Still a Lot of Potential in Dendreon and the Cancer Immunotherapy Market

Dendreon (DNDN) released an update on Thursday that outlined the path that the company is taking to advance its prostate cancer treatment Provenge to market.

In a mid-day PR, the company announced that they will file an NDA with the FDA in November and that the FDA would then be expected to act on the application by mid 2010. It is expected that the FDA will rule to approve Provenge, based on previous comments by the regulatory agency after mid term results were released last year. Keep in mind, however, that nothing is a sure thing both with regard to the stock market or the FDA. While indications point to an FDA approval, it is also good to realistically temper the enthusiasm by remembering that members of the FDA are humans - government officials, at that - and are just as likely to change their minds or ask for more information as anyone else out there.

That being said, as longer term data continues to demonstrate that the treatments work, they are slowly becoming more accepted by the medical field - and Provenge is no exception.

I like the chances of a Provenge approval, although I think that by the time the treatment becomes approved in the United States, it will be long overdue. It was Oncophage, a kidney cancer vaccine produced by Antigenics (AGEN), that became the world's first approved cancer immunotherapy when the Russian medical authorities approved it in April of 2008.

Back to Thursday's DNDN press release: the company issued Provenge sales estimates of between $60 and $120 million for the second half of 2010. For full year 2011, the estimates were for well over one billion dollars as the manufacturing plant in New Jersey would by then have the capacity to produce the product at a level to support that much in sales. I was also reported in the press release that additional manufacturing facilities will be opened in late 2011 in Los Angeles and Atlanta.

Before we look at the potential of the DNDN stock, let us also consider the potential of the pipeline. Provenge is not the only product that Dendreon has to offer. The company also has Neuvenge in its back pocket. Neuvenge can potentially treat multiple cancers, including breast, bladder and colorectal.

When it's all said and done, there is a whole lot of potential still wrapped up in this company and its stock.

With a current market cap of over three billion dollars, DNDN is pretty much priced for possible approval, however I would expect to see the stock trading closer to thirty dollars by the time the FDA issues a decision next year. Assuming both that Provenge receives FDA approval and that the company's sales estimates are fairly accurate, I would expect fifty dollars a share to be attainable by the end of 2010.

From that point on, after a few quarters of Provenge sales, when we should have a good feel for just how much revenue is coming in, the stock could still move up very significantly - especially if Neuvenge looks to also be posting positive Phase II and III results by then.

There's a lot of "ifs" still left to sort out - the most important being that none of this occurs IF the FDA does not approve Provenge. However, IF the FDA does approve the treatment, which I consider likely, and the New Jersey manufacturing facility is fully ramped up by the timeframe outlined in Thursday's press release, then I can see DNDN becoming a hundred dollar stock a couple of years down the road, barring a stock split or a buyout.

Wait - there's more. Once Provenge is granted approval in the United States, I would expect to see a rally in the other cancer immunotherapy stocks, such as AGEN, ONTY and CVM.

Antigenics (AGEN) is preparing to launch the kidney cancer vaccine Oncophage in Russia in the fourth quarter of 2009 and is also awaiting a marketing approval decision by the EMEA in Europe. Oncophage did not meet the standards for a US approval in a previously conducted Phase III trial, but Russia granted approval based on a subset of patients that responded well to the treatment. Additional long term data collected from treated patients since that time has further demonstrated that Oncophage works, according to reports released earlier this year.

Also of note, once regulators and medical professionals began using patient survivability instead of tumor progression as a marker of success for cancer vaccines, it was hard to ignore the fact that extending the lives of patients is exactly what these vaccines were capable of doing. In my opinion, that fact was the highlight of this year's American Society of Clinical Oncology (ASCO) meeting. Hence the run for cancer immunotherapy stocks at the meeting's conclusion.

Also highlighted at the meeting for demonstrating positive late stage trial results was StimuvaxID, Oncothyreon's (ONTY) experimental cancer vaccine that will potentially treat various cancer indications, including lung and breast.

Biovest's (BVTI) BiovaxID also received honorable mention.

Notably missing from the media spotlight, however, was Cel Sci's (CVM) Multikine. Multikine is a head and neck cancer immunotherapy treatment that has been on the sidelines for some time awaiting the commencement of a Phase III trial which Cel Sci has recently stated may begin later this year. Multikine, in my opinion, could be huge if Phase III trials offer the same positive results as the Phase II trials did, and that potential makes the Cel Sci stock (CVM) that much more appealing as a long term investment.

It has long been my opinion that we are on the verge of something big in the arena of cancer treatment and I believe that the cancer vaccines are the next big thing. Patients and Doctors have been lobbying for years for these treatments to become available and it looks like we are getting close to the time that there wishes will be granted.

And yet the full potential of these vaccines is still untapped, in my opinion. They have only been tested on patients that are also receiving chemotherapy and/or radiation treatments, which wreak havoc on a body's immune system. If a cancer vaccine had a healthy immune system to work with - one that was not already beat down by time and other treatments - you have to wonder just how much more of a benefit the treatment would provide to the patient.

When Dendreon announced their plans for the future of Provenge, it offered an insight into what could be coming next for cancer patients, Doctors and investors of the sector.

With the potential of the cancer immunotherapy treatments now coming to light, we're looking at a scenario where everybody wins - patiens and investors alike. However, I always like to point out that the patients bear the true benefit of these treatments - life; an investor's financial gains are largely secondary and hugely unimportant by comparison.

Disclosure: No position DNDN, long AGEN, ONTY, CVM, BVTI

Comments

[fourstarz:]

One billion in sales?.. another PND press release by a management with a history of attempted manipulation. Unless and until there is a commitment by insurance carriers to pay $45,000 in treatment costs for only a percentage of patients to gain 3 months of barely tolerable existence, sales will be necessarily be privately funded.
In this economy, given that only a fraction of those expenditures will result in additional life and that if the dice rolls in the the patient's favor the additional life they purchase will have little quality, the outrageous prediction of millions in sales next year and a billion dollars in sales the year after warrants an investigation by the SEC.

Sep 25 07:50 AM

[Factation:]

Starpharma's proprietary dendrimer platform, which includes the company's Priostar dendrimer technologies,
also has potential in targeted diagnostics and in drug delivery for a wide variety of drugs. Improvements
including enhanced solubility, targeting, and reduced toxicity have been demonstrated for a number
of existing drugs. More broadly, the company, via Dendritic Nanotechnologies, Inc. (DNT), is actively exploring
dendrimer opportunities DNT has also assisted in efforts to resolve leaching issues with Oncosphere, a product being developed by
Oncologix Tech, Inc. as a novel microsphere technology for the treatment of soft tissue cancers. DNT also
provided chemical development and manufacturing assistance in the redesign of the Oncosphere product

Sep 25 07:53 AM

[jspy:]

Just wondered why CTIC is not included in this news?

Sep 25 09:01 AM

[gloriason:]

Must correct the inaccuracies of Fourstarz comments . . . first off, patients on Provenge do not have "barely tolerable existance" or "little quality". That is part of the beauty of Provenge. Side effects for the three infusions required are chills and/or slight fever for one to two days following each infusion. That is it. No hair loss, nausea, vomiting, etc as one would get with chemo. Patients are enjoying improved quality of life with Provenge. Additionally, the average increase in life was 4.1 months, not 3 months as stated by Fourstarz. Many of the men in the clinical trial were alive 3 years after receiving Provenge. It is obvious that Fourstarz has not spent any time actually researching Dendreon and their cancer vaccine for prostate cancer, Provenge before writing a comment.

Sep 25 11:09 AM

[Bedeviled:]

Must agree on the sleight of hand by DNDN. They have a pending patent reexamination on what they themselves called a "key" patent for Provenge. Check the public record at the US patent office, its serial no 90/009565. They have known about it since late August yet said nothing at press conference. It will be their next "unforeseeable" crisis. It is unlikely that they can get any market exclusivity absent patent protection. If the patent office grants the reexam, it would call the whole portfolio into question. However, it does alleviate the expense problem as generics would be immediate. Buy your shorts now and sit back with popcorn.

Sep 25 02:25 PM

[spot:]

This is great news for male prostrate cancer sufferers. An Australian company Prima Biomed (ASX:PRR) is commencing phase IIb trials for their ovarian cancer immunotherapy vaccine in 4Q 2009, receiving FDA approval in August 2009. Now the company is seeking orphan drug status as well. Finally, vaccines may be the cure for this horrible disease we all know too well as cancer - having lost my own young mother to breast cancer, if vaccines are proven to work, I wish she could have still been alive today to have been given the 'chance' at least.

Sep 25 07:34 PM

[Cherry Inve...:]

more info on CEL-SCI @ cherryinvesting.blogsp...

Sep 29 03:06 PM