Are There Short-Term Risks for Dendreon Corporation?

Echo To All submits: So now that the major question of efficacy is no longer an uncertainty, things are obviously looking good for Dendreon (DNDN) and PC patients. While the FDA almost always approves based on the committee recommendation, the FDA can still issue an Approvable Letter. Here are some catalysts to an Approvable Letter:

1. The FDA found something within the manufacturing facility during the pre-approval inspection they did not like. (Unlikely based on the seasoned personnel in charge of developing the facility, but you never know.)

2. A compromise by the FDA and DNDN to have completed enrollment of 9902B, then Provenge can go to market. (I heard this one floating around over the past few days, but I do not see the validity toward this argument. If the FDA requests the study to be completed, DNDN will complete it. Forcing a company to its word to me is a form of punishment. The FDA only gives punishment when companies do wrong, and merit such distrust. For instance, a Consent Decree is not given to a company unless gross neglect is observed. DNDN has not demonstrated the lack of trust to issue such an Approvable Letter.)

I do not think that the FDA will issue an Approvable Letter until the 9902B study is complete, which will delay the distribution of Provenge to patients by two years or so. If an Approvable Letter is issued, for whatever ‘reason’, that ‘reason’ should not take longer than a few month to rectify. So if Provenge does not go to market upon the FDA decision, it will be within a few months of that decision.

If an Approvable Letter is issued, and the stock takes a hit, a tremendous buying opportunity will be presented.

But then again, this just me thinking of potential risks. I do not think an Approvable Letter will be issued. I believe Provenge will get approval, and am very long DNDN.

Disclosure: Author is (very) long DNDN

DNDN 1-yr chart