Shares of Dendreon (NASDAQ: DNDN) soared 13% in early trading today after Sanford C. Bernstein upgraded the stock from "market-perform" to "outperform." Even better, Berstein singled out the drug company as potentially one of the top stocks of 2013. 

What it means
Any good news is welcome for long-suffering Dendreon. The stock actually traded above $50 per share back in 2010 after its prostate cancer drug Provenge was approved by the Food and Drug Administration. However, sales for Provenge were much lower than projected. As a result, Dendreon shares dropped more than 90% from its peak. 

Longtime readers of The Motley Fool know that we don't automatically fall into lockstep with analysts' opinions. However, when those opinions are based on solid fundamentals about the company, it pays to listen. Is that the case with Bernstein's upgrade of Dendreon?

Berstein analyst Geoffrey Porges commented that the market for Provenge is improving, despite competition from Medivation's (NASDAQ: MDVN) Xtandi and Johnson & Johnson's (NYSE: JNJ) Zytiga. Interviews with urologists found that they are frequently prescribing a combination of Provenge and Xtandi, according to Porges.

These comments are only anecdotal, but Dendreon's preliminary results for fourth quarter did confirm increased sales for Provenge. However, current growth rates won't allow the company to reach profitability soon.

Foolish take
It's a long shot for Dendreon to get back to its high levels of 2010. However, it doesn't need to do that for investors to achieve big gains. The landscape for Provenge does appear to be improving, although at a slower pace than Dendreon shareholders would prefer.

The good news, though, is that the opportunities for Provenge are still significant, and the stock could be poised to move up as the company capitalizes on these opportunities. Bernstein's upgrade seems to be right on target in my view.

Dendreon's run over the past four years witnessed sub-$5 share prices skyrocket to 10-bagger status before tumbling all the way back down below $5, as its revolutionary prostate cancer vaccine became a lightning rod of debate. But where does that leave investors? Our own David Williamson answers this question, and many more, inside our brand new premium research report on Dendreon. Inside, he details every key issue facing the company and outlines just how Dendreon intends to regain its former glory. The report also comes with a full year of analyst updates, so claim your copy of this exclusive report today by clicking here now.

Fool contributor Keith Speights has no position in any stocks mentioned. The Motley Fool recommends Johnson & Johnson. The Motley Fool owns shares of Dendreon and Johnson & Johnson. Try any of our Foolish newsletter services free for 30 days. We Fools may not 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.