Dendreon Volume and Volatility Compress Ahead of ASCO (DNDN)

If you thought the day would never come that Dendreon (DNDN-NASDAQ) would see its volatility, its hyperactive volume, and its options premium compress to something back to almost normal, guess again: it came.  The stock including after-hours only traded under 5.5 million shares.  The near-month June options have seen the volume dry up, and the closest call options (JUN07 $7.50 Calls) are only priced at $0.25.  That is unheard of, yet this is just getting back to normal.  Even its stock only saw a $0.30 trading band between the highs and the lows.

Its MAY short interest showed it to be relatively high earlier in month, but that cut-off date was before even last week.  Just a week ago the stock was getting a lot of volume and interest because of some AUA data presentation (which is actually older ‘re-analyzed’ data) and after the cost cutting and impending layoffs.

Investors need to know that the ASCO (American Society of Clinical Oncology) data should be up either this coming weekend or early next week, but there are going to be many skeptics since there was so much speculation last week that the "new data presentation" was not in fact new at all.  The truth is that as far as the investment community is concerned the data IS new, yet it is also NOT new.  I used to refer to this as "re-data" or even "re-re-data" for different variations of either regurgitated or re-analyzed data or BOTH.  Sometimes there are new findings in the same data, and sometimes the figures are the same. 

There was previously a brief hope that the new FDA policy and guidelines dated May 15, 2007 might offer a chance at a sooner review, but this has also passed with only a whimper.  The company is still trying to meet with the FDA and this story is a far cry from over either way.  It just looks like this one is now a long ways off and the company has a long road ahead of it before any resolution is known.  But what is evident is that the investment community thinks this one is heading into stealth mode or drone mode, because it is acting like traders are starting to ask "What does that Dendreon company do?".

Of course a class action lawsuit was also just filed against the company, like that wasn’t predictable.  The stock may see some activity on that, but it will be along way off before that suit matters to the bottom line.

Jon C. Ogg
May 29, 2007

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