Dendreon Runs to Daylight

The Food and Drug Administration will approve Dendreon's(DNDN) Provenge prostate cancer vaccine on or around its May 15 deadline.

I don't normally start a column with such a declarative opinion, but it seems right in this case. Thursday's positive recommendation from the FDA's advisory panel was a big win for Dendreon.

I stayed neutral on Provenge going into the panel, but the discussion and vote -- despite some strangeness and controversy -- moves me into the pro-Dendreon camp.

That's not to say I think Dendreon is home free. The FDA decision carries risk -- if pressed for odds, I'd say there is an 80% chance that regulators clear Provenge for approval and immediate sale. That leaves a 1-in-5 likelihood that the FDA delays Provenge approval and asks Dendreon for something more before it gives the marketing OK.

On Friday, Dendreon shares jumped $7.71, or 148%, to close at $12.93. Not bad, unless you were short, as many of Wall Street's biotech hedge funds surely were. The stock did open Friday as high as $18, so a lower close probably reflects a nervousness going into the FDA's May 15 decision. Given the advisory panel vote, that's not unexpected.

Dendreon shares were up more than 5% to $13.63 in recent Monday trading.

If you owned Dendreon going into Thursday's panel and now sit on a tidy profit, don't be piggish. At the very least, take whatever investing steps are necessary to lock in some winnings ahead of May 15. Thursday was a clear win, so enjoy it, but don't lose everything if, for some reason, the FDA decides not to grant approval to Provenge.