Last week, development-stage pharma Dendreon
For 2006, Dendreon burned through $81 million and ended the year with more than $120 million in cash and investments. This should be more than enough to get it through 2007, considering that last year it was spending heavily to build out the manufacturing facility where it will produce the cancer treatment drug Provenge if it gains regulatory approval.
The excitement over Dendreon and Provenge will come to a head on March 29, when an FDA advisory panel will discuss the drug and vote on whether to recommend for or against its marketing approval.
This advisory committee vote is completely nonbinding and is not always indicative on what the FDA's decision will be when the drug's PDUFA review date arrives on May 15. Nonetheless, the advisory panel meeting will give a good indication of how the agency stands in regard to the chance of Provenge being approved and also what its concerns are about the drug.
Expect some volatility in shares of Dendreon before the committee meeting, because the FDA will post any public material that Dendreon and the FDA bring to the panel meeting at least two full business days before the meeting is held.
Don't take the movement in Dendreon's stock price next week as an indicator of whether the panel vote was positive or not. FDA regulatory events are never so black and white.
When a drug is up for marketing approval, even if the FDA gives the go-ahead, it can be a huge negative for a pharmaceutical company if the drug's marketing label is too restrictive, for example. On the flip side, a negative panel vote could also turn out to be a long-run positive for Dendreon if the committee's concerns are benign or can be easily satisfied.
An advisory panel vote is useful to investors, as it's one of the rare times that a window into the FDA's concerns and other thoughts about a drug are discussed openly before a drug is formally approved or rejected. A panel decision in outright favor of approval for Provenge would be the least conservative decision displayed by the FDA since a panel voted in favor of approval for cancer treatment Iressa back in 2002.
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