Why Dendreon Isn’t Running on Positive Analyst Call (DNDN)
Dendreon Corp. (NASDAQ: DNDN) has not continued its strong run-up we had been seeing, although shares are up almost 25% in just the last week. And then today came an initiation with an “Outperform” rating and a $40.00 target at Leerink Swann. The analyst expects that PROVENGE, its prostate cancer vaccine, will get FDA approval and that it will get broad widespread adoption from physicians. All of that is good, but shares are at a point where a wait and see attitude is starting to take hold.
Dendreon is scheduled to speak in front of investors and analysts Thursday morning in New York City. Last week’s gain seen in options trading was mostly based on takeover or partnership hopes and rumors because most of the activity had been in teh September-2009 Calls which expired last week.
Leerink Swann noted that there may interest in both on-label and off-label use, which is actually not outside of the norm for many patients. The platform will have limited competition and may actually become a platform for many other cancers.
Part of the caution is that there is a worry that Thursday’s meeting will not have much in the form of new data. The target is now for a late-Q4 approval by the FDA, and investors will be watching to make sure that the FDA does not make the big delay or request for any additional data. PROVENGE could have likely been on the market a year ago if everything had gone smoothly.
We may get an idea for some sort of sales projections and more detailed pricing information. We expect to hear more longer-term details about the recent locations secured for manufacturing and its supply pacts and more. But as far as any partnerships, mergers, or definite change from the FDA, we are not expecting that other than we’d say, “We hope so.”
The Leerink Swann upgrade today was an upgrade that just came too late after too much of a run in the last week. If this was a week ago you would have seen more of a move from that.
At 1:00 PM EST we have shares trading up 0.3% at $29.56 on almost 3 million shares.
Jon C. Ogg
September 22, 2009
