Why Dendreon's Provenge Must Be Approved

It is becoming increasing obvious that Wall Street and others are trying to bring political pressure to bear upon the FDA by spinning an FDA decision in favor of Dendreon's (DNDN) Provenge as a compromise in their ability to review future drugs. I do not buy this argument one bit.

Provenge is a very unique situation: compelling survival potential, very low side-effect profile, no reasonable treatment alternatives, and a treatment population with an extremely poor prognosis for survival. How many treatments that come before the FDA fall within this category? Frankly, if they choose to view FDA support of treatments with a 39 in 40 chance of being effective in prolonging the lives of patients without any reasonable treatment options and poor prognosis for survival, then I believe most will agree that such a compromise within the FDA is long overdue.

The bottom line in this decision boils down to whether it will do more harm to patients to offer this treatment now and find out later that it less effective than originally thought, or offer it a few years from now after confirming that it is effective. Since Provenge does not limit additional treatment options such as chemo and has an extremely low side-effect profile, my personal view is that there is zero harm in offering it now. But, to withhold treatment for years only to confirm that Provenge is effective WILL result in tens of thousands of lives cut short because this treatment option was not available for patient consideration.

However, if this argument is not compelling enough, the catalyst a Provenge approval will represent within the industry towards pursing and financing new paradigms in cancer treatment cannot and should not be ignored. This decision is bigger than Provenge and bigger than Dr. von Eschenbach. I truly believe Dr. von Eschenbach knows this and is willing to accept the future consequences of his decision, even if in the 1 in 40 chance (1 in 40 chance according to the FDA statistician in the Provenge briefing documents that Provenge's success is due to chance) Provenge proves to be less than promised in the future, because in the end he can accomplish more towards his goal of curing/controlling cancer by 2015 at this moment in time, with this decision on Provenge, than perhaps any opportunity he will ever have.

Comments

[dwb:]

dont forget about the shelf they need to sell and the fact that they are burning cash. great product great stock. this is a bubble about to burst on ya. target price: $1.50

2007 May 03 08:01 AM

[hpski:]

Target price with approvable letter = $10. Marketing clearance = $40. Expect price swings reflecting market conditions and short seller noise in between clearance this month and product availability, most likely after Labor Day. Chris makes some compelling, insightful arguments. D WB likes to scrape his finger nails on a blackboard.

2007 May 03 09:17 PM

[dwb:]

should say great product NOT EQUAL to great stock.

2007 May 03 08:02 AM

[gearle0521:]

I think the following are important and conflicting arguments:
* the FDA is pursuing their OWN prostate cancer vaccine. This means they are serious in believing this is a direction to be heading.
* I think the oncologists are starting to believe that cancer must be killed this way...by the body. even if a magical chemical could kill cells, unless you kill the mechanism creating NEW cellls, the cancer will come back. therefore we must teach the body to kill and continue to kill the cells.
* An approvable letter is like a disapproval to a patient because it won't be marketed. It may seem like a middle ground but it's not. Approval, doctors can prescribe it. Disapproval or approvable letter, doctors can't prescribe it.
* I don't think the FDA gives a crap about the stock. They can't. They 'kill' biotech stocks all the time; they're used to their decisions making and breaking stocks.
* People argue that they have to issue the approvable letter just to be safe. No. They could approve it, watch it and then PULL it if they think they made a mistake. They would be watching this like no other cancer drug in a long while.
* There is a chance they approve it with a label limitation concerning different ethnic groups since there was a strange divergence of issues/problems between different groups. But this would still be an approval. Maybe it only doubles then ;-)
* I can't say whether I'm bullish or bearish, I haven't made up my mind yet. So I guess I'm currently an agnostic trader.
* I am writing this as well to convince myself one way or another ;-)

2007 May 04 01:58 AM

[windowlite:]

Letter from the Heart (a loving Daughter's Hope and Plea) ....

This will not be a "technically-inspired" message - but rather, thoughts and feelings from someone who has a much-loved Father who's extremely ill now, and who's desperately hoping to find a 'third' modality that will extend his life for a few more years - until another type of treatment can be brought out - before another return of his cancer !! He's suffering from head and neck cancer, which unfortunately can't be helped by the prostate cancer vaccine, PROVENGE, but logic tells me that if the FDA gives approval to it (which I'm 99% convinced it will, based on all of the evidence that CBER based it's overwhelming recommendation for approval on) - then "that" will not only extend the lives of the tens of thousands of men suffering now from UNTREATABLE cancer, but it will ALSO open NEW DOORS for development of other vaccines which will be based on HELPING the immune system to kill the cancer cells - instead of the "Chemo-theory" which is - KILL the cancer,, as well as the "PATIENT" !! I became extremely excited about PROVENGE when CBS did a news segment and played a video which interviewed both Oncologists and men who have been surviving with the help of Provenge. Dr. Berger (North Shore Hemotology), who was doing a final phase trial at the time - said "we have not seen Any Phase 3 trial in prostate cancer, showing a SURVIVAL difference - except for This one" ... and he went on to say "When the cancer cell load is low, we can Kill those cancer cells before they have a chance to spread - Unlike chemotherapy - which attacks EVERY cell in the body!! Provenge ONLY ttacks the Cancer cells !!" He said "this drug is very very low risk in terms of side effects" and that he expects the FDA to approve it. The only side-effects which a man named Charlie was experiencing, was some minimal sweats for a few days. The piece said "It helps men live longer when nothing else has worked!"

Another newer video interviewed Dr. Manuel Guerra in Florida, who said that the patients that it does work for (which is a large percentage) - it Has controlled their cancer. It triggers the immune system to attack Only the cancer cells, and Not the healthy ones!! It's So Exiting to see the birth of a New, Nontoxic form of therapy for Cancer patients - instead of the BARBARIC use of CHEMOTHERAPY, which makes the patient suffer to an Inhuman degree, and after it's virtually rendered the patient completely helpless, and in INCREDIBLE PAIN - patient FINALLY acheives painless peace - by Dying !! When the video was done, the CBS commentators commented that Provenge could control the cancer for a few more years, but that even a "few more months would be a valuable tool !! For people like me - who have loved ones - who are desperately searching to at least, extend the lives of the people whom they cherish - it would be an extraordinary Blessing to be able to spend some more months or years with their cherished-one !!

The doctors who did the trials, and now the FDA Panel, are in agreement that it's completely Safe !! I'm soooo Excited about future this brand new therapy which doesn't Ravage the Patient, and which ENHANCES their 'Quality of Life' !! Won't it be WONDERFUL when the approval of this non-toxic vaccine leads to Other vaccines for other cancers ... and leads to not only Extending life, but possibly (down the road) - actually CURING the disease !! I started reading about Dendritic Cell vaccines about 8 years ago - when my father's cancer came back for the second time, and at that time, I was hoping against hope - that I would see an approval of a vaccine like this - "Before" my father lost his life !!

Dr. von Eschenbach did a half hour interview on C-Span a couple of weeks ago, in which he made statements that seem to me to give alot of hope for Provenge to be approved. The following are some of the exerpts from the interview:

In a comment about how the FDA can review and modify their reccommendations, he stated... "We need to do that in a very 'targeted' kind of way .. we need to do that in a way that is addressing areas where we have greatest concern about potential risk or greatest areas in which we don't have all the knowledge that we need to have, so "We may be APPROVING a drug, but approving it with the realization that once it's used in a large population, we'll have to learn more about it.

We're dealing with a Risk/Benefit ... Certain diseases, like Cancer - we know we Have to have treatments that are in fact, "Life-Saving" .... and therefore the RISKS that come with that - may have to be Greater, but more acceptable ,.. We need to find BETTER Drugs !! That's the bottom line !! We need to be able to Enhance our development of drugs that are going to in fact Improve quality of life with a much lower level of Risk. And so That's why we have to keep this Pipeline really healthy in terms of getting More CHOICES ...

We have to be also very thoughtful and careful about those decisions in balancing benefits and risks, in not allowing things to go forward -that could in fact create more harm than benefit, and I think that's where the "Advisory Panel's help us - in Making those Decisions !!!

too causious ?? We WANT new drugs to come Forward, and into the market place. because people ARE suffering - whether it's from Cancer or from arthritis and they NEED solutions .. We WANT that to happen !! And we're going to continue to be effective and efficient in getting those drugs out there. So we're going to keep guardrails out there. It's a balance.

Part of My goal at the Food and Drug Admin - is to help MODERNIZE THE FDA - where we now are seeing science and technology develop these new life-saving, life-enhancing interventions.

... because people's lives are depending on it !!

I believe we'd be open to "ANY" new product coming forward."

This interview gave me such HOPE that we could FINALLY, FINALLY begin to forge a NEW path into Cancer treatments which don't Ravage the immune system, but rather - ENHANCE it !! The good doctor seems to be saying that he wants the FDA to open new doors into the future - with Safety in mind ... and the fact that the Entire FDA Panel voted that there are No Safety concerns for Provenge makes me Convinced that this drug has a very, very strong chance of being approved.

I want to say "Thank You" to this site for not only allowing the expression of thoughts and REAL FACTs from people who have the knowledge and the expertise to inform us, but which also gives people like me a forum to speak from the deepest place of the heart - to make a PLEA for a CHANGE in way we go about treating this very pervasive and insideous disease !!

With Much Thanks ....

windowlite*

2007 May 04 08:15 AM

[thebigass:]

<b>Great product and great stock.</b>

Only 82 million shares outstanding, 44% of them short. $2 billion potential revenues for late stage prostate cancer, $10 billion additional potential revenues if label expansion to early stage prostate cancer is indicated in 2-3 years (trials in early stage PC are into year #2 right now). Ideal delivery system and pipeline of antigens for other cancers. No side effects.

DNDN has no partner. This is significant since most startup biotechs partner early. Now, with an approval for Provenge and potential for $12 billion in worldwide sales, Partner will have to pay substantially more to get into this therapeutic platform than had they bought in 2 or 3 years ago. Cash burn is not an issue with approval, just do a discount analysis from expected revenues, but add back the lack of risk with the drug already approved and you're looking at over $1 billion in upfront fees for partnership rights. If equity is to be sold (the way Roche bought into DNA for example) it will likewise command a premium because the risk is removed with approval. Several ways to structure it but DNDN management has indicated it intends to keep North American sales rights and partner ex-US only. If you had been following their job offerings you'd see they have been recruiting as if N.A. sales will be kept in house.

So 82 million shares, $1 billion+ potential partnership cash, $12 billion in potential revenues + pipeline + platform. 100% of N.A. Revenues will likely go right to DNDN top line. Market cap reflects risk of approvable, but once Provenge is approved upside market cap on discounted cash flow is easily $70-$80 for 2007, increasing to $250-300 in 2009 if revenue projections are met and another $200 if label expansion is granted. This does not consider new drugs that may be entering late stage trials by that time which could also add premium to the valuation.

Nor does it include short squeeze potential. Lets not forget that the DNDN retail longs are kool aid drinkers, they have consistently indicated their vision of a $1000 stock in 7 years. If they have held from $4 to $25 to $15 to $20 (as Reg Sho list seems to indicate an inability to dislodge enough shares to cover shorts, let alone all those calls that have been sold) then it seems doubtful they will let go anytime soon after approval. This leaves 37 million shorts vying for shares with new funds seeking a long term position in a paradigm shift in medicine, while kool aid drinking longs and institutions have locked up close to 1/2 the outstanding shares (not to mention call options).

Very good drug. Very good stock. Potential for squeeze to $125-$150 is possible before settling back in the $70-80 range as this may be the only way to dislodge some shares from long term longs who understand what a zero side effect cancer therapy platform is really worth.

2007 May 05 02:19 PM