After a disappointing 2012 that was defined for Dendreon (NASDAQ:DNDN) and its investors by several missed benchmarks, 2013 saw the stock reach the remarkable achievement of having 35.4% of its float sold short. Now as 2014 begins to kick into full gear, many investors are wondering if public sentiment will ever turn around for this much-maligned stock.
In this video, Fool health care analysts David Williamson and Max Macaluso sit down and take a look at the future of Dendreon. David notes that much of the overoptimism and subsequent fall of public opinion around the stock had to do with the reality that the launch of its prostate cancer vaccine Provenge was ultimately flawed. Management credits competition from Johnson & Johnson's (NYSE:JNJ) Zytiga as being stronger than anticipated and damaging sales; David also mentions that Medivation's (NASDAQ:MDVN) Xtandi is a strong second-line treatment that should soon be a competitor in the first-line treatment space as well.
While the company does have a couple other strategies to employ here, it's running out of time. David looks at the company's balance sheet and highlights the fact that at the company's current spending rate, it won't even make it through 2014 without some sort of capital raise, which will be dilutive for shareholders. David closes by discussing what would have to happen for the heavy short position on this stock to change.
David Williamson owns shares of Johnson & Johnson. Follow David on Twitter: @MotleyDavid. Fool contributor Max Macaluso has no position in any stocks mentioned. The Motley Fool recommends Johnson & Johnson. The Motley Fool owns shares of Johnson & Johnson. 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 Motley Fool has a disclosure policy.