Looking Beyond Dendreon’s Upcoming Earnings Release (DNDN)

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Dendreon Corp. (NASDAQ:DNDN) will release earnings next Tuesday, August 7, after the close.  The volatility in shares has dried up considerably as shares have only traded above $8.00 or below $7.00 for part of three trading days in July.  The company’s only expected revenues here will be from interest and the loss expected looks like it is -$0.30 on an EPS basis.  That number may change before the report.

There can always be some activist group activity here, or at least that is what incoming emails received have stated.  Some sent in to us listed "the first of many" and "Many more to come."  We’ll see if that creates some movement or not. Options are still fairly active in the open interest with over 154,000 contracts in the August $7.50 Calls and over 129,000 contracts in the $7.50 puts.  That huge open interest drops off a cliff in the near-months after this as no new FDA data is really expected.  An at-the-money straddle right now only looks like it costs $0.70, lower than in any recent month.   

All of these following issues are already known and already in the news, but on top of earnings the company is going to address the following:

  • The Company received confirmation that the U.S. Food and Drug Administration will accept either a positive interim or final analysis of survival from its ongoing IMPACT study to amend the Biologics License Application for ProvengeĀ® (sipuleucel-T), its investigational active cellular immunotherapy for metastatic, androgen-independent prostate cancer.
  • The Company continues to have strong patient enrollment in its Phase 3 IMPACT study, which is on track for completion of enrollment this year.
  • The Company completed a financing that resulted in gross proceeds of approximately $85 million from a convertible senior subordinated notes offering.
  • Presented data from an analysis of Phase 3 Studies (D9901 and D9902A) that showed a prolonged survival benefit for patients who were initially treated with PROVENGE who then went on to receive docetaxel chemotherapy after disease progression.

Obviously if there is any new development out of the FDA or if the company decides it wants a partner that will be key to watch over anything else.  We previously noted how shares may face a news vacuum through much of summer and that looks like it has been the case as trading volume has dropped and volatility in the stock has disappeared.  What we will be looking at the closest is the company’s current and projected cash burn rates since it secured the recent financing package and announced its reduced cost structure. 

This one has been eerily quiet of late as far as any real news out of the company.  We’ll follow up if there are any substantial changes ahead of the release. 

Jon C. Ogg
August 3, 2007

Jon Ogg can be reached at jonogg@247wallst.com; he does not own securities in the companies he covers.