Dendreon’s Big Day

This was Dendreon’s (DNDN-NASDAQ) big day, and may be what will end up as the largest battleground stock so far in 2007.  This situation for Dendreon was hardly covered at all until the end of last week, and now it is one of the most covered stories this week.  Dendreon (DNDN) should have plenty to rejoice over after panel backing from the FDA.  The "safety" vote for Provenge was in favor with a 17-0 vote from the FDA panel today.  The "efficacy" vote was also also in favor, although not unanimous as it came in at 13-4.  Final FDA Approval is due on or before May 15(ish).  The FDA Approval process is not guaranteed by a panel backing, but the common trade is that the FDA panel rarely goes against its prior panel backing in the outright approval process.

Here is a quick fact sheet:

The stock has been halted all day awaiting an FDA panel decision regarding a potential panel backing of its Provenge before the final approval later this spring. Provenge is a late-stage prostate cancer treatment that is mostly meant as a life extender after all other efforts have failed.  In short, this is supposed to be a life-extender rather than a cure.

On Sunday we ran several excerpts from various presentation data to show the statistics for Provenge. 

The FDA issued some mixed commentary Tuesday where it questioned the data and effectiveness, and also that there could be some support for the vaccine.  Big surprise, the government says two conflicting things.

Options pricing and trading activity have been all over the place here, but this is looking to be a big mover.  The open interest in the April and May contracts was more than well over 300,000 contracts alone.

The February short interest of 20.3+ million shares grew to 26.4 million in March.  That is 32% of the float, and the short interest has reportedly grown to the point that it can hardly be borrowed at most firms.

A firm called Brean Murray, Carret & Co. was noted yesterday as reiterating a Sell rating with a $1.50 target.  Earlier this month another firm McAdams Wright reiterated a Hold rating.  We have not confirmed the exact details of either research note there.  If those notes are exact, at least one of those guys is going to be answering some angry calls.

Here is the rest of the company’s drug candidate pipeline.

A conference call with Dendreon management to address this issue will be held this evening.  Here is the direct jump to the conference call.

Last but not least, all traders and investors alike need to recall that the company has a current shelf registration to allow it to raise up to $146.8 million in stock sales.

This stock was hardly doing any trading volume last week and was trading at $3.70 on March 21.  It closed at $4.47 last Friday on almost 10 million shares and it closed up at $5.22 yesterday on more than 32 million shares after CNBC ran a feature on it.  This one is going to be wild tomorrow.  The company also has a conference call tonight, so it is not yet clear if a "lift" will be made to the halt status today or if they will wait to release it tomorrow morning.

Jon C. Ogg
March 29, 2007

Jon Ogg can be reached at [email protected]; he does not own securities of the companies he covers.