Stock Analysis:What’s Going On with Dendreon Stock?

By James Altucher
source:blogs.wsj.com
Shares of Dendreon are off over 2% today and down 12% in the past week despite the S&P being down about 0.4%. But even more importantly, DNDN, currently at 34 and change, is 23 points off its high of 57.67, which it reached after the FDA approved the prostate drug Provenge. What is going on here?

Clearly, some people/funds were in it for the short haul. They were making the bet that Provenge was going to get approved and the stock would pop. The drug got approved, the stock popped, and as per their plan, they bailed on the stock and are probably still bailing. If you held it at 10, 15, 35, and were happy to see it pop to 57, there’s no reason for you to hold out for $70 where it can probably go once its drug starts selling and producing profits.

Part of the concern is that people are afraid Dendreon might miss analyst estimates on the quarter. They are just beginning selling Provenge and estimates are for about $7 million. Any miss here is meaningless. This is a drug that eventually will bring in billions of dollars a year.