For an example of how to strike when the iron is hot, check biotech cancer treatment developer Dendreon's (NASDAQ:DNDN) press release, issued today, in which the company announced plans to sell 8 million more shares (plus the option of another 1.2 million to cover underwriters' overallotments) to the public.

It was just seven days ago that we covered Dendreon's upbeat Phase III trial news about its Provenge treatment for prostate cancer. That news provided a nice pop for shares of the company, which have outperformed the S&P 500 by a significant margin over the last 12 months. Now the company is taking advantage of its recent run of good fortune by moving to stock its coffers.

By selling 8 million shares at Friday's closing price of $11.29 -- the actual offer price hasn't been set -- Dendreon would raise more than $90 million. That's big money for a company that had $16.1 million in cash on the balance sheet as of Sept. 30 and is losing money. (It had operating cash outflows of nearly $30 million in the first three quarters of 2003.) While Dendreon said in its latest 10-Q report that it had enough money to fund more than two years of operations, it has already filed with the SEC to sell well over $100 million in shares as it sees fit.

Shares of companies that sell (or file to sell) more stock to the public invariably tick downward in the trading hours immediately following their announcement. Investors, understandably, don't like seeing their ownership diluted. But Dendreon hasn't moved much today -- and it's easy to see why.

Dendreon, unprofitable, must look outside its walls for financing. That's something any investor in such developmental companies understands. Last week's news, meanwhile, made today's announcement far more palatable for two reasons: It meant the company is another step closer to returning the faith of its investors, and it meant a better deal (more cash for less stock) for the company.

Check out what Fools are saying on the Dendreon discussion board.

Dave Marino-Nachison can be reached at