A Lost Hope? Dendreon Derailed While Archaic FDA Promises 'New Era'

Two weeks ago, I wrote that “Dendreon (DNDN is a stock from the backwoods that has moved to the forefront as a new day dawns at FDA”. I was right on the first half of that statement. Dendreon has been on the forefront, trading more 100% of its issued shares twice in the past 30 trading days, and exceeding one billion shares traded since March 30, 2007.

On March 29, 2007 an FDA panel voted 17-0 on safety and 13-4 in efficacy for late stage prostate cancer patients. Since then, Dendreon has flown high and is about to crash with the hopes of their patients, advocates, and investors.

In the meantime, the FDA is on a half baked mission to change itself. It is stuck in the Stone Age. There way of carrying out their mission would offend the Geico cave men.

Their leader Dr. Andrew von Eschenbach is promising a new era. Excerpts from his recent speeches:

“…We are committed to serving patients to bring them new products and a new vision. Ability to bring new solutions for cancer. I saw much suffering and dying. Important we continue to make progress. Progress has to have a purpose. We are immersed in era of opportunity. Opening up opportunities for new solutions for cancer, diabetes, etc...”

“….A bridge between discovery and development to delivery - rapid, translation and delivery of those interventions. Accelerate and facilitate, while we can still assure patients, not just as a bridge but to protect their health. Rapid is not reckless. Bring effective agents rapidly not less safe. Most profound transformation of what is now possible in this new era. Effectiveness and safety can go hand in hand. Profound transformation has come about because of the advancement made. Cancer is no longer a lump or a shadow, but for the first time at the genetic, molecular and cellular level. Opened up a new understanding to create new solutions…”

“…..FDA is positioned to take a new view of its future, to be that bridge to bring the products to patients for safety and efficacy. FDA is going to work across the entire life cycles of those products. Total life cycle - need to ensure understanding of outcomes. Promote and protect public health. Work collaboratively and cooperatively. Enhance our understanding, to maximize their effectiveness and minimize side effects….”

“….Science led and science based. So radical a transformation that one must think about it like a metamorphosis, the difference between a caterpillar and a butterfly. The change is profound, it’s occurring as we speak…”

"People will no longer need to suffer from a disease. They will be able to see their grandchildren grow up."

The new FDA is a“a bridge rather than a barrier”, and “guard rails instead of speed bumps and potholes in the development of new therapies”.

“We can change the world”.

Well the guard rails seem to have derailed Dendreon.

• Dendreon has lost 75% of its market value in the last two days.
• Dendreon has spent much needed cash for its survival in anticipation of approval.
• The Complete Approval Letter is incomplete.
• Investors have lost hundreds of millions of dollars.
• Short sellers have won, because they were able to forecast FDA’s outcome.
• Above all the patients have lost the most….Hope!

In the aftermath of FDA’s Complete Response Letter, Dendreon is hanging on to its life much the same way as its patients were awaiting the promise of provenge…with a wing and a prayer!

As I listened to the conference call from Dendreon yesterday, President and CEO Dr. Mitch Gold was unsure of exactly what additional data would suffice. It was even more shocking to learn that Dendreon had, “limited to no contact” with the FDA since the Advisory Panel meeting. Yet, Dendreon continued to post over 44 job openings on their site, spent several million dollars on purchase of commercial antigens in anticipation of the expected approval. As a result, Dendreon’s losses widened and their cash on hand has diminished substantially.

Dendreon had an opportunity to sell up $200 million of additional shares during the stocks run up to over $20 dollars. Were they so confident, or did they misread FDA’s posture after the panels meeting.

According to Dendreon’s press release Wednesday:

The FDA has requested additional clinical data in support of the efficacy claim contained in the BLA. The Company is seeking a clarification from the FDA as to the nature of the data that is being requested. The FDA has also requested additional information with respect to the chemistry, manufacturing and controls [CMC] section of the BLA, which the Company believes it can supply to the FDA in a timely manner.

And today the Company is still seeking clarification. Asked if Dendreon would appeal the decision (if you can call it that), Dr. Gold said, “we could, but we will not...”

As I finished listening to the conference call, I left with more questions than I had before listening to it. The management seemed confused by the next steps. They are planning to reduce the burn rate. The website has gone from 44 job openings to no openings at this time.

In the meantime, Dr. Andrew von Eschenbach says, “We can change the world”.

Well sir, you have…

Disclosure: Author has a long position in DNDN

DNDN 1-yr chart

Comments

[goamofo:]

Von Eschenbach has no teeth. Why did he direct this to an Advisory Committee it he was going to ultimately deny the application. This coming from a man who is himself a prostate cancer survivor and whose father died of prostate cancer. Do you think that being able to have spent an additional 4.5 months with his father (the Provenge survival benefit) would have been worth it to Von Eschenbach?

What a waste for terminal prostate cancer patients. Clean safety and statisically signifcant survival benefit. Most prostate cancer patients that are ALREADY terminal value quality of life and SURVIVAL greater than whether dubious and toxic chemotherapy is shrinking his tumor.

To wit, this decision is a catastrophy on so many levels. Funding for biotechs like Dendreon? Gone. Provenge availability to prostate cancer sufferers? Sorry, it's not happening.

Regardless of your position on the stock --- long or short --- you cannot deny that this decision means a probable death sentence for 20-some-thousand men per year in the United States. Great, just great.

2007 May 11 06:19 AM

[Karuna Kana...:]

FDA in the single largest impediment to progress in the USA. I read some ones comment on the WSJ that said, if FDA were regulating the electronics, we would hand land lines and IBM mainframes only.

I am not as generous. I think if they were regulating transporting we will be on horse buggy's and bicycles would be receiving Complete Response Letters.

This was a POLITICAL DECISION, and not a scientific decision. You can not change science, but you can sway a political decisions. If you are angry, channel your energies, make your self be heard. Few years ago AIDS created a stir and medicines were approved sooner rather than later.

The, "Change Wave Letter" has written an article calling the FDA cowards...

Thank you for your comments.

2007 May 11 09:09 AM

[Echo To All:]

nice article. My anger over the FDA, and its ambiguity does not permit me to be so elegant.

The FDA owes the cancer patients (they deprived of hope) a HUGE explination. And it better be fricken good.

It better be more logical than... allowing a treatment that is COMPLETELY safey, that shows substancial evidence of efficacy and that is specific for a patient population that has no other form of treatment available to them. (Either Tax. will not work for these patients or they refuse it due to the quality of life issue.)

They better be able to explain the "risks" of provenge toward this patient population for the delay, when these patients have NO OTHER OPTIONS. They better be able to explain how they (the FDA) are doing these hopeless patients NO HARM!

The FDA has a LOT of explaining to do, and congress better force them to explain, ASAP. And the FDA better have a pretty good fricken reason.

2007 May 11 08:41 AM

[Karuna Kana...:]

Thank you. I put off writing this until last night. It was somewhat of a therapeutic process.
I had spent most of the day reading various articles. Excellent articles and blogs in Wall Street Journal.

Pharmacyclics CEO is taking the fight to the FDA. Please look it up.

I enjoy your writing and have read your blogs. Thanx.

2007 May 11 09:15 AM

[clangley:]

Boo hoo, you got greedy and lost money, so now you cry about it. Maybe you should do your homework next time instead of random speculation.

2007 May 11 04:09 PM

[Karuna Kana...:]

Thank you. It's all so clear now.

2007 May 14 04:39 PM

[DHANABAL AT...:]

Karuna,
Good article. I was watching DNDN sour on the squeeze day, but could not get in because my money was locked up in other stocks. I do beleive that this stock will come back. Thease agencies like FDA, SEC etc are never on the common investors side, rather they are on the hedge funds and big shorters side only.

2007 May 11 04:33 PM

[Karuna Kana...:]

300 million shares in the last 4 trading days. Total available shares 83 million. Wow..

2007 May 14 04:40 PM

[dennisslosser:]

It was a race bet a one legged duck & chicken, & the duck won,u know the mob was there-fixed!!!!!!!

2007 May 11 08:34 PM

[Karuna Kana...:]

Agreed!

2007 May 14 04:45 PM

[jimmy Turano:]

WHAT ABOUT THE 'RODNEY DANGERFIELD' STOCKS OF BIOTECH THAT GET "NO RESPECT'
MAY 12TH *HERE ARE TWO STOCKS THAT ARE POISED TO TAKE OFF AND MAKE INVESTORS A NICE POTENTIAL PROFIT THIS COMING WEEK. ENOUGH WITH DNDN ALREADY. ENOUGH WITH CRAMERS TOUTING 'NSTK' WHICH IS A COMPANY HEADING NOWHERE FOR THE REST OF 2007. THE OBJECT IS NEWS YES, BUT TO MAKE MONEY IS THE
KEY TO INVESTORS!
INCY $7.25 AND IMM $7.00 ARE THE TWO RODNEY DANGERFIELD STOCKS OF THE WEEK READY TO TAKE OFF!
WHY CAN'T WE HEAR ABOUT SOME NEW REFRESHING "REAL"BIOTECH COMPANIES FOR A CHANGE!!!!
JIMMY T

2007 May 12 09:31 AM

[Karuna Kana...:]

With FDA's current posture, you can make more money shorting Biotech stocks with a hedge than risking long positions. For every one approval there is 10 rejections and Complete Response Letters.

2007 May 14 04:45 PM

[jim in penn...:]

I have been following the dndn scenerio for several months now and i feel that the FDA made a political decision on provenge. How can they approve Paxil--Vioxx- and other harmful drugs that ultimately lead to heart attacks--- suicides and strokes, but deny the only hope for male cancer patients a better life for a undetermined time?
The stone age political biased FDA owe many thousands of last stage protate cancer patients a full explanation of their stone age decision!

2007 May 13 08:43 AM

[Karuna Kana...:]

I share your sentiments.

2007 May 14 04:46 PM

[Mr Mister:]

Unfortunately for Dendreon, government regulation is much more than a academic exercise and the FDA is mandated to ‘Protecting Consumers and Protecting Public Health’ rather than securing the profitability of Bio-tech companies.

If Dendreon was worth anything, it would have been bought out a long time ago. The fact that they don't have a partner is very telling.

2007 May 14 02:14 PM

[Karuna Kana...:]

You must have missed the 17-0 vote for safety 13-4 vote for efficacy, as well as the testimonial of the patients who have benefited from provenge.

You must have also missed the fact, that Dendreon has resisted buyouts.

Thank you.

2007 May 14 04:43 PM

[patty George:]

for a take-off...........cpt...

2007 May 14 05:40 PM