I really dont know now, I like DNDN but I'm getting out
and thinking there may be a lower entry point in the next
two years. Good luck to those with the guts and youth
to be able to stick it out. I really hope Forbes is wrong
but I must run with my miserly $6,000.
FORBES:
The window for a Dendreon comeback appears to be closing.
Two weeks after the Food and Drug Administration refused to approve Provenge, the company’s prostate cancer treatment, Dendreon (nasdaq: DNDN - news - people ) shares slipped again on Thursday amid increased concern that Provenge will not be approved soon.
At the closing bell, Dendreon shares were down 4.2%, or 29 cents, to $6.55-- a far cry from its height of $23.58 realized just one month ago.
On the day of the FDA’s decision, Dendreon’s shares plummeted 64%, to $6.33 from $17.74. According to the company, the FDA granted an “approvable” letter, which means that it will hold off approval until Dendreon submits more data. At the time, the company did not elaborate on what data the FDA required and when it would be able to produce the data. (See: "FDA Delay Rocks Dendreon.")
Even though Provenge failed to meet its primary goals in clinical trials, many investors were optimistic that the FDA would grant an outright approval after a separate FDA advisory panel endorsed the drug earlier this year. (See: "The Long and Short Story of Dendreon." )
On Thursday, Charles Duncan, a JMP Securities analyst, said the company’s recent actions, including the layoff of 40 employees this week, indicated that it was not confident that it would get a rapid approval. He downgraded the stock to “Market Perform” from “Market Outperform” and drastically slashed his price target to $8-to-$10 from $13. Duncan predicted that it was now less likely that the FDA will only require the ongoing trial’s interim results, due next year, and will probably wait for the study’s final results expected in 2010.
However, Lisa Bayko, a Next Generation Equity Research analyst, warned investors not to read too much into the layoffs. After the FDA’s “approvable” letter, “I had expected all the layoffs, because you don’t need to have the whole sales force immediately in place,” she said on Thursday. The best case scenario, an approval next year, could still happen, Bayko said. But timing remains crucial to Dendreon.
If the FDA waits till 2010, the end of its ongoing trial, Dendreon would be severely disadvantaged because other immunotherapies from competing firms will crop up in 2010 and 2011.
There is also the question of Dendreon's financials. Now that the stock price has been heavily depressed, the company may have lost a pool of money it was relying upon to fund ongoing trials and operations. However, some analysts suspect that Dendreon was able to cash out when shares was riding high at $20 in April.
Dendreon may have used a $200 million shelf registration that was filed in March. It was an "opportunity to refinance the balance sheet and ensure that they have sufficient funding through 2010," Paul Latta, a McAdams Wright Ragen analys,t said in April.
Dendreon is expected to meet with the FDA in the next couple of weeks to discuss what kind of data is needed, according to
AI
