Why Dendreon Shares Surged

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 (NASDAQ: DNDN  ) , a biopharmaceutical company focused on developing cancer immunotherapies, surged as much as 14% after the European Commission approved its advanced prostate cancer immunotherapy, Provenge, for marketing.

So what: This really shouldn't come as a surprise here as the Committee for Medicinal Products for Human Use (the EU's version of our FDA panel) recommended Provenge for marketing approval in late June. The marketing authorization was granted based on a 737-patient late-stage study where median overall survival in the Provenge arm increased 4.1 months relative to the placebo. This approval gives Dendreon the right to sell Provenge in all 28 countries of the EU.

Now what: Now for the real challenge: Will it sell? In the U.S., Provenge sales have been going in reverse in 2013 thanks to tougher metastatic prostate cancer competition and higher costs, which have been difficult for Dendreon to keep under control. With Dendreon cutting jobs and administrative expenses, coupled with this approval, there is hope that Dendreon's cash burn rate will shrink dramatically. However, without a marketing partner or differentiable factor that makes Provenge the go-to medication, it could still be difficult for Dendreon to separate itself from the pack and move toward profitability.

Something to get excited about
Day-traders are certainly having a field day with Dendreon today, but it's been proven time-and-again that nothing beats the best investment strategy which 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 (1) | Recommend This Article (1)

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.

  • Report this Comment On September 18, 2013, at 4:02 PM, ScoopHoop wrote:

    This little bounce is nothing. This company may never reach profitability. Without profits, a company is unsustainable.

Add your comment.

DocumentId: 2641985, ~/Articles/ArticleHandler.aspx, 7/25/2014 3:28:36 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...


Advertisement