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TheStreet Open House

The 5 Dumbest Things on Wall Street This Week: Aug. 3

3. Dendreon's Demise

What a long strange trip it's been for our buddies at Dendreon (DNDN). And a round trip at that.

Shares of the volatile biotech outfit sank 22% to $4.80 Tuesday -- a level not seen since early 2009 -- after it announced that revenue for its prostate cancer drug Provenge tumbled in the second quarter. The company said Provenge sales fell more than 2% sequentially to $80 million, thereby raising a legitimate question about slowing demand for the company's franchise immunotherapy in the face of new competition.

And that's not the only question raised about Dendreon in the wake of its latest train wreck (Ah, who can forget last summer's destruction which sent the stock from $35 to $10? Talk about falling off a fiscal cliff!) TheStreet's biotech ax Adam Feuerstein came up with a fistful of problems facing the company.

"Dendreon insists that Johnson & Johnson's (JNJ) competitive drug Zytiga is not having an impact on Provenge but common sense argues otherwise . It seems pretty clear that Provenge has a demand problem and it's not going to get any better with Zytiga on a path towards approval in the pre-chemo setting and Medivation's (MDVN) MDV3100 moving fast behind it," says Feuerstein, who adds that the deep cost-cutting announced by Dendreon Monday is the right strategic move but won't be sufficient given Provenge's problems.

Furthermore, the eagle-eyed Feuerstein points out that oncologists flat-out detest Provenge.

"They're not prescribing the drug to their prostate cancer patients so why does Dendreon insist on wasting money and resources trying to convince them otherwise? The company would be more effective if they focused solely on marketing Provenge to urologists."

Speaking of urination, Feuerstein reports that there has been a steady stream of Dendreon sales reps leaving the company, possibly to rival J&J. So clearly Dendreon's investors are not the only ones getting the piss scared out of them.

And rightfully so.

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