Dendreon (NASDAQ:DNDN) released an update on Thursday that outlined the path that the company is taking to advance its prostate cancer treatment Provenge to market.
The company announced that they will file an NDA with the FDA in November and that the FDA would then be expected to act on the application by mid 2010. It is expected that the FDA will rule to approve Provenge, based on previous comments by the regulatory agency after mid term results were released last year. Keep in mind, however, that nothing is a sure thing both in regards to the stock market or the FDA. While indications point to an FDA approval, it is also good to realistically temper the enthusiasm by remembering that members of the FDA are humans - government officials, at that - and are just as likely to change their minds or ask for more information as anyone else out there.
That being said, as long term data continues to demonstrate that the treatments work, they are slowly becoming more accepted by the medical field; and Provenge is no exception. I like the chances of a Provenge approval, although I think that by the time the treatment becomes approved in the United States, it will be long overdue. It was Oncophage, a kidney cancer vaccine produced by Antigenics, that became the world's first approved cancer immunotherapy when the Russian medical authorities approved it in April of 2008.
As for Thursday's DNDN press release, the company issued Provenge sales estimates of between $60 and $120 million for the second half of 2010. For full year 2011, the estimates were for well over one billion dollars as the manufacturing plant in New Jersey would by then have the capacity to produce the product at a level to support that much in sales. I was also reported in the press release that additional manufacturing facilities will be opened in late 2011 in Los Angeles and Atlanta.
Before we look at the potential of the DNDN stock, let us also consider the potential of the pipeline. Provenge is not the only product that Dendreon has to offer. The company also has Neuvenge in its back pocket. Neuvenge can potentially treat multiple cancers, including breast, bladder and colorectal. When it's all said and done, there is a whole lot of potential still wrapped up in this company and its stock. With a current market cap of over three billion dollars, DNDN is pretty much priced for possible approval, however I would expect to see the stock trading for over thirty dollars by the time the FDA issues a decision next year. Assuming both that Provenge receives FDA approval and that the company's sales estimates are fairly accurate, I would expect fifty dollars a share to be attainable by the end of 2010. From that point on, after a few quarters of Provenge sales, when we should have a good feel for just how much revenue is coming in, the stock could still move up very significantly - especially if Neuvenge looks to also be posting positive Phase II and III results by then.
There's a lot of "ifs" still left to sort out - the most important being that none of this occurs IF the FDA does not approve Provenge. However, IF the FDA does approve the treatment, which I consider likely, and the New Jersey manufacturing facility is fully ramped up by the timeframe outlined in Thursday's press release, then I can see DNDN becoming a hundred dollar stock a couple of years down the road, barring a stock split or a buyout.
Wait - There's more. Once Provenge is granted approval in the United States, I would expect to see a rally in the other cancer immunotherapy stocks, such as AGEN, ONTY and CVM.
Antigenics NASDAQ:AGEN) is preparing to launch the kidney cancer vaccine Oncophage in Russia in the fourth quarter of 2009 and is also awaiting a marketing approval decision by the EMEA in Europe. Oncophage did not meet the standards for a US approval in a previously conducted Phase III trial, but Russia granted approval based on a subset of patients that responded well to the treatment. Additional long term data collected from treated patients since that time has further demonstrated that Oncophage works, according to reports released earlier this year.
Also of note, once regulators and medical professionals began using patient survivability instead of tumor progression as a marker of success for cancer vaccines, it was hard to ignore the fact that extending the lives of patients is exactly what these vaccines were capable of doing. In my opinion, that fact was the highlight of this year's American Society of Clinical Oncology (ASCO) meeting. Hence the run for cancer immunotherapy stocks at the meeting's conclusion.
Also highlighted at the meeting for demonstrating positive late stage trial results was StimuvaxID, Oncothyreon's (NASDAQ:ONTY) experimental cancer vaccine that will potentially treat various cancer indications, including lung and breast.
Biovest's (OTC:BVTI) BiovaxID also received honorable mention.
Cel Sci's (AMEX:CVM) Multikine®. Multikine® is a head and neck cancer immunotherapy treatment that has been on the sidelines for some time awaiting the commencement of a Phase III trial which Cel Sci has recently stated may begin later this year. Multikine, in my opinion, could be huge if Phase III trials offer the same positive results as the Phase II trials did. In a couple of weeks, the company is expected to unveil it's new state-of-the-art manufacturing facility, where it expects to manufacture Multikine® for that pivotal Phase III trial, will be used for the process known as cold 4°C Aseptic Filling on a contract basis to stem cell and biologic companies, academic institutions and commercial media suppliers.As a short term play, CEL-SCI's shares also look attractive and have been rising steadily in recent weeks due to their FDA fast-tracked H1N1 (Swine Flu) treatment based on the company's proprietary L.E.A.P.S. technology. There are newly published reports indicating that CEL-SCI could be granted an Emergency Use Approval of their investigational LEAPS-H1N1 treatment for patients hospitalized due to exposure and infection of H1N1 since no other form of treatment exists for such patients. In similar fashion, since the beginning of September, shares of Cepheid (NASDAQ:CPHD) have been rising sharply in anticipation of the very same type emergency FDA approval for their Flu A (Influenza Virus) Panel. The company announced in early September that the test was under EUA review by the FDA for use during the upcoming influenza season, with product shipments beginning in January 2010. A Cepheid official said yesterday that the firm expects to receive that Emergency Use Authorization and that the firm expects to file for full FDA clearance of the test after it receives the EUA. The test helps identify H1, H3, and novel H1N1 strains and will provide results in 45 minutes. Healthcare providers and patients all over the country have been requesting that such a test be made available as soon as possible given it's urgent need in the face of the growing pandemic. The L.E.A.P.S. platform was also mentioned yesterday on Bloomberg Television during a segment about some of the issues facing biotech companies during the upcoming H1N1 flu season.
Getting back to the subject at hand, it has long been my opinion that we are on the verge of something big in the arena of cancer treatment and I believe that the cancer vaccines are the next big thing. Patients and Doctors have been lobbying for years for these treatments to become available and it looks like we are getting close to the time that there wishes will be granted.
And yet the full potential of these vaccines is still untapped, in my opinion. They have only been tested on patients that are also receiving chemotherapy and/or radiation treatments, which wreak havoc on a body's immune system. If a cancer vaccine had a healthy immune system to work with - one that was not already beat down by time and other treatments - you have to wonder just how much more of a benefit the treatment would provide to the patient.
When Dendreon announced their plans for the future of Provenge, it offered an insight into what could be coming next for cancer patients, Doctors and investors of the sector. With the potential of the cancer immunotherapy treatments now coming to light, we're looking at a scenario where everybody wins - patients and investors alike.
I always like to point out, however, that the patients bear the true benefit of these treatments - life; an investor's financial gains are largely secondary and hugely unimportant by comparison. Disclosure: No position DNDN, long AGEN, ONTY, CVM, BVTI.
Vinny Cassano is the newest member of the BioMedReports contributors team. He is also the author of the popular biotech investing blog VFC's Stock House.
