Quarterly earnings reports are usually not the most important events for development-stage drugmakers without any approved products, unless they announce insane strategic moves the way Neurochem (NASDAQ:NRMX) did last week.

In its third-quarter earnings release, Dendreon (NASDAQ:DNDN), thankfully, didn't announce anything as wacky. Dendreon expects to finish the year with $110 million in cash and equivalents.

Now that Dendreon has solved its cash problems and finished enrolling patients in its pivotal phase 3 study for lead drug Provenge, the only news before the second half of 2008 interim results from this study might be the announcement of a marketing partnership.

Dendreon has been looking for a partner to market potential prostate cancer treatment Provenge outside the U.S. for years. At this point, investors should expect any potential partnership deal that may be signed before the final phase 3 results come out in 2010 to have most of its payoffs delayed until Dendreon has proven that Provenge works.

A large deal is not out of the question with the right drugmaker desperately in need of new oncology treatments, like AstraZeneca (NYSE:AZN), but investors shouldn't expect a huge up-front cash payment to Dendreon.

It's more likely that cash from any deal will come in large regulatory and clinical trial milestone payments if, for example, Provenge shows a survival advantage at the end of the study and gets approved. Of course, Dendreon could just choose to wait until after the phase 3 results come out to find a partner if it hasn't found a lucrative deal by then.

Once the interim results of the phase 3 study come out next year in the form of a go to no-go decision by the data monitoring board, then it will be time to see whether shares of Dendreon are a suitable investment. Until then, I'm keeping Dendreon on my Scary Stocks list because of the hefty amount of clinical trial risk.

Looking for more Foolish drug-stock coverage?  Check out the Fool's Rule Breakers newsletter.

Fool contributor Brian Lawler does not own shares of any company mentioned in this article. The Fool has an A+ disclosure policy.