Seeking Alpha
Long only, long-term horizon, dividend investing
Profile| Send Message|
( followers)  

On January 31, 2012, after market close, Dendreon announced presentation of Provenge data at the ASCO 2012 Genitourinary Cancers Symposium.

Also, on February 1, 2012, before market open, Dendreon Corporation (NASDAQ:DNDN) announced that its Board of Directors has elected John H. Johnson to the position of president and chief executive officer (CEO), to succeed Mitchell H. Gold, MD. Dr. Gold has been elected executive chairman and will serve in that role until June 30, 2012, at which point he will continue to serve as a director and Mr. Johnson will become chairman.

Note that both those announcements effectively were after 01/31 market close and before 02/01 market open. Both influenced market trading on 02/01.

Stock price reacted positively. As of this writing, it was up +$0.73, or 5.41% @ $14.31.

But which press release did influence the stock price more? What do they mean to the Company?

I'll start with #1.

I'll quote the Company PR (so you can skip them more easily if you wish), then try to make sense of it in layman terms.

Abstract #144: An Analysis to Quantify the Overall Survival (OS) Benefit of Sipuleucel-T Accounting for the Crossover in the Control Arm of the IMPACT Study

The Phase 3 IMPACT trial included a crossover design that allowed patients who were randomized to the control arm and experienced disease progression the opportunity to participate in an open label Phase 2 protocol to receive APC8015F, an investigational autologous cellular immunotherapy made from cells that were cryopreserved at the time the control was manufactured. As a result, 109 out of the 171 control patients (64%) received APC8015F.

The FDA approved Provenge on April 29, 2010 to be used for the treatment of asymptomatic or minimally symptomatic metastatic castrate resistant (hormone refractory) prostate cancer (mCRPC).

Trial design was such that some of the patients received Provenge, some (the control group) received nothing while some others (from the control group) received, at a later stage, frozen Provenge (dubbed Frovenge).

What the above analysis says is that Provenge works much better than previously thought. The median overall survival for Provenge is probably about 7.8 months rather than the 4.1 months that is shown in the prescribing information. Provenge possibly has the best overall survival in the history of medications fighting against cancer.

Abstract #42: Sipuleucel-T Product Characterization Across Different Disease States of Prostate Cancer

An exploratory analysis of several PROVENGE clinical trials (IMPACT, ProACT, OpenACT, and NeoACT) examined the product characteristics of PROVENGE comparatively across different disease states (asymptomatic or minimally symptomatic metastatic castrate resistant prostate cancer (mCRPC), and mCRPC, and neoadjuvant).

The pattern of antigen presenting cell (NYSE:APC) activation, as measured by upregulation of CD54, was consistent across all of the clinical trials, with increased APC activation at the second and third PROVENGE treatments relative to the first. The second and third dose of PROVENGE also consistently showed enhanced expression of lymphocyte activation markers and cytokines. APC activation tended to be more robust in earlier disease states, as evidence by increased cumulative fold increase in CD54 upregulation in neoadjuvant patients (35.5) relative to asymptomatic or minimally symptomatic mCRPC (28.7) and mCRPC patients (21.8; P < 0.0001).

This one means that Provenge is able to stimulate one's own immune system in a detectable and proven way. It also means that the FDA might approve Provenge for earlier stages of prostate cancer, when patients have less tumor burden. The earlier Provenge stimulates the immune system, the better.

Abstract #181: Neoadjuvant Sipuleucel-T in Patients with Localized Prostate Cancer: Immune Responses in Prostate Tumor Tissue

A Phase 2 study, called NeoACT (NEOadjuvant Active Cellular immunoTherapy), evaluated treatment with PROVENGE prior to radical prostatectomy in patients with localized prostate cancer. PROVENGE is not currently indicated in this setting. This analysis assessed the presence of lymphocytes by immunohistochemistry (NYSE:IHC) in radical prostatectomy tissue following treatment with PROVENGE and compared it to prostate biopsy tissue obtained prior to treatment.

At the time of abstract submission, IHC analysis had been completed in 19 patients. Significant increases ( > 2-fold) in CD3+ and CD4+ T-cells populations were observed at the tumor rim between the interface of benign and malignant tissue when compared with the pretreatment biopsy tissue (ANOVA post hoc Newman-Keuls test: P=0.0002, both).

Many people complained that - while we had proof that Provenge works - we did not have a grasp on the mechanism of action (MOA).

The above abstract shows Provenge MOA, it shows us how Provenge works. One less piece of ammo for those who are short the stock and one more piece of ammo for prescribing doctors when dealing with patients.

Abstract #178: Evaluation of Immune Activation Following Neoadjuvant Sipuleucel-T in Subjects with Localized Prostate Cancer

In addition, a second analysis of the Phase 2 NeoACT study evaluated immune activation in PROVENGE for patients with localized prostate cancer treated prior to surgery. This analysis evaluated the cellular composition and APC activation of the product both prior to and after the culture with the recombinant fusion protein PA2024, consisting of prostatic acid phosphatase (PAP) and granulocyte macrophage colony stimulating factor (GMCSF).

The Phase 2 NeoACT study enrolled 42 patients and 38 received all three infusions of PROVENGE. Consistent with past findings in PROVENGE mCRPC trials, CD54 upregulation (APC activation) was greater at the second and third PROVENGE infusions. The expression of early T-cell activation markers (CD134, CD137, CD278 and CD279) was increased in cells obtained after the first infusion of PROVENGE, and then further increased post-culture with PA2024. Also observed was a progressive increase in memory B-cells (CD20+CD27+IgD-CD86+; pre- and post-culture) and activated mature B-cells (CD20+CD27+IgD+CD86+; post-culture) following the first infusion of PROVENGE. Activated T-cell-associated cytokines were significantly elevated (TNF-α, P < 0.001; IFN-γ, P < 0.001; and IL-2, P < 0.001) in the second and third PROVENGE doses.

This last one basically tells us again that it might be worth to use Provenge for earlier stages of prostate cancer, when patients have less tumor burden.

Now for PR #2. Dear reader, mind you: the following are my own conjecture.

I believe the Board of Directors replaced Mitchell H. Gold, MD, who has served as president and CEO for nearly a decade, because of a couple of foolish mistakes.

Mistake #1 - While he had no previous experience with any other large pharmaceutical company, thus having no experience about new therapies launches, he gave sales guidance to Wall Street and proved spectacularly wrong. Stock price lost circa two thirds of its value in one day (it was August 4, 2011). Just note that he sold shares after he provided guidance but before he was forced to pull it.

Mistake #2 - On 1/3/2012 (but news went out on 1/4/2012 after markets closed), Dendreon granted a grand total of 1,387,000 shares to executives and directors. Mitchell H. Gold, President & Chief Executive Officer, got 460,000. As if to mitigate shareholders' anger, the following day Dendreon announced fourth quarter revenues and updated on commercialization. News was good and the stock price reacted accordingly. It has almost doubled since.

My bottom line is that Dr. Gold - who did well overall at Dendreon in my opinion - became more a liability than a resource.

Wall Street wants credibility if a Company's share price is to appreciate. Dr. Gold, I'm sorry, lost it.

Enter John H. Johnson, elected by Dendreon's Board of Directors to the position of president and chief executive officer.

Mr. Johnson has been a member of Dendreon's Board of Directors since August 2011 and brings to Dendreon nearly 30 years of experience in the life sciences industry, including serving as president, CEO, and director at Savient Pharmaceuticals, president of Eli Lilly's (NYSE:LLY) Oncology Business Unit, CEO of ImClone System, and company group chairman of Johnson & Johnson's (NYSE:JNJ) Worldwide Biopharmaceuticals.

One important tidbit, in my opinion, is this:

While at ImClone, Mr. Johnson managed the market expansion of colorectal cancer treatment Erbitux, overseeing the global growth of the billion dollar brand and eventual sale of the company to Eli Lilly for $6.5 billion.

So you have this four-letter word: sale.

I believe Mr. Johnson will do his best to increase shareholders' value; to make Dendreon a bigger company through better Provenge sales and pipeline development. I believe that Mr. Johnson, if faced with an offer from Big Pharma, will be able to extract the maximum dollar amount possible for the benefit of Dendreon shareholders.

As a positive, I don't think (rumors were that Dendreons missed January sales forecast) that the replacement comes because Provenge sales are disappointing. You just don't change CEO in a couple of weeks. These things take time to develop.

Source: Dendreon Corp.'s Latest Developments: What They Mean

Additional disclosure: I did not trade DNDN over the last 72 hours and will not trade DNDN over the next 72 hours.