Dendreon Can’t Deliver on Its Pioneering Prostate Treatment

Provenge Prostate Cancer Dendreon

If you found out a company developed a ground-breaking new way to treat prostate cancer, you might seriously consider investing in that company in the hope that it produces a billion dollar drug, the pharmaceutical equivalent of a home run!!

Dendreon Corp (DNDN) did just that, with its Active Cellular Immunotherapy (ACI) drug Provenge, which essentially treats a patient’s immune system to recognize and fight cancer. The problem is that Dendreon is a one-trick pony and competition in ACI is heating up and coming from the pharmaceutical giants with much broader product lines and much deeper pockets.

In our view, Dendreon is a lame duck. The only hope for investors is that it gets acquired by one of the large pharmaceutical companies looking to leverage the technology that Dendreon pioneered. But we don’t see a catalyst for this to happen in the near future and while it is looking at partnership opportunities for the European market, it may need to raise more capital to continue to operate until it becomes cash flow positive.

We understand how investors can be excited by ACI, we just don’t think Dendreon is the way to play it.