Dendreon Corp fka DNDNQ

[stuck_holder]

I thought i would throw out some thoughts on what i increasingly see as the only two options DNDN has to realistically ensure it survives longer term. hopefully this will generate some discussion from some of our more knowledgeable posters.

the most important current aspect to ensuring the long term viability of the company, imo, is to secure adequate cash to fund ongoing R&D so that if for some reason Provenge fails, their other products in development will be much further along (than their current ph I/pre-clinical status) to support the viability of the company.

in terms of raising cash this time, i think management (in particular Gold & Schiffman) need to demonstrate much more business savvy and go on the offensive, especially since they now look extremely foolish & amateurish for not doing a financing after the panel. (if they simply do another dilution at 10% or 15% discount to market, they will do nothing for their image or reputation as managers except confirming their incompetence, imo, and merely invite the shorts/hedges to continue to manipulate & short the stock to the detriment of existing shareholders).

one plausible approach imo could be to file an appeal with the FDA primarily to raise public awareness and attention to the FDA's decision. I would hire Gottlieb, Small & Petrylak as consultants...call a press conference with all 3 present to make their case for Provenge in a very public forum (contrary to their unsuccessful, silent approach after the panel vote which allowed Scher, Hussain & Fleming to essentially have the public domain to themselves and dominate the discussion).

the FDA might still deny the appeal (perhaps just to spite DNDN for not accepting their decision quietly), but surely the FDA is going to get a lot of (deserved imo) unwanted public attention & scrutiny, particulary if the company can secure the support of 3 "heavyweights" in Gottlieb, Small & Petrylak, who imo can't & won't be easily dismissed by the press.

even if the appeal is dismissed, the public attention and focus on Provenge's saftey and "substantial evidence of efficacy" as determined by the FDA's own panel of experts and on the FDA's inexplicable decision should throw a major scare into the FDA and those 40M shorts.

and if 9902B comes back stat sig (and an appeal certainly isn't going to impact the results), the FDA has to approve per the SPA.
i see an appeal as a no lose proposition, and very possibly a way to squeeze the shorts to raise $200M cash under their shelf registrations with a lot less dilution than the previous two financings...

and if that doesn't work... then the Plan B takes shape to seize on the vulnerability of the shorts -

reported short position is 41M or approximately half the total shares outstanding - the number of naked shorts, though unkown, could be siginficant. institutional holdings as of Mar 31/07 was reported as 26.5M shares, which is probably down since the May 9th CR.

based on my read of Gold, i don't anticipate a partnership near term, though it makes more sense now than ever from the perspective of (re-)establishing credibility of management especially if they aren't going to appeal the FDA's decision. (Gold & Schiffman in particular, need their credibility restored in the market, imo)

Partnering with a major reputable pharma/biotech would allow them to save face by boosting the share price (perhaps dramatically given the apparent vulnerability of the shorts), and enable access to cash that would allow the company to continue development of its pipeline while it waits for 9902B results to mature. i don't think conserving cash and letting their clinical & pre-clinical programs sit while they wait is a wise option - if 9902B interim & final results somehow don't hit stat sig - the company is finished.

i think self-preservation dictates they make a deal, even if it is much less than what they were targeting before the CR - if they can structure it so that a short squeeze results, they can probably alleviate a lot of their current cash concerns, resume their R&D and sustain the longer term viability of the company if 9902B for some reason fails.

and if they can pull off a deal with an equity component that establishes a floor for the share price (say in the $15 or $20 range), they could potentially create a massive squeeze that could resolve their cash concerns for a long time (and make a lot of shareholders happy).

heck, i've almost talked myself into buying back some shares i sold...

comments?