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What: Shares of oncology-focused biotech company Dendreon (NASDAQ: DNDN) vaulted higher by as much as 32% after reporting third-quarter earnings results.
So what: For the quarter, Dendreon noted a 27% increase in sales of its late-stage prostate cancer treatment, Provenge, to $77.9 million. Dendreon also announced that revenue from community oncologists is leveling off, which is good news. In spite of large one-time costs associated with its restructuring that resulted in a wider loss than expected, it did reduce expenses by 20% and expects to save $150 million annually once its job cuts and restructuring is complete.
Now what: Instead of running out of the gate, Provenge continues to limp. The biggest obstacle remains the treatment's hefty $93,000 price tag, as well as its numerous competitors, including Johnson & Johnson's (NYSE:JNJ) Zytiga and Sanofi's (NASDAQ:SNY) Jevtana (which are both approved in Europe too), as well as the newly FDA-approved Xtandi from Medivation (NASDAQ:MDVN). In order for Dendreon to head higher, it's going to need to gain European approval for Provenge and it'll need more favorable actions from insurers like Aetna (NYSE:AET), which expanded its coverage of Provenge last month. The road is tough, but I feel Dendreon will eventually be successful.
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