Please Note: Blog posts are not selected, edited or screened by Seeking Alpha editors.

Dendreon Update

|Includes:Dendreon Corporation (DNDN)

Since my first piece on Dendreon on July 7, in which I recommended that readers buy all they could get their hands on, there have been many developments in the world of the company that is the first to get FDA approval for a cancer immunotherapy.  Readers are urged to consult the earlier articles, but in brief Dendreon is the small biotech that has rocked the world by attaining the Holy Grail of cancer research by succeeding in training the prostate cancer patient's immune system to recognize cancerous cells as foreign and to attack and kill them.  Its approved treatment, Provenge, significantly extended the lives of even the sickest of the sick prostate cancer sufferers in 3 separate phase three studies.

First of all, those who followed my advice are sitting on a 33% gain (29.09 close on July 7 to the current 38.90 as I write) in just 33 days.

There's no suggestion here that similar jumps are imminent, but good news continues to pile up for Dendreon.

The scare I originally wrote about--Medicare instituting a review of coverage for Provenge--has died down as investors have consulted the law applicable to the review and as the medical community has weighed in on whether Provenge is "reasonable and necessary" for late stage prostate cancer patients.  As to the law, Mr. Market has confirmed what I wrote on July 7, which is that Medicare's statutory authority to conduct such a review DOES NOT INCLUDE authority to review a treatment's cost.  Therefore the hysterical moment of rumors about denying the treatment as too expensive have pretty much disappeared (except among the hard core Obamacare bashers, who somehow see a conspiracy to kill old people in every bureaucracy).  And as part of the review process, in the public comment portion of the review the medical community has weighed in like an 800 pound gorilla in favor of coverage for Provenge.  Out of close to 800 public comments there were a mere 11 or 12 that one would characterize as "anti-Provenge", while heavy hitter organizations like ASCO weighed in strongly in favor of Provenge not only as "reasonable and necessary", but heralded the treatment as a breakthrough in cancerworld and urged coverage in the strongest possible terms.

Next, with wonderful timing for the company, since the CMS public comment period was just about to end, the results of the Impact trial--which resulted in FDA approval of Provenge--were published as the lead story in The New England Journal of Medicine, the premier medical journal in the world.  This enabled Dendreon in its public comment to the CMS to append the NEJM article and to agressively assert that the entire CMS review was unnecessary and should be withdrawn as baseless, since the case for Provenge coverage was overwhelming.

Then they had a Quarterly conference call.  And Wall Street was blown away by its first look at the uptake of Provenge.  While Quarterly revenues from the first sales of Provenge were slightly below consensus analyst estimates at $2.8 Million, the company also wisely revealed the additional fact that in spite of the plant in New Jersey being closed down as part of expansion plans for 10 days in July, July revenue was still $5.2 Million.  They further revealed that doctors in the short period of time since Provenge was approved on April 29, 2010, have already written over 500 prescriptions for full course, $93,000, treatments with Provenge.  Further, the company said that 14 of the 15 regional Medicare contractors--whose policy decisions regarding coverage control pending the completion of the national CMS review--have already decided to cover Provenge.  They reiterated guidance that at least 2000 patients will be treated in the first 12 months of Provenge availability, and that further plant capacity for almost $2.5 Billion of annual Provenge production will come on line in mid 2011.

The next day, August 4, Dendreon shares touched 40 before settling in the high 30's.  Many analysts reiterated buy ratings with targets in the 50's and 60's for the next year.

The company did not announce anything, except that there would be a future announcement sometime in the fall or in early 2011, regarding the progress on EMEA approval for Provenge.  But for readers here only I will share that I spoke directly will Hans Bishop, Dendreon's Chief Operating Officer, at the shareholder's meeting in June and he gave me the distinct impression--without literally saying the words--that they do not expect EMEA to require additional trials in order to gain European approval.  I have not spoken with him since, but I would expect this feeling to be even stronger now that the Impact results have been accepted for publication in the NEJM.

He did directly tell me that the company is likely to partner Provenge in the Asian market, although he provided no time frame for this to happen.

This is the recent micro stuff--and it's all good.  But please also remember the macro:  this is the company that owns 100% of worldwide rights, not just to the first FDA approved active immunotherapy for late stage prostate cancer, but for a well protected antigen delivery cassette technology that has been validated by the success of Provenge.  That same technology will be tested in multiple cancers in the years to come--giving Dendreon the potential to be a biotech behemoth.

Cure for cancer?  As shocking as it may be to type that question, it is at least in the legitimate realm of discussion regarding the future of Dendreon.  I remind you--the Provenge researchers themselves have publically opined that when given in earlier stage disease, as doctors may now legally do off label,  to men with earlier disease and thus healthier immune systems, Provenge may prove to be a cure.

How big would that be?

Buy all you can and hold long term.


 



Disclosure: long Dendreon

Stocks: DNDN