Investing in Dendreon: Approvable Letter Likely
By Ian L. Cooper
It’s been a bad couple of days for Dendreon longs. Take it for what its worth, but we still believe it’s unlikely that the drug will get full approval. And, according to the latest short interest, we’re not the only ones that think so. Compare April’s 33.9 million shares short to March’s 26.4 million shares short.
In our opinion, an approvable letter is apropos here… that is, if the FDA listens to the latest round of doctors against full Provenge approval, such as Dr. Maha Hussain, the second to come out against Provenge approval with Dr. Howard Sher.
Again, take it for what it’s worth. But we’re following in the footsteps of Dr. Howard Sher and Dr. Maha Hussain, both of whom reiterated their positions that existing clinical trials do not warrant Provenge approval. One problem to keep in mind, says Hussain (as referred to by Forbes.com), “is that the large study that Dendreon is conducting might become impossible to do if Provenge is approved. This 500-patient study is comparing Provenge to a placebo version of the treatments.”
Also keep in mind that the FDA, which has followed advisory panel advice in the past, is not legally required to do so. As do we, the sizeable short position, believes that the FDA will counter the advisory ruling with an approvable letter.
Look, eventually, it is likely to be approved… but not by May 15, 2007, in our opinion. Chances are better with more testing. Studies, according to reports, failed to demonstrate that the drug slowed down cancer’s spread – a primary study goal.