Dendreon Shares Roiled by Medicare Questions
Updated with Dendreon stock price.
SEATTLE (TheStreet) -- Dendreon (DNDN) shares took another spin on the volatility roller coaster Monday after the U.S. agency in charge of Medicare posted voting questions for an upcoming advisory panel scheduled to assess the company's prostate cancer therapy Provenge.
The U.S. Centers for Medicare and Medicaid Services (CMS) is asking a panel of advisors on Nov. 17 to assess Dendreon's Provenge as a treatment for patients with metastatic prostate cancer.
To date, Dendreon has said it is seeing very little pushback from regional Medicare carriers towards reimbursement for Provenge, which costs $93,000 a treatment. However, that could change depending on the outcome of the Medicare Evidence Development & Coverage Advisory Committee (MEDCAC) meeting.Voting questions for the Nov. 17 panel were posted to the CMS web site Monday. The questions ask the panel members to use a 1-5 scale to identify their confidence level in Provenge's ability to improve overall survival, control disease related symptoms and lessen the burden associated with cancer therapy, among other questions. Both on-label and off-label use of Provenge is being examined, according to the panel quesitions. Dendreon shares fell 4% to $40.95 just before 1 p.m ET when the Medicare panel questions were posted to the agency's web site. The stock has since rebounded and is down just 10 cents on the day to unchanged for the day at $42.48. Reaction to the new Provenge development was mixed. The Medicare voting questions on Provenge were "Exactly what we expected," said Ramsey Baghdadi, a healthcare policy analyst with Prevision Policy and Concept Capital. Baghdadi added, "CMS has been steadfast not only that they would look at the off-label use of the therapy, but they also emphasized in their announcement that they would be looking at the on-label use. We always thought the positive reaction to the original MEDCAC announcement was odd and the negative reaction to this is equally odd because CMS telegraphed that this is exactly what was coming." ISI Group biotech analyst Mark Schoenebaum was more cautious in his initial assessment. "Surprisingly, many of the questions focus on efficacy in the on-label indication. It asks the panel to rank efficacy on a scale of 1-5, leaving the possibility of an ambiguous outcome. This is the first time we’ve seen Medicare analyze the efficacy of a drug. This could have important read-across to the entire sector, and plays into pricing themes that have emerged in the last year," he said in an email to clients.
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
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.
- Real Money + Doug Kass + 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
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.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV