Thursday, March 13, 2008

Waiting for Provenge

Provenge is Dendreon's active immune therapy for prostate cancer. Its development by Dendreon and review by the FDA is an epic tale, which I can't repeat in its entirety here. For more background see my main Dendreon page.

"Waiting for Provenge" is a title I've been thinking about for weeks. Strangely, two days ago Dendreon announced the wait may be shortened. Those of us who are waiting fall mainly into two classes. One is men who have prostate cancer, specifically the type called asymptomatic, metastatic, androgen-independent prostate cancer. It is not that this is the only kind of prostate cancer that may be helped by Provenge; it is the one that they did clinical trials on and for which they are seeking FDA approval.

I would not call Provenge miraculous, but it has some real advantage over current therapies. In addition to prolonging life in some patients, it improved the quality of life over other therapies for all patients. Provenge is created by stimulating the immune response to an antigen that appears only on the surface of prostate cancer cells. So it helps the body kill the cancer. It does not always work, but unlike chemotherapy, its side effects are minor. You can live a relatively normal life. And you only are infused with Provenge once, or at most twice. So men who have tried alternatives, or have seen other men try alternatives, really like to try Provenge. But they can't, because the FDA failed to approve Provenge, even though their own advisory committee recommended that they approve it. I'll come back to that point.

Aside from the people at Dendreon itself, the other people who are waiting to see if Provenge will be approved, and wondering when that will happen, are investors. That includes me. I own a bit of Dendreon (DNDN). I confess I've actually already made some money buying the stock when investors were depressed about Provenge's prospects for approval and selling some of it when investors seemed over elated about its chances.

Today I listened to the quarterly analyst conference (for Q4 2007) [See my Dendreon Q4 2007 Analyst Conference Summary]. The main topic was the ongoing Impact Phase III trial and the acceleration of the FDA schedule for approval (or rejection).

Provenge is in limbo. It was given what is called (in slang) an "approvable letter." The FDA did not approve it, but did say that they would if certain conditions were met, mainly that more solid statistics were needed to get final approval.

There is much speculation among investors, analysts, and patients as to why the FDA did not approve Provenge. There were certainly grounds for approval. Certain individuals who argued and voted against approval appear to have connections with rival drug companies that could see some income go away if Provenge were approved. But the value of the stock is based on the future, so let's focus on that.

Here is how management sees the future, and I tend to agree, but want to caution that there is uncertainty in any clinical study. If you combine the data from the two prior Phase 3 trials, Provenge is marginal only in the sense that not enough patients were included in those studies. Luckily, the current study, Impact, began enrolling patients in August 2003. This being a particularly nasty cancer they are studying, it means many patients have had time to die (deaths are called "events" in this context). The Impact study will have more events than the prior studies combined. Therefore, if the benefit trends are the same, the statistical significance of the trends is more certain.

An independent committee will look at this double-blind, placebo controlled study in the second half of 2008, for what is called an interim analysis. If the benefit trend is as good as or better than the prior studies, Provenge passes, because a larger group of subjects gives a stronger statistical significance. At least management says that is the current agreement with the FDA.

More waiting will be necessary unless Provenge fails this interim test so badly that they have to stop the trial (usually they do that when there is no effectiveness or an unacceptable number of severe side effects). If interim results are marginal it is still quite possible that Provenge will pass the mark on the final analysis. That analysis date has been moved up from 2010 to 2009. Since it depends on a certain number of "events" being reached, the date is vague. Note that events include deaths of patients receiving either the placebo or Provenge.

The Provenge naysayers read the statistical tea leaves differently. They don't think the results of earlier trials were that great. They think doing a larger trial will cause Provenge to regress to mean, in other words give results more similar to the placebo. There are finer statistical points to argue as well, but they all amount to a belief that the most likely outcome is that Provenge will fail both the interim and that final analysis. I don't find their arguments very compelling, but I cannot entirely discount them. There is a big chance element in clinical trials. Bigger trials tend to eliminate the chance element, but that can to for you or against you.

So buying Dendreon is no slam dunk. If the interim trial results aren't enough to get FDA approval, the stock will likely sink even lower than it is now.

On the other hand, if Provenge is approved, Dendreon is ready to test active immunotherapies on a variety of cancers, including less aggressive and earlier forms of prostate cancer. This is why big biotechnology and pharma companies are watching closely. Given time and money, Dendreon might change the whole cancer therapy game.

So Dendreon is a risky stock to buy. I suspect even if Provenge gets approved, there will still be time to buy it at a reasonable price. The factory is ready to produce Provenge on a large scale, but it still takes some time for revenues to start coming in after a therapy is approved.

There was good news for a few guys with prostate cancer. Dendreon is conducting a couple more small trials which won't be placebo controlled. In other words, everyone in them will receive Provenge.

More data:

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