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Dendreon's $230M Haul Says It All

Dendreon needs the money. I know there is a contingent of investors out there under the impression that Provenge will just sell itself magically to prostate cancer patients, but sadly, it costs money to make money in the drug business.

Dendreon will be using the money raised Thursday to ramp up manufacturing capacity and hire a sales force and all the other stuff necessary to build out commercial operations to support the launch of Provenge.

Why did Dendreon management, including CEO Gold, sell some of their personal stock holdings in the company last week, ahead of Thursday's financing? These insiders were able to sell their shares at a higher price than yesterday's deal. Isn't that bad form?

Look, insider sales always rub investors the wrong way, and there really isn't a best time for management to cash out. In this case, after all that's happened with Provenge, I'm not inclined to begrudge Gold and his crew a payday.

Would it better if they sold stock after Provenge was filed again with the FDA? Perhaps, but wouldn't that just raise suspicions that something was wrong? And if insiders wait for the commercial launch, fears would arise that Provenge wasn't selling well.

Those grumbling about the timing of the insider sales do have a valid bone to pick because the sales took down Dendreon's stock price this week and thereby, theoretically, caused the company to leave money on the table Thursday night.

Point taken. But if Provenge is eventually approved and does well commercially, all these nits being picked will be forgotten footnotes to a successful and profitable story for Dendreon and its investors.

Adam Feuerstein writes regularly for In keeping with TSC's editorial policy, he doesn't own or short individual stocks, although he owns stock in 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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