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Dendreon Corp (DNDN)
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A biotechnology company focused on the discovery, development and commercialization of novel therapeutics that harness the immune system to fight cancer.
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BUY Dendreon (DNDN)—potential cure for cancer (again)
Posted by intelledgement on Tue, 14 Apr 09
Yep, we are once again dipping into the Dendreon well. If you were not around in 2007, please read our original pitch for buying DNDN stock:
http://intelledgement.wordpress.com/2007/01/10/buy-dendreon-dndn%E2%80%94a-cure-for-cancer/
...as we do not propose to rehash all the basic reasoning, most of which remains valid.
What happened in 2007 is that the FDA granted the company fast track status to review their application for approval based on two relatively underpowered Phase 3 studies for Provenge, Dendreon’s anti-prostate cancer immunotherapy, despite the fact that both studies failed to meet their primary endpoint, which was time-to-progression for tumors. This unusual step was taken because [a] there was compelling evidence that the men who had been treated with Provenge were significantly outliving the men in the placebo arms in both studies and [b] there is not good alternative for patients with advanced prostate cancer, which kills 30,000 men a year in the USA.
In March 2007, an advisory committee (“AC”) assembled by the FDA to consider Provenge concluded 13-4 that it is efficacious and 17-0 that is safe. Expectations had been low as approval of a drug that fails the primary endpoint of two Phase 3 studies is not common, and as is di riguer with development stage biotech companies, the stock was heavily shorted and the shorts had spent considerable energy debunking/trashing Provenge. However, it was virtually unheard of for the FDA to go against the recommendation of their own AC, and so the stock promptly soared from $4 to the mid-teens, with spikes as high as $25. As we had initiated an options straddle position in anticipation of a decision by the AC:
http://intelledgement.wordpress.com/2007/03/09/buy-dendreon-dndn-puts-and-calls%E2%80%94straddle-play/
...we were happy campers.
Then in May, the FDA did go against their AC and required that Dendreon successfully complete the third, larger Phase 3 trial—which was already enrolling patients and has survival as the primary endpoint—in order for them to approve Provenge. The stock instantly tanked back to the $3-to-$7 range. We had cashed in our options play after the AC meeting and made a killing; now we sold the stock and took a mere 50% profit (down from potentially 250%).
Last January, we again initiated an options straddle in anticipation of the release of the latest Phase 3 trial. And today, the company announced that this third trial—which recently concluded earlier than anticipated—“resulted in the study successfully achieving the pre-specified level of statistical significance defined by the study’s design,” according to a press release:
http://investor.dendreon.com/releasedetail.cfm?ReleaseID=376922
...issued prior to the market open.
This new information substantively changes the nature of game here.
Yesterday, a purchase of DNDN stock was a bet on a two-time loser drug and a company with no other cards to play (in that all the other potential products were immunotherapies based on the same science, so if Progenge failed...). Today, it is still a speculative venture—the company has no revenue and limited cash, a novel and complex production process (they need dendritic cells from each patient to process customized dosages of Provenge), no sales force in the USA or partner in Europe, and still only one product within sight of commercialization—but if management’s conclusion that the FDA requirement for approval has been met, that product is a blockbuster with $1B+ potential in the USA and again in Europe (presumably split 50-50 with a partner-to-be-named-later).
Furthermore, this is the first immunotherapy to successfully complete Phase 3 trials and—by this time next year—would be the first to be approved. It is a whole new approach to fighting cancer, focusing on marshaling the body’s own defenses to fight the disease, with potential applicability to breast cancer, kidney cancer, colon cancer, etcetera. And their complex production/delivery process is patented and potentially licensable for use with other immunotherapeutic products.
In short, we have a $1.8B company that could easily be worth $9B five years down the road, a company doing important, ground-breaking biotech work that is worth watching, and rooting for.
Not to mention we are so far ahead on our previous DNDN plays that even if we lose 100% here, we’ll still be ahead overall.
Dendreon (DNDN, again) updatePosted by intelledgement on Wed, 15 Apr 09An article posted earlier today on the Financial Times website: http://www.ft.com/cms/s/2/047da548-29b9-11de-9e56-00144feabdc0,dwp_uuid=e8477cc4-c820-11db-b0dc-000b5df10621.html…suggests “that FDA almost always requires multiple Phase III trials, making rare exceptions for drugs that are already on the market for different indications…. [A]s a bureaucracy, the agency would choose caution over risk, following rules and regulations as closely as possible with very few exceptions, and that in the case of a new chemical entity, it is expected that extra care would be taken to ensure that the proper decision is made.”While technically, the just-completed 500-patient IMPACT study is the third Phase 3 trial Dendreon have conducted for Provenge, the first two were small studies and both failed to meet their primary endpoint, which—inappropriately, we would say—was time-to-progression for tumors. While retrospectively pooling the data from those two studies uncovered an apparent survivor benefit, that did not suffice to persuade the FDA to approve Provenge in 2007. And, the article cited one anonymous industry executive as opining, “the initial Phase III studies that pooled data from two studies together to form a larger trial is a point of concern, and would not be considered a second Phase III trial. The only Phase III trial that has [overall survival] as an endpoint is the IMPACT trial, and nothing will settle the question of whether the results can be reproduced, unless another well controlled Phase III trial is conducted.”We’d like to dismiss this out of hand as totally contrary to what Dendreon were told in 2007…however, the FDA has already proven to be shaky at best in dealing with an innovative mode of treatment such as Provenge:http://intelledgement.wordpress.com/2007/05/25/provenge-and-the-fda%E2%80%94frog-meets-scorpion/Plus—yeah, we know it’s just a sleep remedy, not a therapy for a life-threatening illness—we still get tremors when we consider the Indiplon fiasco:http://intelledgement.wordpress.com/2007/12/13/neurocrine-biosciences-nbix-update-4/…where the FDA kept moving the goal posts after Neurocrine (NBIX) scored each touchdown until finally management realized they were throwing good money after bad…and no matter what hurdles they successfully cleared, the FDA were never going to approve. Pregnant animal studies for a drug not indicated for pregnant humans in a drug class not indicated for pregnant humans where none of the dozens of previously approved drugs in that class had been so burdened! There’s a message there for biotech investors, folks.Even if this is needless worry, even if everything is copacetic, even if Provenge approval by June 2010 is in the bag, then we still believe the takeaway from 9 May 07 remains that we need to pay more attention to the incapability of the FDA to deal with innovation.Dendreite conspiracy theorists maintain an elaborate fantasy construct of an epic plot to suppress Provenge hatched by shortsellers and big pharma drug companies and incorporating journalists who publish “bad” articles, advisory committee members who voted “no” on efficacy (one or two of whom do appear to have at least potential conflicts of interest, not that that necessarily proves their opinions insincere or their analysis tainted), analysts who issue negative opinions, and most critically, FDA staffers working at the behest of these evildoers. But we seriously doubt anyone in the FDA gives a hoot about the fate of chemotherapy. We believe the problem is simply that dedicated and well-meaning agency personnel have too much incentive to be cautious, and are conditioned to be so zealous at rejecting dirt that they can’t see the babies for the bathwater.That condition is a threat not only to prostate cancer victims and Dendreon investors, but to the viability of a US-based biotech industry.In the meantime, we believe that the immunotherapeutic mechanism Dendreon are employing works at some level with Provenge, and that whether or not the FDA ultimately require another Phase 3 trial, the IMPACT results will prove sufficient for them to approve at least a limited label use of Provenge for advanced prostate cancer patients who have no other options by next June. And we believe there is a significant likelihood that Dendreon’s immunotherapeutic mechanism will prove to have wide utility in fighting various and sundry cancers—breast, cervical, kidney, colon, et al—and that ultimately prophylactic treatments with successor immunotherapies might become standard for everyone.If those eventualities pan out, it won’t make much difference if you bought DNDN stock at $4, $16, or $28, because it is headed way, way higher.
Dendreon (DNDN, again) update #2Posted by intelledgement on Sun, 19 Apr 09Another feather floated onto the camel’s back earlier today when Dendreon released an unusual Sunday press release:http://finance.yahoo.com/news/Dendreon-Announces-Data-on-prnews-14965704.html…announcing that data from an earlier Phase 3 Provenge study (not the just-completed IMPACT study) suggest “that PROVENGE® (sipuleucel-T) induces long-term memory immune responses that are durable and can be maintained following boosting.”The data were presented this morning at the annual meeting of the Association for Cancer Research in Denver (hence the timing of the press release, which as of this evening was still not posted on Dendreon’s website…unlike we investors, the marketing staff must take weekends off). The study measured the immune response in 176 patients—half of whom were treated with Provenge and half with a placebo—with non-metastatic androgen-dependent (hormone sensitive) prostate cancer who have had a prostate-specific antigen (PSA) recurrence following surgical removal of the prostate.The press release quoted David Urdal, the company’s chief science officer, as stating, “We are encouraged to see that CD54 upregulation in APCs is maintained after boosting in men with androgen-dependent prostate cancer. This pattern of CD54 upregulation suggests that the first dose ‘primes’ the immune system for subsequent ‘memory’ responses and is consistent with that observed in our studies of men with androgen-independent disease where the cumulative CD54 upregulation dose correlated with survival. We also are encouraged by these data which suggest that the immune response generated by PROVENGE is durable for a year or more after initial treatment and that it can be maintained following boosting.”
I am really hoping the FDA becomes less bureaucratically obstructive now that the administration that gave us "Heckuva Job Brownie" is gone.
Dendreon (DNDN, again) update #3Posted by intelledgement on Tue, 28 Apr 09Our biotech speculative play Dendreon (DNDN) today revealed the details of the results of their IMPACT Phase 3 trial of Provenge at the American Urological Association’s annual meeting in Chicago and…they look great!http://investor.dendreon.com/releasedetail.cfm?ReleaseID=380042Provenge reduced the risk of death from prostate cancer by 22.5%—comparing the Provenge arm of the trial with the placebo arm—which beat the 22% bogey which had been set by the FDA in order to prove that the survival advantage was real. Provenge also extended median survival by 4.1 months compared to the placebo (25.8 months versus 21.7 months) and improved three-year survival by 38% compared to the placebo (31.7% versus 23.0%).The results were revealed at 2pm EDT; the stock was halted at 12:27pm after trading became disorderly, with the price of the stock dropping from $24 to $7.60 in the space of 74 seconds on huge volume. About 20% of the outstanding shares are sold short, so an attack by shorts to drive down the share price prior to the news release might have been the cause. Here is a transcript of trades of 5000 shares or higher for that time span (welcome to the thrills of speculation in individual stocks):Price Bid Ask Volume04/28/09 12:25:32 24.00 24.00 24.00 2324104/28/09 12:25:33 23.9009 23.90 23.91 3455804/28/09 12:25:34 23.87 23.85 23.86 1693904/28/09 12:25:35 23.8201 23.82 23.83 1016004/28/09 12:25:36 23.79 23.79 23.80 1982404/28/09 12:25:37 23.74 23.74 23.75 1793404/28/09 12:25:38 23.69 23.69 23.70 1460804/28/09 12:25:38 23.50 23.54 23.52 2270504/28/09 12:25:39 23.48 23.49 23.49 4563204/28/09 12:25:40 23.39 23.36 23.36 1354704/28/09 12:25:41 23.26 23.28 23.28 671304/28/09 12:25:42 23.16 23.18 23.16 4135104/28/09 12:25:43 23.10 23.10 23.11 862504/28/09 12:25:44 23.06 23.07 23.03 734004/28/09 12:25:45 22.94 22.95 22.95 2311904/28/09 12:25:45 22.88 22.88 22.88 1891504/28/09 12:25:46 22.80 22.80 22.81 3260904/28/09 12:25:47 22.70 22.73 22.74 5696204/28/09 12:25:48 22.65 22.65 22.65 1002504/28/09 12:25:49 22.60 22.60 22.61 4977704/28/09 12:25:50 22.48 22.50 22.49 2244804/28/09 12:25:51 22.27 22.26 22.26 883504/28/09 12:25:52 22.20 22.21 22.22 1660304/28/09 12:25:53 22.17 22.14 22.14 1254204/28/09 12:25:54 22.04 22.02 22.03 2068004/28/09 12:25:55 21.91 21.90 21.89 2477004/28/09 12:25:55 21.75 21.78 21.76 1260004/28/09 12:25:56 21.67 21.67 21.67 1827004/28/09 12:25:57 21.57 21.55 21.57 2054104/28/09 12:25:58 21.57 21.55 21.56 2766004/28/09 12:25:59 21.51 21.51 21.50 2749404/28/09 12:26:00 21.47 21.45 21.46 2403004/28/09 12:26:01 21.40 21.38 21.40 3094704/28/09 12:26:02 21.31 21.31 21.32 1500804/28/09 12:26:03 21.12 21.14 21.16 2169704/28/09 12:26:03 21.02 21.01 21.02 1005004/28/09 12:26:04 20.95 20.96 20.96 1869404/28/09 12:26:06 20.70 20.73 20.71 877204/28/09 12:26:07 20.45 20.47 20.45 1211104/28/09 12:26:09 20.15 20.25 20.24 2112604/28/09 12:26:09 20.00 20.00 20.00 3514304/28/09 12:26:09 19.88 19.83 19.82 1140004/28/09 12:26:10 19.66 19.69 19.61 694104/28/09 12:26:11 19.51 19.51 19.51 1109504/28/09 12:26:12 19.28 19.26 19.30 1176704/28/09 12:26:12 18.95 18.92 18.93 2488804/28/09 12:26:14 18.48 18.50 18.45 2245504/28/09 12:26:14 18.31 18.05 18.20 1310004/28/09 12:26:15 17.69 17.90 17.77 3271104/28/09 12:26:16 17.42 17.44 17.43 861204/28/09 12:26:18 16.92 16.92 16.91 5609604/28/09 12:26:18 16.50 16.59 16.58 2582304/28/09 12:26:19 16.33 16.31 16.31 3065804/28/09 12:26:20 15.93 15.92 15.93 7359804/28/09 12:26:21 15.80 15.79 15.84 2911604/28/09 12:26:22 15.30 15.30 15.30 4201304/28/09 12:26:23 15.02 15.01 15.02 1453604/28/09 12:26:23 14.92 15.00 14.95 2693604/28/09 12:26:24 14.76 14.73 14.76 1198104/28/09 12:26:25 14.28 14.56 14.27 1193104/28/09 12:26:25 13.95 14.00 13.96 2096104/28/09 12:26:26 13.51 13.30 13.39 1948004/28/09 12:26:27 13.02 13.01 13.06 1729604/28/09 12:26:27 12.62 12.82 12.60 4616804/28/09 12:26:28 12.16 12.44 12.16 2099904/28/09 12:26:29 11.95 11.94 11.94 1897104/28/09 12:26:29 11.77 11.79 11.78 1620004/28/09 12:26:30 11.41 11.49 11.49 814204/28/09 12:26:31 11.16 11.15 11.16 1726104/28/09 12:26:31 11.03 11.02 11.03 2927004/28/09 12:26:32 10.90 10.88 10.69 1590204/28/09 12:26:33 10.31 10.31 10.31 3557604/28/09 12:26:34 10.08 10.07 10.07 875004/28/09 12:26:34 10.03 10.03 10.03 1238504/28/09 12:26:35 9.99 9.99 10.00 5007304/28/09 12:26:36 9.69 9.70 9.71 8489904/28/09 12:26:37 9.48 9.46 9.68 4355604/28/09 12:26:38 9.46 9.47 9.66 3301904/28/09 12:26:38 9.43 9.43 9.50 1915004/28/09 12:26:39 9.50 9.48 9.48 2158204/28/09 12:26:40 9.42 9.42 9.51 1348404/28/09 12:26:40 9.47 9.30 9.64 3135104/28/09 12:26:41 9.36 9.28 9.37 6185404/28/09 12:26:42 9.10 9.11 9.31 9357504/28/09 12:26:42 8.98 9.00 9.00 3640304/28/09 12:26:43 8.30 8.26 8.38 1660904/28/09 12:26:44 8.15 8.15 8.20 1611904/28/09 12:26:45 8.20 8.01 8.19 3019304/28/09 12:26:45 8.01 8.00 8.01 2340704/28/09 12:26:46 7.60 7.60 7.81 3979704/28/09 12:26:47 8.51 8.02 8.29 8236204/28/09 12:26:48 8.27 8.21 8.28 3665204/28/09 12:26:48 8.87 8.56 8.79 7355104/28/09 12:26:49 9.31 9.31 9.03 4373204/28/09 12:26:50 9.61 9.63 9.87 2304104/28/09 12:26:51 9.79 9.78 9.93 2442604/28/09 12:26:51 10.00 10.07 10.34 2390704/28/09 12:26:52 11.79 11.40 10.93 1742004/28/09 12:26:53 11.45 11.38 11.74 1250004/28/09 12:26:53 11.39 11.37 11.39 1705704/28/09 12:26:54 11.18 11.17 11.23 2108904/28/09 12:26:55 11.25 11.25 11.26 1290004/28/09 12:26:56 11.37 11.35 11.45 2823404/28/09 12:26:56 11.92 11.75 12.00 2309004/28/09 12:26:57 11.79 11.78 11.80 1875104/28/09 12:26:58 11.76 11.76 12.25 1876804/28/09 12:26:58 11.77 11.77 12.32 985504/28/09 12:26:59 12.28 12.01 12.31 1705004/28/09 12:27:00 12.37 12.37 12.43 1783104/28/09 12:27:01 12.43 12.75 12.99 2097104/28/09 12:27:02 12.36 12.28 12.00 3275604/28/09 12:27:02 11.841 11.841 11.841 1090004/28/09 12:27:04 11.81 11.81 11.81 100If the stock opens again today—it is still halted pending the completion of the Dendreon presentation at the AUA meeing—it will be interesting to see where it settles. The company has scheduled a conference call to discuss the results at 1730 EDT today. If there is anything interesting to report, we will add a comment to this post.
I totally agree and I am willing to bet (and I am seriously long) that this stock will be $50 per share by the end of the year