Dendreon: A New Form of Shareholder Activism (DNDN)

There was a bit of an unusual message this morning, and that was an advertisement about Dendreon’s (NASDAQ:DNDN) Provenge in the Sunday edition of The Washington Post.  Yet it apparently isn’t from the company itself.  Usually activist shareholders target an actual company for change to ehnace share prices, but a group of shareholders, patients, advocates, and activists have a made an unusual move.  In Sunday’s Washington Post, this group took out an advertisement calling for citizens to contact their Congressional representatives to urge the FDA to reverse their delay of Provenge.

After looking around for more data to see who this group is, I ran across CNBC’s Mike Huckman blog post on this subject.  This even shows a scan of the advertisement that was in the paper.  His post is definitely worth the read.

So far, Wall Street isn’t giving too much credit and hope for the ad, because shares of Dendreon are down roughly 0.25% at $7.77 on under 2 million shares just before noon.  Huckman also noted in his post that the company was unaware of the group.

This is not the first move for a group of shareholders to back or attack in a newspaper advertisement, but this is a highly unusual appeal and a rare use of advertising.  This is a battleground stock, and the stakes are quite large for the prostate cancer patients.  If this happened once, it is probably a safe bet that this won’t be the only call to arms.  Provengenow.org is a site that has taken similar steps, although it has not taken out advertisements such as this.

Jon C. Ogg
July 16, 2007

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