P3analayze,
When I evaluate stocks in the Biotech field I’ve learned over the years that I have to separate the “foreplay” from the “main event”. Unlike the rest of my life the “foreplay” portion is really the most rewarding while the “main event” is normally disappointment.
Let’s remember a little history. While Osip was developing Tarceva, it’s stock jumped with every event (up into the $100 range) and now that it has a great, billion dollar product out there it’s happy to hold a third of that value. Same with Onyx Pharma and Imclone prior to the buyout. Every one of those companies settled in a range of 25% to 40% of their previous highs. Genentech was no different until it was able to amass many products and then even when it sold it wasn’t at its high.
So let’s make a list of positive and negative events which could effect the stock that are possible for Dendreon prior to it’s selling the first dose:
Positive:
U.S. Partnership
ROW Partnership
FDA Submittal
U.S. Pricing Plan
Unrealistic Sales Estimates
Positive Press
FDA Acceptance
FDA ODAC (possible)
FDA Approval
Manufacturing Approvals
New Clinical Trial Scheme’s
Negative:
Stock Dilution
Cougar Pharmaceutical
As you can see Dendreon is probably only on the 2nd or 3rd step of the step ladder. As far as any partnership agreements there’s no question that Dndn has the hammer and it’ll work out something very favorable for the stockholders.
Dendreon will need more money at some point, and I can’t decide if it’ll get it thru issuing more stock or from a partnership. It’ll have an easy time either way and it’ll be a simple business decision. I would guess they wouldn’t have to sell any more than around 5mil to 7mil shares to satisfy their cash needs.
When we talk any type of partnership agreement, Dndn has amassed over $570mil in losses so I would expect them to recoup an appropriate portion of that.
Other stocks we could perform the same analysis on would be Acor, Amag and Affy. (acor’s fda approval is questionable). Over the last 6 weeks Amag has doubled and Affy is up 50%.
AI
