The RollerCoaster named Dendreon

Long time readers and friends know, I love me some Dendreon.

I started reading up on Provenge back in 2006, was just about "all-in" in 2007 during the FDA's Advisory Committee meeting that okayed it, and watched in horror as the FDA then gave the company a Complete Response Letter (CRL) a month later.
I sold some over the next couple years, but was again an active investor in 2010 when they finally got approval. I sold some in the $50s, more in the $40s, and finally sold the very last amount (save one single Jan 2012 call option) around $35, last November. I stay on top of the company news, however, and consider myself a Dendreonaire.

It is with awe and a sickening feeling, then, to see the after hours cratering of the stock price, following the Q2 earnings call. A transcript of that call can be found here: http://seekingalpha.com/article/284445-dendreon-corp-s-ceo-discusses-q2-2011-results-earnings-call-transcript

Let me sum up the entire issue in one paragraph, if I may. Provenge costs $93,000 for a one month round of therapy (3 infusions). Prescribing doctors make about $6K for themselves, but have to "eat" the entire $93K on a credit line or their own resources until they get reimbursed by insurance/Medicare. Up until extremely late June, there was a question of whether Medicare would cover Provenge (and while it did get a determination for coverage, that fact isn't even posted on the proper website yet!). Thus, for cash flow purposes, few urology or oncology practices could prescribe more than 1 patient at a time. Moreover, due to manufacturing limitations and the scale/cost of the one approved plant through most of this period, the company was unwilling to push large scale scripts yet.

All of the preceding hopefully explains the carnage in the stock price. At the end of after hours trading, it was around $13.70 - down from a regular session closing price of $35!

So the proper question now is, what to do: buy, sell, or hold?

The price tomorrow? It could well be $10, or it could be $17.
I would suggest that if one has no position, and a holding period of a half year or more, this is an excellent time to buy, if within the range above.
If you own shares currently, I'd hold on, all else being equal.

I feel, given the facts known now, that the company will recover from this, and end the year 2011 over $20. It may be 2013 before we see the $40s again, but for an extremely long term p-o-v, I believe this is a solid company that should be a core position.

Regards,
Trond