Speculative Prostate Cancer Stocks On Ropes (DNDN, CEGE)
Investors have been warmed up to biotech stocks in recent weeks, but a trend is starting to emerge where investors want companies that are either very close to commercialization of a key product or one where there is a diversified portfolio of molecules and drug candidates with various indications. Cell Genesys, Inc. (NASDAQ: CEGE) and Dendreon Corp. (NASDAQ: DNDN) are two companies who had promising prostate cancer hopes in 2007, but they have gone to the wayside and today is not looking any better for the companies.
Cell Genesys Inc. (NASDAQ: CEGE) is seeing a very poor showing today. Its shares are down 12% to $2.63 and it hasn’t even traded its average daily volume of a normal trading day right after 2:30 PM EST. This is a low not seen since the end of March.
Last week we saw a shelf filing from Dendreon Corp. (NYSE: DNDN) allowing the company to raise up to $300 million for marketing and development of PROVENGE for prostate cancer (if and when it is approved). The stock has been holding up right under the $5.00 mark, but today the stock is now at a 5-day low at $4.85 and a low not seen since the end of March. There is likely a fear that a deal is coming much sooner rather than later as we have seen four-times normal volume.
The culprit here could be a published story in Proceedings of the National Academy of Sciences about lifestyle change studies of 30 men with “low risk prostate cancer” and the study found that many disease-promoting genes (including those associated with cancer, heart disease, and inflammation) were “downregulated” or “turned off” and the protective and disease-preventing genes were “upregulated” or “turned on.” For whatever it is worth, the study/article concludes “we’ve raised more questions than we’ve answered, and we need larger, longer-term studies.”
It is hard to imagine that a small university study would unseat these companies further, but we are talking about small cap questionable stocks.
Jon Ogg
June 18, 2008