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Biotech / Medical : DNDN - Dendreon Corp.

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From: tktrimbath12/31/2011 1:33:42 PM
2 Recommendations   of 751
My semi annual review of DNDN

INTRO Here's my semi-annual exercise to see if I remember why I own the stocks I own, and so I can check back and see if their stories have changed. I post in case it helps others too.

DNDN (market cap $1.13B)
Dendreon is a leading edge biotech company that is treating cancer by re-educating the patient's immune system to recognize and respond to the cancer, therefore it is called a cancer vaccine. Its first treatment, Provenge, is for prostate cancer and was approved by the FDA. The treatment may be applicable to even earlier stages of the cancer, and also to enough other cancers to cover the majority of cancer patients (breast, lung, renal, colo-rectal, bladder, etc.), though each cancer will be addressed in separate tests and trials. Clinically, Provenge seems to be working better than expected and with more benign side effects than chemo or radiation; but reimbursement and procedural issues are slowing the growth. The stock dropped enough to effectively value all treatment and market expansions as negligible. I think the over-reaction is grossly out of proportion to the news and temporary because the company and its products continue to progress. Competition exists, but none are as well developed. European expansion is expected within the next year or two depending on European regulations.

The stock trades at about a fifth of its high, and has multiples similar to mature companies. Because I think Dendreon is still a young company (and some management actions seem to confirm that it is so young as to be naive) I think the stock price will appreciate as the company matures and the institutions become more comfortable with the financial data. Good news has not lifted the stock though, so market psychology is more powerful than business fundamentals, and I am not going to make guesses about market psychology in these irrational times.

DISCLOSURE LTBH since 2002 and glad to be indirectly part of a dramatic improvement in the lives of cancer patients from the efforts of the Dendreon team. Fortunately I bought early. Unfortunately the price has stalled below what I consider an appropriate value which means I've been using an uncomfortable amount of stock to pay my bills. Even with the stock price dive, I made profit.
(I've also collected links to the other discussion boards and my other stocks over on my blog
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