New FDA/Government Issues in Dendreon (DNDN)
Dendreon Corporation (NASDAQ: DNDN) was reported after the close Friday as having received a letter from the FDA asking Dendreon to stop using some promotional materials for its PROVENGE against prostate cancer.
The FDA said in a formal letter that the Dendreon marketing material is “false or misleading” because the materials omit or minimize the risks associated with this in prostate cancer patients. The letter also said that Dendreon’s material overstate the effectiveness of the treatment against prostate cancer.
The materials, also according to the FDA letter, included a misleading time line expectation. Another listed complaint was that the Provenge marketing material did not warn that its final sterility test results are not available at the time of infusion.
Time for a reality check, with some caution and caveats.
This is likely to do nothing for the demand for Provenge today nor for the immediate future. Longer-term, there is a government risk. The FDA held up Provenge’s approval before finally approving it as a last line of defense for those who have run our of options with advanced metastic prostate cancer. The issue to consider is that this is on top of the recent reimbursement rate attack from the government.
Dendreon closed at $39.05 and it traded down less than 1% at the worst after-hours point with only about 46,000 after-hours shares traded.
As this has popped 50% from the lows of the recent woes, this could be one of the times you see profit taking… assuming those persistent buyout rumors are not just many “hoping for rather than knowing of” a deal.
JON C. OGG