Updated from 11:59 a.m. EDT

CHICAGO -- After a long buildup, Dendreon ( DNDN) finally revealed its Provenge prostate cancer survival data Tuesday. Here are some highlights from the dramatic presentation:

Dendreon threw a celebratory cocktail party Tuesday night at a Chicago hotel just off the Miracle Mile. CEO Mitch Gold was beaming as he slapped backs, shook hands and hugged employees, investors and supporters. Gold has a family history with cancer, so Tuesday had extra special meaning for him personally.


What will Provenge cost and how much of the drug can Dendreon sell? Those are two related questions, obviously, neither of which have concrete answers yet. Dendreon executives are loath to answer either directly, mainly because the company's focus now is on filing Provenge with the FDA and getting the drug approved.

Wall Street hasn't come up with a consensus price for Provenge, but the estimate you hear most often is the range of $60,000 to $80,000 for a course of treatment. That puts Provenge in league with pricing for other biologic cancer drugs like Genentech's Avastin or Eli Lilly's ( LLY) and Bristol-Myers Squibb's ( BMY) Erbitux. It also makes Provenge a target for those who question and criticize the high cost of cancer drugs, but that's a debate for another day.

As for peak sales of Provenge, it's not hard to get to $2 billion or more with pricing in the $60,000 to $80,000 range. In fact, it's quite easy. My own Provenge revenue model forecast peak U.S. sales of $1 billion based on what seems now to be a ridiculously low $30,000 annual price tag.

I won't be surprised to see Dendreon trade into the $30 range in the next days and weeks. It was recently up 89.8% to $22.42.


Mystery still surrounds the steep 45% drop in Dendreon's stock price Tuesday right before trading was halted in preparation for the Provenge data presentation. Company officials couldn't explain what happened Tuesday night, nor could analysts and investors gathered on site in Chicago.

Guesses as to the reason abounded, however, including a computerized trading glitch, an errant market order or more nefariously, a coordinated bear raid on the stock.

Whatever the real cause, the sharp selloff caused a few minutes of outright panic for those investors long Dendreon shares. One hedge fund analyst, working for a fund with a significant Dendreon holding, turned deathly white as he frantically spoke with his trader and portfolio manager in New York trying to figure out what the heck was happening. The color in his face and his heart rate returned to normal only after he read the Provenge data as it came over the wire.


The Provenge survival data presented Tuesday appeared to be clean and consistent. You should understand that Wall Street biotech investors -- long or short -- go into these data presentations looking for red flags and weaknesses. This is a blood sport, and everyone is primed to jump on any data point hinting at problems ahead.

I didn't hear any significant complaints from investors last night about the Provenge data. Nothing in Dr. David Penson's slides jumped out in a bad way. Questions and some unease over precisely how and why Provenge works are going to linger, but a survival benefit trumps all in cancer.


I chatted up three private practice urologists from California immediately after Tuesday's data presentation. They didn't want to be quoted, but all three expressed doubts about Provenge's survival benefit in relation to the drug's high price. All three were bothered by the fact that Provenge didn't appear to have any positive or measurable effect on the disease itself, like tumor progression or PSA scores, a protein marker found in blood used to detect or evaluate prostate cancer.

Whether this will be a minority view or not in the urologist and medical oncologist communities remains to be seen.


Tuesday night's cocktail party wasn't the best setting for deep questions about Dendreon's business plans, but CEO Gold did tell me that the company wasn't in a rush to raise money, but if (and more likely when) it does, the cash will come via a partnership for ex-U.S. rights to Provenge and an equity financing.

Gold also said that one of his goals is to bring some stability to the stock price by getting more mutual funds to become significant institutional investors in the company. For years now, Dendreon has been a haven for the fast-money investor crowd, which is one big reason for why the stock is so volatile. Now, Gold would like to see his top holders list more populated with the likes of Fidelity, T. Rowe Price and Legg Mason.


Dendreon's sell-side analyst coverage to date is somewhat thin and absent the bulge bracket firms like Morgan Stanley, J.P. Morgan and Goldman Sachs. Look for that situation to change in the coming weeks and months, if for no other reason than that Dendreon is going to need investment banking help in the near future. An initiation with a buy rating from a big sell-side shop is usually good for a bump in stock price.

Lazard Capital Markets analyst Joel Sendek was a Dendreon bear, but he reversed course and upgraded the stock to a buy April 20 after the company's April 14 announcement about the positive Provenge study. After seeing the data in person Tuesday, Sendek was still a bull and sent the following email squawk to his clients:

"We believe that DNDN's Provenge will achieve regulatory & commercial success. We think Provenge can achieve >$2B in peak sales now that the survival delta is 4+ months (ie similar to previous trials). With two survival studies, solid safety, a (+) FDA panel, & a SPA, we would look to buy DNDN."

Sendek raised his price target on Dendreon to $33 from $25 on Wednesday morning.


Speaking of reformed Dendreon bears, plenty of them were drinking it up at the company's cocktail party Tuesday night. I'll include myself in that group. I was definitely skeptical about Provenge's chance for success in the IMPACT phase III trial, so a mea culpa is appropriate.

I had dinner with three biotech hedge fund buys after the Dendreon party, two of whom were short Dendreon but have now covered and gone long the stock. (The other guy has been long for some time.) One of the short-turned-long guys summed up his experience with Dendreon this way:

"I am surprised that Provenge works, but the facts are the facts and I want to get this right."

Me too.

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; click here to send him an email.

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