This Day On The Street
Continue to site
ADVERTISEMENT
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

Don't Get Burned by the Next Cell Genesys

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

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

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
Stocks Under $10

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

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
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!
SYM TRADE IT LAST %CHG
ONXX $0.00 0.00%
GTOP $0.00 20.00%
DNDN $0.06 -6.02%
AAPL $124.75 0.00%
FB $80.78 0.00%

Markets

DOW 17,826.30 -279.47 -1.54%
S&P 500 2,081.18 -23.81 -1.13%
NASDAQ 4,931.8150 -75.9760 -1.52%

Partners Compare Online Brokers

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs