Dendreon Suffers from Immature Management

The Dendreon (DNDN) bulls are not exactly a cult. Cult is not the right word -- I would say they are an unreasonably large number of wild optimists who love stock they own, always a dangerous thing.

A little history to newer readers -- in my paid service, I recommended DNDN for several years and said they would get an FDA panel approval. Only the folks at Biotech Stock Research and Sagient Research agreed, no one on Wall Street did. The panel meeting was held, it was almost unseemly as both DNDN and the FDA broke records for incompetence, and Provenge, their treatment for prostate cancer, was approved. I immediately told my subs to hedge or take profits because the nature of the panel decision put the final approval at risk. The final decision was negative -- the FDA overturned the panel -- and then the fun started.

Many people hung on to DNDN when it went from $4 to $24 and back to $6 or $7 and change. I believe the stock is worth about $2 because I do not believe the early results from the current trials will generate an approval. So far, as before, I am in the minority and the stock is holding up to near where it first landed after the FDA reversal. There is not enough space or time here to explain why I think the new, early trial data will fail to get them an approval. I do believe if the company were managed by adults, which it is not, DNDN would forgo an early shot at approval and would ultimately get approval in 2010 or 2011.

Part of the hoopla is the ongoing publicity generated by patients dying early or needlessly because of the FDA decision and their attempts to reverse the decision through political means. This will not happen and better not happen -- do you want Congress, and therefore lobbyists, making decisions on which drugs will or will not work? That being said, the cowardice and incompetence of the FDA staff, in particular the oncology gods at CDER and the statisticians, are killing more men early or needlessly in a month than we are losing in Iraq in a year, if Provenge does work for even a small percentage of prostate cancer patients.

And everyone agrees even if Provenge does not work it does no harm. Hormone refractory, late stage prostate cancer is one of the meanest deaths on the planet - what were the FDA bureaucrats thinking when they said no after the panel agreed unanimously and strongly the treatment was safe?

Hope this helps.

For purposes of disclosure, I still own DNDN as I sold January, 2009 $7.50 calls as part of a hedge after the FDA panel decision.

Comments

[nerdseeksbl...:]

I think it is important to note that "immature" is not quite the right word. I fault management too, but because they have a "popular" attitude towards science. I posted more details here,
www.investorvillage.co...

but essentially management is ignoring the science that makes the most of the confusing clinical data. Their attitude, while quite popular these days, is exactly what the FDA is "supposed to" prevent.

2008 Jan 13 01:50 PM

[eponymousLTC:]

I've read this article three times trying to understand exactly *how* DNDN suffers from immature management, and I still don't get it. You mention the FDA and DNDN are both run by incompetents, and while you give commonly held perceptions about the FDA as arguments for them, I still don't understand exactly what makes DNDN management so immature...

2008 Jan 13 01:54 PM

[phoenix55218:]

I like that, you don't have time or space to explain why you think the interim results will not support approval. That does seem like a major omission.
As to your view on the involvement Congress, you are wildly off base. If it was a matter of Congress telling the FDA that Provenge was a great treatment and had to be approved, in essence rendering a medical opinion, then I would agree with you. Instead, it is a matter of holding hearings to see if the FDA's decision making process has been corrupted by outside interests with their own agenda. Dr. Scher comes to mind on this one.

Let's see, why shouldn't DNDN try for approval before 2010/11?
1)Well, another 60,000 men, roughly, will have died from AIPC between the interim results and then. That would influence me.
2)DNDN will have to finance at least one more time (Beyond the $130M financing they have locked up) ,further diluting the stock and delaying the advancement of their pipeline. If you know anyone who has ovarian or breast cancer (My mother has metastatic breast cancer), then this might be an important concern.

"Part of the hoopla"...that phrase kind of implies that the issues at stake are unimportant. Are you saying that patients dying early or needlessly is an unimportant issue?

You say that Provenge"would ultimately get approval in 2010 or 2011.", so it sounds as though you think Provenge is effective.
Why then are you not irate over the FDA's decision and hoping for either a reversal based on Congressional hearings or at least approval based on interim results?

Are you by chance looking to make money on the short side between now and 2011? Maybe that's why you don't offer an argument for not using interim data and why you don't comment on Dr. Scher's COI.

Just my thoughts, but what do I know, I'm just a physician who treats patients dying from AIPC.

2008 Jan 13 03:23 PM

[bloke:]

Interim data would be in 08, and you know it is worthless. And hence you sold 09 calls...right!

"I believe the stock is worth about $2 because I do not believe the early results from the current trials will generate an approval."

Do you really believe .. or are you willing to explain?

2008 Jan 14 12:43 AM

[User 270014:]

"There is not enough space or time here to explain why I think the new, early trial data will fail to get them an approval" is perhaps the biggest cop-out I have ever read in an article. Did you seriously just publish an article about a controversial phase III trial of one of the most important potential cancer treatment advancements of our time and not even attempt to support your thesis that the phase III trial will not result in an approval? I assure you there is plenty of space left on this page for you to atleast summarize your thoughts. There exists such a tremendous amount of mis-information on these Provenge phase III trial results and you have the means to bring clarity to us investors and yet you choose to be the coward and claim there is not enought space on the page to share your wisdom. I challenge you - make space. I am an investor that reads seekingalpha for unique investment insight on companies like GNGN, of which you have provided none. I hope that you will shortly amend your article - if not I will be writing to seeking alpha asking to have you removed as a contributor for wasting editorial space and my time.

Mar 17 03:44 PM