Why Did Dendreon Execs Cash Out on Friday?

Whenever a politician, government agency or company puts out news late on a Friday, chances are it probably isn't good or it's stuff they'd like to just slip under the door. That's when they like to dump stuff that will usually get less attention over a weekend news cycle when readers/viewers are distracted and/or catch reporters after their deadlines. Of course, they'll deny the ulterior motive, but it's a tried and true media relations practice.

So, should investors be all that surprised that Friday evening, May 1st, Dendreon (DNDN) revealed that eight top execs and Directors unloaded a bunch of stock on April 29th and 30th, the two days following the release of the positive test results on the company's prostate cancer treatment?

CEO Dr. Mitchell Gold cashed in more than half a million shares. He's now a multi-millionaire. But the windfall is raising at least a few eyebrows. One shareholder emailed me saying, "This is kind of annoying if you're a (Dendreon) bull." However, these guys have probably been out of the money for years. I did a quick search and couldn't find any previous stock sales by Dr. Gold. And given the unpredictable, rocky history of Provenge, can you blame him/them for pocketing some cash after the huge run-up in the shares? I'm not making a judgment call there, I'm just raising the question.

Is it a signal about the fate of Provenge and the company? Based on their recent commentary, analysts would answer that with a unanimous "No." They all seem to think that FDA approval of the treatment is all but certain and that Dendreon's attractiveness as a partner or takeout target has gone, or will go, way up.

According to the company's proxy statement Dr. Gold received total compensation of $1.6 million last year. His package dropped slightly in 2007 to $1.23 million from $1.29 million in 2006. The statement also says Dr. Gold has (or had) as much as a 1.5% stake in the company. Wouldn't investors have more cause for concern if it turned out the CEO and others tried to thin their holdings (not that they could have) during that frenzied, two-minute cliff-drop last Tuesday before the data came out?

Comments

[SiRi - Hope:]

Anybody who made 100x's of profit should be taking profit. Only the pig is the fool. I have high hope for the stock but still took some profit on this stock after a 380-480% price gain. Now I am waiting for the pullback, then the next spike later this year. This is a great stock and am very happy I heald it for 8months ....waiting ....and waiting ... for either my tax break or for profit (ha).

May 05 07:47 AM

[novster:]

I think it would be better to focus on which company would partner and why..The executives always sell when they have a window.Its prudent.Id like to know who would buy them.Would they wait for approval ,or is the pipe line attractive enough..

May 05 08:06 AM

[hoopdreamer...:]

Why did they take profits? Because they could and will get reupped with options at lower prices than they just sold for.

May 05 08:14 AM

[Short Bugga...:]

500,000 shares at say $20.00 = USD 100,000,000.00
Mr Gold is taking 10 million to buy call options.
DNDN goes up to $160 in 3 years, he need not call himself gold no more. He can call himself "The Smart One"

May 05 09:25 AM

[gloriason:]

Thank you for the sensible article and being the voice of reason. Too many DNDN shareholders see conspiracy theories where none exist, maybe due to Dendreon's prior stock history (especially 2007). But this is a new day and a fantastic time to be a DNDN shareholder. I can't wait to see what the future holds for us and the patients that will be well served by DNDN's pipeline of products.

May 05 10:12 AM

[bill130:]

I agree with the bullish sentiment. This stock may waffle around a bit but there are two major pieces of news that will drive it way up ($50-$60) and that's the signing of a major marketing partner and , of course, FDA approval. Both items are virtually certain, the first within the next few weeks/months and the latter sometime in Q1 of 2010. The longs are smart to remain committed as there is no way to time the first item (yes, there will be rumors but..) and to miss that move would be a bummer

May 05 10:13 AM

[Joseph Bern...:]

I think Dendreon investors will find interesting and compelling that David Miller of Biotech Stock Research published an interesting comparison of Taxotere and Provenge that makes it very clear why Provenge will be approved and used. Taxotere requires 200 days of treatment with awful side effects in order to get less than 90 days of median survival. Surveys show 35% to 65% of patients will not take Taxotere. Provenge requires 28 days for three infusions with minor side effects in order to get 123 days of median survival, with a 38% higher chance of being alive in three years. David compared the major negatives of Taxotere as listed by doctors and patients, as well as the main benefits, to treatment with Provenge. There is simply no doubt that the FDA will approve the drug within six months of the Type 2 resubmission filing scheduled for the December quarter. It would be follish to sell Dendreon now.

Many analyst and brokers will righteously keep recommending the stock going forward and it will be very interesting to see just how many shortsellers are left in the stock over the next couple of days, when the shortseller data is published. I would expect a short squeeze coming very soon, which very well could act as a catalyst for the stock. Long on DNDN.

May 05 01:48 PM

[User 398323:]

Rumor has it Lilly announcing takeover with Dendreon next week

May 05 07:23 PM

[Technon:]

What is the likelihood that the FDA will require a second Phase III trial for Provenge? If so, what will that mean for the stock?

May 05 11:53 PM

[falco_rules:]

Technon. Provenge has already had 2 or 3 Phase III trials, depending on how you count them. (Usually, I just combine the first two,since they were designed to be combined, but 3 is technically the number.)

So, your question doesn't make a lot of sense.

May 06 07:18 AM

[Duude:]

If it is true that these guys hadn't been systematically unloading stock over time, this could be construed into insider trading if negative news is later disclosed.

May 06 10:25 AM

[User 408354:]

Patience Is a Virtue in Life ( hold DNDN stock !)
5 year mark ~

May 06 10:38 AM

[Reg Expert:]

"The IMPACT study achieved a p-value of 0.032, successfully exceeding the pre-specified level of statistical significance defined by the study's design (p-value less than 0.043), and PROVENGE reduced the risk of death by 22.5% compared to placebo (HR=0.775);...."

The Phase III protocol pre-specified stat significance defined p value as 0.043 and the results announced is 0.032.....this announced results are still unaudited!!!! When the BLA is submitted to the FDA, the audited results (i.e. after trial sites inspection by the FDA inspectors, corrections on the CRFs-case report forms etc etc...) the p value may be close to border line or worse, may even be greater than 0.043!!!!
Plus, did you see the vaccine administration procedure??? It is very cumbersome!! One needs to take out patients cancer cells, modify it with provenge and then re-inject back to the patients............this is too cumbersome for a 4 months survival extension.......the cost probably not worth it!!!
Also, look at the language "successfully exceeding the pre-specified level of statistical significance...:
As opposed to saying that the extension of survival is statistically significant...what about clinical significance??? Too many issues...not a clear cut advantage!!
The CEO and the management is no different than Madoffs.......

May 06 11:06 AM

[mikes454:]

Watched DNDN for 5 years. Bot and sold numerous times, kicked myself for not buying the last time it was around 2. History and peculiarities of the FDA suggests another large pull back. Im patienty waiting.

May 06 01:12 PM

[Lavalson:]

You are a financial wizard and I would guess you are a FED or a bank executive for your accounting methods are similar to the fractional reserve banking they practice.
500,000 x 20= 10M not 100M


On May 05 09:25 AM Short Bugga Buggaed. wrote:

> 500,000 shares at say $20.00 = USD 100,000,000.00
> Mr Gold is taking 10 million to buy call options.
> DNDN goes up to $160 in 3 years, he need not call himself gold no
> more. He can call himself "The Smart One"

May 06 01:30 PM

[hsofiak:]

Have a look at deepcapture.com for post on DNDN.

May 06 02:29 PM

[Moral Hazar...:]

I am absolutely astounded at what shorts will do to try and kill a technology that is a quantum leap forward towards a cure for cancer. RegExpert, it's so sad that you were caught with your pants down so short on DNDN, but does that really justify hysterical statements of FUD such as this?

"Plus, did you see the vaccine administration procedure??? It is very cumbersome!! One needs to take out patients cancer cells, modify it with provenge and then re-inject back to the patients............this is too cumbersome for a 4 months survival extension......."

A couple of trips to a specialist is to too cumbersome? Would you rather these poor souls simply take Taxotere, whose side effects include hair loss, anemia, low levels of white blood cells, blood in the stool, severe mouth sores, and severe vomiting and/or diarrhea?

Also, 4 months of life extension is only the beginning with this technology because down the road Dendreon, or someone will find a way to lever this type of technology into much greater lengths of survival, and probably even cancer cures in many cases.

For the shorts who are trying to make a buck here by killing this technology consider this; most of you at sometime during your lifetime will watch someone you care about or even love die horribly from cancer. Provenge is a technology that just might have prevented that. Was a couple of dollars worth it?

May 06 11:43 PM

[Reg Expert:]

So you want dying cancer patients get robbed of 50K/year for four months survival with all the hardship that goes with it for administering this drug?? Let's face it, DNDN is not the only one with this type of technology, have you heard og Northwest Labs,and others who are trying the similar cumbersome process?? How low can you Madoffs go to even squeeze every bit of money from these dying cancer patients/tax payers??
"quantum leap forward towards a cure for cancer" we have heard this spin before for the past several decades since the Nixon declaration of war against cancer! STOP scamming the poor dying cancer patients with just 4months survival with still UNAUDITED efficacy & safety data!!!

On May 06 11:43 PM Moral Hazards Amok wrote:

> I am absolutely astounded at what shorts will do to try and kill
> a technology that is a quantum leap forward towards a cure for cancer.
> RegExpert, it's so sad that you were caught with your pants down
> so short on DNDN, but does that really justify hysterical statements
> of FUD such as this?
>
> "Plus, did you see the vaccine administration procedure??? It is
> very cumbersome!! One needs to take out patients cancer cells, modify
> it with provenge and then re-inject back to the patients............this
> is too cumbersome for a 4 months survival extension......."
>
> A couple of trips to a specialist is to too cumbersome? Would you
> rather these poor souls simply take Taxotere, whose side effects
> include hair loss, anemia, low levels of white blood cells, blood
> in the stool, severe mouth sores, and severe vomiting and/or diarrhea?
>
>
> Also, 4 months of life extension is only the beginning with this
> technology because down the road Dendreon, or someone will find a
> way to lever this type of technology into much greater lengths of
> survival, and probably even cancer cures in many cases.
>
> For the shorts who are trying to make a buck here by killing this
> technology consider this; most of you at sometime during your lifetime
> will watch someone you care about or even love die horribly from
> cancer. Provenge is a technology that just might have prevented that.
> Was a couple of dollars worth it?
>
>
>
>

May 08 10:29 AM

[sdt993:]

Just thought i'd help you out Mike. Your "quick search" was inadequate. The good Doctor punted about 200k shares after the panel in 2007. This is a list of all of his sales in 2009 and 2007. sorry about the format. I copied from a database. If memory serves, i believe he front ran a secondary offering back then too, but i'd have to check to make sure.

S 2009-04-29 2009-05-01 17:31:35 DENDREON CORP DNDN GOLD MITCHELL officer (President & CEO) 57,072 $24.92 $1,422,270.00 486,536 view
S 2009-04-29 2009-05-01 17:31:35 DENDREON CORP DNDN GOLD MITCHELL officer (President & CEO) 1,156 $24.92 $28,808.20 543,608 view
S 2009-04-29 2009-05-01 17:31:35 DENDREON CORP DNDN GOLD MITCHELL officer (President & CEO) 27,309 $24.92 $680,557.00 543,608 view
S 2009-04-29 2009-05-01 17:31:35 DENDREON CORP DNDN GOLD MITCHELL officer (President & CEO) 250,000 $24.92 $6,230,150.00 543,608 view
S 2009-04-29 2009-05-01 17:31:35 DENDREON CORP DNDN GOLD MITCHELL officer (President & CEO) 93,800 $24.92 $2,337,550.00 543,608 view
S 2009-04-29 2009-05-01 17:31:35 DENDREON CORP DNDN GOLD MITCHELL officer (President & CEO) 6,200 $24.92 $154,508.00 543,608 view
S 2009-04-29 2009-05-01 17:31:35 DENDREON CORP DNDN GOLD MITCHELL officer (President & CEO) 22,389 $24.92 $557,947.00 543,608 view
S 2009-04-29 2009-05-01 17:31:35 DENDREON CORP DNDN GOLD MITCHELL officer (President & CEO) 36,204 $24.92 $902,225.00 543,608 view
S 2009-04-29 2009-05-01 17:31:35 DENDREON CORP DNDN GOLD MITCHELL officer (President & CEO) 62,120 $24.92 $1,548,070.00 543,608 view
S 2009-04-29 2009-05-01 17:31:35 DENDREON CORP DNDN GOLD MITCHELL officer (President & CEO) 2,797 $24.92 $69,702.90 543,608 view
S 2009-04-29 2009-05-01 17:31:35 DENDREON CORP DNDN GOLD MITCHELL officer (President & CEO) 40,953 $24.92 $1,020,570.00 543,608 view
S 2007-04-02 2007-04-04 20:51:18 DENDREON CORP DNDN GOLD MITCHELL director officer (President & CEO) 87,204 $13.46 $1,173,760.00 189,486 -27.79% view
S 2007-04-02 2007-04-04 20:51:18 DENDREON CORP DNDN GOLD MITCHELL director officer (President & CEO) 35,000 $13.46 $471,096.00 189,486 -27.79% view
S 2007-04-02 2007-04-04 20:51:18 DENDREON CORP DNDN GOLD MITCHELL director officer (President & CEO) 11,933 $13.46 $160,617.00 224,486 -27.79% view
S 2007-04-02 2007-04-04 20:51:18 DENDREON CORP DNDN GOLD MITCHELL director officer (President & CEO) 4,000 $13.46 $53,839.60 236,419 -27.79% view
S 2007-04-02 2007-04-04 20:51:18 DENDREON CORP DNDN GOLD MITCHELL director officer (President & CEO) 13,434 $13.46 $180,820.00 240,419 -27.79% view
S 2007-04-02 2007-04-04 20:51:18 DENDREON CORP DNDN GOLD MITCHELL director officer (President & CEO) 21,723 $13.46 $292,389.00 240,419 -27.79% view
S 2007-04-02 2007-04-04 20:51:18 DENDREON CORP DNDN GOLD MITCHELL director officer (President & CEO) 16,000 $13.46 $215,358.00 240,419 -27.79% view
S 2007-04-02 2007-04-04 20:51:18 DENDREON CORP DNDN GOLD MITCHELL director officer (President & CEO) 12,796 $13.46 $172,233.00 240,419 -27.79% view

May 29 05:51 PM