Dendreon Troubles Beyond Provenge Test

Dendreon (DNDN) is a company not unknown for hype. Today’s hype was that the Provenge prostate cancer immunotherapy met the Phase 3 survival goals of reducing death by 22% and extending life by 4.5 months for men with advanced prostate cancer who no longer responded to hormone therapy. While the company claims the results are consistent with previous studies, detailed results will not be presented until the American Urological Association's Annual Meeting in Chicago on Tuesday, April 28 at 2:20 pm CT.

I won’t pass judgment as to whether the product is clinically effective. The investor risk is greater with the clinical procedure. The procedure involves three cycles of blood extraction, antigen loading and reinfusion over four weeks. The extraction and reinfusion take place in the doctor’s office, while the customized antigen loading is done for each patient in Dendreon’s manufacturing facilities.

Given the difficulty of this procedure for patients and physicians, the actual clinical results will have to be significantly better and more cost effective than oral or infusion-only products. I had a bad stock investment experience with Trimeris’ (TRMS). Trimeris' Fuzeon HIV treatment showed clinical superiority, but the twice daily injections proved too cumbersome and painful for its target audience. Fuzeon showed only limited commercial success. Likewise, I believe that Provenge’s cumbersome procedure will inhibit its success, even if you believe management on the trial results.

In addition to patient and physician acceptance, Dendreon has a series of manufacturing and logistical problems to overcome. In its unique process, it has to become both the Intel (INTC) and Federal Express (FDX) of the pharmaceutical industry.

Shorting this stock carries a lot of risk and the puts are priced for very high volatility. If you believe the product will be approved by the FDA, but have limited commercial success, wait for the implied volatility to wane. This should happen after the detailed results are released on April 28. Betting on the urological conference is too expensive, whereas betting against the long-term success of Provenge should be quite inexpensive.

Disclosure: Author is long TRMS

Comments

[cmm3rd:]

You have not done your homework. Provenge will be successful because there isn't anything else that effectively treats AIPC. Taxotere, the only chemotherapy, has such a horrendous side-effect profile that a large number of patients decline it and just die earlier. And Taxotere has only marginal benefit. Provenge is easier to administer (requires fewer visits to the doctor) than chemotherapy.

Immunotherapy for cancer will be a game-changing paradigm shift in medicine. Dendreon's antigen cassette delivery system, and indeed their entire platform, has been validated. And, they are out in front of everyone, including big pharma. A buyout could occur at any time.

If you are going to short Dendreon, you had better hedge your postion with calls on the upside or the result could be catastrophic.

Apr 15 03:51 AM

[User 395294:]

Seriously?? Is that the strategy now? Provenge may work, but the procedure is difficult and it's not cost effective. Oh, and let's not forget about the logistical and manufacturing problems to overcome. Lions and Tigers and Bears, Oh my!! Schmuck!

Apr 15 07:37 AM

[User 67863:]

in your own words:
The (Dendreon) procedure involves three cycles of blood extraction, antigen loading and reinfusion over four weeks.

Trimeris’ (TRMS) Fuzeon HIV treatment. The product showed clinical superiority, but the twice daily injections proved too cumbersome

So 3 infusions over four weeks versus twice daily doesn't sound like a diffrenece to you? Why would you not contrast this when your whole thesis is in regard to viable commercialization due to patient acceptance.

Matt

Apr 15 07:41 AM

[cqdcat:]

Procedure is simple by medical standards. Equivalent to donating and receiving blood. Provenge is effective with minimal side effects. IT IS A GAME CHANGER in the world of oncology. It's use will be adopted widely by the medical community. It will become the standard of care for AIPC . Taxotere will continue to be used but after Provenge tx.

Apr 15 07:53 AM

[WACG:]

If we were near the turn of the century you would have saying that the telephone was too complicated for ordinary folks to use or the automobile was too unreliable to ever come into common use. Just keep on with those negative waves ...

Apr 15 08:09 AM

[Wall Diver:]

Hmmm....you're a 60-year old man whose hormone treatments for prostate cancer have stopped working to slow the spread of the cancer, and its metastasizing to your bones...specifically, to your pelvis. You're starting to feel pain. You know that without any treatment, your future is one of severe pain, when the metastases rip your pelvis apart. Your choice is between seven months of Taxotere chemotherapy plus prednisone, or doing nothing. One course of Tax every three weeks for seven months. Your hair and nails will fall out, your white blood cell count will drop, leaving you vulnerable to infection, and you'll probably need anti-nausea medication. There's probably a 50-50 chance Tax's side effects will be so severe that you'll need to be hospitalized. Perhaps a 5-10% chance that Taxotere kills you outright. The Taxotere itself will cost perhaps ~$35K for a full seven-month regimen. Then you have to factor in the cost of the anti-nausea medication, the frequent use of prednisone, and the cost of your hospitalizations. Then, you must factor in the horrible way you're going to feel both during and after the Tax treatment--nausea, exhaustion, and a general feeling of malaise. You decide to decline Taxotere chemotherapy, just as 50% of all men with AIPC do.

Oh wait, now Provenge is approved! Now, you can sit down for an hour in the doctor's office a few times over a four-week period. Your blood gets drawn, and your dendritic cells will be reinfused into your blood, along with the immune booster CM-GSF plus the PAP antigen. Your immune system will be on the alert for any cells with PAP on them, and will be trained by these reinfused elements to be on the lookout for any cells with PAP that are already in your body too (PAP is only found on prostate cancer cells). After the infusions, you'll probably have a low-grade fever and chills for about a day. If you're unlucky, the fever will rise to the 102F range. A couple days after the treatment, you can go play golf. Your urologist has seen the trial results, and he knows that your chance of surviving for three more years after Provenge treatment is about five times higher than if you didn't receive Provenge or Taxotere. Hmmm....what should you do?

Apr 15 08:49 AM

[maxpowerpi:]

Mike-

I would say the treatment with Provenge is WAY EASIER than any other form of treatment available, how could you make the case otherwise?

Not only is Provenge treatment easier, if what Dr. Gold says is true, it works 5 times better!
(OR MORE)

Your article is idiotic... almost like, well, you didn't do any investigation at all?

So what is your Price Target? or are you just nit-picking... "Potentially life saving cancer treatment is TOO HARD"..

what a putz.

Apr 15 05:49 PM

[akcje:]

Somehow your logic, if you got any failed you totally.

Your own example why Trimeris' Fuzeon HIV treatment was received negatively, speaks very strongly for usage of Dendreon's Provenge treatment vs. current chemotherapy.

Basically you wrote:
" More pain to a patient is bad, therefore less pain to a patient is bad..."

--
akcje

Apr 15 11:28 PM

[in4thelonghaul:]

After reading your pathetic and absurdly illogical critique of Dendreon's Provenge, denigrating its commercial viability...I have to conclude you are just another badly bruised short, as it is hard to believe anyone can be truly as stupid as you sound in your article.

Provenge has demonstrated superiority in efficacy and side-effect profile by a wide margin in 3 phase-3 trials. It is obvious to any intelligent and unbiased observer (you are obviously excluded here), that Provenge represents an extreme financial threat to the multi-billion dollar chemo dynasties of the giant pharmaceutical corporations which make such extreme profit from promoting cheap, higthly dangerous and relatively ineffective chemicals (not all of course) as cancer treatments.

Get used to it pal...Dendreon's technology has been validated and a new age is upon us. BTW...all indications are that active immunotherapies such as Provenge work better the sooner in the disease process they are used, and their efficacy is almost certainly greatly enhanced by the timely use of a "booster" infusion. Provenge is vastly superior to Taxotere, which is a truly dangerous and minimally effective treatment for end-stage prostate cancer when used as a mono-therapy. Some Provenge recipients from the earlier phase-3 trials are still alive over 7 years later!

You are on the wrong side of this issue, and I suspect your agenda blinds you to not only the facts regarding Provenge, but also your responsibility for honest communication which all decent human beings share...go back and do some serious research before spouting off next time.

Long DNDN because it is vastly superior to the current SOC.

Apr 16 12:04 AM

[Michael Murphy:]

Do some simple modeling starting with the number of prostate cancer patients, the likely revenue per treatment (about $50,000) and the percentage of patients likely to choose Provenge over Taxotere or nothing. I come out with Provenge as a $1 billion drug for the approved patient population, with $1 billion in revenues discounted to about $25 a share for DNDN today. Now add off-label use for earlier stage PC patients - that's another billion. And Dendreon is going to sign deals in Europe and Japan - that's another billion on label and a fourth billion off label.
Dendreon will restart their breast cancer and head & neck cancer trials, and succeed. Also colon cancer, stomach cancer and several other solid tumor cancers. Let's call breast cancer another $4 billion on and off label worldwide, and all the other cancers together another $4 billion. I think we're up to $12 billion in drug sales and $300 a share for DNDN stock.
The reason this happens is that cancer is a sign of a weak immune system - even the American Cancer Society says that if one has a strong immune system, one will not get cancer. So instead of immune-destroying chemo and radiation, Dendreon's technology dramatically boosts the immune system. As in4thelonghaul said: "Provenge represents an extreme financial threat to the multi-billion dollar chemo dynasties of the giant pharmaceutical corporations which make such extreme profit from promoting cheap, higthly dangerous and relatively ineffective chemicals "
Short it if you like. In NewWorldInvestor.com we've been long and right, and I just doubled my buy limit to $16 with a $40 target based on Provenge alone. Betting against the long-term success of Provenge probably will be very inexpensive, because it is very stupid.

Apr 16 06:00 AM

[whatacrock:]

This is the type of pseudo-blog-journalism that will render this site useless. I do not have to reiterate great points made by others to this grab bag of ignorance, but I will state that this approach to slant information forces an informed visitor not to just question the credibility of this platform, but it actually confirms the necessity to simply slam the door shut and not return.

Apr 16 08:20 AM

[dougout:]

Read walldiver's comment above! It is accurate, and brings the Provenge story home.

Apr 16 08:28 AM

[mgcolin:]

DNDN is a cult stock and obviously the believers are very passionate about it and hate anyone who challenges the cult. But until I see some data from real physicians about how frequently and in what circumstances they will prescribe the treatment, learn whether insurance companies will pay for it, and know more about the manufacturing process and expense of marketing Provenge, I think the bulls are getting WAY ahead of themselves.

Even if FDA grudgingly approves Provenge, it is a long, long way from an FDA approval to a multi-hundred million dollar drug. The road is especially long when something totally challenges the medical establishment.

My bet is there are many disappointing quarters ahead with the massive expectations that will come with a $1B+ valuation. If it does get approved and runs to $40 or whatever the longs think it will, there will likely be a great short opportunity.

Apr 16 11:16 PM

[Dee Trooth:]

If we can put the investing aspect aside and focus on the prospect of a near miraculous medical breakthrough that will at the very least prolong life, then we must hope, Dendreon's, Provenge, is successful.
Those of us who have actually seen and consoled others who succumbed to prostate cancer that metasticized to the bones know the terrible consequences imposed by current "treatment".
Read walldivers commentary above. Both the disease and the treatment cause horrible pain and suffering.
Regarding, Provenge's, prior trial results, the F.D.A..'s advisory group voted 17-0 for safety and 14-3 for efficacy. The Apr.28, report may be even more promising.
Using it is NOT mandatory. For humanities sake please make it available.

Apr 17 10:31 AM

[Pappadoc:]

I'm a 61 year old Post Radical Prostectomy patient (2004 Surgery high Gleason 8.00 scale), that did the Casodex and Luprone therapy. My Urologist told me it would work for one to perhaps two years and then would return.

It had matasisized to four places, the side effects were bad but not intolerable with one bad side effect, complete lack of sexual function. Previously I could be intamate with my Wife even without Viagra or other drugs. The treatment worked and all four tumors died, and I am gratfull for another of life. One year later my PSA went from 2 ( after hormonal treatment) to 42 and most recently 47.

Another highly regarded Cancer Specialist warned me that Lupron could in fact cause more tumors, siteing four articles in Major Medical Journels stating this, plus she told me it can cause heart damage and I am on blood pressure medications already.

To hear this promising possible treatment for myself just has me ask, "Where can I sign up for the next phase of testing!" I want to see our nine Grandchildren grow up.


On Apr 17 10:31 AM Dee Trooth wrote:

> If we can put the investing aspect aside and focus on the prospect
> of a near miraculous medical breakthrough that will at the very least
> prolong life, then we must hope, Dendreon's, Provenge, is successful.
>
> Those of us who have actually seen and consoled others who succumbed
> to prostate cancer that metasticized to the bones know the terrible
> consequences imposed by current "treatment".
> Read walldivers commentary above. Both the disease and the treatment
> cause horrible pain and suffering.
> Regarding, Provenge's, prior trial results, the F.D.A..'s advisory
> group voted 17-0 for safety and 14-3 for efficacy. The Apr.28, report
> may be even more promising.
> Using it is NOT mandatory. For humanities sake please make it available.

Apr 21 04:57 PM

[Wildhorses:]

On Apr 16 06:00 AM Michael Murphy wrote:

> Do some simple modeling starting with the number of prostate cancer
> patients, the likely revenue per treatment (about $50,000) and the
> percentage of patients likely to choose Provenge over Taxotere or
> nothing. I come out with Provenge as a $1 billion drug for the approved
> patient population, with $1 billion in revenues discounted to about
> $25 a share for DNDN today. Now add off-label use for earlier stage
> PC patients - that's another billion. And Dendreon is going to sign
> deals in Europe and Japan - that's another billion on label and a
> fourth billion off label.
> Dendreon will restart their breast cancer and head & neck cancer
> trials, and succeed. Also colon cancer, stomach cancer and several
> other solid tumor cancers. Let's call breast cancer another $4 billion
> on and off label worldwide, and all the other cancers together another
> $4 billion. I think we're up to $12 billion in drug sales and $300
> a share for DNDN stock.
> The reason this happens is that cancer is a sign of a weak immune
> system - even the American Cancer Society says that if one has a
> strong immune system, one will not get cancer. So instead of immune-destroying
> chemo and radiation, Dendreon's technology dramatically boosts the
> immune system. As in4thelonghaul said: "Provenge represents an extreme
> financial threat to the multi-billion dollar chemo dynasties of the
> giant pharmaceutical corporations which make such extreme profit
> from promoting cheap, higthly dangerous and relatively ineffective
> chemicals "
> Short it if you like. In NewWorldInvestor.com we've been long and
> right, and I just doubled my buy limit to $16 with a $40 target based
> on Provenge alone. Betting against the long-term success of Provenge
> probably will be very inexpensive, because it is very stupid.

Michael,

I like how you've made a financial model for Provenge to support the numbers. And, I love treatments that go against the modern day chemo regimins that basically carpet bomb the body.

But, I've been watching this space for a long time and taking on the establishment has some risks. I've invested in PPHM for years. They had a neat TNT (tumor necrosis therapy) drug that would "smart bomb" solid tumors with less chemo. PPHM has always been a small, capital starved player. But, TNT is a neat treatment. They didn't make progress. Oh, they made it to ph III, but never completed it and got set back. Lot's of reasons, but my belief is that they ran up against the chemo establishment. So, PPHM regrouped and has a new drug, Bavituximab, that like DNDN, helps marshal the bodies immune system to attack the tumor. Interesting thing though is that Bavi works well with chemo as chemo causes cancer cells to express more phosphidyliserene (PS), the bavi smart bomb target. So, like Avastin, PPHM entered trials with chemo as a combination. In essence, they are not attacking the establishment. Bavi can work alone, but chemo seems to help and that's not the point. The drug needs to get approved. I thought your point by your DNA friend was very telling.

Anyway, I like the idea of DNDN but probably don't buy all of the extrapolations to breast, lung, etc. as there are many other competitors out there (see Avastin and PPHM). But, I'm excited by the imminent timing. I'm looking for an entry. Do you think there will be a fall after next Monday where I can get in, or do I need to buy now and use some option insurance to protect my downside?

Thanks,

WH

Apr 22 01:22 PM