The Seattle-based biotech announced sequential revenue growth for the fourth quarter ended December 31 of approximately 25% to $82 million, above the consensus estimate of $72 million. For full-year 2011, Dendreon said sales of Provenge (sipuleucel-T) would total approximately $228 million. Gold credited an improved Provenge reimbursement landscape and ongoing physician education initiatives for the stronger results.

Investors were initially bullish on the growth prospects  of the vaccine, which was approved in April 2010 for the treatment of advanced (hormone-refractory) prostate cancer. And with good reason: The first therapy in the U.S. designed to induce the body’s own immune system to attack prostatic tumor cells, Provenge’s side-effects are less toxic than traditional chemo-based treatments for advanced prostate cancer, such as Sanofi’s (NYSE: SNY) taxotere (docetaxel). And, unlike the plethora of drugs in the treatment paradigm for metastatic, castrate-resistant (hormone-refractory) prostate cancer, such as AstraZeneca’s (NYSE: AZN) Zoladex or Abbott’s (NYSE: ABT) wildly popular Lupron injection, Provenge does not focus on reducing testosterone levels, the male hormone fueling growth of tumor cells.

From a high of $42 a share in April 2011, the stock price tumbled more than 80% last fall after the company withdrew prior guidance of $400 million in annual sales, the result of prolonged delays in federal and private insurance reimbursements.

“It’s not what we don’t know that hurts us, it’s what we know for certain that just ain’t so.” ~ American author and humorist Mark Twain

Analysts attribute the dramatic spike in Dendreon’s stock price to the positive shift in insurance coverage — including a reduction in average time to payment of less than 30 days for providers. “We believe that this progress may help clear some of the fog surrounding the Provenge sales trajectory,” said Joseph Pantginis, Roth Capital Partners.

An oft-repeated tragicomedy that befalls investors is how the unabashed certitudes of Wall St. dissemblers result in trading losses for those of us who pile into stocks after the “good” news is out. Not to pick on Pantginis exclusively, but improving trends in reimbursement for Provenge is old news: In a 10Q Detective column posted last November, I noted that CEO Gold had previously mentioned that average (insurance) reimbursement times had fallen from “90 days down to 30 days.”

Though I do not doubt prescription uptake of Provenge by urologists and oncologists is trending higher (read my bullish article, posted on November 17, 2011: Dendreon Buyout, How Imminent?), more likely, the breathtaking climb in Dendreon’s share price was unintentionally engineered by short-sellers closing out open positions. According to NASDAQ, short interest in Dendreon common stock was 31.3 million (as of December 15), about 21% of the stock’s float.

Further exacerbating a combustible trading environment, days to cover had jumped to seven, from 3.9 the month prior.

Need more convincing evidence that Dendreon’s stock price overreacted to acknowledged “modest” growth expectations? On Thursday, January 5, approximately 44.9 million shares changed hands, a 700% increase over its 65-day average volume.

Looking to go long Dendreon stock? Free advice — stand clear, at least for now.

David Phillips

Related Posts:

Dendreon – Not Running Out of Cash

Dendreon Buyout, How Imminent?

Read America’s Most Overpaid CEOs

24/7 Wall St. obtained the list of companies with the 100 highest paid CEOs from GMI, an independent governance ratings firm. The CEOs’ total compensation includes base salary, perks, cash bonuses, equity awards and any increase in pensions and other retirement benefits. We then looked at the stock performance of these companies during 2010. We got the stock performance data from Capital IQ. Our list is comprised of those companies whose CEOs were among the highest paid during 2010, yet their stocks performed the worst and had the largest price drops that same year. We excluded chief executives who are no longer with their company, like Mark Hurd of Hewlett-Packard (NYSE: HPQ), who might have otherwise made the list.

Once again, this list makes it clear that shareholders who cannot effectively vote to have management removed are saddled not only with those ineffectual executives, but also with their pay packages. The notion of “pay for performance” is still not applied systematically among America’s largest public companies. There is no sign that the SEC or any other regulator is likely to change the method by which CEOs at public companies are compensated, so next year, there will be another 24/7 Wall St. Most Overpaid CEOs.

The unofficial closing bells put the DJIA down nearly 72 points to 11,504.70, the NASDAQ fell more than 53 points (2.01%) to2,604.04, and the S&P 500 fell 1.26% or more than 15 points to 1,209.89.

Today’s top analyst upgrade and downgrade calls were numerous and included Wal-Mart Stores Inc. (NYSE: WMT) and Whole Foods Markets Inc. (NASDAQ: WFM), and about a dozen other companies.

Morgan Stanley (NYSE: MS) reported better than expected earnings for the quarter, following  yesterday’s positive report from Bank of America Corp. (NYSE: BAC).  Morgan Stanley got a big lift from an accounting gain that lowered the value of its debt by $3.4 billion, thus boosting the bank’s revenue to $9.9 billion. Even without the gain, MS posted EPS of $0.02, There has been a turnaround from the indicated loss in Bank of America Corporation (NYSE: BAC) after its earnings showed that book value managed to actually grow and the stock was up almost 10% at $6.63 late in the session.

As far as the other big earnings report reactions today (prices within 20 minutes of the closing bell): Apple is down more than -5.5%, at $398.78; Morgan Stanley up 0.3%, at $16.68; Intel Corp. (NASDAQ: INTC) is up about 3.5%, at $24.22; Yahoo is up 2.78%, at $15.90.

Several other standouts from today are as follows…

Williams Companies, Inc. (NYSE: WMB) rose again by another 1.7%, to $29.55, after investors are considering it a cheap merger alternative to the El Paso buyout by Kinder Morgan this week.

Human Genome Sciences, Inc. (NASDAQ: HGSI) had another big day on merger speculation up, up nearly 8%, at $13.83, and here is how it ranks with analysts other price targets for biotechs ahead of the biotech earnings floodgates.

Abbot Laboratories (NYSE: ABT) rose 1.62%, to $53.29, following the announcement of the company’s intention to split its branded drug business from its other product lines.

Oxigene, Inc. (NASDAQ: OXGN)  got a nice boost of about 12.55%, to $1.59, following good data on the survival benefits of its anti-thyroid cancer drug.

Powerwave Technologies, Inc. (NASDAQ: PWAV) warned of a revenue shortfall of more than 50% for its third quarter. The shares lost nearly -42% of their value, to fall to $0.85, after posting a new 52-week low of $0.68 earlier in the day.

Agnico-Eagle Mines Ltd. (NYSE: AEM) has suspended operations indefinitely at its mine in Val d’Or, Quebec, due to unstable ground and inflows of water. The stock has fallen by -19%, to $46.21.

Stay tuned for Thursday.  We have speeches to watch from Lockhart and Kocherlakota on the docket as well as a 30-year TIPS auction.  Here are some economic releases due in the morning and throughout the day:

• 8:30 Unemployment Benefits Claims for last week
• 8:30 Existing Home Sales
• 10:00 Conference Board’s Index of Leading Economic Indicators
• 10:30 Natural Gas Report
• 4:30 PM Federal Reserve Balance Sheet

Paul Ausick

The first bit of news is that the $1.18 EPS report was a penny ahead of expectations, but other reports were calling the earnings a miss.  The larger news is of the company’s break-up whereby it will spin off its drug unit.  Zacks has outlined its take on the break-up as well with a current “Neutral” rating. 

There are at least two partnerships which hang in the balance, although this should not change the relationships in any meaningful way on the surface.  Abbott has a partnership with Biogen Idec Inc. (NASDAQ: BIIB) for daclizumab (in phase III) to treat relapsing-remitting multiple sclerosis.  The candidate of elotuzumab, under development with Bristol-Myers Squibb Co. (NYSE: BMY) is in Phase III studies for multiple myeloma. We would not consider any of these partnerships as being at-risk.
 
After the split, Abbott will become two separate public companies: one will be focused on diversified medical products and one will focus on R&D-based pharmaceuticals.

Diversified medical products: will have an estimated $22 billion in sales and it will retain the Abbott Labs-branded generic pharmaceutical, nutrition, diagnostics, and devices operations.

R&D-based pharma: NewCo is yet to be named and sales are estimated at roughly $18 billion.  This is Abbott’s current portfolio of proprietary pharma and biologics.  Products are CReaon, Kaletra, Humira, Lupron, Synagis, and Synthroid.

The tax-free spin-off will be distributed to existing Abbott Laboratories shareholders and is slated to be completed by the end of 2012 as it wants to continue to ensure its growth strategy.

Abbott saw its shares peak in the $58 to $60 range in 2007 to 2008 and things have not yet recovered the former peak.  Still, shares did hit a 52-week high of $55.61 on Wednesday morning and the stock is currently up 4.5% at $54.83 and shares have already traded double the normal volume in less than an hour of trading.

The current consensus analyst price target one-year out from Thomson Reuters is only $58.00.  This break-up aims to go above and beyond that.

JON C. OGG

NYT: Olympus Backtracks on Payments http://nyti.ms/pAPNmD

CNNMoney: Apple 2.0: Apple’s big miss: The analysts weigh in http://bit.ly/r7OZMN $AAPL

FT: Olympus contradicts chairman over fees http://on.ft.com/pMpov6 #FinancialTimes

FT: Morgan Stanley swings to $2.2bn profit http://on.ft.com/qd4I28 #FinancialTimes

CNNMoney: Consumer prices rise 3.9% on a year-over-year basis, biggest annual change in 3 years, the government says

Yahoo! Finance: Morgan Stanley Posts $2.15 Billion Profit http://yhoo.it/nT4Wmi $MS

CNBC: Abbot Labs $ABT shares rally as company announces plans to split in two – click for quote http://bit.ly/n3jWOg

WSJ: Breaking: Morgan Stanley reports a third-quarter profit of $2.2 billion. http://wsj.com

Douglas A. McIntyre

The most attractive stock investments for periods when GDP growth stalls are those of corporations that proved they could improve sales during the 2007-2009 recession. Many of these corporations have additional attractions. They often generate so much cash they can afford to pay large dividends. This gives investors yields when the value of many equities fall due to concerns about the economy and in a period that interest rates on bonds are near all-time lows.

Recession-resistant companies are also often part of recession-resistant industries. Many of these industries’ sales come from a number of countries around the world. Their sales may slow in the U.S. and Europe, but remain strong in emerging nations. Coke and P&G are examples of corporations in such industries. Other companies are in sectors whose products are used in almost any economic environment. Tobacco companies like Altria and Reynolds American are examples of these. Still other industries have companies that have appeal in an economic downturn. McDonald’s, which offers many meals for a few dollars, often prospers when people cannot afford fresh groceries or more expensive restaurants.

24/7 Wall St. picked its recession proof companies by choosing: 1) corporations with revenue that grew during the last recession or where sales dropped slightly and profits rose, 2) companies in industries that are not usually sensitive to changes in the economy, 3) corporation that have demonstrated they have the balance sheet to pay large cash dividends, 4) corporations that are large enough to be among the most dominant companies by sales or market share within their sectors, and 5) stocks that trade within 10% of their 52-week highs. With the S&P 500 near a one year low, these are obviously companies that Wall St. thinks will do well over the next several quarters.

This is the 24/7 Wall St. “America’s Recession-Proof Companies”

The lucky guy is Michael Mahoney, who is currently Worldwide Chairman of the Medical Device and Diagnostics group at Johnson & Johnson (NYSE: JNJ). Between Mahoney’s October start date and his November 2012 ascension to the CEO suite, Hank Kucheman who is president of Boston Scientific’s largest group will be the interim CEO. Current CEO Ray Elliott announced in May that he would retire, but he will remain available through the end of the year for consultation with Mahoney and Kucheman.

Mahoney’s hiring was apparently contested by J&J and that’s why his start date as CEO has been pushed out more than a year. According to the Boston Scientific press release, the “transition period is being implemented to accommodate Mahoney’s post-employment obligations to Johnson & Johnson, which both Boston Scientific and Johnson & Johnson have agreed is appropriate.” J&J probably thinks it’s more appropriate than does Boston Scientific.

Boston Scientific is betting that Mr. Mahoney is worth waiting another year for. J&J has essentially found a way to keep him hostage for a year, which is probably enough time for Boston Scientific to foul things up even more than they already are.

The company is the world leading maker of coronary stents, a business that J&J dropped because of problems with the devices. Abbott Laboratories (NYSE: ABT) is the other big maker of stents.

Boston Scientific’s problems are well-known. The $28 billion, 2006 acquisition of Guidant Corp. ended a fierce struggle with J&J over control of Guidant. Boston Scientific is still trying to deal with that “win.” The company announced layoffs of an additional 1,200-1,400 workers earlier this year and is on our list of the 2011 Layoff Kings.

Boston Scientific’s board of directors has failed shareholders here. Mr. Mahoney may indeed walk on water, but having to wait for a year for him to prove it is too long for the company. Over the past two years, Boston Scientific’s shares have lost about -45% of their value. Retiring CEO Elliott has been at the helm for two years. And the board keeps him around to give advice to the new guys?

Going back to 2006, Boston Scientific’s stock is down more than -60%. And the board is satisfied to wait another year? Sometimes reality is far stranger than it needs to be.

Paul Ausick

• Read: The Eleven Most Implanted Medical Devices In America

On a yearly basis, medical device companies across the world bring in over $200 billion in revenue. In the U.S. alone, these companies take in over $85 billion a year. A large portion of that is for devices that are implanted in the human body.

On the whole, there is little concentrated information on the industry. Data on which company makes what device; sales figures of each individual implants per medical device companies; or the number of procedures done for each implant each year are not always readily available. More troubling, there is little information gathered in any one place about the potential dangers and flaws of these devices, or the complications that occur due to their implantation procedure.

24/7 Wall St. has examined National Health Survey data, multiple professional physician services, peer-reviewed journals, and SEC filings to complete a list of the most frequently implanted medical devices today. While many of these are life saving, controversy swirls around several others. In some cases, we found exact total costs from self-reporting by physician sub-specialties. In others, we estimated costs based on medicare outlays, industry reports, and academic publications.

Many of the devices implanted are medically necessary and do their jobs extending lives and improving quality of life, the 24/7 Wall St. research shows. Some products, such as artificial knees may even be underutilized. Others, like implantable cardio-defibrillators, may be over-utilized. What is certain in most of the cases we reviewed is that the effectiveness of these devices is not as well researched or understood as their widespread use may imply.

These are 24/7 Wall St.’s Eleven Most Implanted Medical Devices In America.

Our screen yielded six companies.  We list them here by the size of their dividends in descending order: Eli Lilly & Co. (NYSE: LLY) , Bristol-Myers Squibb Company (NYSE: BMY), Merck & Co. Inc. (NYSE: MRK), Pfizer Inc. (NYSE: PFE), Abbott Laboratories (NYSE: ABT) and Johnson & Johnson (NYSE: JNJ).   The six companies pay dividends ranging from 3.45% to 5.27%.  Beyond attractive dividends,  all of these companies boast additional positive characteristics including: forward PE’s lower than 13.5; price to free cash flow (P/FCF) per share lower than 28; and, average volume greater than 2 million shares per trading day.  Five of the six companies sport Return on Equity (ROE) greater than 9%.

The industry faces notable challenges in aiming for positive year-over-year earnings comparisons over the next several years.  Investors today are not able to look at drug companies as a mega-growth sector like they could in the 1990s.  A significant bolstering factor:  cash equivalents on the balance sheets of these six Big Pharma are sufficient to meet dividend payouts for multiple years. Except where otherwise noted, the source for all performance and financial data is Finviz.com.

In recent weeks, all six of these companies have demonstrated relative strength in the face of market declines.  Both the Dow Industrials and S&P 500 have fallen more than 7% since reaching their intermediate highs on the last trading day of April, 2011. During the same period, shares of these six Big Pharma companies have been under pressure as well, but have realized markedly lesser losses.  The shares of two of them, Eli Lilly & Co. (NYSE: LLY)  and Johnson & Johnson (NYSE: JNJ) actually posted tiny price gains, resulting in credible total returns. The other four companies showed share price losses ranging between 1.4% and 3.7%.

Eli Lilly & Co.  (NYSE: LLY) pays a 5.3% dividend with an earnings payout ratio of 46.4%.  Should Lilly encounter a period of declining earnings, its balance sheet boasts $5.80 “cash per share,” sufficient to cover its dividend payout for 12 quarters. Its forward PE is 10 and its price to free cash flow (P/FCF) is 11.6.  Its shares closed at $37.20 Wednesday, down1.1%. Its 52-week price range is $31.12 to $39.40.

Bristol-Myers Squibb Company (NYSE: BMY)  pays a 4.8% dividend with an earnings payout ratio of 67%.  Bristol-Myers holds $3.98 cash per share, sufficient to cover its dividend for 12 quarterly payouts.  Its forward PE is 13.3 and its price to free cash flow (P/FCF) is 24.3.  shares closed at $27.42 Wednesday, down 0.98%.  Its 52-week range is $23.35 to $28.99.

Merck & Co. Inc. (NYSE: MRK)  pays a 4.3% dividend.  Over the next several quarters, bottom line numbers are expected to lower Merck’s horrendous earnings payout ratio to more acceptable levels.  Currently this payout ratio is 292.5%.   Clearly, current quarterly earnings are covering only one third of the company’s current quarterly dividend.  Merck’s $4.22 cash per share is sufficient to cover its dividend payout for 11 quarters. Its forward PE is 9.1 and its price to free cash flow (P/FCF) is 22.6.  Merck’s shares closed at $35.17 Wednesday, down 1.3%.  Its 52-week trading range is $30.73 to $37.25.

Pfizer Inc. (NYSE: PFE) pays a 3.96% dividend with an earnings payout ratio of 69.9%.  The company holds $3.09 cash per share, sufficient to cover its dividend for 15 quarterly payouts. Its forward PE is 8.9 and its price to free cash flow (P/FCF) is 10.8.  Pfizer’s shares closed at $20.19 Wednesday, down 1.9%.  Its 52-week range is $13.43 to $21.45.

Abbott Laboratories (NYSE: ABT) pays a 3.74% dividend with an earnings payout ratio of 62.1%.  Abbott’s balance sheet cash per share is $4.18, sufficient to cover its dividend payout for 9 quarters.  Its forward PE is 10.4 and its price to free cash flow (P/FCF) is just less than 15.  Abbott Lab’s shares closed at $51.31 Wednesday, up 0.04%.  Its 52-week range is $43.41 to $54.24.

Johnson & Johnson (NYSE: JNJ)  pays a 3.45% dividend with an earnings payout ratio of 48.3%.  The company’s $9.80 cash per share is sufficient to cover its dividend payout for 17 quarters.  Its forward PE is 12.5 and its price to free cash flow (P/FCF) is 27.3.  The company’s shares closed at $66.16 Wednesday, down 1.4%.  Its 52-week range is $54.88 to $67.36.

Jim Berdou

A power shortage in China may cause the government to tackle inflation more aggressively. (Reuters)

Google launched its new pay-by-phone product. (Reuters)

The Microsoft (NASDAQ: MSFT) board supported CEO Steven Ballmer after an attack by David Einhorn. (Reuters)

Citigroup (NYSE: C) will try to keep $1 billion in assets given to it by Lehman Bros. to support loan obligations. (Reuters)

MGM China posted its $1.5 billion IPO. (Reuters)

Microsoft’s Steve Ballmer attacked the piracy of its software in China. (WSJ)

Pension funds are increasing their investments in hedge funds. (WSJ)

California state officials have begun to examine the proposed AT&T (NYSE: T) buyout of T-Mobile. (WSJ)

Delphi’s IPO signals an improved auto industry. (WSJ)

The number of people who watch traditional TV has dropped in the last two years. (WSJ)

Alibaba’s former unit–Alipay–got a license to operate in China. (WSJ)

An increase in jobless claims indicates that the recovery in the unemployment rate may be stuttering. (WSJ)

Europe could withhold its next payment to Greece because of concerns about the nation’s ability to cut government costs. (WSJ)

A new Abbott (NYSE: ABT) cholesterol drug had early trials halted because it is not effective. (WSJ)

Freescale’s IPO has been hurt by its debt load. (WSJ)

GM (NYSE: GM) plans to issue junk bonds. (WSJ)

Structured loan deals have begun to re-emerge after being washed away in the credit crisis. (WSJ)

Mortgage rates reached a 2011 low. (WSJ)

Howard Stringer’s efforts to turn around Sony (NYSE: SNE) have been spotty. (NYT)

Facebook has developed an easier way for members to share songs. (NYT)

The heads of a number of internet companies said that heavy regulation would undermine free expression. (FT)

Credit default swaps which cover US sovereign paper have doubled in price. (FT)

Japan’s deflation ended after 25 months. (Bloomberg)

Fidelity said it had a bullish view of the dollar. (Bloomberg)

Douglas A. McIntyre