At about 5:20 this morning after rolling the calendar a day over to see the notes, something stood out like a sore thumb: DENDREON DO OR DIE DATE! The truth is that the May 15 date was on the "by May 15" date, and we all know that last week’s bomb from the FDA came out resulting in what will be very long delays for the company before we know if the FDA will approve Provenge for late-stage prostate cancer victims.
So, What do Dendreon shareholders have to look forward to and what should they expect from here? The "approvable letter" is a far batter response than a non-approvable letter" that is the true kiss of death, but the delays come at a time where the company is going to have to go into cash survival mode.
There is an active shelf registration that on the last conference call the company was very vague about when it would raise cash via security sales. If you can use the term "body language" on an audio call, then the body language sure sounded like the company would raise cash either late this year or in 2008. It signaled that it has enough cash and resources to get through the 2008 mid-point dates of the study. We’ll see if that is the case or not. The company still has "other alternatives" if it decides to partner with a larger drug company, a move which it has resisted.
The company briefly enjoyed a "media openness" in the few weeks in between the FDA panel backing date and the delay from the FDA "approvable letter." Based on last week’s conference call you won’t hear much until the American Society of Clinical Oncology presentations where ‘new data’ is supposed to be presented, whatever the new data is. There is one more conference where data will be show, but after those two events it is likely that you will hear nothing much from teh company until its next earnings report in August.
The FDA has to be cautious, but it also has to be humanitarian as well. That is a difficult balance to maintain and there are an equal number of arguments on both sides that could go on endlessly. There are a couple more potential news weeks coming up for the stock, but after that this story may go quiet for a while. Last week shares reached lows of $4.95, but shares recovered back up to $6.18 yesterday and shares are indicated slightly higher this morning.
Jon C. Ogg
May 15, 2007
Jon Ogg can be reached at email@example.com; he does not own securities in the companies he covers.