This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
$1 buys you full access to ALL of TheStreet's Subscription Services! Learn More

Don't Get Burned by the Next Cell Genesys

Stocks in this article: CEGEDNDN

Cell Genesys (CEGE) is done. In the ashes of the biotech firm's blowup, however, there are important investing lessons to learn.

The end for Cell Genesys came Thursday after an independent futility analysis found the company's GVAX prostate cancer vaccine had little chance of success. Cell Genesys was forced to halt the GVAX prostate phase III study, the second such late-stage GVAX prostate cancer study shuttered in recent months.

Cell Genesys has stopped all clinical development of its GVAX cancer vaccine program and is laying off a majority of its employees. With little else on its plate, the company's future is bleak. The stock is now valued at pennies per share and shareholders have lost everything. Dendreon (DNDN) is now the last company standing with a prostate cancer vaccine in clinical trials.

Biotech investors, especially those willing to make bets on unproven drugs and technologies, usually understand the risks involved. Still, disasters like Cell Genesys shock the system and can discourage even the most risk-tolerant investor from ever dipping their toe into biotech again.

I've never been a fan of Cell Genesys or its cancer vaccine technology. I've been warning folks off Cell Genesys for a long time, which, to borrow a phrase from my friend and former colleague Herb Greenberg, usually caused the Hostile-React-O-Meter to spin outta control!

I'm not here to gloat over being right. Instead, let's re-examine the red flags in the Cell Genesys story so that when the same issues rear their ugly head in another biotech story (and you know they will) you'll be better prepared.

1 of 4

Select the service that is right for you!

Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!


DOW 17,827.75 +12.81 0.07%
S&P 500 2,072.83 +5.80 0.28%
NASDAQ 4,787.3170 +29.0650 0.61%

Brokerage Partners

Rates from

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs