There's a reason why I'm writing about a C grade stock. Many reasons.Dendreon (DNDN $7.79)
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Grade: C
The skinny: I don't like putting a stock rated below 'B' on this list, but that doesn't mean absolute rules are best. Dendreon was a D company in my book for several weeks despite my optimism about the potential of Provenge. Even with the shenanigans of anti-DNDN forces at the FDA and elsewhere, the risk-reward has improved for this company and its immunotherapy vaccine for late-stage prostate cancer. I'd rather wait until the PPS dives below $6.50 again, but this is not a bad entry point, either. Still, it could be two years (or more) before a real, sustained move enters the territory. Short interest is so compact and large (49%) that any good news will cause tremors.
X factor: For all the corruption and arrogance of its foes, much of Dendreon's shot at survival will depend on its ability to find a ROW partner, one that won't take a cut of US profits. Provenge could become worth $1 billion per year, or it could be literally shelved, depending on management's ability to emerge out of a hostile environment. The jury is out on whether CEO Mitchell Gold can hit that finish line.
Summary: Traders are riding the stock up and down, and without ROW and/or partnership news, or completion of Dendreon's 9902B (Phase 3) trial enrollment, this is not a fundamentally sound issue to buy. However, for those who believe in the science and potentially groundbreaking immunotherapy, this is a stock worth holding and accumulating.
Extra point: The Dendreon forum at Investor Village has been chastized by some in the media as cultish. These same media — not all of them — are showing more focus on retail investors than their actual job. So far, only Mike Huckman of CNBC has had the fortitude and integrity to ask tough questions about conflict-of-issue concerns (re: Dr. Howard Scher) regarding Provenge opponents. Most of the remaining media has been gutless, to be blunt.
Disclaimer: Pupule Paul is long DNDN.
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