Upcoming topics and Dendreon interim news

Good morning,

Here's a quick list of topics I want to address in the next few days to weeks:

Californian Propositions that are on the ballot in Nov.
Market makers
Short selling
Presidential candidate claims
Elan (earnings call in late Oct.)
Stocks I like right now
Budgets (personal finance, not the boondoggle we call the federal budget!)

Please - if you want a particular topic addressed, leave a comment or email me at Trond24@gmail.com. Thanks to Ming for the CA Prop question.

On to Dendreon!

On Monday morning (10/6/08) I listened to the conference call CEO Mitchell Gold gave, regarding the interim results on the Provenge trial (called IMPACT).
The independent data monitoring committee (IDMC) recommended that the trial be continued, noting it did NOT meet the criteria to end the trial early, yet also advising a couple things that are extremely important.

First, there are NO safety concerns. This is important for two reasons.
A competitor, Cell Genesys, had a trial halted early for their prostate cancer vaccine GVAX in late August. The IDMC for that trial found more deaths in the drug arm of the trial than the placebo arm! The two drugs have different methods of action in the particulars, but since they are both immunotherapeutic vaccines, any kind of safety profile issues would be fodder for naysayers.
Second, this group of patients are end-stage, terminal prostate cancer victims. They tend to be older, with compromised immune systems anyway. The only drug approved for this stage of cancer is Taxotere, which is a chemo drug with side-effects so harsh that nearly 50% of patients elect NOT to go through the regimen.
This safety profile, by the way, mirrors prior trials -- following infusions some patients develop mild flu-like symptoms for a 2 or 3 day period.

The second finding by the IDMC was something that they did not have to release, but I am glad they did. They reported that the treatment arm had a 20% reduction of risk of death over the placebo arm. This also mirrors prior trial results for this time period, and, as Gold would later say, prior trials also saw the treatment effect increase over time.

Now, in allowing the company to have an interim look at the data, they take a minor penalty against statistical significance in the final look. Instead of 95% confidence, they may have to hit 96% (numbers are total WAGs, by the way). Plus, the interim confidence level has a MUCH higher bar -- might need 99.1% for example. Gold said that to meet success in the final, the treatment arm would have to have a 22% reduction of risk of death.

Now, most people would say, "Wow, only going from 20% to 22% -- what a slam dunk!" However, keep two things in mind. It may "only" be 2%, but that is a 10% change from 20 to 22%. Also, the final numbers INCLUDE the numbers that got us to 20%. So the later deaths have to be much more powerful statistically to get us over the hurdle.

That said, again: prior trials also saw the treatment effect increase over time! IMPACT is consistent with those prior trials, Gold added several times.

And finally, my goodness! TWENTY PERCENT MORE OF POVENGE USERS WERE ALIVE THAN PLACEBO. And -- the placebo group included Taxotere users -- the standard of care right now. We beat out the only competitor around, by 20%.

The share price bounced between 6 and 9 most of the day -- and although Tuesday gave back most of the gains, I do not see going back below $4.50 or so anytime prior to the final.

The final is now projected to be "mid 2009", changed from prior guidance of simply "second half of 2009." So I would guess the final event to be hit somewhere in June/July and real data by August/September. Less than one year to go! Short term, we look to see their trp-p8 small molecule in human trials before year end, and although remote, possibly a partnership agreement for ex-US rights to Provenge given the strong Provenge interim results.

Regards,
Trond