A sharp drop in shares of biotech company Dendreon ( DNDN) minutes ahead of the results of a cancer drug trial prompted an examination by the Nasdaq Tuesday, but the market said the trades that went through would stand. Dendreon, which closed Monday at $21.55, traded as high as $25 during the session, and the stock was above $24 until approximately 1:25 p.m. EDT. During the next two minutes, the stock plunged, falling under $8 for a time, before being halted at $11.81. That was $9.74, or 45%, below the previous close and less than half of its best level of the current day.
The Nasdaq posted a note around 2:30 p.m. EDT, saying that it was investigating what it suspected to be a brokerage error involving Dendreon trading between 1:25 and 1:27 p.m. EDT. The note said participants should "review their trading activity for potentially erroneous trades." However, following a brief review, the Nasdaq said the trades won't be canceled, and the decision can't be appealed. The selloff occurred just before the company released data from a closely watched clinical trial on its cancer drug Provenge. "At about 1:25 the stock starting really tanking. People thought the news was out. Obviously the news wasn't out yet, and then they halted the stock," said one trader, who didn't want to be named, but who bought the shares during the decline. "My guess is that someone sold because they thought they saw something or did see something, and that might have caused the cascade of selling. But there's no way of knowing."
When the Provenge data were released, they showed the drug extended the survival of patients with advanced prostate cancer by more than four months. The Food and Drug Administration wouldn't approve Provenge in 2007, but Dendreon now plans to re-file its application with regulators in the fourth quarter. It could become the first so-called cancer immunotherapy approved for use in the U.S.