Why Dendreon Shares Faltered Again

Don't let it get away!

Keep track of the stocks that matter to you.

Help yourself with the Fool's FREE and easy new watchlist service today.

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of Dendreon Corporation (NASDAQOTH: DNDNQ  ) , a biotechnology company focused on developing novel immunotherapeutic cancer solutions, fell as much as 24% after reporting disappoint second-quarter earnings results.

So what: For the quarter, Dendreon delivered $73.3 million in sales, which was 8% below what it reported at this time last year, and a narrower loss of $68.8 million, or $0.45 per share. Wall Street, on the other hand, expected a smaller loss of $0.42 per share and $75.6 million in revenue. The miss here was bad enough to merit downside action in the share price today, but the real pessimism built when Dendreon noted that Provenge, its prostate cancer immunotherapy, wouldn't see year-over-year growth. That's bad news for a drug that's only been on the market a few years and was projected to be a blockbuster in treating metastatic prostate cancer.

Now what: What a mess is all I can say. I selected Dendreon as a turnaround candidate in my One Person's Trash Is Another Person's Treasure portfolio on the premise that it would get Provenge approved in Europe and it'd maintain low double-digit sales gains in the United States. However, increasing competition from Johnson & Johnson's Zytiga and Medivation's Xtandi has halted its progress dead in its tracks. Even if Provenge gets approved in the EU (which it should based on the EMA panel's positive opinion on the drug), it may run into the same pricing concern issues that crippled its sales potential early on in the U.S. For now, Dendreon needs to keep focusing on reducing costs and, I believe, seek out a marketing partner in Europe that'll help launch this product if and when it's approved.

The fleeting expectations of Dendreon are a great reminder that the best investment strategy is to pick great companies and stick with them for the long term. The Motley Fool's free report "3 Stocks That Will Help You Retire Rich" not only shares stocks that could help you build long-term wealth, but also winning strategies that every investor should know. Click here to grab your free copy today.

Read/Post Comments (0) | Recommend This Article (0)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Compare Brokers

Fool Disclosure

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2588978, ~/Articles/ArticleHandler.aspx, 9/30/2016 10:07:43 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated Moments ago Sponsored by:
DOW 18,240.97 97.52 0.54%
S&P 500 2,159.82 8.69 0.40%
NASD 5,285.25 16.10 0.31%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

12/31/1969 7:00 PM
DNDNQ $0.00 Down +0.00 +0.00%
Dendreon Corp CAPS Rating: *