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Data Request Crushes Dendreon

Shares lose more than half their value on news of an FDA letter.

Updated from 8:40 a.m.

Dendreon

(DNDN)

plunged 57% Wednesday after the company took a big step backward in its quest to market the first prostate cancer vaccine.

The Food and Drug Administration asked for additional clinical data on Provenge before approving it, Dendreon said Wednesday in a press release. The disclosure sent Dendreon shares down $10.24 to $7.50.

For Dendreon and its supporters, this is the bad news they were dreading. Despite a positive recommendation from an advisory panel held at the end of March, the FDA doesn't appear convinced that Provenge is a benefit to prostate cancer patients.

Dendreon isn't saying much about what the FDA is asking for, but the FDA issuance of a so-called approvable letter suggests strongly that data from another clinical trial will be required before Provenge is approved.

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The company is running just such a trial, but full results aren't expected for another two or three years.

"Given our strong belief in the survival benefit and safety profile of Provenge, coupled with the positive outcome of the Advisory Committee meeting, we are disappointed that this decision will cause a delay in the availability of Provenge for patients who suffer from advanced prostate cancer," said Mitch Gold, Dendreon's CEO, in a statement.

According to a source close to the company, the FDA's approvable letter arrived late Tuesday. The letter is apparently not very clear on the specific data requested. For instance, it doesn't specifically ask for more survival data on Provenge, nor does it ask for data to come from the ongoing phase III study.

The company is in contact with the FDA now to get some clarity, but the best guess is that some additional data from the current phase III trial will be required, according to this Dendreon source. The hope is that interim efficacy data -- whether time-to-progression data or interim survival data -- might be able to satisfy the FDA's need, he says.

Such data could be ready by the middle of 2008, which is better than the full survival data in 2010.

Adam Feuerstein writes regularly for RealMoney.com. In keeping with TSC's editorial policy, he doesn't own or short individual stocks, although he owns stock in TheStreet.com. He also doesn't invest in hedge funds or other private investment partnerships. Feuerstein appreciates your feedback;

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