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Dendreon Saga Heads Toward Climax, As Cancer Drug Aims to Prove It Prolongs Lives

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a 20 percent reduction in the risk of death at the time of the analysis, falling short of the minimum 22 percent improvement it needed to satisfy the FDA’s conditions to ship off an urgent application. Yet since history from the previous trial showed that Provenge patients tend to do better over time, and the data was within hailing distance of the goal at the final analysis, Dendreon was hopeful that the trial was still on track.

Still, this early peek came with a price. Because an interim look at the data of an ongoing trial has the potential to introduce bias, Dendreon now needs to clear a higher statistical bar in the final analysis to show that the end result truly isn’t a fluke. Exactly how high the bar has been raised, the company won’t say. (Last month, Forbes quoted some statisticians who say this tainted the integrity of the trial.)

By January of this year, the company was sounding upbeat about Provenge’s prospects again. Dendreon’s CEO, Mitchell Gold, told a crowd of investors in San Francisco that 304 men had died in the ongoing study, meaning enough deaths had occurred for the company to do the final survival analysis on whether Provenge patients did any better than those in the control group. The final data would be available by April 2009, Gold said.

“This is a very exciting time for us, and for patients,” Gold said at the JP Morgan Healthcare Conference. He later used a football analogy to describe the company’s situation. “We’re on the 10-yard line, we’re in the red zone, and we’ve got to punch it into the end zone now.”

Which brings us to today. This drug, and this company, remain so controversial that three expert oncologists I requested for interviews declined to speak on the record until after the results are in. The situation remains “too emotionally charged,” one doctor said.

Dendreon stock, meanwhile, is trading again in the range of $4. About 17 million shares were held in a short position in mid-March, out of a total of 98 million shares outstanding, according to NASDAQ data. That means plenty of people think Dendreon is bound to fall short of FDA approval once again. If the trial is positive, these people with short positions will need to rush into the market to buy shares to close out their positions and stem their losses. That process could unleash enormous buying pressure on the stock once again, driving it higher, Miller says.

Still, passions have cooled somewhat this year in the midst of a recession, and now that hedge funds aren’t able to use as much leverage as they did two years ago before the Dendreon panel vote, Miller says. Many investors will watch what the company says about the final data analysis, and then jump in to buy if it’s positive. “People are not as rabid as they were before. A lot of people are waiting to see about the data,” Miller says.

If Dendreon can somehow beat the odds, and break through with the first FDA approved therapy, it will be a watershed for the field of immune therapies for cancer, and possibly inject some life into the rest of the biotech sector. Dendreon has another immune-boosting program in its pipeline for breast cancer that has shown promising results, but has been stuck on the back burner until the company gets more resources to push it ahead.

But few people in the industry seem to be holding their breath for this kind of positive chain reaction. The whole thing could end with an anticlimactic thud. Bob Kirkman, the CEO of Seattle-based Oncothyreon (NASDAQ: ONTY), another developer of immune therapies for cancer put it this way:

“A positive result would be a major boost to the field, and I think everyone with a stake in cancer vaccines wishes them every success,” Kirkman says. “A negative result may not have a broad impact, since it would just confirm the conventional wisdom of the moment.”

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