Deutsche Bank Starts Dendreon (DNDN) At Buy, Says Provenge Will Be a "Blockbuster"
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Deutsche Bank initiates coverage on Dendreon (Nasdaq: DNDN) with a Buy rating and $36 price target, saying Provenge will be approved by 1H10 and that it will be a blockbuster therapy for prostate cancer.
The firm said, "Provenge was rejected in 2007 by the FDA following a positive Adcom panel on the basis that the two trials submitted did not define survival as a primary endpoint and statistical analyses were not predefined. We believe the data is strong enough for approval, given the survival benefit was significant across multiple subpopulations, even when adjusting for later lines of therapy. The fact that the data are consistent with previous trials and our view that the FDA will likely face public scrutiny, as it did following its last decision, support our thesis."
Deutsche Bank said the primary issues raised by the FDA in its 2007 inspection were bar-coding and lack of data supporting handling multiple samples at a time. They believe DNDN has resolved all issues.
We believe Provenge has the ability at peak to be a ~$1.8B+ product in the US alone, with limited generic risk following patent expiration in 2020.
Their NPV analysis suggests 35%+ upside upon approval in 1H10, but they warn the stock could be range-bound near term.
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