Rogue Analyst Provides Questionable Fodder for Dendreon Conspiracy Theorists
Folks who think a web of conspiracies -- involving CNBC, the FDA, politicians, hedge funds, junk bond dealer Michael Milken and organized crime -- has contrived to keep Dendreon (DNDN)'s prostate cancer vaccine Provenge (sipuleucel-T) off the market got some questionable new fodder yesterday.
My BNET colleague Jim Edwards has written extensively about the (often nutty) Dendreon conspiracy theories. You can read his take on allegations that conflicts of interest on an FDA advisory committee influenced the agency's prior rejection of the drug. And here's his overview of an alleged short selling scandal that caused Dendreon's stock to tank 65 percent in 75 seconds, a matter the SEC is investigating.
What's new is that yesterday financial analyst Elliot Favus sent out a one-paragraph research report that said:
We have been in contact with physicians who have been invited by the FDA to participate in an upcoming FDA Advisory Committee Panel Meeting to discuss Provenge. We believe that the Street is not expecting an FDA Panel to discuss Provenge and that the announcement of an FDA Panel to discuss Provenge will put significant downward pressure on DNDN shares.After the last FDA rejection, Dendreon's Provenge succeeded in a confirmatory Phase III trial, so most folks had been expecting smooth sailing toward an approval on May 1. A panel meeting would certainly mean a delay -- and the mere thought drove investors to push the stock down 10 percent early yesterday.
But reporters quickly got to the bottom of the business. According to Forbes:
"We will not be having an advisory committee on Provenge," says FDA spokeswoman Karen Riley.The agency had backed off a bit by the time I called them for BioWorld, though, saying "Currently, there is no advisory committee scheduled to discuss Provenge."
So could it be that Favus has his facts straight and the advisory committee just hasn't been scheduled yet? Or was Favus misinformed? The conspiracy theorists are likely to take a darker view: They've traced a line from him to hedge fund managers to high-priced hookers to Harvard professors to Milken.
And they might be right. I don't buy the FDA conspiracy theory argument -- Dendreon's first two Phase III trials failed, and even though they had good secondary endpoint data and the failure was due to factors beyond Dendreon's control, the FDA's job is to get confirmatory evidence. But I wouldn't necessarily rule out an insider-trading conspiracy, though; Wall Street hasn't exactly been a paradigm of morality over the past year.
Conspiracy photo by Flickr user alvy, CC 2.0