These Committed Equity Financing (CEFF) deals seem to be popular in biotech (DSCO, CEGE). They often seem to be more like working lines of credit, equity distribution deals where there are more frequent smaller drawdowns and where the CEFF acts more like a broker of the issuer's shares and large placement fees and discounts, such as the last two DNDN $4.50 offerings, need not occur. In DNDN's case, it makes sense since the trading volume remains high (technically allowing for larger drawdowns) and the company must prudently plan for the worst case possibility that the interim 9902b look might not be good enough for FDA approval, at which point in time, the equity markets could be very difficult. There's a real near term decision point, however, in that, absent some intervening positive news, the ideal time to use the facility to raise the most cash and maintain interim pps levels would be at a time when the disproportionately large short position is attempting to cover with the help of active market makers. Once that short covering is completed, daily trading volume might be substantially lower. Other than keeping a cash reserve for product launch if the interim look is positive or an operating reserve if it is not, it would seem that DNDN must keep a viable production facility in operation. Then, after 9902b is fully treated, what does DNDN do with its output? Would you start a necesssarily small open label trial of Provenge + Taxotere vs. Taxotere, as Dr. Petrylak 11/10/06 presentation would support, as an insurance policy? Would you spend more on basic research to more fully elucidate the Provenge MofA to answer some continuing questions to convince the medical community that Provenge is different from the many previous cancer vaccine failures (for example, the lack of reactivity to human PAP, the impact of Tregs, etc)? Much like CEGE's GVAX, time and money mandate concentrating all resources on prostate cancer, rather than other pipeline development. For the sake of their future patients and for each company, I hope that both DNDN and CEGE are successful, and sooner rather than later.
AI
