Dendreon Tames Short Sellers, Transforms Itself into Old-School Buy-and-Hold Stock

6/30/09Follow @xconomy

Dendreon has had enough of the fast money world. The short sellers who hope to profit from a falling stock, and the hedge fund players who thrive on volatility that comes from rumors and speculation, turned this Seattle-based biotech company into one of Wall Street’s great running dramas of the past two years.

Not anymore. At least if the company has its way.

Dendreon, as part of its plan to morph into a full-fledged company that discovers, develops, and markets cancer drugs, has worked behind the scenes to transform its shareholder base from a Wild West gallery into a roster of backers you might expect from a blue-chip biotech. Of course, publicly-traded companies have limited power to influence who buys and sells their stock, but Dendreon (NASDAQ: DNDN) was able to engineer an important switch toward buy-and-hold funds last month as part of its $221 million secondary stock offering through Deutsche Bank, says chief financial officer Greg Schiffman. He wouldn’t name names until they enter the public record, although he did say many are big name healthcare funds with reputations for long-term investing, who had never before bought into Dendreon.

“Dendreon is a stock with very strong emotions, among people who are very supportive or people who don’t support us at all. It was all very passionate on both sides,” Schiffman says. “We have seen a transition in our shareholder base.”

Notice how he used the past tense. Dendreon’s executives have sought to make their stock less of a classic battleground for bulls and bears. This is a sign … Next Page »

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  • http://na Steven

    From Schiffman’s quote…

    “We have the potential to become a large biotech company. We have 100 percent ownership of our lead product candidate, and we have a platform behind that with many more opportunities,” Schiffman says. “I don’t think we ever should have had the drama that we had the past two years.”

    Luke, Again thanks for the even handed reporting. Just the facts is all I want and I got them in this article.

    So tired of the rif raf….!

    Amgen partnered Epogen world wide including the U.S. and didn’t know what they had until the cancer application was discovered. They fought with J&J for years in court.

    ICOS partnered world wide and IMHO gave up the store to LLY who eventually bought ICOS for a song and left an empty parking lot in Bothel where once a good company stood.

    Imunex had a blockbuster,Embrel, for rheumatoid arthritus that they couldn’t produce in quantity…and therefore could not remain independant.

    Dendreon may have learned from the mistakes of the past. They wish to own all the rights to Provenge in this country and they will be able to manufacture all the Provenge they will need.

    Some interesting possibilities for little Dendreon, that company that never gave up when many others might have.

    Thanks again…Steven

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  • http://www.xconomy.com/author/ltimmerman/ Luke Timmerman

    Steve, you make a very astute comment about stumbles that Immunex and Icos made that led them to end up getting acquired rather than remaining independent. Dendreon is in a rare position as a biotech to still be holding onto 100 percent ownership of a drug with $1 billion U.S. sales potential, that has passed Phase III clinical trials.