Dendreon Corp. (NASDAQ: DNDN) shares more than doubled in early morning trading. But this may be somewhat misleading as the 100% surge is following Tuesday's 45% decline that caused a halt in trading.As promised, on Tuesday, Dendreon released detailed results of its innovative prostate cancer drug Provenge. Ahead of the results, the stock plunged some 45% to $11.81 before trading was halted at 1:27 p.m. following two minutes of high volatility. Trading resumed last night and the Nasdaq said it would let stand all the trades.
This morning, shares opened at $26.82, but are now back at above $24 a share. The stock still registers over a 100% gain (over the registered $11.81 close), but in actuality, the reaction to the Provenge news has been somewhat flat.
Provenge, Dendreon said Tuesday, extended median survival in a large clinical trial by 4.1 months and increased three-year survival by 38% compared to a placebo (31.7% versus 23.0%). It surpassed the 22% goal required to meet FDA approval.
With an FDA approval now estimated to come in 2010, and DNDN shares up some 431% so far this year, is it too late to get in?
Before the release of the detailed results, analysts had estimated sales of Provenge would be $1 billion a year; but now Lazard Capital Markets estimates sales would be $2 billion a year. This could provide serious top line growth to the biotech company. In addition, Dendreon said it would try to implement the same unique innovation of Provenge to other treatments.
At least three brokerages upgraded Dendreon on Wednesday, calling the data "robust with a clean safety profile." Needham and Brean Murray upgraded the stock to Buy from Hold, and Wachovia upgraded it from Market Perform to Outperform.
I wouldn't expect the same returns the shares have had so far in the next few months or year, but as a long-term biotech play, Dendreon seems more promising than most.
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Reader Comments (Page 1 of 1)
4-29-2009 @ 3:00PM
Iridium said...
The drug is worthless other than a cash cow for a company and a cash cow for hospitals.
It barely did better than the placebo and only keeps a terminaly ill patient alive for a few months longer. Just enough to net a hospital millions more in revenue off a dying person.
This drug reperesents all that is bad with big money medicine. If it helped save livves then it would be a worthwhile pursuit.
To have a corporation rise 431% in a few months becuase of a drug trial is insane. A few people that manipulated the stock made out like bandits. Trading should have been hlted on this stock a long time ago.
431%, come on that is insane and everyone knows it. It has created a huge bubble that has to collapse. This company can't support that share price. Trades like this prove that the stock market is a worthless institution that causes nothing but harm to the economy. For the people that got rich off of making a trade on Dendreon, you should be ashamed. You don't care though, you made money and that is all that matters.