Dendreon Shares Continue Upswing Despite Analyst Warning
An analyst sounded a warning note on shares of biotechnology company Dendreon on Monday, which have more than tripled in value since March 30, but the stock continued to rise.
A Food and Drug Administration panel endorsed Provenge, a prostate cancer vaccine, on March 30, saying there was evidence the drug could be an effective cancer fighter. The agency usually follows panel recommendations in evaluating new drug applications.
Brean Murray Carret & Co. analyst Jonathan Aschoff said the FDA would set a "dangerous double standard" by approving Provenge, which did not meet its primary goal in two phase III trials. He said the FDA rejected Pharmacyclics' new drug application for Xcytrin for not reaching its goals, but agreed to review the Provenge application.
Aschoff has "Sell" rating and a price target of $1.50 for shares of Seattle-based Dendreon, implying the stock will lose 91.7 percent of its value in the next year.
Five of the nine analysts reporting to Thomson Financial rate Dendreon stock at "Buy" or the equivalent. Two analysts rate it at "Neutral"-equivalent and two at "Sell"-equivalent.
Dendreon were up on the Nasdaq Stock Market. The stock hit a new all-time high of $21 shortly after the open Monday.