Dendreon (NASDAQ:DNDN) released earnings on Friday, and investors got initially excited, perhaps because the release wasn't the train wreck that previous quarters have been. When a stock has fallen from $40 to $4, expectations change. My Foolish colleague David Williamson has all the details on sales and net loss.

Expectations have turned to a trial testing Provenge with Johnson & Johnson's (NYSE:JNJ) Zytiga in prostate cancer patients. The trial is fully enrolled, with data anticipated next year. Zytiga is expected to gain FDA approval for use earlier in the progression of prostate cancer, so Dendreon needs to persuade doctors to use Provenge in combination with Zytiga rather than choosing one over the other (based on current sales numbers, it seems likely most will choose Zytiga).

The trial  measures immune response in prostate cancer patients given Zytiga concurrent with Provenge compared with waiting six weeks after the last dose of Provenge before starting Zytiga. In the best-case scenario, Zytiga increases the immune response when given concurrently. Immune response is only a surrogate marker for Provenge's working properly, but it'll help Dendreon argue that if doctors are going to give Provenge, they should give Zytia as well, since it's probably increasing efficacy.

Of course, Dendreon really wants to argue the opposite: If you're going to give Zytiga, give Provenge as well. Unfortunately, there's no Zytiga-only arm in the trial, so we won't know how adding Provenge affects Zytiga.

Dendreon is planning a separate study combining Provenge with Medivation (NASDAQ:MDVN) and Astellas Pharma's Xtandi, which looks as if it will eventually top Zytiga as the No. 1 prostate cancer drug. Management indicated that it expects to use similar immunologic endpoints, which will get the data out quickly but won't tell doctors what they really want to know: If Provenge is added to Xtandi, will patients live longer than if they were given just Xtandi?

A trial to answer that question would take much longer and would be considerably more expensive, but it could easily turn Provenge into a multibillion-dollar product if it does indeed improve survival in combination with the top product.

Foolish Bottom Line

Fool contributor Brian Orelli has no positions in the stocks mentioned above. The Motley Fool owns shares of Dendreon and Johnson & Johnson. Motley Fool newsletter services recommend Johnson & Johnson. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.