Dendreon Stock Rides Roller Coaster on FDA Panel Rumor
Dendreon stock is in for some wild times today. The Seattle-based biotech company woke up this morning to a new rumor that suggests it will have to appear before an FDA advisory panel one more time before it can get clearance to sell its prostate cancer drug in the U.S.
Shares of the company (NASDAQ: DNDN) fell 4 percent at the opening, but bounced back to climb 4 percent to $34.04 at 10:25 am Eastern time. Trading volume was big even by Dendreon standards, with 11 million shares changing hands in the first hour, up from its 2.6 million share average from the past three months.
The report that lit the spark was from Elliott Favus of Favus International Research, who said he has contacted doctors who have been invited by the FDA to participate in an advisory panel meeting to discuss sipuleucel-T (Provenge). The Favus comment was quoted today by Adam Feuerstein in TheStreet.com.
The notion that Dendreon would have to appear before an FDA panel again has been around for a while, and Dendreon has said repeatedly that a panel hasn’t come up in its ongoing dialogue with the agency about the product. Dendreon spokeswoman Katherine Stueland said it again this morning: “We’ve had no indication from FDA we should prepare for a panel.” The FDA website also doesn’t list any panel that would include Dendreon, nor does its telephone hotline, said analyst David Miller of Biotech Stock Research in Seattle, a longtime Dendreon bull.
“We do not believe this rumor to be true,” Miller wrote in a note to clients this morning.
Analyst Cory Kasimov of JP Morgan, another bull, issued a skeptical note today, and said even if the rumor is true, he would view any price drop in Dendreon as a buying opportunity.
Any whiff of an FDA panel is sure to give Dendreon shareholders with any memory a case of the willies. The company appeared before the FDA’s Cellular, Tissue and Gene Therapies panel in March 2007, and secured a 17-0 vote in favor of the drug’s safety, and a 13-4 positive vote that said it demonstrated “substantial” evidence of effectiveness. That caused Dendreon stock to rocket from $4 before the event to more than $20 a share after the positive votes. That didn’t last long, as the company crashed to Earth in May 2007, when the FDA delayed the product, saying it wanted to see more evidence from an ongoing study of 500 men, known as Impact. Those results are in now, and they confirmed Dendreon’s earlier trial that showed a survival benefit for men on Provenge, and all indications since have been that the FDA wouldn’t need to convene a second advisory panel.
The agency’s deadline to complete its review of the drug is May 1.