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Dendreon Perfect Storm
It looks as though gamblers, psychics or those in a position to know may have anticipated the release of Phase III Trials.
On Monday 13 April 2009, with DND trading from 7.01 to 7.90, a New York City Investment Boutique analyst, one of 7 analysts rating DNDN, said the Provenge drug trial would fail and rated DNDN a Sell with a target of $1.
As of March 26 there were 19 million shares of DNDN short, 20% of the trade, equal to 6.3 days volume, which averaged around 3 million shares a day. The SEC knows how many of those shares were naked, ie had not been properly borrowed.
It is quite likely the shorts increased by 13 April 2009.
Three hours later, DNDN, whose insiders who held 7.61% of DNDN, announced a 9 AM Tuesday 14 April Conference Call to discuss final Provenge results two weeks ahead of the AUA Annual Conference.
On Wednesday 15 April, DNDN gapped up to open at 21.40 on over 65 million shares. Shorts were screwed while longs applauded. Many took profits. DNDN as low as 16 and closed at 16.99.
On Tuesday 28 April, the day of the long-awaited American Urological announcement, headlines reported Provenge increased cancer survival rates and significantly prolongs survival.
On over 28 million shares traded, DNDN traded to 25, sold off to a low of 7.50. The NASDAQ stopped trading at 1:28 PM EDT at a price of 11.81. Longs were screwed and Shorts applauded.
The NASDAQ investigated trades just before the positive news that cut the price of DNDN in half. They let them stand. DNDN did not reopen.
A closer study of the news found that actual three year prostate cancer survival rates were increased 38%, death rates were reduced 22.5% versus placebo, and prolonged survival meant another 4.1 months. To laymen, this is nice, but not staggering. And the caveat always applies that there may be serious side effects and results vary by individual.
Market participants might be forgiven for yet again questioning the integrity and level playing field of the market and insiders, when big bankers give themselves bonuses for bad years, get taxpayer bailouts and seem to get off scot-free running their shareholders into the ground.
