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

Biotech Stock Mailbag: Spectrum Pharma

Dendreon launched Provenge under supply constraints, telling investors that limited manufacturing capacity will only allow about 2,000 patients to be treated in the first 12 months of the launch. Moreover, Dendreon has said that the Provenge launch will be back-end loaded, meaning more patients will be treated in the first and second quarters of next year than will be treated initially in the third and fourth quarters of this year.

If you do the rough math, Dendreon should post $186 million in Provenge sales in the first 12 months (assuming a price tag of $93,000 per treatment). Wall Street takes a more short-term view, of course, which is why all eyes are on Provenge sales for the next couple of quarters.

Analysts don't seem to be easing into their Provenge sales forecasts much. Consensus revenue for the third quarter is around $29 million; for the fourth quarter it's about $50 million. If you stand around Wall Street's biotech water cooler, you'll hear grumblings about Dendreon likely to fall short of these high Provenge sales expectations.

Dendreon has not provided quarterly sales guidance, but the company is trying to temper expectations, explaining that Provenge is only being made available to a limited number of doctors and treatment centers, and even at these centers, not all eligible patients will gain access to Provenge. (Dendreon is not taking an active role in choosing patients for Provenge treatment, allowing doctors to make that call.)

Like it or not, justified or not, Wall Street doesn't seem to be heeding Dendreon's warnings, placing the company in a no-win situation for the early quarters of the Provenge launch. Even if Provenge sales are on track, Wall Street appears to expect even more.


Onward. An email from Nick C: "I know you have been very bearish on Discovery Labs (DSCO - Get Report) in the past. Now that the company has gotten rid of former CEO Robert Capetola, and appears to be working hand in hand with the FDA towards Surfaxin approval, has your opinion changed?"

No. Time and time again, investors have tried to buy the bottom in Discovery, only to lose money when some setback sent the shares lower -- again.

5 of 7

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
DNDN $0.06 -6.02%
GNBT $0.02 0.00%
ARNA $4.64 0.00%
APPY $0.49 0.00%
DSCO $1.12 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