In the following video, Fool analysts David Williamson and Austin Smith discuss Dendreon (NASDAQ: DNDN) and some areas investors need to watch.
For health-care investors, Dendreon was one of the most exciting stocks of 2012, and it may be for 2013 as well, Austin says. But the microcap biotech landscape can be pretty tough for individual investors to navigate.
For a one-trick pony like Dendreon, the company's short-, mid-, and long-term hopes all rest on its prostate-cancer treatment, Provenge, David says.
Investors can think of it a bit like a retail company. A company can keep growing by adding stores, but the best measure of success is its same-store sales.
Since the start of 2013, Dendreon has seen sales at its existing sites go from decelerating to declining. That means doctors may not be seeing enough benefit in the drug to keep prescribing it, David says.
Dendreon has also been restructuring after building three plants to make a product for which demand never materialized. It has closed one of those, and investors will want to watch for additional cost-cutting measures in the coming quarters.
And finally, a large debt payment looms in 2016, and it could be a challenge for Dendreon to meet that payment, David says.
