Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
What: Shares of Dendreon (NASDAQ: DNDN), a biotech company that utilizes immunotherapeutic vaccines to treat cancer, soared as much as 14% after reporting additional data on Provenge, its advanced prostate cancer vaccine, at the American Urological Association's annual meeting.
So what: According to Dendreon's press release, while no specific figures were mention, it did note that data collected from its ProACT and IMPACT studies suggest that "Provenge elicits an immune response associated with an overall survival benefit." Dendreon's presentation also includes data from its PROCEED trial which suggests similar treatment patterns for urologists and oncologists for Provenge patients with metastatic castration-resistant prostate cancer. As chief medical officer Andrew Sandler, M.D., noted, "The elevated immune response against prostate-specific antigen in the ProACT and IMPACT studies is correlated with overall survival, and may point to a useful biomarker of treatment benefit."
Now what: The data surrounding Provenge has never been much of a question mark. In essence, we knew that it provided a marked treatment benefit over the placebo in studies. The problem has been Dendreon's inability to capitalize on its product, allowing competitors to easily gain the upper hand within the space. Whether it's Dendreon's lack of a marketing partner, its inexperienced sales force, or the fact that Provenge's $93,000 price tag scares physicians and patients away, or a combination of all three for that matter, the point is that Dendreon's inability to turn a profit could put its long-term survival in question. Dendreon does have additional clinical research under way, but following two restructurings which have included hefty job cuts it doesn't look like the company is still anywhere near profitability on Provenge alone. Until we see Dendreon make significant progress with improving Provenge sales I'd strong suggest keeping your distance.
