wpe1E.jpg (33803 bytes)

         Daily Blog - Tiger Software

                            Spetember 12, 2007

 Short Squeeze in DNDN  

Does The FDA Really Care
               about Terminal Patients?

William Schmidt,     - Tiger Software's Creator
      (C) 2007 William Schmidt, Ph. D.  - All Rights Reserved. 

      No reproductions of this blog or quoting from it
      without explicit written consent by its author is permitted.

Back to Home Page - www.tigersoft.com


     Send any comments or questions
      to william_schmidt@hotmail.com

 Short Squueze in DNDN Sends Stock Up 500% in Two Weeks!.

Does FDA Really Care about Terminal Prostate Cancer Patients?

                   Dendreon (DNDN)    2006-2007
          wpeC.jpg (44875 bytes) 

There's an important lesson here.  Don't short a stock that has too high a short interest.
          And if unexpected good news should befall the company, buy the stock aggressively.  The
          stock will go up, as the shorts rush to cover.

                 Take the case of  Dendreon (DNDN).  In late March, just before its breathtaking
          ascent from $5 to a high of $25 in 7 trading days, its anti-cancer drug, a vacine named
          Provenge,  was considered by an FDA advisory panel.  Such  panels routinely provide guidance
          that the FDA usually accepts or considers very closely in deciding whether or not to give a
          drug final approval.  

                 As you can see in the 7 year chart at the bottom of this page, DNDN had been steadily
          falling since early 2004, when it was 15.  Reports had come out that its Provenge, which is used
          to treat prostate cancer that does not respond to hormone therapy, was not reaching its primary
          "end-points" in the trials for slowing the progress of the disease.  As a result, it was widely
         believed that the Advisory Panel would   recommend against the drug on grounds of unproven
         efficacy as well as safety.  And the stock was heavily shorted.   In March, 26.4 million shares
         had been sold short.  This was 11 times the average trading volume and an amzing 34.7% of all the
         shares outstanding.  Clearly many of the shares sold short were "naked" short sales, where the
         stock was never even borrowed when it was sold.  (The Securities and Exchange Commission
         usually does little more than shake its finger at the accused brokerages when such cases are
         pointed out to them!)

                The monthly short interest figures published by the NASDAQ.
Avg Daily
Share Volume
to Cover
Aug. 15, 2007 36,029,103 4,134,767 8.71
Jul. 13, 2007 42,339,655 8,288,430 5.11
Jun. 15, 2007 40,847,280 20,081,558 2.03
May 15, 2007 41,662,926 32,227,947 1.29
Apr. 13, 2007 33,901,959 29,283,869 1.16
Mar. 15, 2007 26,419,737 2,389,099 11.06
Feb. 15, 2007 20,306,278 1,537,648 13.21
Jan. 12, 2007 16,799,777 1,392,811 12.06
Dec. 15, 2006 13,055,168 1,605,236 8.13
Nov. 15, 2006 12,425,374 1,323,045 9.39
Oct. 13, 2006 12,323,167 513,946 23.98
Sep. 15, 2006 12,565,560 602,930 20.84

                                                                 The Bullish Surprise.

To the surprise of all the shorts, though the drug did not meet the goals set out
                in the original study, the average survival time of patients on Provenge was increased by
                3 to 5 months.  Moreover,  the mode of treatment was far less destructive of a patient's final
                days than the alternative,  radiation therapy.  /The FDA Advisory Panel voted unanimously
                that the drug was safe, as it was grown from the patient's own cells, and voted by 13-4 that
                it was "effective".   Word got out the day before the announcement.   On March 28th, trading
                volume more than tripled from the day before and the stock rose  from 4,612 to 5.22.   On the day
                of the panel's meeting, the NASDAQ halted trading..  On the next day, March 30th, the stock
                tripled and opened at 17.92.  It closed at 12.93.  The volume that day was  925,478 shares,
               a 9-fold increase from what it had been the day before the announcement.  It rose each of the
               next 5 days and hit 25.25 on the sixth.  It came very close to its all-time high.   The rise was
               all short squeeze. 

  What's The Lesson Here.

Buy aggressively stocks that have unexpectely very good news when the short
                positions are so high.  Watch the news in very high volume stocks, if you are a day
                trader or even a short-term trader.   And when you look at a Tiger chart, know that
                insiders can be wrong.  The Tiger Accumulation chart shows steady red distribution,
                reflecting heavy shorting.  Seldom are the insider this wrong, but they can be very
                wrong, in the short- term.   Below is the Tiger Accumulation chart.  In fairness to it,
                users know that sudden spikes of Accumulation are important.  Tiger charts represent
                these as Buy B17 and Sell S17 signals.  Use these when the closing price is within
                the bands. With this understood, these signals excel.

Back to Earth: Does The FDA Care?

DNDN's stock quickly fell back once the short squeeze was over.  And, as
                if to prove the insiders were right all along to short the stock, on May 8th the FDA
                disregarded its Panel's advise and raised new questions about the new vacine's
                efficacy that will probably not be answered until 2010!  So, ultimately, the cynical
                insider-short sellers will probably be proven right.  They understood how bureaucratic
                the FDA is.  They understood how much more concerned the FDA is in protecting
                itself from criticism it is than in alleviating pain and suffering among a class of patients
                that is presently quite doomed!

               wpe10.jpg (42938 bytes)


wpeF.jpg (22723 bytes)
Dendreon Corp.
3005 First Avenue
Seattle, WA 98121
United States - Map
Phone: 206-256-4545
Fax: 206-256-0571
Web Site: http://www.dendreon.com

DNDN engages in the discovery, development, and commercialization of therapeutics that harness the immune system
to fight cancer. Its product portfolio includes active cellular immunotherapy, monoclonal antibody, and small molecule
product candidates to treat various cancers. The company's product candidates include Provenge (sipuleucel-T),
an active cellular immunotherapy that is in FDA priority review status for the treatment of asymptomatic, metastatic,
androgen-independent prostate cancer.  See also http://finance.yahoo.com/q/pr?s=DNDN


        Did The FDA Make A Mistake?

Q&A: Dendreon’s Vaccine for Prostate Cancer Patients

wpe11.jpg (3400 bytes)

An FDA advisory committee yesterday voted 13-4 in favor of Provenge, an experimental treatment for advanced
prostate cancer. The vote was hotly anticipated by cancer patients and investors in Dendreon, the Seattle-based
biotech company whose future is pegged to Provenge. Shares in the company rose more than 100% today. Provenge
commands special attention because it’s a vaccine, derived from a patient’s own cells, that mobilizes the immune system
to attack cancer.

But what would Provenge mean for men with prostate cancer? To find out, we called Simon Hall, director of the
Deane Prostate Health and Research center at the Mount Sinai School of Medicine in New York, and an investigator
on a trial of Provenge. (Hall told the Health Blog he has no financial ties to Dendreon.) Here are the highlights of our

Q: If the FDA approves Provenge, how would it fit in with current treatment?
A: The vast majority of patients are diagnosed with localized disease, which is treated with surgery or radiation.
About a third of those patients will have a recurrence — if they live long enough, they’ll have metastatic disease and
have hormone treatment. For the vast majority of those patients, that will buy them several years where their disease
is under control. But then the cells will adapt and start to grow anyway. I would estimate between 29,000 and 40,000
men are in this boat. The only treatment that has ever been shown to have any advantage for these patients was taxotere
[a chemotherapy drug from Sanofi-Aventis], shown to extend life by 3 months. But the bottom line is patients don’t
want chemotherapy. The reality will be that when the patients get to this point, they’re probably going to do the vaccine.
I think there will be a huge demand. I’ve had a lot of my own patients calling me and saying, “Can I get the vaccine?”

Q: Any idea how much Provenge will cost? Will the price influence who gets it?
A: It’s going to be a very expensive, boutique-type agent. Different from drugs or even vaccines that are in the pipeline,
this one is custom made for each individual patient with their own cells. A lot of times we use drugs off label; I don’t
think it will happen in this case because of the expense. The rumor is it will cost $20,000 per infusion. And the way
the trials have been done, it’s been three infusions per patient.

Q: The clinical studies failed to meet their goals, but suggested the vaccine prolongs survival for four months.
Is that significant?

A: You set up a study and you say my primary endpoint is time to progression, and my secondary endpoint is delaying
time to pain. They failed on that. They were disappointed, and I’m sure they had statisticians come in and say, “How
can we carve up the data and get something out of the study? And they were like, “Holy cow, at 36 months, only 10%
of those on placebo were still alive, but you’ve got a third of those on Provenge still alive.”

Q: Do you think the FDA will follow the committee’s advice?
It’s hard to guess. Would they approve a drug based on one very small study that was sort of done backwards?
A committee looks at it and votes 13-4 to approve. I don’t know what they will do. Will they approve?
Or will they say, “Listen, you’ve got this other big study that’s going on and maybe we should wait a year and see
what that says.”

Q: What’s the bottom line for Provenge?
We need it. There’s little toxicity. If the larger study validates the first study, or clinical experience validates it, it will be
a step forward for men with prostate cancer, and for this whole idea of using the immune system to fight cancer.

(Source: http://blogs.wsj.com/health/2007/03/30/qa-dendreons-vaccine-for-prostate-cancer-patients/ )

















Hit Counter