Dendreon: The Challenge Of Misinformation

| About: Dendreon Corporation (DNDN)

One of the challenges facing Dendreon Corporation (NASDAQ:DNDN) as it attempts to recover from its recent slide is the need to respond to and correct the virtual torrent of misinformation that has attended the Provenge story.

For those new to the story, Provenge is a newly approved treatment for late stage prostate cancer that those in the scientific know have called a true breakthrough in cancer treatment. Rather than cut, burn or poison--as is the norm with standard cancer therapies before the Provenge breakthrough--Provenge works by training the patient's own immune system to attack cancerous cells. This has been the Holy Grail of cancer research for a century.

And the results of the Provenge studies suggest that the Holy Grail has been found. Although the study subjects were the sickest of the sick--men whose cancer had already spread and for whom hormone therapy had already failed--Provenge produced the largest median survival advantage EVER in this patient population. It reduced the risk of death by 22.5%. Almost 40% more men in the Provenge group survived to three years than the control group. Many men lived for many extra years. And with remarkably few side effects.

Rather than producing the well known horrors of chemotherapy--hair loss, nausea, vomiting, weight loss, fatigue, even death from the poisons that are chemo--Provenge was generally well tolerated, as the docs say, and most frequently caused a few days of flu like symptoms--fever and chills--that then resolved. No long courses of therapy, either. A full course of treatment entails three infusion over a one month period. And then the patient can sit back and enjoy the treatment's expected extension of life.

What's not to like? Or even go crazy about in this story?

By some weird aligning of the stars and confluence of events, this seemingly glorious breakthrough has been transformed into a key player in the "controversy" surrounding the costs of new medical treatments. Those with an agenda to suggest that new cancer treatment have been grossly overpriced have latched like bulldogs onto the Provenge story, and seem very unwilling to let go. The key is the median survival benefit--4.1 months.

Median survival benefit is the age-old cancer research world measure of the effectiveness of a cancer treatment. It is very common to see an approved cancer treatment have a seemingly small median survival benefit. Taxotere, for example, the only other treatment for the Provenge population before Provenge was approved, showed a 2.6 month median survival benefit. Median benefit really has little real world significance and is an esoteric statistical measurement which is only consistently used in research because it is clean and easily used as a shorthand comparison tool.

As above, when Provenge was approved the 4.1 months represented the best benefit ever. What it means is that in the study which resulted in Provenge's approval half the men in the non-treatment group were dead at 21 months, in the Provenge group it took until 25 months before half the men were dead. By definition the "median" is the halfway point in a series of numbers.

So the halfway point of all the men having died in the non-treatment group came four months before half of all the men dying in the Provenge group. Got it? Doesn't usually matter, because the much more important figures to a guy deciding whether to take the treatment or not, are the "extending life" figures: as above, reducing the risk of death by 22.5%, increasing 3 year survival by almost 40%, that many men lived years longer.

So what is the problem for Dendreon and Provenge? Statistics-challenged reporters early on began writing about the high cost of Provenge ($93,000 for a full onetime course of therapy--in line with many new cancer treatments) when it "only provided a few extra months of life" or "on average only extended life by a few months". Those same articles sadly even sometimes included quotes from apparently similarly statistically-challenged physicians who repeated the "few extra months of life" mantra.

I don't think I can express it categorically enough: THE ''FEW EXTRA MONTHS OF LIFE'' LINE IS DEAD WRONG! The study didn't show any such thing--instead it showed that half the placebo men died four months before half the Provenge men. Most importantly it showed that the men for whom the treatment worked the best--those in the so called "right hand side of the graph"--lived in many cases years longer, that as a group the Provenge men had 38% more men make it to three years, and that overall the risk of death was reduced by 22.5%.

To put it bluntly, if a man is being advised that the decision whether to take Provenge or not is a decision whether to pay a high price for "possibly a few extra months of life", he is being badly advised. The decision is rather, whether to take a fairly risk free chance--since the side effects of Provenge are so benign--that Provenge may result in many years of extra life, as it already has for many, many men.

Lately there have been rumblings that this tide of misinformation may be at least in part responsible for the slower than expected ramp up of the Provenge launch. Patients reading the erroneous "few extra months" everywhere they seek, doctors even falling into the "everybody knows it" trap as well and repeating the line to patients--it's a problem Dendreon must forcefully address with both patient and doctor education. The company must also, in my opinion, aggressively challenge media misinformation. I have taken a very amateur stab at a bandage for the problem.

There's been good news for Dendreon on the Provenge front: Medicare is fully reimbursing for Provenge on label and they have just received a "Q code" which will allow for much speedier reimbursement by computer filing; the FDA has just approved the third Provenge plant in Atlanta, so that the company now is at full capacity for Provenge production.

But if the payoff for finding the Holy Grail is going to be realized by investors in Dendreon, a part of the company's plan MUST be to attack the "few months" question head on. Erroneous media reports need to be challenged. Patients and doctors must be unequivocally shown the irrefutable truth: for the men for whom it works, Provenge significantly extends lives with almost no side effects.

When that truth is widely known, the share price will take care of itself.

Disclosure: I am long DNDN.

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