Was anyone else staring at Dendreon's (Nasdaq: DNDN ) results in one window yesterday and the stock price in another and thinking something didn't seem right?
Turns out there was some weird trading of Dendreon's shares yesterday afternoon; this was right before trading on the stock was stopped ahead of presentation of the data for the company's prostate fighter, Provenge, at the American Urological Association's annual meeting.
The data looked good. Really good. But the stock was trading down 45% right before trading was stopped for the data presentation.
We already knew Provenge had passed its pivotal phase 3 trial, but the data confirmed that the treatment can get past the FDA and it suggests how well Provenge might sell.
Provenge extended survival by 4.1 months compared to placebo, which should be good enough for approval and fairly robust sales. The current treatment for advanced prostate cancer, sanofi-aventis' (NYSE: SNY ) Taxotere, extends survival by about 2.5 months. In addition to the apparent longer survival, Taxotere is a nasty chemotherapy agent with horrible side effects compared to Provenge, which has relatively minimal side effects.
So what have we learned from yesterday?
- When a CEO describes the data as "unambiguous," that probably means the full data set will look good. There are some CEOs out there that pump up weak data, but clearly Dendreon doesn't have one.
- Put stop losses on stable companies like Johnson & Johnson (NYSE: JNJ ) or Abbott Labs (NYSE: ABT ) if you must, but stop losses can cause a lot of pain on more volatile stocks like Dendreon, Las Vegas Sands (NYSE: LVS ) , and Citigroup (NYSE: C ) .
If you missed getting in on the soap opera or got stopped-out with a cameo, there's still plenty of time to buy Dendreon. The company plans to amend its marketing application in the fourth quarter, which would push a potential FDA approval back until this time next year.