Doc points to Dendreon's 'drug company incompetence'

Count Dr. Charles "Snuffy" Myers as one of the latest cancer specialists who faults a cruddy trial design by Dendreon as the primary reason for the FDA delay in approval of vaccine treatment Provenge.

His comments are available at PharmaLive.com. Here's an excerpt.

"Dendreon made major and obvious mistakes in developing Provenge. The FDA is not some sort of bad guy -- at least in this case and yet Dendreon's stock continues to rise," Myers' says. "The primary end point of a clinical trial seeking FDA approval should be either survival or improved quality of life, but Dendreon still chose to muddy the waters by changing endpoints midway through the clinical trial, forcing the FDA's hand with their poor design."

"This is actually the second time that we've had a useful drug fail in development. The other was Atrasentan (a.k.a. Xinlay)," Myers adds. "Again, it failed not because of the FDA but because of drug company incompetence. While the FDA is far from perfect, people need to understand who to blame in this case."

Myers, a prostate cancer survivor, writes for the newsletter ProstateForum.com.

Pupule Paul is long DNDN.

Hoku, Dendreon longs feel the pain

While I view some of my favorite stocks as pricey, they're doing better than small-cap underdogs HOKU and DNDN.

Hoku took another pummeling today, down 2.6% to $9.04. It's been a steep decline from a recent high above $14, but it's not a shock considering the Co is, at earliest, 18 months away from producing polysilicon. I'm bullish on the Co, but I'll wait this out before picking up more shares.

Dendreon had a freaky moment early in the day when CNBC's Mike Huckman gave viewers a teaser about the Co. That sent the stock on a wild ride from the $7.50 range to $7.93 in less than 10 minutes. Turns out, Huckman was referring (on his blog) to a lawsuit filed in Ohio against FDA honcho Andrew von Eschenbach in regards to prostate cancer immunotherapy treatment Provenge.

It didn't take long for buyers and sellers to get the marbles back into their heads. DNDN closed the day down 2.1% to $7.51.

Pupule Paul is slightly long HOKU and DNDN.

Pupule promotions, demotions

With a tide of earnings reports in, it's time for some shuffling in my stock pick lists. Movin' on up:

Nintendo NTDOY.PK whacked it out of the park with its gigantic revenues and profits.

If it's one thing about the Japanese market, the fluff and wild speculation are just not, well, fluffy and wild. Think about it. While we have intrigue and bubble thoughts hovering over China — not to mention the way the government's ownership in major stocks — it's not so in Japan. Savings rates among citizens are astronomically high, as always, and bubble-icious stocks are not as prolific as they are in China or the U.S.

That's not why I am so devoted to Nintendo, however. It's about the numbers, which don't lie. That's why I'm backing up my bullish stance (and holding) by moving NTDOY.PK from B+ to A-.

Finally.

Garmin This is a Co that was on my B list when it should've been at B+, which is where I'm moving it today. Not understanding what the Co does is a large reason why I paid so little attention to it. Strictly on the numbers, though, I liked it at the B level. GRMN's earnings report is due out on Wednesday.

Demoted:

Spartan Motors As a Co, not much has changed for SPAR. Landing contracts (or not) is a way of life, an irrefutable fact of life that alters its stock. But the flip side of it is that the fundamentals of Spartan won't make investors a profit unless revenues are realized, and without the latter, the stock has tumbled mightily. As much as I rely on a Co's fundamentals, stocks are about popularity to an unfortunate, but real extent.

Is yesterday's $1 million stock buyback going to turn the tide? With the earnings miss (by 6 cents per original estimate), that'll be tough. The Co is quite the same. Traders who ran it up and knocked it down ... they're the real Jekyll and Hyde here. The real longs will scoop up cheap shares here at $12, particularly with 40% annual growth coming, according to the Co.

Hoku Scientific Demoted from B- to C+. Great prospects, dwindling revenues (per last week's earnings report), huge promises. HOKU is not your average small cap. It's the equivalent of taking a promising young baseball player out of the minors after a short stint and starting him on a major-league team. Hard-working player, diligent on and off the field, but at least a year or two from hitting his stride.

Opposing fans ride him incessantly for his hefty paycheck. Home fans dote on him and believe he will develop into an All-Star in due time. HOKU traded up today, but at $9 is well off its high in the $14 range. This is likely a trader's dream for the coming 18 months.

Volcom An earnings miss has pulverized the stock, which traded today at $38, a 14% haircut. I own a Volcom surfer wallet and like it. However, unless some new products enter the market, VLCM is going to trade sideways for some time. Retail is a rough market, more so with an outdoor-oriented Co that misses in what should have been its best season of the year. I demoted VLCM from B to C+.

Joy Global Earnings aren't due for another month, but a guidance cut from JOYG sent the shares down 14% on Wednesday.

Demoted down to C+ by Pupule.

Dendreon The silence from top brass is deafening. Insider sales, including those by CEO Mitchell Gold, before the stock took a major plunge off a cliff on May 9, still haven't been explained sufficiently by the Co. Worse yet, the lack of transparency has the SEC mired in an "informal inquiry" of DNDN and its clinical trials.

Provenge is Provenge, a potentially life-extending immunotherapy treatment for prostate cancer patients. However, DNDN has shown no signs of life when it comes to navigating the treacherous waters of the FDA, hedge funds and big pharma. Provenge has been shelved for much too long, and no reason the Co has given can excuse the delay for patients.

Demoted from C to D+. Sadly, until management is shaken up or overthrown, Provenge will remain locked up.

Pupule Paul is long NTDOY.PK, HOKU and DNDN.

Northwest Bio takes a beating, Skins steps up

Bargain hunters are on the move.

The bargain-basement shoppers are never in short supply, and neither is their prey. Even in the midst of a blazing-hot summer, a 100-point down day on the Dow reverse in the last 30 minutes and became a 40-point down day.

A stroll through message boards inevitably yields a sidewalk salesman or two, carnival barkers extolling the virtues of their elixirs. Two days ago, you could find a pumper or two of Northwest Biotherapeutics on forums not devoted to NWBO.OB. True, the Co is the first to market with an immunotherapy treatment (for brain cancer) thanks to limited approval in Switzerland.


However, the limitations and the lack of clarity in terms of Northwest Bio's bottom line as a result of the approval are a mystery. So, the stock has fallen from $7.33 to a close of $3.15 today. That includes double-digit percentage drops in the past three sessions.

[Ed: The Co has stated that authorization for non-commercial use has granted in Switzerland, but that it would apply for marketing and commercialization of its treatment there by the end of the year.]

Six of the past seven sessions were down, and the most recent days are marked by lower volume since 3.9 million shares traded on NWBO's big day on July 9. With a float of only 4.17 million shares, it takes very little to boost or boot this stock, which is why today's volume of 508,000 shares brought NWBO down another 12 percent.

Even a press release from the Co denying any selloff by shareholders Toucan Capital or Toucan Partners hasn't stopped the slide.

Buyer beware. NWBO closed at $2.30 in the session prior to the Swiss news and established no real level of support beyond that day. Finding that floor is a gut-churning experience for Northwest Bio's longs.

Dendreon longs know the churn well. The stock dropped 12 cents (1.6 percent) to $7.41 today, With options expiry looming, DNDN has not had an up day since July 10. The visible support level has been $6.50. DNDN's last stock slump came between June 20-26, when it bottomed out at $6.51.

That was followed by five up days in the ensuing six on healthy volume. It's tempting, though, for longs to unload shares here out of sheer frustration. Maybe casting off a portion of shares would be a healthy compromise, at least for peace of mind. The SEC's "informal inquiry" into the Provenge clinical trials has yet to reveal any news positive or negative.

That's enough to unnerve most investors, but with Dendreon, only the hardiest of souls remain. Hardy or stubborn; I'm more of the latter, and I'm still holding my shares.

Hoku Scientific was up in six out of eight sessions, and hit an intra-day high of $14.55 on Monday. However, Monday was the start of a tumble for the stock, which closed at $12.51 today. In the same way HOKU bolted to a new high last week — descending volume on Wednesday (11.6 million shares), Thursday (7.1 million) and Friday (4.6 million) — this week's decline is relatively similar.

Volume has dropped each day: Monday, 4.7 million shares; Tuesday, 2.9 million; today, 2.5 million. Those are still hefty numbers considering HOKU's float of 11 million shares. This is the first string of three down days for the stock since Hoku announced its first polysilicon contract on June 13. Bears are have been feeding on the glut of optimism, but the decline in volume indicates that the stock is ready to level out sometime soon.

Skins Inc. is the tiniest of the companies I've explored recently. The Co has tantalized footwear fans with a slick marketing campaign, but angered investors by delaying the release of its product twice in the past year. Still, the stock keeps bouncing back up. SKNN.OB was up 11 cents to $1.83 today to end a four-session skid. However, volume was its lowest in eight trading days.

Momentum could resume as a major shoe show nears (July 30). Skins will be there. Enter at your own risk.

Disclaimer: Pupule Paul is long HOKU and DNDN.

Pupule's small caps taking body blows

Has the summer slump finally arrived?

With as much certainty as a summer swell, each summer brings a period of lower volume and downtrend in the market. This time, the lull is showing up in bits and pieces even as the Dow sets a new high. Am I bitter? Aaaaaah ... not really.

I have enough faith in Crocs, Sina, Apple and Nintendo to feel comfortable. Baidu? They lead their field, and what a large field it is. Concerned about the lofty PPS? Yes, but it's a good problem. It's the weakness in my small-cap favorites that is a source of some stress.

Dendreon continues to take a beating — to a pulp — that brings Rocky Balboa to mind. You wonder when DNDN will stop taking the punches and fight back, though. DNDN is down 3.4 percent to $7.52 with an hour left in the session.

Hoku Scientific took a breather yesterday, giving back some gains on a relatively paltry 2.6 million shares. Today, with an hour left in the market, HOKU has retreated 3.4 percent to $12.95 on 3.3 million shares. HOKU is now down 11 percent since its mid-day high yesterday.

Even with this low volume, I think HOKU could possibly drop to $11.85, which would be 18 percent down from yesterday's mid-day high. The stock could also drop 23 percent from its high, as it did between June 26 ($12.80 intra-day) and June 29 ($9.84 intra-day).

A 23-percent pullback from yesterday's all-time (mid-day) high of $14.55 would bring HOKU down to $11.23.

Bears are finally smiling again as HOKU proves to be vulnerable to the whims of traders, but the lack of volume today could mean Mama and Papa Bear may be shooed out of the party real soon. The last time volume was this low — 1.8 million shares on July 5 — HOKU was up in five of its next six trading sessions on strong volume.

Disclaimer: Pupule Paul is long in the stocks mentioned in this story.

Transcript: Mike Huckman/CNBC on Provenge activist ad in Wash Post

Here's the full transcript off the Provenge/activist ad segment during "Closing Bell." And yes, I like typing up transcripts when Mike Huckman talks about Dendreon. He's been the most consistent and balanced member of the media when it comes to Provenge. By far.

Closing Bell, Monday, July 16, 2007

Melissa Francis: Investors in a volatile biotech stock are taking their case to Capitol Hill to reverse a controversial FDA decision and their fortune. Their effort doesn't seem to have made much of a difference in the shares of Dendreon today. Take a look at that. They closed the day unchanged. CNBC's pharmaceuticals reporter Mike Huckman joins us now with the latest episode in this soap opera. Mike?

Mike Huckman: That's right, Melissa, a soap opera it is. In this post-Vioxx era, it has become pretty commonplace over the last few years for consumer advocates to launch campaigns to get drugs taken OFF the market, but this is case where a different category of activists is pushing to get a drug put ON the market. (close-up of ad, "DYSFUNCTION AT THE FDA") A group of about 150 investors, patients and their advocates ponied up 24 grand to buy this no-frills, half-page ad in yesterday's Washington Post. It recaps the results of the clinical trials for Dendreon's controversial prostate cancer drug, Provenge, the favorable FDA advisory committee recommendation and subsequent negative decision by the FDA. And it's urging Congress to demand the agency to reconsider. Dendreon investor Arnie Mass spearheaded the fundraising campaign for the ad because he says, time isn't just money here; it's lives.

Arnie Mass: The mistake by waiting is about 30,000 deaths a year of patients who have prostate cancer. These patients can LIVE. We already have evidence of patients living (clears throat) beyond six years that ordinarily would die in 19 or 20 months, so to wait three years is another 90,000 patients that are gonna die.

Mike Huckman: Mr. Mass is referring to the fact that Dendreon says the FDA wants more data about whether Provenge, indeed, extends patients' lives. Preliminary results won't be available, though, until at the earliest, the middle of next year, and complete results are not expected for another two to three years. A Dendreon spokesperson said the company had nothing to do with this ad and that nobody at the company saw it until it ran in the Washington Post yesterday. Last week, Melissa, Dendreon did disclose that the SEC is now doing an informal inquiry into the Provenge clinical trials. Back to you.

Melissa Francis: Wow, what a story. OK, Mike Huckman, thanks so much.

Disclaimer: Pupule Paul is long DNDN.

From the minds and hearts of DNDN's retail investors

The Dendreon forum at Investor Village is a haven for true believers in the Co's pioneering late-stage prostate cancer immunotherapy treament, Provenge.

At least, they hope it will be a pioneering treatment. I won't go into the many levels and chapters of the war between all parties involved. Between lawsuits, the FDA, hedge funds, corrupt doctors, insider information and victimized shareholders, all the info could fill a fat book and then some.

For now, I'll lead you to a highly pertinent post by one of the forum's regulars. In his post, These are the Questions the SEC, the DOJ (FBI), and HHS OIG Should Be Asking..., warlord_2010 leaves no stone unturned.


It's unfortunate that most folks, including myself, have a soft spot in our hearts for the underdog. Since Dendreon went into this uphill battle against many murderous opponents hiding in the wings — the ones who orchestrated the defeat of Provenge — it's been a one-sided, bloody fight. If this were held in a boxing ring, the referee would have declared this a TKO long ago.

Read warlord_2010's list and consider what role the FDA currently plays in saving human life, or whether the FDA has become de-evolved into something it was never meant to be.

Disclaimer: Pupule Paul is long DNDN.

Just another dysfunctional day at Dendreon

This is the kid you love, the kid who has all the potential in the world.

Time and time again, though, he needs help. Someone has to bail him out, not literally. Not yet, anyway.

The good news for Dendreon today was that a late-session surge vaulted the PPS to $8.15, a 4.6% gain. Nice.

Then came the bad news. For those of us who caught the close but ignored after-hours trading, it was a body blow. News of the SEC's inquiry — informal, they say — regarding prostate cancer immunotherapy treatement Provenge scared off the weakest of hands. DNDN traded at $7.63 by the end of the day.

That's 16 cents lower than Monday's close.


It's the latest in the long, unpredictable history of Dendreon. Shareholders are, once again, feeling powerless to help. Only the most patient and optimistic are still in the stock.

Along with the SEC's inquiry, Dendreon announced that it received a letter from shareholders. The letter, addressed to the board of directors, requested immediate investigation and action against exeuctives who may have acted improperly after the FDA's advisory counsel approved Provenge in late March.

Whatever the case is with the SEC — there's no clear indication that it will be as "informal" as suggested — Dendreon may have more than a little scuffle ahead with angry shareholders who have filed lawsuits. If Dendreon execs have, indeed, gained financially by witholding vital information from shareholders, ugly won't begin to describe the train wreck.

Then again, those of us who are long Dendreon already expect the worst, and in fact, all of the worst-case possibilities are probably built into the stock already.

It's just that ... shareholders just want to breathe some air here, and Dendreon management shows no signs of providing an oxygen tank. Par for the course.

How bad is perception plus reality for shareholders? If Gold were fired tomorrow, the PPS would probably spike. Yet, even a dysfunctional family has better prospects if Daddy can just straighten out rather than be removed from the home.

Two days into the week, two days of major news. What more could happen tomorrow?

Disclaimer: Pupule Paul is still long DNDN.

Northwest Bio beats Dendreon to the punch

For those of you who are long Dendreon, today was either

a. disheartening, or

b. encouraging

I write this because a little-known Co called Northwest Biotherapeutics became the first to gain approval for a cancer vaccine today. Northwest Biotheraputics (NWBO.OB) announced early this morning that its Phase 1 (yes, that is not a typo) treatment for brain cancer has been approved for use in Q3 in Switzerland.

How is it that a Phase I treatment is already going to market in Europe, while Dendreon's Phase 3 Provenge sits idly with prostate-cancer patients waiting month after month, year after year?

Can it be that Northwest Biotheraputics simply has more finesse and maneuverability? Can it possibly be that Dendreon couldn't find a partner if it were the only boy at an all-girls school dance?

In other words, what the frick is going on here?


Northwest Biotherapeutics had a market cap of $29 million before today's session opened. (The Co is so small, Google Finance doesn't have a summary or quote price, though Yahoo has one.) After trading around $2 in recent days, the PPS spiked up at the open before bottoming around $2.50.

From that point on, NWBO.OB rocketed and finished at $7.33, a gain of 249%. Pink-sheet stocks don't trade in after hours, but there is almost absolute certainty that the stock will continue to climb.

European investors will get word of this news when the sun rises there. Media will also pick up the story. They'll learn that Northwest Bio not only has a treatment ready for market this quarter, but also has a treatment in the pipeline for other cancers. The tiny Co from Bothell, Wash. could trounce the bigger boys in Seattle. With all its eggs in one basket — prostate-cancer treatment Provenge — Dendreon could soon be left in the dust.

Full enrollment for Provenge Phase 3 trial 9902B may not be completed until next year, and the FDA clearly has its scopes set on shooting down Dendreon even if interim results are positive. Sure, the FDA is corrupt, but the game still plays on. The clock stops for no one.

Still, NWBO.OB is a risky stock to delve into. With a float of only 4.17 million shares, it's possible the continued rise in the PPS would make Dendreon's zany ride in March and April feel like slow motion. As quickly as the price goes up, however, it can come down. There's definitely risk in trading a stock like NWBO, but the good news is real.

For the Dendreons of the world, stockholders can only ponder and wonder, what the hell? What is it that Northwest Bio CEO Alton Boynton has that Dendreon's top brass does not? Before I leave you with a forecast of more doom and gloom, however, let's sit on the sunny side of the street. Maybe this will encourage CEO Mitchell Gold to pursue Europe with more vigor. If he has, as rumored, already turned down opportunities there in recent weeks, Northwest Bio's Great Leap Forward could prove to be a catalyst.

In other words, Dendreon's Board of Directors might pull their heads out of the sand and light a fire under Gold's okole. If a $29 million Co can do it, what's stopping Dendreon and its well-heeled (re: new slate of options) executives?

Gloom for longs? Yes. But the pressure is mounting. Good pressure.

Disclaimer: Pupule Paul is long DNDN and wishes he had been long NWBO.OB.

Not for the squeamish: Dendreon

There's a reason why I'm writing about a C grade stock. Many reasons.

Dendreon (DNDN $7.79)
Chart
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.

Of celestial promise and potential: Hoku Scientific

It's the hottest Hawaii-based stock in years. Hoku Scientific is in position to reach the heavens in a scant two years.
Hoku Scientific (HOKU $11.13)
Chart
Grade: B-

The skinny: This Co, based out of Kapolei, Hawaii, has switched gears in the relatively recent past, but its tenacity in the face of doubters is impressive. The current PPS ($11.50) may have all of the good news baked in so this will be a better buy at $9. Then again, there could be more good news coming around the pike. Like Dendreon, this is a small cap that is a couple of years away from real fruition. Even its processing/manufacturing facility in Idaho won't be completed until 2009. Definitely not for the squeamish, but certainly worth watching closely.

X factor: Can Hoku Scientific survive and fulfill its contracts (non-binding) worth $1.2 billion? The daily trading action on this solar/polysilicon Co is so intense, the PPS leaped from $4.50 to $12.80 on news about the contracts. All in a two-week span of June.

Summary: As a side note, CEO Dustin Shindo, is a Waiakea High School graduate and former baseball player. In fact, much of the executive staff hails from the islands. For a local fan, it's easy to love this Co. As a stock, HOKU is not fundamentally sound — not yet, anyway. No young company that hasn't hit its proverbial sweet spot with revenues and margins is going to be a low-risk investment. The risk/reward, however, is clearly appetizing for small-cap lovers.