Dendreon (DNDN) is a company not unknown for hype. Today’s hype was that the Provenge prostate cancer immunotherapy met the Phase 3 survival goals of reducing death by 22% and extending life by 4.5 months for men with advanced prostate cancer who no longer responded to hormone therapy. While the company claims the results are consistent with previous studies, detailed results will not be presented until the American Urological Association's Annual Meeting in Chicago on Tuesday, April 28 at 2:20 pm CT.

I won’t pass judgment as to whether the product is clinically effective. The investor risk is greater with the clinical procedure. The procedure involves three cycles of blood extraction, antigen loading and reinfusion over four weeks. The extraction and reinfusion take place in the doctor’s office, while the customized antigen loading is done for each patient in Dendreon’s manufacturing facilities.

Checking on the biotechnology sector, we spoke with Zacks senior analyst Grant Zeng, CFA about recent developments among these companies. We discussed M&A [mergers and acquisitions] activity as well as top Buy recommendations.

How has earnings season gone this quarter? Any major surprises?

There seem to be many reasonably priced plays within biotech at the present time, which is a very good thing in a soft market such as the one we have been slogging through. Zacks senior biotech analyst Grant Zeng, CFA was on hand to give us his perspective on the sector recently.

Do you expect 2008 will be a strong year for biotech stocks?

Yahoo (YHOO) – News over the weekend that Yahoo and Microsoft (MSFT) had returned to the bargaining table for talks on a “strategic online partnership” not involving a total acquisition had minimal impact on Yahoo’s share price. Shares are up .58% this morning to $27.81, but with nearly 250,000 options trading in the first 90 minutes of the market, we see puts marginally outpacing calls, due in large part to the more than 56,000 lots trading in July 27.50 puts. These traded to the middle of the market, making directionality a tough call, but we can confirm that they were transacted in one fell swoop for $1.66.

Trimeris (TRMS) just came out with its 4th quarter and 2007 year end numbers. Plugging this into my cash flow analysis results in a new valuation range:

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I’ve been working in the technology field for several years designing and laying down systems to push bits and bytes around over the web. Anyone that works in this industry knows that in order to stay competitive, one must dedicate themselves to continuous research and development. So when a company such as Trimeris whose sole foundation is based upon research and development of new drugs suddenly decides to eliminate its research and development staff, it does not paint a pretty picture for the future.

So how did I end up with Trimeris in the Ten Grand portfolio? It was not the smartest of decisions on my part, but in documenting my decision criteria and analysis, I hope some of you will learn from my mistakes.

HealthCor noted it's interested in having discussions with the company's management concerning the current prospects and various strategies for maximizing shareholder value. The firm said it has requested a meeting with the company's management.

Swiss drug giant Roche Holdings AG and its U.S. partner Trimeris Inc., reported positive interim results from an HIV study conducted with Fuzeon, an HIV treatment the companies have co-developed. The results, presented at the Fourth International AIDS Society Conference on HIV Pathogenesis, Treatment and Prevention in Sydney, show that when Fuzeon is combined with with Darunavir and a third anti-HIV drug, 64% of treatment-experienced patients achieved undetectable HIV at 24 weeks. The study involved 63 patients in the US and Australia. "Undetectable" HIV is defined as less than 50 copies per ml of blood. Fuzeon is the first fusion inhibitor available for the treatment of HIV.

In addition to the risk of declining new patient starts on Fuzeon, this study underscores the potential for direct switching of existing Fuzeon patients to new oral drugs. Firm believes that the side effects and inconvenience of Fuzeon therapy could open the door for switching to create further pressure on future Fuzeon sales. These new oral options could enter the market in 2H07 (PFE's maraviroc and MRK's Isentress).

Firm discusses BMY's Zerit and PFE's Viracept as case studies, both lost significant market share. If Fuzeon suffered a similar rate of market share decline (and they believe it could be worse), the company's current profitability may be unsustainable by 2009-2010. As a result, they are lowering their price target from $7 (16x 2010, disc 30% for two periods) to $5 (12x 2010, disc 40% for two periods) to reflect the low end of the current range of biotech multiples and heightened risk to our profitability assumptions.

That trumps an $85 per share bid from Beckman Coulter (BEC), an offer that was made 10 days ago on March 26. At the time, Biosite management pronounced itself in agreement with the merger. Anticipating still higher bidding, investors moved the price of Biosite up over the $90 per share figure offered by Inverness. During the past 12 months, Biosite produced $112 million of EBITDA on revenues of $309 million.

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The company said Q3 revenues will be between $80 and $85 million. That number is up from last year’s sales of $76 million, but considerably below the $111 recorded in Q2. Revenue for all of 2007 will be about $330 million, a large increase from the $239 million recorded in fiscal 2006.

Pfizer (PFE) reported that maraviroc produced an undetectable level of virus in twice as many patients as an optimized regimen. Maraviroc was given as an adjunct to the optimized regimen and compared to the regimen alone. Also, in maraviroc patients, the level of CD4 cells was almost twice as high as the placebo group.