Dendreon shares fall back after prior day's rise

The stock declined $1.33, or 19.2 percent, to $5.60 Tuesday. On Monday, shares had reached $10 intraday, their highest point in more than a year, but reversed course to close at $6.93--still a 33 percent gain for the day.

The boost came as Seattle-based Dendreon said its prostate cancer vaccine candidate Provenge might be on target to meet its goal in a late-stage study. According to interim data, Provenge cut the risk of death by 20 percent compared with a placebo. The trial will be a success if that risk is reduced by about 22 percent, the company said.

Full results from the study are expected in mid-2009.

"Given the delayed treatment effect we have seen in previous studies, we are pleased to see evidence suggesting a prolongation of survival in the Provenge arm at the time of the interim analysis, as well as a favorable safety profile," said President and Chief Executive Dr. Mitchell H. Gold, in a statement.

In March of 2007, a Food and Drug Administration's panel of outside cancer experts voted unanimously that Provenge was safe, and in a 13-4 vote, that the drug appeared effective against advanced prostate cancer. That decision was made even though Provenge failed to meet goals in prior studies.

Several months after the recommendation, the FDA requested more patient data before approving the drug. The move was unusual because the FDA normally follows the advice of its advisory panels.

Overall, Wall Street's view of the company ranges from cautious to negative. Lazard Capital Markets and Needham & Co. maintain "Hold" ratings for the stock, while Rodman & Renshaw and Wachovia Capital Markets have "Market Perform" ratings for Dendreon.

Meanwhile, Banc of America Securities, Canaccord Adams, and Brean Murray, Carret & Co. maintain "Sell" ratings for the stock.

Brean Murray analyst Jonathan Aschoff, in a note to investors late Monday, said he remains skeptical that the drug will meet the study goal. He said the study is fairly mature at this point and he remains "suspicious" about the outcome.