Dendreon shares Left for Dead?

Submitted by theStockMasters... on Thu, 10/18/2012 - 17:26

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Daryl Dixon - Walking Dead Zombie Hunter

You would think Daryl Dixon is hunting down DNDN, are they the Walking Dead?

Dendreon Inc (DNDN) shares have been killed this year and this week came within 2 pennies from its 12 month low. DNDN shares have tanked 70% since February. Worse yet, the company share price has yet to recover after falling from near $40 a share in summer of 2011.

This week Dendreon shares got as low as $4.07. Today DNDN has managed to get back above $4.20 a share. This year has been brutal to the company from takeover rumors, short selling, restructuring, and constant scrutiny of its wonder drug Provenge. Just about every firm covering DNDN cut their ratings on the stock this year including BofA setting a $6 target price in July.

There are the crazy price targets such as $18 by Maxim Group set in September and more reasonable $7 from Baird back in August. Going with BofA would represent a 44% increase to get back to $6 from today's price. Take a look at the crack price tp of $18, a 300%+ increase in the next 12 months...really?

Ticker	Current Price	Target Price	% Increase
DNDN	$4.17	$ 6.00	43.9%
DNDN	$4.17	$ 7.00	67.9%
DNDN	$4.17	$ 18.00	331.7%

Dendreon reports Q3 earnings at the end of the month on October 30th. Expect the stock to tread water until we hear something at that time. What could work for playing the conference call is a covered call on DNDN to protect your neck.

MASTERY Bottom Line (Lightning Dude Style)

MASTERY Bottom line:

Provenge has a bunch of competition and when it costs $100K per patient, its not going to everyone who could really benefit from it.

Medivation (MDVN) and Astellas Pharma (ALPMY.PK) are getting ready to take on Provenge with their prostate cancer fighting drug Xtandi. There is room in the prostate cancer arena, these drugs are used at different stages of treating prostate cancer. Johnson & Johnson's (JNJ) Zytiga is also competing in this space as is Jevtana from Sanofi. The prostate cancer treatment field is getting crowded, its why DNDN has tanked to $4.

However Dendreon isn't dead yet. The stock can go lower but at $4 its worth a few bucks to go long.

DNDN Charts

DNDN