West Coast Editor

SAN FRANCISCO - As Dendreon Corp.'s stock plummeted on what the market viewed as bad Phase III news on the prostate cancer drug Provenge, President and CEO Mitchell Gold told investors at the JPMorgan Healthcare Conference here that the vaccine represents a "new era for patients," as well as the company.

"We certainly think there's an opportunity to do better [than current therapies] and we think Provenge may provide that opportunity," Gold said during a presentation at the conference.

Dendreon's stock (NASDAQ:DNDN) lost more than 26 percent, closing Tuesday at $7.62, down $2.77, after trading as low as $7.56 on word that the final analysis of the primary endpoint, time to disease progression, in the study known as D9902A, did not reach a statistically significant delay in the overall group or in the Gleason score subgroups.

But an interim analysis of overall survival in the intent-to-treat patient population, which is the secondary endpoint, found the survival rates and the median survival benefit compared to placebo were similar to the results in the final, three-year survival analysis of the D9901 study, reported in October. (See BioWorld Today, Oct. 29, 2004.)

Gold described D9902A as "small companion study to 9901 and designed to be pooled with [it]," and the final, three-year survival analysis of its data is expected to finish in the second half of this year. Final D9901 results, including the three-year survival data, won't be disclosed until February, at the American Society of Clinical Oncology's 2005 Prostate Cancer Symposium in Orlando, Fla.

"The market is taking [Tuesday's news] hard because it's difficult to digest," Gold told BioWorld Today. D9902A's survival benefit is being compared to D9901's - but the latter has not been disclosed because of ASCO's embargo policy, he said.

Needham & Co. in New York downgraded Dendreon to "buy" Tuesday, and MDB Capital Group in Santa Monica, Calif., downgraded the stock to "neutral." Ahead of the curve was Jonathan Aschoff, analyst with Brean Murray & Co., which in November reduced its Dendreon rating to "sell."

Aschoff wrote in that note that it was "not worth waiting for another positive catalyst to provide a better price at which to issue a rating downgrade that we concede is already long overdue." Dendreon suggested at an analysts' meeting that it wanted to commercialize Provenge in the U.S. itself and seek an ex-U.S. partner.

That is "not exactly consistent with prior guidance," Aschoff wrote. Even if it's approved, Provenge is "likely to cost tens of thousands of dollars and it involves what could be considered a cumbersome ex vivo procedure. Therefore, aggressive ex-U.S. market uptake is highly unlikely, in our view, which should discourage involvement from any potential partner."

Still, Gold found cause for hope. Findings from the D9901 trial showed a statistically significant survival benefit in all Provenge-treated advanced prostate cancer patients, he noted. That news shone a better light on initial data from the study, reported two years earlier, which showed a 43 percent clinical benefit in delaying time to disease progression compared to placebo (not statistically significant) but also a delay in the onset of disease-related pain in those men with androgen-independent prostate cancer who had a Gleason score of 7 or less. (See BioWorld Today, Aug. 12, 2002.)

"We have three ways to win," he said

D9902A enrolled 98 men with asymptomatic, metastatic, androgen-independent prostate cancer. The study was stopped in 2002 when the analysis of D9901 came up with the lack of significant benefit in time to disease progression in the overall group. Dendreon then amended the D9902A protocol, changing that trial to become the D9902B pivotal Phase III study, which is ongoing under a special protocol assessment agreement with the FDA.

Another Aschoff note issued Tuesday said the data on D9902A "cast a negative light" on D9902B, justifying the "sell" rating, since "even those patients with a Gleason score of 7 or below failed to benefit in time to disease progression. The Gleason score [of] 7 and below subgroup is Dendreon's current thrust, but we believe that today's results in this subgroup underscore our concerns regarding what we believe to be poor data quality issues in the original D9901 trial."

Provenge, designed to stimulate the immune system against prostate cancer, was developed through Dendreon's Antigen Delivery Cassette technology, which deploys a recombinant form of prostatic acid phosphatase, an antigen found in 95 percent of prostate cancers.

Gold insisted "the key piece is that if you look at the overall data from Provenge, we're showing a survival benefit."

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