Dendreon (DNDN) 17% 4-Day Jump Raises Eyebrows; Is a Deal in the Works?

After plunging since the FDA approved its prostate cancer drug Provenge in April, shares of Dendreon (Nasdaq: DNDN) are up for the fourth straight session today and the move has Wall Street talking.

Shares of Dendreon are down 45 percent from the $57.67 intra-day high reached the day after the FDA approved the first in class cancer drug in April, but the 17 percent four-day rally is raising eyebrows.

Traders are attributing the move to two things, which are somewhat related - short covering and takeover speculation.

With the sell-off in the shares, and word that big pharmaceutical companies are on the prowl for smaller biotechs to fill their pipelines, Dendreon comes up in many screens as a top ten takeover target in the sector.

Eli Lilly (NYSE: LLY) or Roche could be potential buyers of Dendreon. Celgene (Nasdaq: CELG), which recently made a large acquisition of Abraxis BioScience, Inc. (ABII), could also be tempted to make a run at Dendreon.

While potential suitors may be licking their chops on Dendreon, with the recent sell-off, the company is not likely a seller anywhere south of $60 per share.

Something appears to be up with Dendreon... stay tuned.

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