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DNDN Doldrums
By Stock Charts | May 29, 2007
After soaring to highs of $22-23 almost 2 months ago on heavy speculation regarding it’s cancer drug Provenge, Dendreon’s (DNDN) future doesn’t look too bright. At the time, an FDA advisory panel endorsed the drug, causing investors to believe that the FDA would approve the drug, creating a gold mine for Dendreon. Unfortunately for the longs, it didn’t happen and the stock plummeted from it’s lofty heights. Here’s a look at the stock chart:
Without the revenue from sales of Provenge, it looks like DNDN’s financials will continue to remain in the red, with the cost of ongoing additional clinical trials weighing heavily on the bottom line. With the stock price seeing a significant decline since the FDA announcement, DNDN has lost a significant amount of money that could have been used to help finance further trials. Some analysts suspect that Dendreon was able to cash out a number of shares during the initial frenzy; we already know that the CEO as well as other top management did. However, with the recent layoff of 40 employees and the results from the final clinical trials not available until 2010, DNDN’s immediate future looks pretty dim. Barring a sudden strike of good luck, I suspect shares of DNDN will continue to languish as short term investors and daytraders move on to greener pastures.
In other news, it appears that some investors are trying to sue Dendreon for “issuing a series of material misrepresentations to the market which had the effect of artificially inflating the market price.” Waste of time if you ask me, no one forced you to buy the stock, bub! Short interest in DNDN grew from May to April by 24.16%, increasing from 32,696,403 to 40,596,562.
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