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TheStreet Open House

A Dendreon Shareholder Voices His Frustration at Incompetent Directors

SEATTLE ( TheStreet) -- Dendreon (DNDN) is holding its annual shareholder meeting today in New Jersey. Management and directors are facing some tough questions about who should be held responsible and accountable for Provenge's commercial troubles and the stock's poor performance.

Brad Loncar, a Dendreon shareholder who has previously agitated for change at the troubled company, is attending today's meeting and tweeting about it:

The full text of Loncar's question:

This year Dendreon had one director who chose not to stand for reelection to the board, but there are two, Douglas Watson and Bogdan Dziurzynski, who did decide to go ahead and stand today. My question is for them:

Three years ago when you last stood for reelection, Dendreon's stock price was $43.16. Today it is $4.57, a decline of 89%.

Three years ago Dendreon was hiring, and would soon employ over 2,000 people. Today, the company has laid-off or displaced about 1,000 of them.

Three years ago Dendreon was respected in the investment community. Today its reputation has deteriorated so badly that one of the industry's most highly-regarded analysts, Mark Schoenebaum, last month took the rare step of publicly apologizing for ever backing this company... calling it the worst decision of his entire career.

In terms of shareholders, not only have you lost nearly all their money over those three years, but during that time you have also settled two lawsuits with them totaling over $56 million dollars.

Finally, in terms of Dendreon's relationship with its regulators, the company has gone through three general counsels in those three years, and your disclosure practices have led to a formal investigation by the SEC...an embarrassing and unnecessary distraction for a company that should be 100% focused on its commercial activities.

So given that track record, my questions to you Mr. Watson and Dr. Dziurzynski are: (a) do you think Dendreon could have done better and (b) why do you think you should be running for reelection again?

Fantastic question! Dendreon's response, sadly, was underwhelming, as Loncar recounts:

I noted:

Corporate governance at U.S. companies today means lifetime seats and extravagant pay packages for directors. There seems to be no level of mismanagement or stock underperformance that gets incompetent directors fired.

That's too bad, but kudos to Loncar for trying.

-- Reported by Adam Feuerstein in Boston.

Adam Feuerstein writes regularly for TheStreet. In keeping with company editorial policy, he doesn't own or short individual stocks, although he owns stock in TheStreet. He also doesn't invest in hedge funds or other private investment partnerships. Feuerstein appreciates your feedback; click here to send him an email.

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