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Saul Kerpelman  

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  • Dendreon Is Way Undervalued [View article]
    I think you have your facts wrong. They are actually conducting a phase three trial right now--P-11--that is assessing Provenge use in men who have not yet had their prostates out. It doesn't attack the prostate--only cells expressing the antigen that is used in Provenge, and that antigen is expressed in >90% of prostate cancer cells. There was a concern that there might be a problem with attacking healthy cells, since there are some healthy cells that express PAP, the antigen, but it hasn't happened that way. Early results showed that Provenge slowed PSA doubling time significantly. The study is also tracking progression and survival and results next year may be a step toward Provenge being recognized for use in earlier stage disease--a >10 billion dollar market.
    Apr 22, 2011. 09:06 AM | 4 Likes Like |Link to Comment
  • Beyond Provenge: Dendreon Is Too Expensive for Value, Growth Investors [View article]
    There are lots of good facts in your article, but you begin from the faultiest of premises--that a reasonable market cap for Dendreon is 2-2.5 times revenues. Where on earth did you get that figure?

    The tiniest amount of research would show you that Wall Street uses different revenue multiples for early stage, large growth smaller biotechs than for large, established companies. Even Amgen--which you must concede is the model for the biotech world--and which is a mature biotech has a market cap more than 3X revenues.

    Maybe AstraZeneca and Bristol Meyers Squibb trade at 2.5 times revenue, but those are huge behemoths for whom any one drug is going to be a drop in the revenue bucket, and so the companies are assigned lower multiples.

    A much more apt comparison would be Celgene--with a market cap of 26 Billion and revenues of 3.6 Billion. That's a multiplier of better than 7X revenues. Celgene is the best model for Dendreon because Dendreon is explicitly following the same path as Celgene--going it alone globally with a Blockbuster cancer treatment (Revlimid for Celgene)--and Celgene can be conceived of as Dendreon 3 years down the road.

    Had you used the 7X multiplier of course your article would have needed a different headline. Was that the point?

    Using Celgene's multiplier for the maximum revenues you predict for Dendreon would have given Dendreon a market cap of almost 29 Billion--and making Dendreon a screaming buy at its current price.
    Apr 21, 2011. 09:18 AM | 19 Likes Like |Link to Comment
  • Why Provenge Could Be a $10 Billion Drug for Dendreon [View article]
    That's a complicated question to answer fully.

    First, on label usage of Provenge would only be for a man whose prostate had already been removed and then the cancer recurred and spread. Those guys are the sickest of the sick, and Provenge still helps them and extends their lives.

    Earlier stages include men whose prostates have been removed, but whose disease hasn't yet recurred and thus hasn't spread. These men are prime candidates for Provenge, because their immune systems are presumably stronger and Provenge may prevent the recurrence of the disease.

    As to men whose prostates have not yet been removed, that too is potentially fertile ground for Provenge use. Remember, there are more and less aggressive forms of prostate cancer and doctors do not always recommend removal of the prostate--in cases where the cancer is not aggressive doctors often recommend "watchful waiting", because, in fact, many men with slow growing cancer will instead die of other causes. Provenge may actually turn out to cure these men, or at least boost their immune systems to enable them to keep their cancer in check--not growing and not spreading.

    Also remember it is not as simple as "get diagnosed, automatically get your prostate out"--there are many downsides to prostate removal including urinary incontinence and permanent impotence in many cases. If Provenge in early stage might eliminate these possibilities there are many men who would opt for it.
    Apr 15, 2011. 08:20 AM | 2 Likes Like |Link to Comment
  • Dendreon Learns From ICOS' Mistake [View article]
    "Morons"--see, that is an example of an ad hominem attack. You seem to be what you say we are. Sorry.
    Apr 6, 2011. 08:48 AM | 2 Likes Like |Link to Comment
  • Dendreon Learns From ICOS' Mistake [View article]
    "efficacy is weak at best"--you've got to be kidding. Provenge improved three year survival by 40% and that was comparing Provenge to Frovenge, the frozen salvage product, which it turns out confers its own survival benefit. Even as it is Provenge has the greatest survival benefit in this population EVER. You obviously have some agenda or simply are ill informed. Provenge is just the start in a cancer treatment sea change--and Dendreon owns the whole thing.
    Apr 6, 2011. 08:45 AM | 3 Likes Like |Link to Comment
  • No 'Shareholder Uprising' at Dendreon [View article]
    Are you following the story closely, because the company hired Hans Bishop away from Bayer precisely because of his global experience in the areas you cite? So far he seems to be doing a masterful job too. As to owning this "niche" for long, I also disagree. The nearest competitor is years behind. Further, no one else is close to having FDA approval for an active cellular immunotherapy. Provenge is not just about Provenge, it also provides proof of concept for Dendreon's patented Antigen Delivery Cassette technology, which gives them a rich pipeline for developing additional cancer treatments. This year they begin a trial in advanced bladder cancer.
    Apr 4, 2011. 02:38 PM | 6 Likes Like |Link to Comment
  • No 'Shareholder Uprising' at Dendreon [View article]
    As I set out above I did and do agree that better shareholder communications with management is a good thing--and is in almost every company I have ever invested in. The difference is that what was presented to me initially as a friendly and behind the scenes proposal for a greater voice in company affairs was, without consultation, turned into a media attack suggesting serious problems at the company. I don't think there are serious problems at the company. It has achieved remarkably and is going to continue to do so.
    Apr 4, 2011. 10:56 AM | 11 Likes Like |Link to Comment
  • Why Dendreon Will Power Ahead Now [View article]
    Don't think so. The market cap is way too low if you price in 2 Billion in revenue in 2 years. Usually cancer biotechs with new drugs get a multiple of 6 to 8 times revenue for their reasonable market cap.
    Mar 31, 2011. 05:43 PM | 3 Likes Like |Link to Comment
  • Why Dendreon Will Power Ahead Now [View article]
    Actually I do know Medicare very well--I was at the MEDCAC panel they held on Provenge and have read all the applicable statutes.

    No one is counting chickens--Dendreon is going to meet its guidance and the share price will appreciate accordingly.
    Mar 31, 2011. 05:41 PM | 4 Likes Like |Link to Comment
  • Good News for Dendreon's Provenge [View article]
    As a resource to those confused about the importance of mean vs. median I am providing the link to a Stephen Gould article on the importance of the distinction for cancer patients. Gould himself lived another 20 years after a cancer diagnosis that had a "median" survival of 8 months:
    Feb 28, 2011. 08:55 PM | 1 Like Like |Link to Comment
  • Dendreon: A Look at the Potential for Provenge in the European Market [View article]
    Nice summary Larry. What are your thoughts on the rest of the world? I talked to Hans Bishop at the Annual Shareholders Meeting and he said they will probably partner Provenge for the Asian markets, because they will likely require new trials with an Asian population (he said particularly Japan usually insists on this). Any ideas on what they might get in such a deal?
    Feb 25, 2011. 10:05 AM | Likes Like |Link to Comment
  • Dendreon: The Big Push on Provenge Begins [View article]
    Big--I think it is better known than you think. It comes from the company, but they claim recognition is in the 90's for Urologists and I believe 80's for Oncologists. I think the main factor now is the intentionally slow ramp up. Nothing would be worse for the company than an early screw up hurting a patient--and so they are going slow and careful while they learn. They have also said while they are capacity constrained--limited to the approved 25% of New Jersey--it doesn't make sense for them to build up long waiting lists of impatient patients who then resent the long wait. Makes more sense for them to not start a big sales push until they can quickly and efficiently meet the demand it creates. They are working on those parts--increasing sales staff, upping the number of approved and trained centers providing the treatment--in anticipation of all three plants coming fully on line later this year. There is also the task of getting urologists used to the idea of infusions as part of their practices--pretty simple, all they need is a nurse, a chair and an IV pole (as Hans Bishop famously remarked in one of the Conference Calls)--but since they will make $5600 every time they treat a patient with Provenge that should be a pretty easy sell. For sure this is the full of tension, will they execute or won't they?, year, but if they do (and I think they will) the current share price is going to look to have been incredibly cheap.
    Feb 22, 2011. 08:02 PM | 1 Like Like |Link to Comment
  • Dendreon: The Big Push on Provenge Begins [View article]
    Great article, Larry. I think you should also point out that the Dendreon plants to manufacture Provenge are atypical in another way as well: Cost. Where the usual recombinant protein plant can cost hundreds of millions and, as you say, take years to build and get approved, Provenge "factories" are really just warehouses with dozens of drop in, standard lab "clean rooms", and cost somewhere between 50 and 70 million total, depending on the number of work stations or "hoods" (in biotech parlance). Then each cheap factory can produce Billions worth of product for years.

    I have heard rumors for the past year about future plants in the Chicago area and in Texas. Do you have any information on this?
    Feb 22, 2011. 01:35 PM | 3 Likes Like |Link to Comment
  • Good News for Dendreon's Provenge [View article]
    Sorry if you perceive me as attacking your character. I'm not. I don't even know you. What I am questioning is your slant against Provenge. I'm not attacking Matt Herper either--it's a fact however that his articles are not reliable regarding Provenge. As I said, I have personally heard the author present the data and he was enthusiastically supportive of Provenge. My point is that I suspect Mr. Herper did not report everything the doc said to him--selectively quoting what agreed with Herper's agenda.
    Feb 21, 2011. 07:36 PM | Likes Like |Link to Comment
  • Good News for Dendreon's Provenge [View article]
    I can't read your mind, of course, but it doesn't seem to me as if you just want accurate reporting to me, since, for example, you ascribe to me a misrepresentation as to larger percentages of patients achieving multi-year remissions than with other drugs, when I never said that at all. You are the one who began talking down Provenge by suggesting other treatments for other cancers had comparable results. I have in fact limited myself to telling the story of Provenge, and you have come in to comment about "disappointment" as to the Provenge results and the "just 9% difference" between Provenge and placebo survivors--while glaringly ignoring the precise point of the Duke study, that 66% of the "placebo" men received salvage frozen Provenge and may have thereby received a survival benefit. Further, as to this example, you also for some reason choose to slant your "statistics" quote with the 9% figure, when you could just as well have couched it as "the 3 year survival of the treatment arm was 41% better than the placebo arm". Of course you have consistently paid lip-service to wishing Provenge success, but I must say that claim is belied by your slanting of the facts and your setting up a straw man to claim that I am not reporting objectively. Your attacks are subtle, for sure, but still pretty transparent to one who knows the full fact set.

    Just curious--do you deny that succeeding in training the human body to recognize cancer as foreign and to attack it is a major cancer breakthrough that has been sought by researchers for over a hundred years? And that if Dendreon's method to do that can be applied to other cancers, that it will prove to have been a paradigm shifting accomplishment? Nobel prizes likely for its originators?
    Feb 20, 2011. 01:27 PM | 7 Likes Like |Link to Comment
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