This Day On The Street
Continue to site
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: Cadence Pharma

Cadence shares have moved higher to around $8.60, still not back to the $9-plus level before the drug's approval but a definite improvement from when the stock was mired in the low $7s earlier this year.

Ryan thinks I should eat crow for my November column. We'll agree to disagree.

Via Twitter, @5redheads asks, "Any reason for the poor price action on $DNDN? Only see good news on the horizon but shorts only ones willing to commit $$."

Investors are focused most on real patient demand for Dendreon's (DNDN) prostate cancer therapy Provenge. What happens when the supply constraints that cap Provenge sales today are lifted in the middle of the year? Will demand for Provenge from doctors and patients take off? And if demand spikes, can Dendreon handle the increased logistical and manufacturing load?

A look at consensus sales estimates for Provenge in 2011 underscores the importance of the back half of the year for Dendreon. Provenge revenue is expected to hit $28.6 million in the first quarter; the Street's consensus forecast increases to $59.4 million, $97.7 million and then $177.4 million in quarters two, three and four, respectively.

To meet its own forecasts, Dendreon has to receive on-time approval from FDA to boost Provegne manufacturing capacity. The FDA approved an expansion of Dendreon's New Jersey facility Thursday. After that, the FDA needs to approve the two additional Provenge plants in Atlanta and Southern California, expected midyear.

Investors are not concerned about the Medicare National Coverage Decision expected at the end of the month.

It's a long wait for fourth-quarter Provenge sales so in the interim, watch closely to see if Dendreon can meet or beat the consensus estimate for second-quarter sales. With the N.J. plant at full capacity, Dendreon can roughly triple Provenge manufacturing capacity and therefore should be able to triple sales (roughly) from the first quarter to the second quarter -- $28.6 million to $59.4 million.

Accomplishing this feat would demonstrate that supply constraints are a true gating factor on Provenge revenue, not patient demand. Investors would also have more confidence that when Dendreon triples manufacturing capacity again in the middle of the year, Provenge sales will follow suit.
2 of 5

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
Dividend Stock Advisor

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
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
BPAX $55.05 -1.24%
CADX $0.00 0.00%
DNDN $0.06 -6.02%
APRI $0.53 0.00%
VVUS $1.65 0.00%


Chart of I:DJI
DOW 17,773.64 -57.12 -0.32%
S&P 500 2,065.30 -10.51 -0.51%
NASDAQ 4,775.3580 -29.9330 -0.62%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs