This Day On The Street
Continue to site right-arrow
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
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

The Deal: After String of Miscues, Dendreon Likely on Block

Stocks in this article: DNDN MDVN JNJ JPM

Plus, if Dendreon were to be purchased, its creditors would likely negotiate on the debt, he said.

Dendreon made several mistakes. It failed to recognize and prepare for the effects brought on by its high cost, limited reimbursement and robust competition.

Not only that, but patients and physicians had trouble embracing the drug. Prostate cancer patients like to see their PSA (prostate-specific antigen) numbers decline after treatment, and even though Provenge is working, it doesn't reduce that biomarker at first.

Sermo, a social network for physicians, conducted a survey of oncologists and urologists asking what they thought of Provenge in 2011. Respondents said the most influential factors determining whether they would use the drug were the high price tag, high copays for patients, the logistics around administering the drug, and that the clinical benefit just wasn't enough to outweigh the drawbacks.

Provenge's clinical trials showed that it beat placebo in overall survival by more than four months, but it did not show an improvement in progression-free survival.

When doctors in the Sermo poll were asked what kind of survival benefit they'd like to see in a therapy to treat late-stage prostate cancer, two-thirds said at least seven months. About one-third said one year or more.

In September, Dendreon gained approval through the European Union centralized system to market Provenge. But it hasn't got the funds to go it alone. Even though it has tried to interest a big pharma or biotech with boots on the ground in the EU in a commercial collaboration, there hasn't been any interest.

In addition to looking for partners, Dendreon's management has tried various strategies to boost its use. But, Kolbert said, the direct-to-consumer approach championed by chairman, president and CEO John Johnson, "treats Provenge too much like a small molecule drug."

"TV commercials will not turn Provenge around," Kolbert contends.

Johnson, a veteran of Eli Lilly & Co.'s oncology unit and a handful of small biotechs, joined Dendreon in August 2011.

Another major problem Dendreon encountered, and hadn't prepared well enough for, was reimbursement. It had to go through a lengthy Centers for Medicare and Medicaid review process to gain the Medicare coverage. But prior to that decision, analysts and investors were saying that it's likely Dendreon could be used off-label for other cancers. Medicare's decision was narrow, saying that it would only pay for on-label use.

Kolbert this week increased his target price on Dendreon to $10 per share, reflecting an enterprise value of about $1.5 billion. Dendreon is due to report its third-quarter sales Nov. 12.

Dendreon's shares were trading down 4.27% at $2.69 mid-day in New York.

-- Written by Pamela Taulbee in New York

2 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Jim Cramer and Stephanie Link 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

Jim Cramer's protégé, David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
Try it NOW
Try it NOW
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

Jim Cramer's protégé, 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
Try it NOW
Try it NOW
Try it NOW
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!


DOW 17,672.60 -141.38 -0.79%
S&P 500 2,051.82 -11.33 -0.55%
NASDAQ 4,757.8790 +7.4820 0.16%

Partners Compare Online Brokers

Free Reports

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs