SEATTLE (TheStreet) --Waiting for U.S. drug regulators to make their approval decision on Dendreon's (DNDN) prostate cancer "vaccine" Provenge this week will be like watching for white smoke to emerge from the Sistine Chapel.
The FDA isn't in conclave choosing the next pope. To biotech investors, the FDA is doing something even more important -- deciding the fate of the first drug that harnesses a patient's own immune system to fight cancer. If approved,
to reach the market, succeeding where many other similar drugs have failed.
FDA is expected to announce its
on May 1. Since that's a Saturday, Dendreon might get the news Friday.
The speculation that FDA would convene an
has faded away.
Dendreon's stock price is up more than 50% since January, but still has room to run higher if FDA grants full approval to Provenge, according to an informal and non-scientific poll of biotech buyside investors and various other biotech sector followers conducted Friday.
Of the 30 respondents to my quick poll, 57% forecast a full and final approval for Provenge.
Sixty-five percent of these "full approvers" said Dendreon's stock price would move higher on the news, with the average price around $51, representing a 27% increase from Dendreon's closing price of $40.10 on Friday.
Three responders to my poll said Dendreon would sell off on news of a Provenge approval; another three people felt the stock price wouldn't change appreciably.
On the other side of the poll, 43% believe FDA will not grant full approval to Provenge this week. All but two of these skeptical responders said unresolved (but fixable) Provenge manufacturing and labeling issues would be the reason for an FDA approval delay.
I only heard from two dead-enders who believe FDA will reject Provenge outright, meaning no approval without new clinical data.
If Provenge's approval is delayed past Friday or Monday, expect Dendreon shares to fall to around $32, according to the poll.
If FDA approves Provenge, Dendreon has said previously that the company is ready to launch the drug within 24 hours. If Dendreon follows through on this plan, Dendreon CEO Mitch Gold gets about three hours to enjoy the good news from FDA before investors start worrying about the Provenge launch.
More on Biotech
Provenge is no ordinary off-the-shelf cancer drug, instead the drug is personalized for each individual prostate cancer patient. This adds a logistical complexity to the manufacture and delivery of Provenge that could cause Dendreon some problems, or at least some sleepless nights, in the first days and weeks of the drug's launch.
And don't expect Wall Street to cut Dendreon much slack on the Provenge launch, not with the company already sporting a $5.4 billion market value. Biotech investors will be carefully scrutinizing Provenge's commercial debut, much the same way tech investors poured over every detail of the iPhone and iPad rollouts by
If FDA decides not to grant full approval to Provenge this week, investors will be clamoring for the reasons why, obsessing over the length of the delay. Glitches in drug manufacturing can be resolved rather quickly, or can linger for months. But predicting the length of any Provenge approval delay will be complicated by the fact that Dendreon is treading virgin territory with a personalized immunotherapy for cancer.
The Dendreon watch on Wall Street starts now.
-- Reported by Adam Feuerstein in Boston.
Follow Adam Feuerstein on
Adam Feuerstein writes regularly for TheStreet.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;
to send him an email.