12:00 AM
 | 
Apr 20, 2009
 |  BioCentury  |  Finance

Ebb & Flow

Investors scrambled last Tuesday to cover the 20% of Dendreon Corp. shares that they had sold short, after the company unveiled a positive topline survival result from the Phase III IMPACT trial of its prostate cancer immunotherapy, Provenge sipuleucel-T. The stock climbed $9.69 (133%) to $16.99 on 65.2 million shares on the day. The three-month average daily volume is 4.8 million shares.

On the week, Dendreon (NASDAQ:DNDN) rose $11.69 (186%) to $17.99. The stock still hasn't quite made a round trip to its $19.39 high on April 30, 2007, after FDA's Cellular, Tissue and Gene Therapies Advisory Committee voted that the company had provided substantial evidence of the efficacy of Provenge.

The bubble burst after Dendreon received an approvable letter from FDA in May 2007 requesting additional clinical data. At the time, the company said FDA agreed that positive overall survival from IMPACT would support the proposed efficacy claim in the BLA (see BioCentury, May 14, 2007).

Dendreon now plans to amend the BLA in 4Q09 and expects the response to be classified as a Class 2 resubmission, which would result in a six-month review. Data will be presented at the American Urological Association meeting in Chicago on April 28 (see Cover Story).

At March 31, 19.4 million Dendreon shares were short out of 98.2 million shares outstanding, with 7.7 days to cover. Short interest has fallen in the last year from more than one-third of shares outstanding at April 15, 2008, when there were 37 million shares short with 17.4 days to cover.

Sellside analyst response ran the gamut from Jonathan Aschoff of Brean Murray Carret, who initially maintained his "sell" rating and $1 target, to Reni Benjamin of Rodman & Renshaw, who upgraded to "market outperform," introduced a $28 target and said the product is a potential blockbuster.

Benjamin also said Dendreon is now an acquisition target. Aschoff relented a bit later in the week, upgrading to "hold" and removing his $1 target (see "Analyst Picks & Changes," A19).

In a conference call, Dendreon President and CEO Mitchell Gold said the company plans to market Provenge on its own in the U.S. and through a partner in Europe. He estimated the company would need a sales force of about 100 to market Provenge to urologists and oncologists.

At year end, Dendreon had $109 million in...

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