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Tuesday, November 16, 2010

Dendreon Stats Revisted

Provenge has traveled a rocky road. In 2007 it was recommended for FDA approval but not approved. Controversy surrounded the FDA decision. In 2010 it was approved.

On Wednesday the Centers for Medicare and Medicaid Services, or CMS, are going to review the drug.

Just last week a government health agency that studied Provenge on Medicare's behalf found only "moderate" evidence that it works. In the clinical trial that led to FDA approval, statistics on 512 patients demonstrated a median survival of a little more than two years, or four months longer than patients in the control group.

The question for Medicare is not about the cost of the drug. Their job is to assess the efficacy and safety of Provenge. In the background is the projected sales peak of nearly $2.3 billion in 2016. If Medicare gives Provenge a thumbs up, the stock price could increase 60% in 12 months. Based on the history of the reception of the data touting Provenge, I would say Medicare approval is a toss up. Add in the money to be made and the lobbying efforts of Dendreon, I would buy up as much of this stock as you can afford.

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