2-Star Stocks Poised to Plunge: Dendreon?

Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, biotechnology company Dendreon (Nasdaq: DNDN  ) has received a distressing two-star ranking.

With that in mind, let's take a closer look at Dendreon's business and see what CAPS investors are saying about the stock right now.

Dendreon facts

Headquarters (founded) Seattle (1992)
Market Cap $1.1 billion
Industry Biotechnology
Trailing-12-Month Revenue $396.7 million
Management CEO John Johnson (since February 2012)
CFO Gregory Schiffman (since December 2006)
Return on Capital (average, past 3 years) (24.7%)
Cash/Debt $497.5 million / $573.8 million
Competitors Northwest Biotherapeutics
Progenics Pharmaceuticals
Sanofi

Sources: S&P Capital IQ and Motley Fool CAPS.

On CAPS, 17% of the 1,623 members who have rated Dendreon believe the stock will underperform the S&P 500 going forward.

Just yesterday, one of those Fools, All-Star TSIF, succinctly summed up the bear case for our community:

I can't find any fundamentals that would suggest Dendreon share price should increase from here. Although it's Provenge is a worthy achievement, as expected it couldn't productize it and it never got the buyout it sought. One trick pony with a drug that's expensive, difficult to manufacture and difficult to get doctors to prescribe. Burn rate continues with no end in sight.

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Fool contributor Brian Pacampara owns no position in any of the companies mentioned. The Fool owns shares of Dendreon. 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 Fool's disclosure policy always gets a perfect score.


Read/Post Comments (5) | Recommend This Article (7)

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 June 20, 2012, at 11:57 AM, Mulder35 wrote:

    Wow! Your obvious "short" biased against this company is very obvious. One after another with your negative comments to push the price down with no motive behind it? I don't believe you. They've fallen from $42 down to $7 and you see no reason why it should increase at all? Really? With a FDA approved drug that's one of a kind. But you see no reason it could go up from here. Sounds like someone wanting cheap shares to me. When you guys scream "sell" it's time to buy, ALWAYS.

  • Report this Comment On June 20, 2012, at 12:00 PM, gtisabee wrote:

    "I can't find any fundamentals that would suggest Dendreon share price should increase from here. Although it's Provenge is a worthy achievement, as expected it couldn't productize it and it never got the buyout it sought. One trick pony with a drug that's expensive, difficult to manufacture and difficult to get doctors to prescribe. Burn rate continues with no end in sight."

    I would amend this in a couple of significant ways:

    1. They COULD and DID productize it... maybe it hasn't returned the gains promised, but that's a management failure not that they couldn't productize it.

    2. They haven't gotten the buyout they wanted... yet.

    3. Re: one trick pony: you'll want to check your research on that one.

    4. Re: expensive: you'll want to check your research on this one. There is a misconception that the cost is $93K v. $5K. That's simply wrong.

    5. Re: burn rate: with no information on the current quarter, it is hard to provide an accurate estimate on when the first breakeven quarter will be.

  • Report this Comment On June 20, 2012, at 12:09 PM, gtisabee wrote:

    As a PS: I really like your statement:

    "On CAPS, 17% of the 1,623 members who have rated Dendreon believe the stock will underperform the S&P 500 going forward."

    Let me rephrase it for you:

    CAPS, 83% of the 1,623 members who have rated Dendreon believe the stock will not underperform the S&P 500 going forward.

  • Report this Comment On June 20, 2012, at 8:33 PM, kamee73 wrote:

    I have no position in this company but looks like your article is full of ignorance and bias. Not sure how you get so many articles published in so many websites ? SEC should look into your crap as it is illegal.

  • Report this Comment On June 21, 2012, at 11:56 AM, krapbuster wrote:

    Another "Foolish" article slamming Provenge and manipulating DNDN pps so that wall street can finish loading up shares as cheap as possible from scared retail not knowing any better. Provenge still provides best survival data results within PC space.

    Do think Provenge needs ROW player or possible BP acquisition to move to next level.

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