Weekly Healthcare Stock Watch

by: VFC's Stock House

DNDN: After sputtering along for the better part of the week, Dendreon closed right at the nine dollar mark, but dipped back below that mark in after hours trading. The now-closed third quarter won't go down as a good one for this company, at least not in terms of share price performance, after full-year guidance on Provenge sales was pulled due to the lack of prescription growth predicted by Dendreon officials.

Although manufacturing and distribution capacity has increased dramatically during 2011, when the FDA approved new Dendreon manufacturing facilities and workspaces, the inability or unwillingness of doctors to foot the up-front high cost of treatment for Provenge has severely dampered the revenue outlook.

That announcement in August sent DNDN shares diving to below ten bucks, right where they closed the quarter.

Dendreon opens the new quarter with a restructured look and hopes that "education" and demand will help reinvigorate the Provenge sales outlook.

The month-over-month sales numbers, while not gearing up for the monumental run that was previously predicted, are still growing at a solid rate. July Provenge numbers came in at $19 million, while August saw an increase to $22 million. Assuming a similar trend for September, that could put the total Provenge revenue for the quarter close to $70 million.

Should that trend continue into the fourth quarter and into early next year, there's reason to believe that Dendreon is still on the path to realizing the significant place in the history of cancer treatment that was previously expected.

With the entire market dropping - making Dendreon no exception - an eventual rebound from the current levels could still be in store as Provenge sales gain traction. Keep watch for the quarterly numbers.

AMRN: Amarin shares have dipped below ten after an announcement last week that an NDA had been filed with the FDA to bring AMR-101 to market for the treatment of high triglycerides. Two Phase III trials, the ANCHOR and MARINE trials, were positive, but the run to twenty earlier in the year after the positive trial news was mainly fueled by reports that Amarin was the in the sights of numerous suitors as a potential merger or acquisition target.

Those reports never panned out and investors are now antsy about the fact that the company might go-it-alone in bringing AMR-101 to market.

With the NDA filing not looking to be finalized into an approval decision until mid next year, it could be that there are no short-term catalysts to keep AMRN shares from falling even further. With that said, however, peak sales of AMR-101 are predicted to come in at over a billion dollars annually, so any slide might prove to be the time to buy.

It's also my opinion that the product might be best suited in the hands of a potential buyer, as Dendreon has proven to investors what could happen to smaller companies when the large, primed sales and marketing forces of the big boys in the sector are not available to pitch a product. Keep an eye on Amarin.

HGSI: Shares of Human Genome Sciences dropped nearly eight percent on Friday after a report from the UK indicated that the British regulators decided that Benlysta, a new lupus treatment that is partnered with GlaxoSmithKline (NYSE:GSK), did not meet the bang-for-the-buck criteria to be considered for coverage by the national health plan.

This decision is just preliminary, mind you, but the negative news was enough for some buyers to jump the HGSI ship, which also most likely created some panic selling.

European governments are watching their Ps and Qs these days, in a way that many doubt the American government ever will, and issues such as national drug coverage are sure to come to light at a time when Western governments are running low on excess cash.

Earlier in the month, however, HGSI received a boost after Benlysta sales were reported to have come in a tad bit higher than analyst expectations.

It's likely that the issue in Great Britain will be negotiated to an agreement by GSK and the medical authorities, so the news of an initial rejection could be viewed as a non-factor. That said, it turned into a factor because it was used as a reason to spark some panic selling.

Could be that the current prices look to be a decent buying opportunity for those who believe shares will approach the analysts estimates of the north side of twenty.

BDSI: In discussing companies that might be suffering from an overly dramatic downward move due to the pessimistic sentiment that is dominating the entire market, look no further than BioDelivery Sciences.

The company announced news last week that its Phase III trial for BEMA Buprenorphine had missed the primary endpoint. As a results, shares have been cut about in half and BDSI is trading for a hair over the dollar mark.

Given the lack of any news that could halt the slide and provoke some immediate short covering, many predict that BDSI is destined for the sub-$1 mark.

As disappointing as the trial outcome may be, this move lower might be an overreaction.

Onsolis is already on the market in the United States, and once the REMS issues are finalized - which could be soon - that product is free to start realizing some revenue. Onsolis is also due to launch on the Canadian market where there will be no REMS issues thrown into the mix as a road block.

The last two trading days saw some huge bailing of BDSI shares, with nearly seven million shares leaving, but investors with a long-term outlook on the company and its technology might not be so much in a hurry to leave.

As I've previously stated, I like this one for the IRA, and some accumulation at the current prices might pay off pretty decently down the road, especially if see some REMS resolution.

AMPE: Not much has gone negative for Ampio Pharmaceuticals lately, aside from some fairly heavy short interest, yet the share price - after about doubling in a month's time - has spent the better part of a week on the decline.

It's possible that the decline is related to the short interest, as nothing but encouraging news has hit the wires for a while, but it's also possible that the stock is still trading below the radar.

With a pipeline of repositioned products being readied for market, Ampio's low-risk, high reward approach to bringing old drugs to market for new indications may be close to paying off.

Zertane is the product most advanced, and a recent licensing deal in South Korea is a good indication that interest in the product could soon translate into sales revenue.

Upcoming catalysts could easily reverse the downward tick that began early last week.


SIGA: Siga shares have already started to rebound following a dramatic drop on news that a judge ruled heavily in favor of PharmAthene (PIP) in a ruling over a lawsuit regarding a failed merger years ago. With the market acting the way its been, don't count on a continued rebound, but the potential of Siga's antiviral pipeline could pay off big later on down the road. Siga will also appeal the recent legal decision.

AGEN: After trading lower following news of a reverse split last week, look for a possible continued decline from Agenus shares as reverse splits are often followed by temporary slides in share price. Unless pipeline news (Prophage is currently being tested from glioma) can spark a rally, AGEN will continue trading under the radar and be looked at as a potential player later on down the road.

OTC:TLON: Big rebound on double the volume Friday from Talon shares after the company announced an NDA for Marqibo early last week.

OTCPK:OVIT: Silent for some time, volume has picked up a bit - although that's not saying much considering the no volume days of the recent past - as speculation about the continuation of the OVI-123 trial takes place. Any attention by a big player could lead to a quick double, in my opinion, as volume has been nonexistent.

ONTY: The hype that flew shares to ten bucks has subsided, but this isn't one to forget about with the Stimuvax trials winding down.

MNKD: A recent run stalled on Friday, but Mannkind is making a push toward four.

OTCPK:GNBT: A Mannkind competitor, Generex shares remain trading at a dime as the company prepares to spin-off subsidiary Antigen Express and its flagship product, the breast cancer vaccine AE-37.

Disclosure: I am long DNDN, HGSI, MNKD, SIGA, AGEN.