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Dendreon (NASDAQ:DNDN) shares were already demolished once this year after an August earnings report drastically changed the shape of the expected take for Provenge sales in 2011, and shares took a beating yet again to open November as investors failed to receive assurances from the company that a turnaround in Provenge sales momentum was in the works.

In fact, according to comments made by Dendreon CEO Mitchell Gold in the third quarter conference call, the company expects November sales to see a slight decline over October sales.

The third quarter report wasn't all bad news, though. Provenge has still raked in $145.6 million through the first three quarters of 2011, well below the original estimates of up to $500 million, but still a solid demonstration of growth. About $65.8 of that number came during the third quarter, and October recorded a slight increase in revenue over September, $26.4 to $25 million, respectively.

What's really killing Dendreon at this point, however, after the early reimbursement troubles and slower-than-expected rollout of Provenge, might be that the competition has had time to catch up to, if not surpass, Dendreon's market momentum.

First it was Johnson & Johnson's (NYSE:JNJ) Zytiga that dominated the headlines and took advantage of the Provenge sales woes, but now even stiffer competition may be forthcoming as Medivation Inc. (NASDAQ:MDVN) and Astellas Pharma Inc (OTCPK:ALPMY) have stolen their own share of headlines, after proving to extend the lives of prostate cancer patients by the same margin as Provenge -- and for a cheaper price.

With the competition hot on the tails of Provenge, it may be hard for Dendreon to recover the ground lost as a result of the initial setbacks of the commercial launch.

That said, Provenge still brings a unique approach to the table, as having ushered in the first generation of cancer immunotherapeutic treatment. In clinical trials, cancer immunotherapies have been tested on patients whose immune systems have already been significantly weakened by the late stages of the cancer, as well as by chemotherapy and radiation treatments. Should evidence emerge that the effects of cancer immunotherapeutic treatments are more effective when used in patients with healthier immune systems, that might give Provenge the edge in the long run.

For now, DNDN continues to be a risky play, given the slowing growth and increasing competition. On the other hand, it's also a very high-reward play, especially from the current prices.

Retrospect means little in the current market, but if a sales pitch to the medical community has been what's needed, in terms of reimbursement and education, then you have to wonder if an established sales force by a major pharmaceutical company could have had Provenge as a top tier treatment already, had Dendreon partnered early-on.

Keep an eye on Dendreon; it's still possible that this company's best days are ahead.

Source: Dendreon's Best Days Could Still Be Ahead