Event - Dendreon's looming Provenge data promises to maintain excitement

Analysis

Final results from Dendreon’s therapeutic prostate cancer vaccine Provenge are due at the end of April, an occasion that some commentators are describing as one of the biggest binary events the biotechnology industry has seen.

That may sound overly dramatic, but the company has certainly given shareholders and sector followers an exhilarating ride over the last few years; the unexpected knock back from the FDA at the end of 2007 following a positive vote by an advisory committee, which prompted wild swings in the group’s share price, and vocal campaigns by patient groups to get access to the drug, all spring to mind. With little else to Dendreon apart from Provenge, these trial results, which are polarising opinion, should live up to past excitements.

At the end of April, Dendreon will announce the result of a 500 patient trial called Impact, designed to measure the survival benefit of Provenge in patients with advanced prostate cancer.

An interim analysis, announced last June, found a 20% reduction in the risk of death in Provenge patients compared with those given a placebo. The difference was not statistically significant, but encouraging enough for an independent data monitoring committee to allow the trial to continue.

Significance achievable?

To reach statistical significance and satisfy the FDA, a 22% reduction in risk needs to be established. Commentators are divided on whether that is achievable.

To get those two extra percentage points of survival benefit, patients still alive after the interim analysis was conducted must live longer than those who had already died, and who had already been counted. Given that data from previous studies suggest Provenge’s survival benefit increases over time, this would seem to be possible.

However, many analysts are concerned about a decision taken two years into the trial, which started way back in 2003, to broaden the enrolment criteria and allow sicker patients to take part. If a higher proportion of the data generated in the latter part of the trial is from a patient population with a worse prognosis, this could clearly affect the overall result.

The fact that Dendreon announced this month that the number of deaths, 304, required to trigger the final analysis had occurred earlier than anticipated, would seem to add weight to this theory. The final analysis was previously due mid-year, therefore it would seem a reasonable assumption that patients died sooner than thought.

Confidence low

That the cancer vaccine space is littered with failures does not help confidence. In fact, a lesson that many have taken away from Cell Genesys’ GVAX programme, Favrille’s SpecifId and Genitope’s MyVax, is that these immunotherapies are particularly ineffective in very sick patients; another reason that makes Dendreon’s decision to include the very ill look unwise.

However, the 62% jump in Dendreon’s share price in the last six weeks, to $4.22, albeit from a record low, suggests some are willing to take a punt. The positive advisory committee meeting in 2007 prompted a massive spike in Dendreon shares, from $5.22 to touch $25 at one point, a few days later. It is quite possible that positive Impact results will prompt a response on a similar scale, no doubt a tempting prospect for those investors who like to take a risk.

Another factor to consider is that around 17% of Dendreon's stock is sold short, meaning a lot of people are betting on negative results. If it is positive, that will accentuate any rise on positive data, as short sellers scrabble to buy back stock.

Considering previous inconclusive data from Provenge and the experience throughout the cancer vaccine space, failure for the drug seems more likely that success. Analysts who believe the Impact trial will flop have price targets of $1 or $2 on Dendreon, and failure is likely to see the stock fall below that level, at least initially. After all these years, a negative outcome will clearly be a big disappointment for Dendreon and its shareholders, but also to many prostate cancer sufferers who consider Provenge their biggest hope of survival.

However, even if the trial fails to reach the magical 22% level, it is unlikely to be end of the story. Further trials are already ongoing, and the group has enough cash to last well into 2010, irrespective of the results. If the trial only narrowly misses statistical significance, subsets of patients that did respond are likely to be sought; those with a better prognosis would probably be the first place to start. For if there is one thing that Dendreon has demonstrated for sure over the last few years, it is the tenacity of its management team to develop this drug.

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