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: Dendreon's Aftermath

Regardless, NuPathe had lousy luck since it timed the announcement of the financing with Wednesday's volatile stock market action. NuPathe fell 25% Wednesday and another 15% Thursday. I wonder how Aspire feels about those $7.07 shares now?

NuPathe is waiting word from the FDA on an approval decision for its Zelrix migraine headache patch. That announcement from FDA is expected on Aug. 29. I wrote about Zelrix in a previous Mailbag.


Back to Dendreon, Martine P. asks, "Is this a buying opportunity in Dendreon the way it was back when FDA rejected Provenge in 2007?"

Provocative question! I don't have the guts to give you a direct answer, but I will point out that Dendreon opened Thursday at $12.71, and as I type this, the stock looks like it will close around $11.94. That's not a good sign, even on a terrible, horrible, miserable day for stocks like Thursday.

I laid out most of the issues pertaining to Dendreon and Provenge in my Thursday column, but here are a few more thoughts:

As much as Dendreon insists that it's dealing with a reimbursement issue, I'd hazard to say that a majority of investors believe slacking demand for Provenge is as big a problem, if not more so. It should really worry you when you hear Dendreon say that doctors aren't identifying enough Provenge-eligible patients. That either means Dendreon's sales team is incompetent (not good) or doctors don't believe in Provenge enough to bother screening patients (really not good.)

Assuming the "cost density" of Provenge is a problem, how will getting doctors more comfortable with reimbursement make this issue go away? Even if a doctor knows that he can reimbursed quickly, he still has to lay out $93,000 for every patient he puts on Provenge. ISI Group biotech analyst Mark Schoenebaum thinks Dendreon needs to consider cutting Provenge's price (not likely) or coming up with a way to offer doctors more generous payment terms. Whether the latter solution helps solve this cash-flow problem is not clear, he adds.

Dendreon failed its first major test in the "non-supply constrained" Provenge era, and Wall Street is not likely to be in a forgiving mood for a very long time. Management credibility -- zero. That's not to say investors aren’t responsible for their own mistakes, just that it's hard to regain trust when you've lost it.

5 of 6

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
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
SYM TRADE IT LAST %CHG
PATH $0.00 0.00%
AMAG $69.58 1.55%
DNDN $0.06 -6.02%
SPPI $6.27 0.80%
SGEN $43.09 -0.16%

Markets

DOW 18,010.68 -115.44 -0.64%
S&P 500 2,107.39 -13.40 -0.63%
NASDAQ 5,070.0260 -27.95 -0.55%

Partners Compare Online Brokers

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs