Approval? Check. Partner? Not So Much.

The European Commission approved Dendreon's (NASDAQOTH: DNDNQ  ) Provenge on Tuesday .

The approval was pretty much a given. The European Commission acts as a rubber stamp. The real regulators are the European Medicines Agency Committee for Advanced Therapy and the EMA's Committee for Medicinal Products for Human Use, which both gave positive recommendations.

What less certain is Dendreon's plan to sell the drug in the EU; the biotech is still working on a plan.

When Provenge didn't live up to expectations in the U.S. -- a combination of poor marketing and competition from Johnson & Johnson's (NYSE: JNJ  ) Zytiga and Medivation's (NASDAQ: MDVN  ) Xtandi -- Dendreon smartly shifted gears in Europe, electing to use a contract manufacturer rather than building its own manufacturing plant.

Now the big question is who is going to sell Provenge in Europe. Launching the treatment on its own isn't the best idea given Dendreon's dwindling supply of cash. Gross margins early in the launch might be better in Europe when volumes are small since it doesn't have fixed costs associated with owning a plant, but I'd guess it could still take a few years to break even. Even after major cost cutting, Dendreon still isn't cash flow positive from sales in the U.S. after an approval in 2010.

On its quarterly conference call in August, management indicated that it's in talks with potential partners in Europe, but so far, nothing has been announced. Dendreon's backup plan is to launch on its own, likely in just a few countries where it could get positive cash flow relatively quickly.

Pricing is going to be a real challenge in many of the European countries where health care is paid for by the government or prices are highly regulated. The U.K.'s National Institute for Health and Care Excellence, for instance, is notorious for driving a hard bargain to get drugmakers to charge considerably less for the drug than the companies can get in the U.S.

But Dendreon doesn't have much wiggle room on price. Provenge, a cell therapy, is considerably more expensive to make than Zytiga and Xtandi, which are simple pills.

On the plus side, the higher regulation in Europe will likely keep some of the competition at bay. Provenge will mostly only have to compete with Zytiga and not Xtandi in Europe. Both Zytiga and Provenge are approved for use before Sanofi's Taxotere, but Xtandi is only approved as a second line therapy. That's true in the U.S. too, but doctors here are much more likely to prescribe the drug off label than in Europe where reimbursement is tighter.

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