Dendreon CEO Dumped $1M in Stock Before Withdrawing Revenue Guidance
Dendreon (DNDN) has done it again: the company that makes the $93,000 prostate cancer drug Provenge pulled its investor guidance today after admitting there is no way it can meet its revenues estimate for 2011. The company has been bedeviled by conspiracy theories about whether its drug actually works and hedge funds secretly shorting its stock, insider transactions and a general lack of transparency from CEO Mitchell Gold. Worse, Gold dumped $1 million in DNDN stock after he scheduled today's earnings call back in July.
Provenge is one of the 20 most expensive drugs that threaten the viability of Medicare; it is regarded as a miracle treatment because it stimulates the body's own immune system to fight the cancer.
UPDATE: DNDN didn't move much on the news because trading in its stock was halted. It closed at $35.25 Aug. 3 and opened below $13 Aug. 4. Previously, citizen investor Brad Loncar, armed with only a laptop, a Twitter account and a single share of stock, had published a scathing analysis of the company in February which highlighted the way management's guidance often conflicted with reality, provoking whiplash changes.
Today's Q2 2011 release said the company had earned only $50 million in revenues as it awaits despite a controversial decision allowing Medicare to pay for the drug:
Accordingly, Dendreon is withdrawing its previous guidance of $350-400 million in revenue for 2011 and currently expects modest quarter over quarter revenue growth for the remainder of this year.
Dendreon will also have to layoff a bunch of people, Gold (pictured) said.Retail investors are already asking how long Gold has known he could not meet his revenue targets; today's announcement was scheduled back on July 8. Gold sold roughly $1 million in DNDN stock between the scheduling and today's retraction. Many but not all of the sales were automatic. An email and a phonecall requesting comment from Dendreon were not immediately returned.
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