Less than two months ago, an FDA panel surprised nearly everyone by recommending the agency approve Dendreon’s Provenge prostate cancer med. The stock rose 147 percent. Now, the FDA wants more data about effectiveness, chemistry and manufacturing. And the stock is down about 60 percent so far today.

One study examined the FDA panel showed Provenge prolonged lives, but didn’t meet the primary goal of slowing the disease. Dendreon is seeking “clarification” and may cut jobs. Provenge would have its first marketed med. The Seattle company has only one other drug in development and nearly $400 million in deficits.

“We are disappointed that this decision will cause a delay in the availability of Provenge for patients who suffer from advanced prostate cancer,” says Mitch Gold, Dendreon’s ceo.

Demand for Provenge is strong. About 50 percent of men with late-stage prostate cancer surveyed say they wouldn’t consider chemotherapy because of side effects, according to a survey of 500 patients, caregivers and doctors by US Too International, a patient advocacy group.

“With chemotherapy, men lose their hair, throw up and die,” says Jim Kiefert, Us Too’s chairman and a 17-year prostate cancer survivor. “This means people will die without getting a chance to try this treatment. I’m very disappointed.”

Many investors were betting Dendreon would stumble. About 33.9 million shares were held in a short position last month, up from 20 million in February, according to ShortSqueeze.com. That represents nearly 42 percent of outstanding shares.

Gold, by the way, sold 202,000 of his shares on April 2, just a few days after the FDA voted in favor of approving Provenge. The shares were sold at about $13.46 a share, according to a filing with the Securities and Exchange Commission. The sale was worth about $2.7 million, at prices more than double before the FDA vote.

The stock sold represented about 20 percent of Gold’s holdings, spokeswoman Monique Greer tells Bloomberg News. It was the first time Gold sold shares in the company, she said in April. The company can now expect shareholder lawsuits over the insider sale, David Miller of Biotech Stock Research, an independent equity research firm, wrote in a note to clients today.

Further reading….
Bloomberg News;
The Seattle Times;
Dendreon statement;
ShortSqueeze.com (type in ticker symbol DNDN).

[tags]Dendreon[/tags]