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Real Story: Cancer Drug Mania

Adam Feuerstein dissects the wild moves in Dendreon, Cell Genesys and others. Plus, David Peltier on Dow Chemical, Buffett's latest investment and the Geoff Tate Zone.
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Dendreon

(DNDN)

has clearly become a "momentum play" vs. trading in fundamentals, Adam Feuerstein tells Aaron Task on Monday's

The Real Story podcast.

But the biotech stock "could see $40" if its Provenge prostate cancer drug gets full FDA approval, says Feuerstein, a senior writer at

TheStreet.com

. The biotech columnist was less upbeat about

Cell Genesys

(CEGE)

, however, expressing a lack of faith in the company's own prostate cancer vaccine, GVAX.

More to the point, Feuerstein says there is a "mania" developing for cancer drug stocks in the wake of Dendreon's huge rally in the past two weeks, noting that

Pharmacyclics

(PCYC)

was soaring Monday on the hope the FDA will re-review its prostate cancer treatment, Xcytrin, which an FDA panel previously rejected.

The mania notwithstanding, Task says "all biotech ETFs" are not created equal, noting that the

Biotech HOLDRs

TheStreet Recommends

(AMEX)

were down Monday despite all the excitement over cancer drug stocks and a huge rally in

Nuvelo

(NUVO)

, amid rumors that

Bayer

is taking the company's experimental blood-clot dissolver into a stroke trial.

Task's second guest Monday was David Peltier, editor of

TheStreet.com's

Dividend Stock Advisor . The newsletter has a longstanding position in

Dow Chemical

(DOW) - Get Dow, Inc. Report

, which jumped 5% Monday on another round of rumors of a potential private-equity buyout. Peltier says the stock is worth holding even if no buyout emerges, because of Dow Chemical's strong earnings growth and healthy dividend.

Task and Peltier also discussed news that billionaire investor Warren Buffett's

Berkshire Hathaway

(BRK.A) - Get Berkshire Hathaway Inc. Class A Report

has purchased a 10.9% stake in

Burlington Northern

(BNI)

.

"It never pays to bet against Buffett," says Peltier, who also pens

TheStreet.com's

Value Investor newsletter. Still, investors are betting off taking a position in

Berkshire Hathaway

"B shares" than chasing stocks after news of a Buffett stake is revealed, he says. "That has not been a winning strategy."

Outside the biotechs and rails, Task notes many of the day's "story stocks" were winners, including

Peabody Energy

(BTU) - Get Peabody Energy Corporation Report

,

Mirant

(MIR)

and

AMD

(AMD) - Get Advanced Micro Devices, Inc. Report

.

While AMD rallied despite its revenue warning. Task notes that shareholders of other stocks caught in what he calls "The Geoff Tate Zone" were not so fortunate. Shares of

Sanmina-SCI

(SANM) - Get Sanmina Corporation Report

,

Daktronics

(DAKT) - Get Daktronics, Inc. Report

,

Conexant Systems

(CNXT) - Get VanEck Vectors ChinaAMC SME-ChiNext ETF Report

,

Sourcefire

(FIRE)

and

American Home Mortgage Investment

(AHM)

were each down sharply after issuing disappointing guidance.

In the remainder of the podcast, Task provided some speculative suggestions for listeners participating in

TheStreet.com's

"Beat the Street" contest, a fantasy trading game.

Click

here to listen to the entire podcast.