So when the Agency for Health Care Research and Quality (AHRQ) came out with its assessment of the Provenge clinical trials and described the data supporting the evidence for using Provenge as "moderate," that was good enough for a moderate rally. Shares were up more than 5% this morning.
Experts will discuss the pricy prostate cancer treatment at a meeting next Wednesday. The Centers for Medicare & Medicaid Services (CMS) wants to know which patients should get Provenge.
The short answer should be all the patients who are described on the label -- that is, the patients who were enrolled in the clinical trials. Unlike Johnson & Johnson's
My guess is the experts at the meeting next week will follow suit, offering moderate support for on-label use of Provenge and little to no support for off-label use. Dendreon doesn't really need the off-label sales to reach blockbuster status, so that outcome would be perfectly acceptable.
The problem with these meetings, though, is that the answers tend to be mushy. Rather than asking simple yes-no questions, the answers are on a sliding scale, asking for experts' confidence in the data. After the meeting next week, we could have no more certainty about what CMS is going to decide than we have today.
And as we all know, investors hate uncertainty. Don't be surprised if the stock relinquishes some of its gains next week if experts aren't supportive enough.
Jordan DiPietro celebrates the glorious return of the individual investor.
Fool contributor Brian Orelli, Ph.D., doesn't own shares of any company mentioned in this article. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Motley Fool Options has recommended a diagonal call position on Johnson & Johnson, which is a Motley Fool Income Investor selection. The Fool owns shares of Johnson & Johnson and has a disclosure policy.