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Roy...FYI...DNDN
"Dendreon’s (DNDN) breakthrough prostate cancer treatment Provenge was supposed to be on its way to becoming a blockbuster product. Instead, Dendreon said Wednesday the drug badly missed a sales target for the second quarter, the company withdrew its revenue goal for the year and said it will cut jobs.
Shares of Dendreon fell 63% to $13.25 in pre-market trading Thursday morning.
The US Food and Drug Administration approved Provenge for advanced prostate cancer last year. Initially, the company’s sales were held back by manufacturing issues. On Wednesday, the company said some doctors aren’t putting their patients on the vaccine because of the cost and fears that they won’t be reimbursed by insurers. Analysts expected Dendreon to report Provenge sales of almost $58 million. Instead, the company reported less than $50 million in sales.
Even worse: Dendreon withdrew its forecast of as much as $400 million in sales this year. Instead, the company expects only “modest quarter over quarter revenue growth for the remainder of this year.”
CEO Mitchell Gold tried to explain the disappointing sales in a conference call, often repeating key words and phrases, such as: “Cost density,” “near-term issues,” “shift in the launch trajectory,” “new reimbursement paradigm” and “shifting the curve to the right.”
But in the end, the fact is that the company is below where it is supposed to be in terms of sales. And when you have to cut jobs and throw out your sales assumptions, things are bad.
Provenge is a revolutionary treatment. A vaccine, it uses the body’s immune system to fight cancer and has shown in company studies to extend survival rates. A patient is given three infusions at a cost of $93,000 for the regimen, a price that has raised questions about insurance reimbursement. The infusions are administered over about six weeks, which is what Gold is talking about when he uses the phrase cost density. Doctors have to administer a pricey treatment over a short time. That has some docs worried about getting reimbursed, Gold says. The CEO says he doesn’t believe the lower sales are an indication that doctors and patients aren’t sold on Provenge’s benefits.
Dendreon has defended the price and surely felt exonerated after the government body that runs the Medicare and Medicaid insurance programs confirmed that the vaccine should be covered. (See Dendreon Wins Medicare Ruling)
Yet here is Dendreon telling investors that the drug isn’t meeting expectations. While Dendreon was highly successful convincing doctors in academic medical centers about Provenge’s benefit, the company has had a tougher time getting community-based urologists to embrace the drug, Gold told analysts and investors on a conference call late Wednesday afternoon.
There were high hopes for Provenge, which some analysts believed would be a multi-billion dollar drug. Now it’s not clear whether the drug will reach $200 million in this year (sales are just under $78 million for the first half of the year).
That doesn’t bode well for its outlook, says biotech consultant Michael Becker.
“Any product that’s introduced commercially and doesn’t do well after launch typically does not go on to be a success,” Becker says.
Dendreon execs gave little detail about the cost cuts: “The Company expects to reduce expenses, including workforce reductions, to align with its near-term manufacturing requirements.”
“These near-term issues are surmountable,” Gold said Wednesday. “They may take some time to navigate.”
Analysts ratings and price targets are coming down. The bulls suddenly sound pessimistic about the drug’s prospects.
“We cannot get past the fact that despite management’s depiction of short-term
headwinds, the company will implement workforce reductions -- typically indicative of a longer-term issue,” Robert W. Baird analyst Christopher Raymond says in a note Thursday morning. “Altogether, these concerns make us fear that the tempered outlook may indeed be demand-driven.”
He lowered his investment opinion to a hold from a buy and slashed his price target to $20 from $56."
Roy as usual your post makes complete sense, but I think that the Gov't will Not let the markets fail or drop severely no matter what. They pull some stuff "out of the hat" to prevent this 2nd dip from manufesting.
Shawn
Roy regarding RIMM I think it's a good/bad scenario where obviously if you are laying off personal business is not too good however I think that in the past investors appear to like when lay-offs occur...
Heard on the news this morning that RIMM is scheduled to lay off 2,000 people
Johnbits, I concur in what your saying. He is so much more knowledgable then myself I was hoping to pick up some of his crumbs from that Rib-eye steak he just barbaqued. I know that wife and kids would appreciate it very much if Daddy brought home a ittle more money, God knows I'm trying....
Thanks Roy
Roy; Even though it has only been 2-3 minutes, by the time I read your posts and try to buy some of your incredible pickins, the buy & ask has basically doubled. Is it possible that your are posting on IHUB 10 minutes after your purchases?
please and thanks , Shawn
A rare situation, only one of the few that you couldn't handle
Roy: Brian and I work together and we are so unbelievably impressed with your trading and knowledge of investing. We also appreciate your humbleness (posting your losses) I've been reading many, many stock investment sites and you are about the top of list, Congrats on your excellent trading.
Regards Shawn
Roy: thank you for your reponse. When you buy is it for hte weekly or monthly? Still learning here.....
Roy.....been reading your posts for awhile...rather impressive....have you heard of a book called "selling puts my way" by Gerry Lee ? Can I ask you how many contracts are you typically buying? When you buy "long" puts or calls, how long is the long? Weekly , monthly, quartley? thanks !
having a good couple of days here......
If you performed some DD you'll find that it's an ok product with sh*t mangagement, hence the drop in share price
thanks Fabian...I thought he was pretty good at flippin those ETF's both Bull and Bear....speakin of Asian printing I follow a very smart dude on the stock stuff and he says that DYP is lookin really good
What ever happened to Chartreader?
really appreciater your posts, your one of the few logical people here, have you tried contacting the company this concern?
what is the 200 mda on this, can some one advise?
What-ever buddie......
wow, you people are in denial, wishing the best anyhow...
Averge penny stock climb is 1.5 days, this is down and will stay down, there is no substance
Can somebody confirm...that 100% CEMJQ shareholders
that are holding roght now at .37 cents will not loose their shares? I am thinking of buying more but I do not want
to take a chance that the shares will be wiped-out before BK
thanks !
Thanks Voice for the lowdown. I wonder if Judge Gerber has any other cases he is working on at the same time as CEMJQ...
Awesome letter, I hope that he just gets it
Good post....
I just egged Judge Gerbers car...hope everyone is ok with that....
How is this beneficial to the share price by the bond $ lower?
Thanks!
whats up this morning
Good one JD
thanks wall st for your accurate input
Edge. when will that be? thanks...
good point trader
Hellooo is there anybody in here, just nod if you can hear me....is there anyone home
If the bonds are maintaining there $ highs, why are we so low, we are we not at $1.70? ..thanks !
Thats what she said....
Great post. Your correct that the shippers are your first sector in finding out where the market / economy is headed
Lee not as warm as my co-worker. He doing a 6month tour in Afghanastan. He just emailed me thsi morning with some pic's and one of them was a thermomstat showing 123 deg f
CSIQ in a little trouble
Well you have a 50%-50% chance of being correct
thanks chart, much apprec
Chart/r what do da charts look like for WNR?