stock, respectively, were exercised on a cashless basis in exchange for
24,020 and 364,839 shares of common stock, respectively.
|- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

SEE ACCOMPANYING NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.



37



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##### Table of Contents

MEDIVATION, INC.

(A DEVELOPMENT STAGE COMPANY)

CONSOLIDATED STATEMENTS OF STOCKHOLDERS EQUITY

INCEPTION (SEPTEMBER 4,
2003) TO DECEMBER 31, 2007



|                                                        |  |              |  |                          |         |  |                                              |             |   |                          |   |             |   |  |   |             |  
|------------------------------------------------------- |  | ------------ |  | ------------------------ | ------- |  | -------------------------------------------- | ----------- | - | ------------------------ | - | ----------- | - |  | - | ----------- | -
|                                                        |  | COMMON STOCK |  | ADDITIONALPAID-INCAPITAL |         |  | DEFICITACCUMULATEDDURING THEDEVELOPMENTSTAGE |             |   | TOTALSTOCKHOLDERSEQUITY |  
|                                                        |  | SHARES       |  | AMOUNT                   |         |  |                                             
|Balances at inception (September 4, 2003)               |  |             |  | $                        |        |  | $                                            |            |   |                          | $ |            |   |  | $ |            |  
|Net loss                                                |  |             |  |                          |        |  |                                              |            |   |                          |   | (401,449    | ) |  |   | (401,449    | )
|                                                        |  |              |  |                          |         |  |                                              |             |   |                          |   |             |   |  |   |             |  
|Balances at December 31, 2003                           |  |             |  |                          |        |  |                                              |            |   |                          | $ | (401,449    | ) |  | $ | (401,449    | )
|                                                        |  |              |  |                          |         |  |                                              |             |   |                          |   |             |   |  |   |             |  
|Common stock issued for:                                |  |              |  |                          |         |  |                                              |             |   |                          |   |             |   |  |   |             |  
|Cash in the December 2004 financing                     |  | 6,903,399    |  |                          | 69,034  |  |                                              | 10,631,236  |   |                          |   |            |   |  |   | 10,700,270  |  
|Debt conversion in the December 2004 financing:         |  |              |  |                          |         |  |                                              |             |   |                          |   |             |   |  |   |             |  
|To related party                                        |  | 444,487      |  |                          | 4,445   |  |                                              | 684,509     |   |                          |   |            |   |  |   | 688,954     |  
|To other party                                          |  | 394,049      |  |                          | 3,940   |  |                                              | 606,836     |   |                          |   |            |   |  |   | 610,776     |  
|Placement agent services in the December 2004 financing |  | 625,699      |  |                          | 6,257   |  |                                              | 963,577     |   |                          |   |            |   |  |   | 969,834     |  
|Offering expenses                                       |  |             |  |                          |        |  |                                              | (1,602,981  | ) |                          |   |            |   |  |   | (1,602,981  | )
|Warrants issued to related party guarantors             |  |             |  |                          |        |  |                                              | 17,505      |   |                          |   |            |   |  |   | 17,505      |  
|Stock-based compensation expense                        |  |             |  |                          |        |  |                                              | 109,265     |   |                          |   |            |   |  |   | 109,265     |  
|December 2004 merger:                                   |  |              |  |                          |         |  |                                              |             |   |                          |   |             |   |  |   |             |  
|Elimination of retained earnings                        |  |             |  |                          |        |  |                                              | (422,120    | ) |                          |   |            |   |  |   | (422,120    | )
|Common stock outstanding before December 2004 merger    |  | 1,213,507    |  |                          | 12,135  |  |                                              | 2,282,231   |   |                          |   |            |   |  |   | 2,294,366   |  
|Net loss                                                |  |             |  |                          |        |  |                                              |            |   |                          |   | (2,874,147  | ) |  |   | (2,874,147  | )
|                                                        |  |              |  |                          |         |  |                                              |             |   |                          |   |             |   |  |   |             |  
|Balances at December 31, 2004                           |  | 9,581,141    |  | $                        | 95,811  |  | $                                            | 13,270,058  |   |                          | $ | (3,275,596  | ) |  |   | 10,090,273  |  
|                                                        |  |              |  |                          |         |  |                                              |             |   |                          |   |             |   |  |   |             |  
|Common stock issued for:                                |  |              |  |                          |         |  |                                              |             |   |                          |   |             |   |  |   |             |  
|Conversion of Series B preferred stock                  |  | 6,638,490    |  |                          | 66,385  |  |                                              | (63,685     | ) |                          |   |            |   |  |   | 2,700       |  
|Cash in the December 2005 financing                     |  | 5,635,000    |  |                          | 56,350  |  |                                              | 10,396,575  |   |                          |   |            |   |  |   | 10,452,925  |  
|Cash upon exercise of Class B warrants                  |  | 203,300      |  |                          | 2,033   |  |                                              | 23,379      |   |                          |   |            |   |  |   | 25,412      |  
|Cash upon exercise of stock options                     |  | 17,980       |  |                          | 180     |  |                                              | 180         |   |                          |   |            |   |  |   | 360         |  
|Offering expenses                                       |  |             |  |                          |        |  |                                              | (689,227    | ) |                          |   |            |   |  |   | (689,227    | )
|Stock-based compensation expense                        |  |             |  |                          |        |  |                                              | 1,113,235   |   |                          |   |            |   |  |   | 1,113,235   |  
|Reclassification of warrant liability to equity         |  |             |  |                          |        |  |                                              | 633,149     |   |                          |   |            |   |  |   | 633,149     |  
|Adjustments related to December 2004 merger             |  |             |  |                          |        |  |                                              | 3,569       |   |                          |   |             |   |  |   | 3,569       |  
|Net loss                                                |  |             |  |                          |        |  |                                              |            |   |                          |   | (9,817,567  | ) |  |   | (9,817,567  | )
|                                                        |  |              |  |                          |         |  |                                              |             |   |                          |   |             |   |  |   |             |  
|Balances at December 31, 2005                           |  | 22,075,911   |  | $                        | 220,759 |  | $                                            | 24,687,233  |   |                          | $ | (13,093,163 | ) |  | $ | 11,814,829  |  
|                                                        |  |              |  |                          |         |  |                                              |             |   |                          |   |             |   |  |   |             |  
|Common stock issued for:                                |  |              |  |                          |         |  |                                              |             |   |                          |   |             |   |  |   |             |  
|Cash in the May 2006 financing                          |  | 3,000,000    |  |                          | 30,000  |  |                                              | 14,220,000  |   |                          |   |            |   |  |   | 14,250,000  |  
|Cash in the December 2006 financing                     |  | 2,215,384    |  |                          | 22,154  |  |                                              | 35,977,836  |   |                          |   |            |   |  |   | 35,999,990  |  
|Cashless exercise of warrants                           |  | 364,838      |  |                          | 3,648   |  |                                              | (3,648      | ) |                          |   |            |   |  |   |            |  
|Cash upon exercise of stock options                     |  | 67,399       |  |                          | 674     |  |                                              | 220,263     |   |                          |   |            |   |  |   | 220,937     |  
|Offering expenses                                       |  |             |  |                          |        |  |                                              | (3,498,533  | ) |                          |   |            |   |  |   | (3,498,533  | )
|Stock-based compensation expense                        |  |             |  |                          |        |  |                                              | 2,448,853   |   |                          |   |            |   |  |   | 2,448,853   |  
|Net loss                                                |  |             |  |                          |        |  |                                              |            |   |                          |   | (15,363,408 | ) |  |   | (15,363,408 | )
|                                                        |  |              |  |                          |         |  |                                              |             |   |                          |   |             |   |  |   |             |  
|Balances at December 31, 2006                           |  | 27,723,532   |  | $                        | 277,235 |  | $                                            | 74,052,004  |   |                          | $ | (28,456,571 | ) |  | $ | 45,872,668  |  
|                                                        |  |              |  |                          |         |  |                                              |             |   |                          |   |             |   |  |   |             |  
|Common stock issued for:                                |  |              |  |                          |         |  |                                              |             |   |                          |   |             |   |  |   |             |  
|Cash under committed equity line of credit              |  | 1,023,548    |  |                          | 10,235  |  |                                              | 21,239,765  |   |                          |   |            |   |  |   | 21,250,000  |  
|Cashless exercise of warrants                           |  | 24,020       |  |                          | 240     |  |                                              | (240        | ) |                          |   |            |   |  |   |            |  
|Cash upon exercise of stock options                     |  | 66,190       |  |                          | 662     |  |                                              | 235,650     |   |                          |   |            |   |  |   | 236,312     |  
|Offering expenses                                       |  |             |  |                          |        |  |                                              | (451,290    | ) |                          |   |            |   |  |   | (451,290    | )
|Stock-based compensation expense                        |  |             |  |                          |        |  |                                              | 5,893,473   |   |                          |   |            |   |  |   | 5,893,473   |  
|Net loss                                                |  |              |  |                          |         |  |                                              |             |   |                          |   | (31,742,985 | ) |  |   | (31,742,985 | )
|                                                        |  |              |  |                          |         |  |                                              |             |   |                          |   |             |   |  |   |             |  
|Balances at December 31, 2007                           |  | 28,837,290   |  | $                        | 288,372 |  | $                                            | 100,969,362 |   |                          | $ | (60,199,556 | ) |  | $ | 41,058,178  |  
|                                                        |  |              |  |                          |         |  |                                              |             |   |                          |   |             |   |  |   |             |  

SEE ACCOMPANYING NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



38



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##### Table of Contents

MEDIVATION, INC.

(A DEVELOPMENT STAGE COMPANY)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2007

1. DESCRIPTION OF BUSINESS

Medivation, Inc. (the Company or Medivation), together with its operating subsidiaries, is a biopharmaceutical company with small molecule drugs in clinical development to treat three large, unmet medical needsAlzheimers
disease, Huntingtons disease and hormone-refractory prostate cancer. The Companys strategy is to identify promising product candidates, to develop them in a rapid, cost-effective manner, and to seek development and/or commercialization
partners as appropriate to complement its internal efforts.

2. THE MERGER

On December 17, 2004, the Company acquired its operating subsidiary Medivation Neurology, Inc. (MNI) by merger (the Merger). Because the Merger was
accounted for as a reverse merger under generally accepted accounting principles, the consolidated financial statements of the Company for periods prior to December 17, 2004 reflect only the operations of MNI.

3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(a) Basis of
Consolidation

The consolidated financial statements incorporate the accounts of Medivation and its operating subsidiaries. All
significant inter-company transactions have been eliminated in consolidation.

(b) Development Stage Company

For the period from inception (September 4, 2003) to date, the Companys operations have been directed primarily toward developing its proprietary
product candidates. Accordingly, the Company is considered to be in the development stage.

The Company has not generated any revenue from
operations to date, and does not expect to generate any revenue for several years, if ever. The Company has incurred cumulative net losses of $60,199,556 through December 31, 2007, and expects to incur substantial and increasing additional
losses in the future as it expands its research and development activities. In particular, the Company expects total operating expenses to continue to increase significantly beyond 2007 levels. All of the Companys operations to date have been
funded through the sale of its debt and equity securities, and the Company expects this to continue to be the case for the foreseeable future.

As of December 31, 2007, the Company had cash, cash equivalents, prepaid expenses and other current assets of $44,249,388, accounts payable and other current liabilities of $4,034,772, and no long-term debt. The Company expects that
its current resources, including the remaining capacity under its committed equity line of credit facility with Azimuth Opportunity, Ltd., will be sufficient to fund the presently budgeted costs of executing its development plan through
December 31, 2008. However, this statement is subject to significant risk and uncertainty, and the Company may require additional financing sooner than expected for any of a number of reasons, including without limitation if it were to incur
significant delays or cost overruns in the execution of its development plan or if it were to expand its portfolio to include new product development programs. The Companys ability to raise additional financing on acceptable terms, or at all,
is subject to significant risks, many of which are beyond its control.



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##### Table of Contents

(c) Estimates

The preparation of financial statements in conformity with generally accepted accounting principles requires that management make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Estimates and assumptions principally relate to services performed by third parties but not yet
invoiced, estimates of the fair value and forfeiture rates of stock options issued to employees and consultants, and estimates of the probability and potential magnitude of contingent liabilities. Actual results could differ from those estimates.

(d) Cash Equivalents

The Company
considers all highly liquid investments with a remaining maturity of three months or less at the time of acquisition to be cash equivalents. The Company deposits cash and cash equivalents with high credit quality financial institutions and is
insured to the maximum limitations. The Company and its operating subsidiaries presently maintain checking accounts at Bank of America. Cash and cash equivalents held in these accounts are insured by the Federal Deposit Insurance Corporation up to a
maximum of $100,000. The Company also maintains a brokerage account at Bank of America. Deposits in this account are insured by the Securities Investor Protection Corporation up to a maximum of $500,000 (including cash claims limited to $100,000).

(e) Short-Term Investments

The
Company considers all highly liquid investments with a remaining maturity at the time of acquisition of more than three months but no longer than twelve months to be short-term investments.

(f) Property and Equipment

Property and equipment
purchases are recorded at cost. Repairs and maintenance costs are expensed in the period incurred. Property and equipment is depreciated on a straight-line basis over the estimated useful lives of the assets as follows:



|                                    |  |                                                 
|----------------------------------- |  | ------------------------------------------------
|Description                         |  | Estimated Useful Life                           
|Office equipment and furniture      |  | 3 years                                         
|Software and Computer equipment     |  | 3-5 years                                       
|Laboratory equipment                |  | 5 years                                         
|Leasehold improvements and fixtures |  | Lesser of estimated useful life or life of lease

(g) Intellectual Property

The costs of acquiring intellectual property rights to be used in the research and development process, including licensing fees and milestone payments, are charged to research and development expense as incurred in
situations where the Company has not identified an alternative future use for the acquired rights, and are capitalized in situations where it has identified an alternative future use. Capitalized costs are amortized over the estimated useful life of
the applicable intellectual property right. Legal and other costs of prosecuting and maintaining intellectual property rights are expensed as incurred.

(h) Impairment or Disposal of Long-lived Assets

The Company evaluates its long-lived assets, primarily its intellectual
property, for impairment whenever events or changes in circumstances indicate that the carrying amount of such assets, property and equipment and intangibles may not be recoverable. Recoverability of assets to be held and used is measured by a
comparison of



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##### Table of Contents

the carrying amount of an asset to future undiscounted net cash flows expected to be generated by the asset. If such assets are considered to be impaired,
the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. Assets to be disposed of are reported at the lower of the carrying amount or fair value less cost to sell.

(i) Research and Development

Research
and development costs are charged to expense when incurred. Ongoing projects, such as clinical and preclinical trials, are reviewed each quarter and accrued for based on work completed in the applicable period.

(j) Stock Based Compensation

The Company accounts
for stock-based compensation in accordance with SFAS No. 123R, Share-Based Payment, which requires the Company to record as an expense in its financial statements the fair value of all stock-based compensation awards.

(k) Income Taxes

On January 1, 2007, the
Company adopted Financial Accounting Standards Board (FASB) Interpretation No. 48, Accounting for Uncertainty in Income Taxesan interpretation of FASB Statement No. 109 (FIN 48). There was no impact on the
Companys consolidated financial position, results of operations or cash flows at December 31, 2007 and for the year then ended as a result of implementing FIN 48. At the adoption date of January 1, 2007 and at December 31, 2007,
the Company did not have any unrecognized tax benefits. The Companys practice is to recognize interest and/or penalties related to income tax matters in income tax expense. As of January 1, 2007 and December 31, 2007, the Company had
no accrued interest or penalties. The Company currently has no federal or state tax examinations in progress nor has it had any federal or state tax examinations since its inception. As a result of the Companys net operating loss
carryforwards, all of its tax years are subject to federal and state tax examination.

(l) Net Loss per Common Share

Basic net loss per share is computed by dividing the loss available to common stockholders by the weighted-average number of common shares outstanding.
Diluted net loss per share is computed similarly to basic net loss per share except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential common shares had been issued
and if the additional common shares were dilutive.

The following outstanding potential common shares have been excluded from the
computation of diluted net loss per share for the years ended December 31, 2007 and 2006 because they are antidilutive:



|         |  |                     |  |          
|-------- |  | ------------------- |  | ---------
|         |  | Year ended Dec. 31,
|         |  | 2007                |  | 2006     
|Warrants |  | 321,979             |  | 338,814  
|Options  |  | 3,359,326           |  | 2,211,750
|         |  |                     |  |          
|Total    |  | 3,681,305           |  | 2,550,564
|         |  |                     |  |          



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##### Table of Contents

(m) Recently Issued Accounting Pronouncements

In December 2007, the FASB issued SFAS No. 141 (revised 2007), Business Combinations, or SFAS No. 141R, which replaces SFAS No. 141.
SFAS No. 141R establishes principles and requirements for how an acquirer recognizes and measures in its financial statements the identifiable assets acquired, the liabilities assumed, any non-controlling interest in the acquiree and the
goodwill acquired. SFAS No. 141R also establishes disclosure requirements which will enable users to evaluate the nature and financial effects of the business combination. SFAS No. 141R is effective for business combinations for which the
acquisition date is on or after the beginning of the first annual reporting period beginning on or after December 15, 2008. The Company is currently evaluating the impact that the adoption of SFAS No. 141R will have on its consolidated
financial statements.

In December 2007, the FASB issued SFAS No. 160, Noncontrolling Interests in Consolidated Financial
Statementsan Amendment of Accounting Research Bulletin No. 51, which establishes accounting and reporting standards for ownership interests in subsidiaries held by parties other than the parent, the amount of consolidated net income
attributable to the parent and to the noncontrolling interest, changes in a parents ownership interest and the valuation of retained noncontrolling equity investments when a subsidiary is deconsolidated. SFAS No. 160 also establishes
reporting requirements that provide sufficient disclosures that clearly identify and distinguish between the interests of the parent and the interests of the noncontrolling owners. SFAS No. 160 is effective for fiscal years, and interim periods
within those fiscal years, beginning on or after December 15, 2008. The Company is currently evaluating the impact that the adoption of SFAS No. 160 will have on its consolidated financial statements.

In June 2007, the Emerging Issues Task Force (EITF) issued Issue No. 07-3, Accounting for Nonrefundable Advance Payments for Goods or
Services To Be Used in Future Research and Development Activities (EITF 07-3) which concluded that nonrefundable advance payments for goods or services to be received in the future for use in research and development activities should be
deferred and capitalized. The capitalized amounts should be expensed as the related goods are delivered or services are performed. Such capitalized amounts should be charged to expense if expectations change such that the goods will not be delivered
or services will not be performed. The provisions of EITF 07-3 are effective for new contracts entered into during fiscal years beginning after December 15, 2007. The consensus may not be applied to earlier periods and early adoption is not
permitted. The Company does not expect that the adoption of EITF 07-3 will have a material impact on its financial position and results of operations.

In February 2007, the FASB issued SFAS No. 159, The Fair Value Option for Financial Assets and Financial LiabilitiesIncluding an amendment of FASB Statement No. 115 (SFAS No. 159),
which permits entities to choose to measure many financial instruments and certain other items at fair value that are not currently required to be measured at fair value. SFAS No. 159 is effective for fiscal years beginning after
November 15, 2007. The Company has not yet decided if it will elect to measure these financial instruments and other items at fair value.

In September 2006, the FASB issued Statement of Financial Accounting Standards No. 157, Fair Value Measurements (SFAS No. 157). This standard establishes the framework for measuring fair value and expands the
disclosure requirement for fair value measurements. SFAS No. 157 is effective for fiscal years beginning after November 15, 2007. The Company is currently evaluating the impact of adopting SFAS No. 157 on its financial statements.



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4. PROPERTY AND EQUIPMENT

The components of the Companys property and equipment and related accumulated depreciation and amortization at December 31, 2007 were as follows:



|                                                |  |                   |         |  
|----------------------------------------------- |  | ----------------- | ------- | -
|                                                |  | December 31, 2007 |        
|Furniture and fixtures                          |  | $                 | 31,852  |  
|Leasehold improvements                          |  |                   | 593,830 |  
|Computer equipment and software                 |  |                   | 38,294  |  
|Laboratory equipment                            |  |                   | 94,241  |  
|                                                |  |                   |         |  
|                                                |  |                   | 758,217 |  
|Less: accumulated depreciation and amortization |  |                   | (69,474 | )
|                                                |  |                   |         |  
|                                                |  | $                 | 688,743 |  
|                                                |  |                   |         |  

Depreciation and amortization expense on property and equipment was $69,912 and $1,753 for the
years ended December 31, 2007 and 2006, respectively, and $71,884 for the period from inception (September 4, 2003) to December 31, 2007.

5.
INTELLECTUAL PROPERTY

At December 31, 2007, intellectual property consisted of patents and patent applications acquired from third
parties. This intellectual property is being amortized over periods ranging from 156 months to 248 months. Amortization expense on the Companys intellectual property was $4,412 and $5,377 for the years ended December 31, 2007 and 2006,
respectively, and $24,336 for the period from inception (September 4, 2003) to December 31, 2007. Estimated aggregate amortization expense on the Companys intellectual property is $4,412 per year for each of the five subsequent fiscal
years. In the years ended December 31, 2006 and 2004, the Company wrote off $68,238 and $75,000, respectively, of its historical patent acquisition costs to reflect managements decision to stop work on a patent application that is
unrelated to the Companys ongoing development programs.

6. OTHER NON-CURRENT ASSETS

At December 31, 2007, other non-current assets included a $500,000 restricted account securing a letter of credit in favor of the Companys current
landlord.

7. OTHER NON-CURRENT LIABILITIES

At December 31, 2007, other non-current liabilities included the non-current portion of deferred rent and lease incentives on the Companys current and former offices in the amount of $487,623, which will be amortized over the
remaining terms of the office leases.

8. REDEEMABLE PREFERRED STOCK

The Company is authorized to issue 1,000,000 shares of preferred stock with such designations, voting, and other rights and preferences as may be determined from time to time by the Board of Directors (Board). The
Company has outstanding 110 shares of Series A Redeemable Preferred Stock, which it issued for an aggregate purchase price of $11,000. The Series A Redeemable Preferred Stock is non-voting, does not bear dividends, and is not convertible into common
stock or any other securities of the Company. The Series A Redeemable Preferred Stock is redeemable at any time, at the option of the holders thereof, for a redemption price equal to its original purchase price. No other preferred stock of the
Company is outstanding.



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9. STOCKHOLDERS EQUITY

(a) Common Stock

In May and December 2006, the Company issued 5,215,384 shares of its common stock in registered direct
offerings, raising gross proceeds of $50,249,990. Placement agent, legal, accounting, printing and other costs related to these offerings, in the aggregate amount of $3,498,533 and $5,207, were charged to additional paid-in capital in the years
ended December 31, 2006 and 2007, respectively.

In December 2005, the Company issued 5,635,000 shares of its common stock in an
underwritten public offering, raising net proceeds of $10,452,925. Legal, accounting, printing, travel and other costs related to this offering, in the aggregate amount of $689,227, were charged to additional paid-in capital in the year ended
December 31, 2005.

In December 2004, the Company issued 7,741,935 shares of its common stock in a private placement, 6,903,399 of
which were sold for cash, generating $10,700,270 in gross proceeds. The remaining 838,536 shares were issued in exchange for cancellation of outstanding bridge notes of MNI, in the aggregate amount of $1,299,731. Medivation also issued an aggregate
of 625,699 shares of its common stock to two investment banking firms as partial compensation for placement agent services provided in connection with this offering. The cost of these shares, in the aggregate amount of $969,834, was charged to
additional paid-in capital in the year ended December 31, 2004.

(b) Committed Equity Line of Credit

The Company entered into a committed equity line of credit with Azimuth Opportunity Ltd. (Azimuth) pursuant to a Common Stock Purchase
Agreement dated September 7, 2007. Subject to the conditions set forth in that agreement, Azimuth is committed to purchase up to $100,000,000 of the Companys common stock pursuant to draw down notices that the Company may give to Azimuth
from time to time at the Companys discretion until April 1, 2009. The price of shares sold is determined by reference to the volume weighted average price of the Companys common stock on the Nasdaq Global Market during a ten trading
day pricing period at the time of each draw down notice, less a discount of 4.656.15 percent.

In October 2007, the Company sold
265,431 shares of its common stock to Azimuth under the equity line of credit, raising gross proceeds of $6,000,000. In November 2007, the Company sold 758,117 shares of its common stock to Azimuth under the equity line of credit, raising gross
proceeds of $15,250,000. Placement agent, legal, accounting, printing and other costs related to these offerings, in the aggregate amount of $446,083, were charged to additional paid-in capital in the year ended December 31, 2007. The
Companys remaining financing capacity under the equity line of credit is $78,750,000.

(c) Stock Purchase Rights

All shares of the Companys common stock are subject to stock purchase rights. The rights are exercisable only if a person or group acquires twenty
percent or more of the Companys common stock or announces a tender or exchange offer which would result in ownership of twenty percent or more of the Companys common stock. Following the acquisition of twenty percent or more of the
Companys common stock, the holders of the rights, other than the acquiring person or group, may purchase Medivation common stock at half of its fair market value. In the event of a merger or other acquisition of the Company, the holders of the
rights, other than the acquiring person or group, may purchase shares of the acquiring entity at half of their fair market value. The rights were not exercisable at December 31, 2007.

(d) Medivation Equity Incentive Plan

The Medivation
Amended and Restated 2004 Equity Incentive Award Plan (the Medivation Equity Incentive Plan), which is stockholder-approved, provides for the issuance of options and other stock-based awards, including restricted stock and stock appreciation rights,
covering up to 7,500,000 shares of Medivations



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common stock. Shares issued upon exercise of stock-based awards are new shares that have been reserved for issuance under the plan. The amendment and
restatement of the Medivation Equity Incentive Plan was approved by the Board and by the stockholders in March and May 2007, respectively.

The Medivation Equity Incentive Plan is administered by the Board, or a committee appointed by the Board, which determines recipients and types of awards to be granted, including the number of shares subject to the
awards, the exercise price and the vesting schedule. The term of stock options granted under the Medivation Equity Incentive Plan cannot exceed ten years. Options generally have an exercise price equal to the fair market value of the common stock on
the grant date, and generally vest over a period of four years. The options may contain an early exercise feature, pursuant to which the optionee may exercise the option before it has vested. However, so long as an option remains unvested, all
shares purchased upon early exercise remain subject to repurchase by Medivation at the option exercise price if the optionees service with Medivation terminates. For purposes of the following disclosures, early exercise options are not
considered to have been exercised, or to be exercisable, until this repurchase right has lapsed. To date, the Company has not issued any shares upon early exercise of stock options. In addition, all outstanding awards under the Medivation Equity
Incentive Plan will accelerate and become immediately exercisable upon a change of control of Medivation, as defined in the Medivation Equity Incentive Plan.

At December 31, 2007, the total outstanding, and the total exercisable, options under the Medivation Equity Incentive Plan were as follows:



|                          |  |                                   |  |                                |       |                                           |           |                          |   |           
|------------------------- |  | --------------------------------- |  | ------------------------------ | ----- | ----------------------------------------- | --------- | ------------------------ | - | ----------
|                          |  | NumberOutstanding atDec. 31, 2007 |  | Weighted-AverageExercise Price |       | Weighted-AverageRemainingContractual Term |           | AggregateIntrinsic Value
|Total outstanding options |  | 3,359,326                         |  | $                              | 10.10 |                                           | 8.4 years |                          | $ | 14,430,360
|Total exercisable options |  | 1,210,685                         |  | $                              | 3.43  |                                           | 7.4 years |                          | $ | 13,286,684

A summary of the stock option activity under the Medivation Equity Incentive Plan during the year
ended December 31, 2007 is presented below.



|                                 |  |                          |  |                                |      
|-------------------------------- |  | ------------------------ |  | ------------------------------ | -----
|                                 |  | Year Ended Dec. 31, 2007
|                                 |  | Number ofOptions         |  | Weighted-AverageExercise Price
|Outstanding at beginning of year |  | 2,211,750                |  | $                              | 4.53 
|Granted                          |  | 1,309,566                |  | $                              | 19.83
|Exercised                        |  | 66,190                   |  | $                              | 3.57 
|Forfeited                        |  | 95,800                   |  | $                              | 18.90
|Outstanding at end of year       |  | 3,359,326                |  | $                              | 10.10

The weighted-average grant-date fair value of options granted during the years ended
December 31, 2007 and 2006, and during the period from inception (September 4, 2003) to December 31, 2007, was $11.78 per share, $4.85 per share and $6.02 per share, respectively. Further information regarding the value of options
vested and exercised during the years ended December 31, 2007 and 2006, and during the period from inception (September 4, 2003) to December 31, 2007, is set forth below.



|                                                   |  |                         |           |                         |   |                                         |  |   |          
|-------------------------------------------------- |  | ----------------------- | --------- | ----------------------- | - | --------------------------------------- |  | - | ---------
|                                                   |  | Year EndedDec. 31, 2007 |           | Year EndedDec. 31, 2006 |   | Inception(Sep. 4, 2003) toDec. 31, 2007
|Fair value of options vested during period         |  | $                       | 3,915,872 |                         | $ | 3,674,426                               |  | $ | 8,110,299
|Intrinsic value of options exercised during period |  | $                       | 914,524   |                         | $ | 654,431                                 |  | $ | 1,622,535

(e) Warrants

At December 31, 2007, warrants to purchase an aggregate of 321,979 shares of Medivation common stock at a weighted average exercise price of $1.93 per share were outstanding. These outstanding warrants expire
between 2009 and 2017.



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(f) Stock-Based Compensation

Medivation estimates the fair value of stock options and warrants using the Black-Scholes option valuation model. Estimated volatility is based on the historical stock price volatility of Medivations common
stock, the historical stock price volatility of comparable companies common stock and, beginning in the third quarter of 2007, the implied volatility of Medivations common stock inherent in the market prices of publicly traded options in
Medivations common stock. The Company presently weights historical volatility more heavily than implied volatility because options on Medivations common stock began trading publicly only in the second quarter of 2007. Estimated dividend
yield is 0%. The risk-free rate is estimated to equal U.S. Treasury security rates for the applicable terms. As of December 31, 2007, less than five percent of the options issued by the Company since inception had been exercised. Given this limited
exercise history, beginning in the third quarter of 2006 the Company has used the simplified method of estimating option term provided for in Staff Accounting Bulletins 107 and 110 for all options granted to employees and directors, which results in
an estimated option term of six years. For consultant options, the Company since inception has used an estimated option term of four years, which is equal to the period required for the options to vest in full. As it gathers more history regarding
its option exercise pattern, and as information regarding the option exercise pattern of other public companies in its industry becomes publicly available, the Company will review these estimates and revise them as appropriate.

The Black-Scholes assumptions used in the years ended December 31, 2007 and 2006 for employee, director and consultant options are as follows:



|                                     |  |                             |   |  |                             |  
|------------------------------------ |  | --------------------------- | - |  | --------------------------- | -
|                                     |  | Year EndedDecember 31, 2007 |   |  | Year EndedDecember 31, 2006 |  
|Expected volatility                  |  | 5484                       | % |  | 5584                       | %
|Weighted-average expected volatility |  | 61                          | % |  | 69                          | %
|Expected dividends                   |  | 0                           | % |  | 0                           | %
|Expected term (in years)             |  | 0.510.0                    |   |  | 1.510.0                    |  
|Risk-free rate                       |  | 3.74.8                     | % |  | 4.55.1                     | %

Options and warrants granted to employees and directors are valued at their respective grant dates
and expensed over the remaining vesting period of the award. Options and warrants granted to consultants are valued at their respective measurement dates, and recognized as expense based on the portion of the total consulting services provided
during the applicable period. As further consulting services are provided in future periods, Medivation will revalue the associated awards and recognize additional expense based on their then-current fair values.

Total stock-based compensation recognized by the Company in the years ended December 31, 2007 and 2006, and the period from inception (September 4,
2003) to December 31, 2007, all of which relates to stock options and warrants, is as follows:



|                                       |  |                          |           |                                                  |   |           |  |   |          
|-------------------------------------- |  | ------------------------ | --------- | ------------------------------------------------ | - | --------- |  | - | ---------
|                                       |  | Years ended December 31, |           | Inception(September 4, 2003) toDecember 31, 2007
|                                       |  | 2007                     |           | 2006                                             |  
|Income statement line item:            |  |                          |           |                                                  |   |           |  |   |          
|General and administrative:            |  |                          |           |                                                  |   |           |  |   |          
|Payroll                                |  | $                        | 1,258,601 |                                                  | $ | 265,127   |  | $ | 1,634,512
|Consulting and other professional fees |  |                          | 2,546,800 |                                                  |   | 1,158,442 |  |   | 4,265,921
|Research and development:              |  |                          |           |                                                  |   |           |  |   |          
|Payroll                                |  |                          | 1,541,645 |                                                  |   | 441,023   |  |   | 2,219,450
|Consulting and other professional fees |  |                          | 546,425   |                                                  |   | 584,261   |  |   | 1,444,945
|                                       |  |                          |           |                                                  |   |           |  |   |          
|Total                                  |  | $                        | 5,893,473 |                                                  | $ | 2,448,853 |  | $ | 9,564,827
|                                       |  |                          |           |                                                  |   |           |  |   |          



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Stock-based compensation attributable to employee and director awards was $2,800,247 and $706,150 in the
years ended December 31, 2007 and 2006, respectively, and $3,853,963 in the period from inception (September 4, 2003) to December 31, 2007. Stock-based compensation attributable to consultant awards was $3,093,226 and $1,742,703 in the
years ended December 31, 2007 and 2006, respectively, and $5,710,864 in the period from inception (September 4, 2003) to December 31, 2007.

Unearned stock-based compensation attributable to employee and director awards totaled $15,891,384 at December 31, 2007 and will be recognized as expense over a weighted-average period of 3.1 years.

(g) Presentation of Unearned Employee Stock Compensation

Prior to the first quarter of 2007, the Company presented unearned stock-based compensation attributable to employee and director awards both within the stockholders equity section of the balance sheet (as deferred compensation, with
an offsetting entry to additional paid-in capital) and in the financial statement footnotes. In the first quarter of 2007, the Company concluded that a more appropriate interpretation of SFAS No. 123R is that unearned stock-based compensation
attributable to employee and director awards be presented only in the financial statement footnotes and not within the stockholders equity section of the balance sheet. Accordingly, the Company has revised its deferred compensation and
additional paid-in capital accounts at December 31, 2006 and 2005 as follows:



|                           |  |                     |            |   |      |   |            |  
|-------------------------- |  | ------------------- | ---------- | - | ---- | - | ---------- | -
|                           |  | Year ended Dec. 31, |           
|                           |  | 2006                |            |   | 2005 |  
|Deferred compensation      |  |                     |            |   |      |   |            |  
|as previously reported     |  | $                   | (4,813,229 | ) |      | $ | (1,757,366 | )
|as revised                 |  | $                   |           |   |      | $ |           |  
|Additional paid-in capital |  |                     |            |   |      |   |            |  
|as previously reported     |  | $                   | 78,865,233 |   |      | $ | 26,444,599 |  
|as revised                 |  | $                   | 74,052,004 |   |      | $ | 24,687,233 |  

The revision does not affect the Companys previously reported statement of operations,
statement of cash flows, assets, liabilities, total stockholders equity or unearned stock-based compensation for any period.

10. THIRD PARTY
EQUITY INTERESTS IN OPERATING SUBSIDIARIES

(a) Medivation Neurology, Inc.

At December 31, 2007, Medivation owned all of the issued and outstanding stock of its operating subsidiary Medivation Neurology, Inc. (MNI), and
there were no outstanding options, warrants or any other third party rights to acquire any MNI stock.

(b) Medivation Prostate Therapeutics, Inc.

At December 31, 2007, Medivation owned all 16,062,088 shares of the issued and outstanding stock of its operating subsidiary
Medivation Prostate Therapeutics, Inc. (MPT), and is entitled to receive one additional share for each dollar that Medivation invests, directly or indirectly, in MPT. MPT has reserved an aggregate of 3,000,000 shares of its common stock for issuance
upon the exercise of awards granted under the Medivation Prostate Therapeutics, Inc. Equity Incentive Plan (the MPT Equity Incentive Plan). At December 31, 2007, one option was outstanding under the MPT Equity Incentive Plan. This option, which
was issued to the licensor of MPTs MDV300 series technology, is exercisable without cash payment for 150,000 shares of MPT common stock, but vests and becomes exercisable only upon the occurrence of specified MPT liquidity events including a
sale of MPT, a public offering of MPTs common stock, a corporate partnership involving MPT, or receipt of regulatory approval to market any MPT product. In accordance with Emerging Issues Task Force (EITF) Issue No. 96-18,
Accounting for Equity Instruments That Are Issued to Other Than Employees for Acquiring, or in Conjunction with Selling, Goods or Services, no expense will be recognized with respect to this option unless and until such a liquidity event
occurs.



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11. LIQUIDATED DAMAGES TO RELATED AND OTHER PARTIES

In the year ended December 31, 2005, the Company recorded aggregate liquidated damages of $1,610,430 to investors in its 2004 private placement as a
result of the inability to register by an agreed-upon date certain shares sold in that offering. Of this amount, $1,102,530 pertains to related party investors, and $507,900 pertains to other investors. The formulas used to calculate the amounts
payable to related party investors and to other investors were identical. Medivation paid $1,337,931 of this amount in the year ended December 31, 2005, and the remaining $272,499 in the year ended December 31, 2006.

12. CONVERTIBLE NOTE TRANSACTIONS WITH RELATED PARTY

In October 2003 and April 2004, the Companys subsidiary MNI received bridge loans from a related party in the aggregate principal amount of $1,250,000. Principal plus accrued interest on these loans in the amount of $688,955
was converted into Medivation common stock in the 2004 private placement. The remaining outstanding principal plus accrued interest of $622,720 was repaid in December 2004.

13. INCOME TAXES

The components of net deferred tax assets and liabilities as of December 31, 2007
consisted of the following:



|                                     |  |   |             |  
|------------------------------------ |  | - | ----------- | -
|Deferred tax assets                  |  |   |             |  
|Net operating loss carryforward      |  | $ | 21,688,215  |  
|Stock-based compensation             |  |   | 1,386,443   |  
|Depreciation, amortization and other |  |   | 14,510      |  
|Accruals and reserves                |  |   | 220,461     |  
|Research & development credit        |  |   | 691,744     |  
|Less valuation allowance             |  |   | (24,001,373 | )
|                                     |  |   |             |  
|Net deferred tax assets              |  | $ |            |  
|                                     |  |   |             |  

The valuation allowance increased by $12,910,320 and $6,452,772 during the years ended December
31, 2007 and December 31, 2006, respectively. The deferred income tax benefit of the loss carryforward, stock-based compensation, and research credits are the only significant deferred income tax assets of the Company and have been offset by a
valuation allowance since Management does not believe the recoverability of these deferred tax assets during the next fiscal year is more likely than not. Accordingly, a deferred income tax benefit for the year ended December, 31, 2007 has not been
recognized in these financial statements.

At December 31, 2007, the Company had net operating loss carryforwards for federal and state
income tax purposes of approximately $55,096,171 and $55,228,617, respectively. The net operating loss carryforwards begin expiring in 2021 and 2013, respectively.

At December 31, 2007, the Company had research and development credit carry forwards of approximately $408,349 and $429,386 for federal and state income tax purposes, respectively. If not utilized, the federal carry
forward will expire in various amounts beginning in 2026. The California credit can be carried forward indefinitely.

The Tax Reform Act of
1986 limits the use of net operating loss and tax credit carryforwards in certain situations where changes occur in the stock ownership of a company. In the event the Company has had a change in ownership, utilization of the carryforwards could be
restricted.



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Reconciliation of the statutory federal income tax to the Companys effective tax rate follows



|                                                    |  |                         |    |  |       |   
|--------------------------------------------------- |  | ----------------------- | -- |  | ----- | --
|                                                    |  | Year ended December 31, |   
|                                                    |  | 2007                    |    |  | 2006  |   
|Federal tax provision at statutory rate             |  | 34.0                    | %  |  | 34.0  | % 
|State taxes (net of federal benefit)                |  | 5.83                    | %  |  | 6.4   | % 
|Permanent difference due to non-deductible expenses |  | (0.25                   | )% |  |      |   
|Research and development credits                    |  | 1.31                    | %  |  |      |   
|Other                                               |  | (0.22                   | )% |  | 1.6   | % 
|Valuation allowance                                 |  | (40.67                  | )% |  | (42.0 | )%
|                                                    |  |                         |    |  |       |   
|Effective tax rate                                  |  | 0.0                     | %  |  | 0.0   | % 
|                                                    |  |                         |    |  |       |   

In June 2006, the Financial Accounting Standards Board (FASB) issued FASB
Interpretation No. 48, Accounting for Uncertainty in Income Taxes-an Interpretation of FASB Statement No. 109 (FIN No. 48), which clarifies the accounting for uncertainty in income tax positions. This interpretation requires
that the Company recognize in its financial statements the impact of a tax position if that position is more likely than not of being sustained on audit, based on the technical merits of the position. The provisions of FIN No. 48 are effective for
financial statements for fiscal years beginning after December 15, 2006. The cumulative effect of applying the provisions of FIN No. 48, if any, are required to be recorded as an adjustment to accumulated deficit. The Company adopted FIN No. 48
effective January 1, 2007. Upon adoption, there was no adjustment to accumulated deficit as the Company had no unrecognized tax benefits, and there were no accrued interest or penalties related to tax contingencies.

The Company did not have any unrecognized tax benefits or accrued interest and penalties at any time during the year ended December 31, 2007, and does
not anticipate having any unrecognized tax benefits over the next twelve months.

The Company is subject to audit by the IRS and California
Franchise Tax Board for all years since inception.

14. COMMITMENTS AND CONTINGENCIES

The Company has commitments under operating leases for its current and former offices in San Francisco, California, which leases run through August 2012
and April 2011, respectively. In April 2007, the Company provided a $500,000 letter of credit to the landlord of its current office as security. The Companys contingent obligations under the letter of credit are collateralized by a $500,000
restricted account at the issuing financial institution. In September 2007, the Company entered into a sublease of its former office through February 2011. Aggregate future minimum lease payments under the two operating leases net of sublease income
at December 31, 2007 are as follows:



|                                                 |  |   |          
|------------------------------------------------ |  | - | ---------
|Year ending December 31, 2008                    |  | $ | 570,951  
|Year ending December 31, 2009                    |  |   | 593,215  
|Year ending December 31, 2010                    |  |   | 615,479  
|Year ending December 31, 2011                    |  |   | 692,336  
|Year ending December 31, 2012                    |  |   | 396,825  
|                                                 |  |   |          
|Total of future minimum operating lease payments |  | $ | 2,868,806
|                                                 |  |   |          

Rent expense, net of sublease income, for the years ended December 31, 2007, 2006 and in the
period from inception (September 4, 2003) to December 31, 2007 was $372,113, $135,791 and $635,193, respectively. Sublease income was $40,439, $0 and $40,439 for the years ended December 31, 2007, 2006 and in the period from inception
(September 4, 2003) to December 31, 2007 respectively.

The Company has entered into a service agreement regarding a medicinal
chemistry facility pursuant to which it has commitments to purchase a minimum of $1,220,000 and $300,000 of services in the years ending December 31, 2008 and 2009, respectively.



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|Item 8. | Changes In and Disagreements With Accountants on Accounting and Financial Disclosure.
|------- | -------------------------------------------------------------------------------------

None.



|Item 8A(T). | Controls and Procedures.
|----------- | ------------------------

The company maintains
disclosure controls and procedures that are designed to ensure that information required to be disclosed in the companys reports under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the
Commissions rules and forms and that such information is accumulated and communicated to the companys management, including its Chief Executive Officer and Chief Financial Officer, as appropriate, to allow for timely decisions regarding
required disclosure. In designing and evaluating the disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired
control objectives, and management is required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures.

As required by Commission Rule 13a-15(b), the company carried out an evaluation, under the supervision and with the participation of the companys management, including the companys Chief Executive Officer
and the companys Chief Financial Officer, of the effectiveness of the design and operation of the companys disclosure controls and procedures as of the end of the quarter covered by this Report. Based on the foregoing, the companys
Chief Executive Officer and Chief Financial Officer concluded that the companys disclosure controls and procedures were effective at the reasonable assurance level.

There has been no change in the companys internal control over financial reporting during the companys most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect,
the companys internal control over financial reporting.

Managements Annual Report on Internal Control over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting. Internal control
over financial reporting is a process designed by, or under the supervision of, the chief executive officer and chief financial officer and effected by our board of directors, management and other personnel, to provide reasonable assurance regarding
the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.

Our evaluation of internal control over financial reporting includes using the COSO framework, an integrated framework for the evaluation of internal controls issued by the Committee of Sponsoring Organizations of the
Treadway Commission, to identify the risks and control objectives related to the evaluation of our control environment.

Based on our
evaluation under the frameworks described above, our management has concluded that our internal control over financial reporting was effective as of December 31, 2007.

This annual report does not include an attestation report of the companys registered public accounting firm regarding internal control over
financial reporting. Managements report was not subject to attestation requirements by the companys registered public accounting firm pursuant to temporary rules of the Securities and Exchange Commission that permit the company to
provide only managements report in this annual report.

Respectfully,

David T. Hung, President and Chief Executive Officer

C. Patrick Machado, Chief Financial Officer



|Item 8B. | Other Information.
|-------- | ------------------

Not applicable.



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##### Table of Contents

PART III



|Item 9. | Directors, Executive Officers, Promoters, Control Persons and Corporate Governance; Compliance With Section 16(a) of the Exchange Act.
|------- | --------------------------------------------------------------------------------------------------------------------------------------

The information to be provided under the captions Management and Election of Directors, each to be contained in the Definitive
Proxy Statement and required to be disclosed in this Item 9, is hereby incorporated by reference in this Item 9; and the information to be provided under the caption Section 16(a) Beneficial Ownership Reporting Compliance, to
be contained in the Definitive Proxy Statement and required to be disclosed pursuant to Section 16(a) of the Exchange Act, is also hereby incorporated by reference in this Item 9.

We have adopted a written code of business conduct and ethics that applies to our principal executive officer, principal financial officer, principal
accounting officer or controller, or persons serving similar functions. The code of business conduct and ethics is available on our corporate website (www.medivation.com).



|Item 10. | Executive Compensation.
|-------- | -----------------------

The information to be
provided under the caption Compensation of Directors and Executive Officers, to be contained in the Definitive Proxy Statement and required to be disclosed in this Item 10, is hereby incorporated by reference in this Item 10.



|Item 11. | Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.
|-------- | -----------------------------------------------------------------------------------------------

The information to be provided under the captions Equity Compensation Plan Information and Security Ownership of Certain Beneficial
Owners and Management, each to be contained in the Definitive Proxy Statement and required to be disclosed in this Item 11, is hereby incorporated by reference in this Item 11.



|Item 12. | Certain Relationships and Related Transactions, and Director Independence.
|-------- | --------------------------------------------------------------------------

The information to be provided under the caption Certain Relationships and Related Transactions, and Director Independence, to be contained in the Definitive Proxy Statement and required to be disclosed in
this Item 12, is hereby incorporated by reference in this Item 12.



|Item 13. | Exhibits.
|-------- | ---------

Exhibits

Unless otherwise indicated below, the Commission file number to the exhibit is No. 001-32836 for filings made in or after March 2006 and No.
000-20837 for filings made prior to March 2006.



|            |  |                                                                                                                                                                                                                                
|----------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit No. |  | Exhibit Description                                                                                                                                                                                                            
|            | 
|3.1(a)      |  | Amended and Restated Certificate of Incorporation (incorporated by reference to Exhibit 3.1(a) to the Quarterly Report on Form 10-QSB of Medivation, Inc. for the quarter ended June 30, 2005).                                
|            | 
|3.1(b)      |  | Certificate of Amendment of Amended and Restated Certificate of Incorporation (incorporated by reference to Exhibit 3.1(b) to the Quarterly Report on Form 10-QSB of Medivation, Inc. for the
quarter ended June 30, 2005).    
|            | 
|3.1(c)      |  | Certificate of Amendment to the Amended and Restated Certificate of Incorporation (incorporated by reference to Exhibit 3.1(c) to the Quarterly Report on Form 10-QSB of Medivation, Inc. for the
quarter ended June 30, 2005).



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|            |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|----------- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit No. |  | Exhibit Description                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|            | 
|3.1(d)      |  | Certificate of Designations of the Series C Junior Participating Preferred Stock of Medivation, Inc.                                                                                                                                                                                                                                                                                                                                                                                                       
|            | 
|3.2         |  | Bylaws of Medivation, Inc. (formerly Orion Acquisition Corp. II), together with all amendments and restatements thereto (incorporated by reference to Exhibit 3.2 to the Registration Statement on
Form SB-2 of Medivation, Inc. (formerly Orion Acquisition Corp. II) (No. 333-03252)).                                                                                                                                                                                                                   
|            | 
|4.1         |  | Common Stock Certificate (incorporated by reference to Exhibit 4.1 to the Registration Statement on Form SB-2 of Medivation, Inc. (formerly Orion Acquisition Corp. II) (No.
333-03252)).                                                                                                                                                                                                                                                                                                                  
|            | 
|4.2         |  | Rights Agreement, dated as of December 4, 2006, between Medivation, Inc. and American Stock Transfer & Trust Company, as Rights Agent, which includes the form of Certificate of
Designations of the Series C Junior Participating Preferred Stock of Medivation, Inc. as Exhibit A, the form of Right Certificate as Exhibit B and the Summary of Rights to Purchase Preferred Shares as Exhibit C (incorporated by reference to Exhibit
4.1 to the Current Report on Form 8-K filed on December 4, 2006).
|            | 
|10.1        |  | Registration Rights Agreement by and among Orion Acquisition Corp. II and Special Situations Fund III, L.P., Special Situations Cayman Fund, L.P. and Special Situations Private Equity Fund,
L.P., dated as of December 17, 2004 (incorporated by reference to Exhibit 10.3(a) to the Registration Statement on Form SB-2 of Medivation, Inc. (formerly Orion Acquisition Corp. II) (No. 333-122431)).                                                                                                    
|            | 
|10.2(a)     |  | Warrant to purchase Common Stock of Medivation Neurology, Inc. assumed by Orion Acquisition Corp. II issued to Joseph J. Grano, Jr., dated as of June 8, 2004 (incorporated by reference to
Exhibit 10.5(a) to the Registration Statement on Form SB-2 of Medivation, Inc. (formerly Orion Acquisition Corp. II) (No. 333-122431)).                                                                                                                                                                        
|            | 
|10.2(b)     |  | Warrant to purchase Common Stock of Medivation Neurology, Inc. assumed by Orion Acquisition Corp. II issued to Joseph J. Grano, Jr., dated as of August 1, 2004 (incorporated by reference to
Exhibit 10.5(b) to the Registration Statement on Form SB-2 of Medivation, Inc. (formerly Orion Acquisition Corp. II) (No. 333-122431)).                                                                                                                                                                      
|            | 
|10.2(c)     |  | Warrant to purchase Common Stock of Medivation Neurology, Inc. assumed by Orion Acquisition Corp. II issued to Joseph J. Grano, Jr., dated as of September 1, 2004 (incorporated by reference to
Exhibit 10.5(c) to the Registration Statement on Form SB-2 of Medivation, Inc. (formerly Orion Acquisition Corp. II) (No. 333-122431)).                                                                                                                                                                   
|            | 
|10.2(d)     |  | Amendment Agreement by and between Orion Acquisition Corp. II and Joseph J. Grano, Jr., dated as of December 17, 2004 (incorporated by reference to Exhibit 10.5(d) to the Registration
Statement on Form SB-2 of Medivation, Inc. (formerly Orion Acquisition Corp. II) (No. 333-122431)).                                                                                                                                                                                                                
|            | 
|10.3        |  | Warrant to purchase Common Stock of Medivation Neurology, Inc. assumed by Orion Acquisition Corp. II issued to David T. Hung, M.D., dated as of November 16, 2004 (incorporated by reference
to Exhibit 10.6 to the Registration Statement on Form SB-2 of Medivation, Inc. (formerly Orion Acquisition Corp. II) (No. 333-122431)).                                                                                                                                                                       
|            | 
|10.4(a)*    |  | Amended and Restated 2004 Equity Incentive Award Plan.                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|            | 
|10.4(b)*    |  | Form of Stock Option Agreement (incorporated by reference to Exhibit 10.7(b) to the Annual Report on Form 10-KSB of Medivation, Inc. (formerly Orion Acquisition Corp. II) for the year ended
December 31, 2004).                                                                                                                                                                                                                                                                                          
|            | 
|10.4(c)*    |  | Form of Stock Option Agreement (incorporated by reference to Exhibit 10.7(c) to the Annual Report on Form 10-KSB of Medivation, Inc. (formerly Orion Acquisition Corp. II) for the year ended
December 31, 2004).                                                                                                                                                                                                                                                                                          



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|            |  |                                                                                                                                                                                                                                                       
|----------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit No. |  | Exhibit Description                                                                                                                                                                                                                                   
|            | 
|10.5        |  | Form of Subscription Agreement (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed on December 8, 2006).                                                                                                               
|            | 
|10.6        |  | Common Stock Purchase Agreement, dated as of September 7, 2007, by and between Medivation, Inc. and Azimuth Opportunity Ltd. (incorporated by reference to Exhibit 10.1 to Medivation, Inc.s
Current Report on Form 8-K filed on September 10, 2007).
|            | 
|16          |  | Letter from Singer Lewak Greenbaum & Goldstein LLP to the Securities and Exchange Commission (incorporated by reference to Exhibit 16.1 to the Current Report on Form 8-K filed on March
23, 2007).                                                   
|            | 
|21          |  | Subsidiaries of Medivation, Inc.                                                                                                                                                                                                                      
|            | 
|23.1        |  | Consent of Independent Registered Public Accounting Firm.                                                                                                                                                                                             
|            | 
|23.2        |  | Consent of Former Independent Registered Public Accounting Firm.                                                                                                                                                                                      
|            | 
|24          |  | Power of attorney (contained on signature page).                                                                                                                                                                                                      
|            | 
|31.1        |  | Certification pursuant to Rule 13a-14(a)/15d-14(a).                                                                                                                                                                                                   
|            | 
|31.2        |  | Certification pursuant to Rule 13a-14(a)/15d-14(a).                                                                                                                                                                                                   
|            | 
|32.1        |  | Certification of Chief Executive Officer.                                                                                                                                                                                                             
|            | 
|32.2        |  | Certification of Chief Financial Officer.                                                                                                                                                                                                             



|* | Management contract or compensatory plan or arrangement required to be filed as an exhibit to this Annual Report on Form 10-KSB.
|- | --------------------------------------------------------------------------------------------------------------------------------



|Item 14. | Principal Accountant Fees and Services.
|-------- | ---------------------------------------

The
information to be provided under the caption Principal Accountant Fees and Services, to be contained in the Definitive Proxy Statement and required to be disclosed in this Item 14, is hereby incorporated by reference in this
Item 14.



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SIGNATURES

In accordance with Section 13 or 15(d) of the Exchange Act, the registrant caused this Report
to be signed on its behalf by the undersigned, thereunto duly authorized.



MEDIVATION, INC.By:

/s/    C. PATRICK
MACHADOName:

C. Patrick MachadoTitle:

Senior Vice President and Chief Financial OfficerDate:

February 19, 2008


KNOW ALL MEN BY THESE PRESENTS, that we, the undersigned officers and directors of
Medivation, Inc., hereby severally constitute David T. Hung and C. Patrick Machado, and each of them singly, our true and lawful attorneys with full power to them, and each of them singly, to sign for us and in our names in the capacities indicated
below, the Form 10-KSB filed herewith and any and all amendments to said Form 10-KSB, and generally to do all such things in our names and in our capacities as officers and directors to enable Medivation, Inc. to comply with the provisions of the
Securities Exchange Act of 1934, and all requirements of the U.S. Securities and Exchange Commission, hereby ratifying and confirming our signatures as they may be signed by our said attorneys, or any of them, to said Form 10-KSB and any and all
amendments thereto.

In accordance with the Exchange Act, this Report has been signed by the following persons on behalf of the registrant
and in the capacities and on the dates indicated:



|                                                 |  |                                                                                                |  |                  
|------------------------------------------------ |  | ---------------------------------------------------------------------------------------------- |  | -----------------
|/s/    DAVID T. HUNG,
M.D. David T. Hung, M.D.   |  | President, Chief Executive Officer and Director
(Principal Executive Officer)                  |  | February 19, 2008
|                                                 |  |                                                                                               
|/s/    C. PATRICK
MACHADO C. Patrick Machado     |  | Senior Vice President and Chief Financial Officer
(Principal Accounting and Financial Officer) |  | February 19, 2008
|                                                 |  |                                                                                               
|/s/    DANIEL D.
ADAMS Daniel D. Adams           |  | Director                                                                                       |  | February 19, 2008
|                                                 |  |                                                                                               
|/s/    GREGORY H. BAILEY,
M.D. Gregory H. Bailey |  | Director                                                                                       |  | February 19, 2008
|                                                 |  |                                                                                               
|/s/    KIM D.
BLICKENSTAFF Kim D. Blickenstaff   |  | Director                                                                                       |  | February 19, 2008
|                                                 |  |                                                                                               
|/s/    W. ANTHONY
VERNON W. Anthony Vernon       |  | Director                                                                                       |  | February 19, 2008



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EXHIBITS



|            |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|----------- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit No. |  | Exhibit Description                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|            | 
|3.1(a)      |  | Amended and Restated Certificate of Incorporation (incorporated by reference to Exhibit 3.1(a) to the Quarterly Report on Form 10-QSB of Medivation, Inc. for the quarter ended June 30, 2005).                                                                                                                                                                                                                                                                                                            
|            | 
|3.1(b)      |  | Certificate of Amendment of Amended and Restated Certificate of Incorporation (incorporated by reference to Exhibit 3.1(b) to the Quarterly Report on Form 10-QSB of Medivation, Inc. for the
quarter ended June 30, 2005).                                                                                                                                                                                                                                                                                
|            | 
|3.1(c)      |  | Certificate of Amendment to the Amended and Restated Certificate of Incorporation (incorporated by reference to Exhibit 3.1(c) to the Quarterly Report on Form 10-QSB of Medivation, Inc. for the
quarter ended June 30, 2005).                                                                                                                                                                                                                                                                            
|            | 
|3.1(d)      |  | Certificate of Designations of the Series C Junior Participating Preferred Stock of Medivation, Inc.                                                                                                                                                                                                                                                                                                                                                                                                       
|            | 
|3.2         |  | Bylaws of Medivation, Inc.(formerly Orion Acquisition Corp. II), together with all amendments and restatements there to(incorporated by reference to Exhibit 3.2 to the Registration Statement on
Form SB-2 of Medivation, Inc. (formerly Orion Acquisition Corp. II) (No. 333-03252)).                                                                                                                                                                                                                    
|            | 
|4.1         |  | Common Stock Certificate (incorporated by reference to Exhibit 4.1 to the Registration Statement on Form SB-2 of Medivation, Inc. (formerly Orion Acquisition Corp. II) (No.
333-03252)).                                                                                                                                                                                                                                                                                                                  
|            | 
|4.2         |  | Rights Agreement, dated as of December 4, 2006, between Medivation, Inc. and American Stock Transfer & Trust Company, as Rights Agent, which includes the form of Certificate of
Designations of the Series C Junior Participating Preferred Stock of Medivation, Inc. as Exhibit A, the form of Right Certificate as Exhibit B and the Summary of Rights to Purchase Preferred Shares as Exhibit C (incorporated by reference to Exhibit
4.1 to the Current Report on Form 8-K filed on December 4, 2006).
|            | 
|10.1        |  | Registration Rights Agreement by and among Orion Acquisition Corp. II and Special Situations Fund III, L.P., Special Situations Cayman Fund, L.P. and Special Situations Private Equity Fund,
L.P., dated as of December 17, 2004 (incorporated by reference to Exhibit 10.3(a) to the Registration Statement on Form SB-2 of Medivation, Inc. (formerly Orion Acquisition Corp. II) (No. 333-122431)).                                                                                                    
|            | 
|10.2(a)     |  | Warrant to purchase Common Stock of Medivation Neurology, Inc. assumed by Orion Acquisition Corp. II issued to Joseph J. Grano, Jr., dated as of June 8, 2004 (incorporated by reference to
Exhibit 10.5(a) to the Registration Statement on Form SB-2 of Medivation, Inc. (formerly Orion Acquisition Corp. II) (No. 333-122431)).                                                                                                                                                                        
|            | 
|10.2(b)     |  | Warrant to purchase Common Stock of Medivation Neurology, Inc. assumed by Orion Acquisition Corp. II issued to Joseph J. Grano, Jr., dated as of August 1, 2004 (incorporated by reference to
Exhibit 10.5(b) to the Registration Statement on Form SB-2 of Medivation, Inc. (formerly Orion Acquisition Corp. II) (No. 333-122431)).                                                                                                                                                                      
|            | 
|10.2(c)     |  | Warrant to purchase Common Stock of Medivation Neurology, Inc. assumed by Orion Acquisition Corp. II issued to Joseph J. Grano, Jr., dated as of September 1, 2004 (incorporated by reference to
Exhibit 10.5(c) to the Registration Statement on Form SB-2 of Medivation, Inc. (formerly Orion Acquisition Corp. II) (No. 333-122431)).                                                                                                                                                                   
|            | 
|10.2(d)     |  | Amendment Agreement by and between Orion Acquisition Corp. II and Joseph J. Grano, Jr., dated as of December 17, 2004 (incorporated by reference
to Exhibit 10.5(d) to the Registration Statement on Form SB-2 of Medivation, Inc. (formerly Orion Acquisition Corp. II) (No. 333-122431)).                                                                                                                                                                                                                



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##### Table of Contents

|            |  |                                                                                                                                                                                                                                                                                                                                     
|----------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit No. |  | Exhibit Description                                                                                                                                                                                                                                                                                                                 
|            | 
|10.3        |  | Warrant to purchase Common Stock of Medivation Neurology, Inc. assumed by Orion Acquisition Corp. II issued to David T. Hung, M.D., dated as of November 16, 2004 (incorporated by reference
to Exhibit 10.6 to the Registration Statement on Form SB-2 of Medivation, Inc. (formerly Orion Acquisition Corp. II) (No. 333-122431)).
|            | 
|10.4(a)*    |  | Amended and Restated 2004 Equity Incentive Award Plan.                                                                                                                                                                                                                                                                              
|            | 
|10.4(b)*    |  | Form of Stock Option Agreement (incorporated by reference to Exhibit 10.7(b) to the Annual Report on Form 10-KSB of Medivation, Inc. (formerly Orion Acquisition Corp. II) for the year ended
December 31, 2004).                                                                                                                   
|            | 
|10.4(c)*    |  | Form of Stock Option Agreement (incorporated by reference to Exhibit 10.7(c) to the Annual Report on Form 10-KSB of Medivation, Inc. (formerly Orion Acquisition Corp. II) for the year ended
December 31, 2004).                                                                                                                   
|            | 
|10.5        |  | Form of Subscription Agreement (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed on December 8, 2006).                                                                                                                                                                                             
|            | 
|10.6        |  | Common Stock Purchase Agreement, dated as of September 7, 2007, by and between Medivation, Inc. and Azimuth Opportunity Ltd. (incorporated by reference to Exhibit 10.1 to Medivation, Inc.s
Current Report on Form 8-K filed on September 10, 2007).                                                                              
|            | 
|16          |  | Letter from Singer Lewak Greenbaum & Goldstein LLP to the Securities and Exchange Commission (incorporated by reference to Exhibit 16.1 to the Current Report on Form 8-K filed on March
23, 2007).                                                                                                                                 
|            | 
|21          |  | Subsidiaries of Medivation, Inc.                                                                                                                                                                                                                                                                                                    
|            | 
|23.1        |  | Consent of Independent Registered Public Accounting Firm.                                                                                                                                                                                                                                                                           
|            | 
|23.2        |  | Consent of Former Independent Registered Public Accounting Firm.                                                                                                                                                                                                                                                                    
|            | 
|24          |  | Power of attorney (contained on signature page).                                                                                                                                                                                                                                                                                    
|            | 
|31.1        |  | Certification pursuant to Rule 13a-14(a)/15d-14(a).                                                                                                                                                                                                                                                                                 
|            | 
|31.2        |  | Certification pursuant to Rule 13a-14(a)/15d-14(a).                                                                                                                                                                                                                                                                                 
|            | 
|32.1        |  | Certification of Chief Executive Officer.                                                                                                                                                                                                                                                                                           
|            | 
|32.2        |  | Certification of Chief Financial Officer.                                                                                                                                                                                                                                                                                           



|* | Management contract or compensatory plan or arrangement required to be filed as an exhibit to this Annual Report on Form 10-KSB.
|- | --------------------------------------------------------------------------------------------------------------------------------