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

6/30/09Follow @xconomy

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with people asking questions about rumors—to correct misinformation, or to comment on why the FDA delayed its drug—Dendreon executives are getting serious inquiries now from investors about its future game plan for marketing Provenge, its prostate cancer drug, and for its manufacturing plans, Schiffman says. This sounds like it is keeping the company on its toes, or at least keeping it focused on stuff that’s more important (or at least not a big waste of time).

“These are valid discussions, and they are important for us to have,” Schiffman says.

Schiffman joined the company in December 2006 from Santa Clara, CA-based Affymetrix, just about a month after Dendreon filed its original application to the FDA. He lived through the heady days of late March 2007 when an FDA advisory panel said the drug was safe and effective, then experienced the colossal letdown two months later when the FDA said it needed more evidence from an ongoing clinical trial before it would clear the drug for the market. That regulatory delay wiped out more than $1 billion of paper wealth in one day.

Now that’s all behind the company since the 512-patient clinical trial in April showed Provenge was able to help men with terminal prostate cancer live a median time of 4.1 months longer than if they got a placebo, with minimal side effects. The result confirmed the earlier trial of 127 men that the company submitted to the FDA two years earlier. The longtime Dendreon bulls suffered through some very dark days—the stock traded below $3 as recently as February—but now no one is really questioning whether the drug has a solid base of evidence behind it, CEO Mitchell Gold said earlier this month at the annual shareholder meeting.

With all that data out in the public domain putting speculation to rest, Dendreon might now just be too boring for the hedge fund set. Marketing and manufacturing are bound to be prominent themes of the company’s upcoming investor day later this summer, Schiffman says. The company is going on a hiring binge—with 76 job openings at latest count—to do all the blocking and tackling it will need to make Provenge a success. It’s even prompted Dendreon executives to start talking again about how Dendreon could be the next big biotech success in Seattle after Immunex in the late 1990s.

“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.”

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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.