Replies to post #2646 on Dendreon Corp fka DNDNQ

[langostino]

Provenge/GVAX market

First, walldiver thx for your tremendous contributions.

Now a couple questions ...

The future sales projections for Provenge seem to have three key variables -- size of addressable market, percentage penetration in addressable market, and projected cost.

(1) Is the size of the addressable market based on a straight-line extrapolation from current incidence rates, or does it assume incidence rates will rise over time (presumably due to longer lifespans or impact of harmful environment or better diagnosis, etc), or fall over time (due presumably to earlier detection and higher early treatment rates, therefore fewer cases reaching late stage where Provenge would apply)?

(2) Do the projections for Provenge's share capture of the addressable market take into account any competition like GVAX?

(3) Do the projections assume insurance companies, Medicare/Medicaid will approve reimbursement? (and by extension, that there will not be an overhaul of the entire medical system?). I realize this is a touchy subject, but it's not unreasonable to posit that our healthcare system is hurtling toward a head-on collision with a wall - based principally on the "free lunch" mindset that there can and should be no limit on the costs we're willing to absorb for life-extending procedures and drugs.

Doesn't the analysis of what Provenge will be worth in 2010-2012, and thus the cash-flow discounted fair value of DNDN today, have a pretty wide range depending on whether the market gets GVAX and/or other similar therapies by then? Both because there would be at least some natural competition exerting downward pressure on pricing, as well as the possibility of splitting the addressable market?

Oh, one last question -- it's concerned me for some time that Dendreon has seemingly had such trouble filling their clinical studies. If the need is truly so desperate, or the "market" of people allegedly willing to shell out huge bucks for the treatment if it's permitted to go commercial is so large, then why would they have such trouble with enrollment when it's free? I've never seen a convincing answer to that question, and it nags at me.

[chessterr2010]

Walldiver - Lehman shared same thought as you on CEGE. Thanks for sharing.

Cell Genesys Shares Jump on Study Data
Tuesday April 3, 4:24 pm ET

Some on Wall Street urged caution, however. Lehman Brothers analyst Jim Birchenough noted that the study showed promising results compared to the current standard of treatment, but added that the small number of patients involved and other issues may have biased the results. He pointed to a number of Phase II studies that showed positive results that didn't pan out under further testing. "Indeed with only 22 patients as a basis for GVAX analysis and no way to control for patient selection bias, we believe that GVAX survival data is more likely driven by better patient baseline status than specific drug effect," he wrote.

http://biz.yahoo.com/ap/070403/cell_genesys_mover.html?.v=1