Vultures Circle Dendreon Even Though Jury Is Still Out on Provenge

(MoneyWatch)  Dendreon had better pull something amazing out of the hat when it gets the results of its "Impact" study on Provenge, the drug it's developing for prostate cancer -- because investors are already guessing that the results are not going to be good.

Back in March, Dendreon announced that it was changing the way its study was working and instead of waiting for a full set of results in 2010 would report interim results much earlier, according to Forbes.

As Forbes' Matt Herper and analyst Joel Sendek at Lazard Capital Markets both pointed out, the new interim study would have fewer men in it and therefore be less statistically significant -- not, generally, a good sign for a pre-approval drug.

On Wednesday CNBC's Mike Huckman cited two analysts who aren't over the moon: Jonathan Aschoff at Brean Murray Carret & Co. and Lazard's Sendak, again. Aschoff said in a note, "We do not expect positive interim results... or positive final results in (the second half of 2009) for overall survival" of the study subjects. Sendak repeated his belief that he didn't think the interim results will be good enough.

Dendreon's Q2 conference call apparently failed to impress. Joe Tartakoff of the Seattle Post-Intelligencer said Wednesday it was a non-news event. He added that analysts Paul Latta of McAdams Wright Ragen and Mark Monane of Needham & Co. both thought the interim results would be inconclusive.

More seriously, folks at the National Cancer Institute are starting to become suspicious that Dendreon is simply rearranging its science goalposts in order to get approval, not to test the validity of the drug. Howard Streicher, a senior investigator at the NCI, said this in an e-mail to a colleague:

I am concerned with what this process says about how we are doing clinical research -- the concern of the company but also of the research community represnted (sic) by the advisors seems to be more of achieving approval than questioning the validity and implications of the results.

The company's own statement on Impact's progress mostly said nothing.

The events of this year have all the classic signs of failure: FDA asking for more data, lowered statistical power, and multiple studies being added on the fly as existing ones fail to satisfy either regulators or Wall Street. So the October deadline when Dendreon has promised to unveil the interim results could not be primed for more drama.