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Dendreon: From Data To A Deal?

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CNBC.com

For years the Dendreon saga was centered around the controversy over whether its prostate cancer treatment worked or not.

Well, now that we know the answer to that question the focus has turned to potential FDA approval of the therapeutic vaccine and the company's ability to make it and master the unique treatment process.

But investors are also anxiously waiting for news on Dendreon's quest for a corporate partner to market Provenge outside the U.S.

On the biotech company's earnings conference call this morning CEO Dr. Mitchell Gold said, "We are in active discussions." A couple of analysts tried to press him for more details, but he wouldn't budge. CFO Greg Schiffman added, though, "We have no need to access the capital markets ahead of positive news from the FDA." Some might interpret that to mean the nearly quarter-billion dollars the company recently raised is enough to carry it through and/or more cash could soon be coming in the form of a so-called upfront payment from a potential partner.

In a research note this afternoon, Merriman Curhan Ford analyst Joe Pantginis estimates that down payment could be close to a hundred million bucks. He handicaps the odds of an ex-U.S. partnership versus a total takeout at 70-30. Pantginis names three potential partners or acquirers: Sanofi-Aventis, Bristol-Myers Squibb and GlaxoSmithKline. But if I were to reach out to those companies I can tell you what they'd say: "We don't comment on market rumors, speculation or analyst commentary regarding M and A or any other type of deal."

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BMY
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DNDNQ
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So, ahead of the potential partnership or acquisition Pantginis is telling clients, "Time to get in (to the stock.)" He has a $50 price target on DNDN. But investors, who might have been hoping for a big announcement today, are selling the shares which are up more than 400 percent this year. MCF makes a market in DNDN.

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Deal negotiations aside, Dendreon is also busy ramping up for the Provenge launch. And on the conference call Dr. Gold indicated the vaccine could almost sell itself. Apparently the company did some kind of survey or something and found that Provenge had 90 percent brand recognition among targeted physicians. 90 percent brand recognition for a product that isn't even formally before the FDA yet and may not be on the market for another year or so! "We're fortunate that this is a product that physicians are already well aware of," he said. To me, that speaks volumes about how closely people have been watching this biotech drama, which is right now between acts, unfold.

Questions? Comments? Pharma@cnbc.com and follow me on Twitter at mhuckman