Golden Star Resources (GSS) update #13

Black ink! Black ink! Black ink!

Well…when we made this investment almost two years ago, we knew that Golden Star Resources was a marginal gold miner, in the sense that the gold ore they are pursuing is relatively more difficult and expensive to process. We knew we needed gold at $750/oz or higher, and we needed management to succeed in honing the complex BIOX® process, which frees the gold ore from sulphide minerals thus rendering it more amenable to standard cyanide leaching.

We expected some teething problems. We didn’t expect electricity costs to triple, production to plummet, costs to climb to as high as $900/oz, and the company to generate red ink for nine consecutive quarters (all of 2007, 2008 and 1Q09). We didn’t expect a decline in the price of the stock from the $4.19 we initially paid to as low as 40 cents a share last December. Welcome to the wonderful world of speculation in individual stocks.

Well after the close today, management announced their 2Q09 results (click here and then select “Golden Star Reports Record Quarterly Gold Sales and Financial Results for Second Quarter 2009”) and—finally!—we have regained profitability. Admittedly it’s only two-tenths of a cent per share—$380,000 total—but after nine consecutive quarters of black ink, we’ll take it!

And it’s not just the black ink. The 99,011 ounces of gold the company produced in 2Q09 was an all-time record high. The $558/oz cost of production was the lowest in two years. As announced in June, the electricity shortage/cost problem finally seems to have been solved. Cash is up from $28MM at the end of 1Q09 to $43MM. Exploration at Wassa has yielded increased reserves. Guidance provided by management confirmed 2009 targets of 400,000 ounces and an overall projected cost of $545/oz.

If management can maintain this trajectory, and the price of gold continues to rise in the face of weakened fiat currencies through the balance of 2009, we expect to see the price of GSS stock—already up from that 40-cent low to $2.45—get back into the black for us. (We optimistically bought a second tranche of GSS at $3.08 when it started to decline in 2007 and our thus our overall basis is $3.57.)

Previous GSS-related posts:

• BUY Golden Star Resources (GSS)—Ghanian gold (19 Jul 07)
• Golden Star Resources (GSS) update #1—2Q07 results (8 Aug 07)
• Buy Golden Star Resources (GSS)—yep, again! (24 Aug 07)
• Golden Star Resources (GSS) update #2—unexpected debentures sale (24 Oct 07)
• Golden Star Resources (GSS) update #3—3Q07 results (7 Nov 07)
• Golden Star Resources (GSS) update #4—new CEO (20 Dec 07)
• Golden Star Resources (GSS) update #5—record production…is BIOX® finally working? (17 Jan 08)
• Golden Star Resources (GSS) update #6—4Q07 results (28 Feb 08)
• Golden Star Resources (GSS) update #7—1Q08 results (6 May 08)
• Golden Star Resources (GSS) update #8—2Q08 results (9 Aug 08)
• Golden Star Resources (GSS) update #9—3Q08 results (4 Nov 08)
• Golden Star Resources (GSS) update #10—4Q08 results (25 Feb 09)
• Golden Star Resources (GSS) update #11—1Q09 results (6 May 09)
• Golden Star Resources (GSS) update #12—electricity rate cut (28 Jun 09)

Vertex (VRTX) update #29

Vertex Pharmaceuticals (VRTX), our biopharma spec play with the killer hepatitis C drug candidate, announced their 2Q09 results today. Thanks to a spate of one-time expenses relating to the retirement of founder and CEO Joshua Boger, the note exchange, and a restructuring charge, losses nearly doubled to $171 million compared to $91 million in 2Q08. The company ended 2Q09 with $754 million in their coffers, and are anticipating collecting $105 million more due to a restructuring of their agreement with Mitsubishi Tanabe Pharma—who have the distribution rights for telaprevir in Asia Pacific (sans Australia)—announced last week.

Phase 3 trials of telaprevir proceed apace; we are on track for a second-half 2010 application by Vertex to the FDA for USA approval (about a year later than we originally projected when we made bought VRTX stock, but such is to be expected when speculating in biotechs). For more details, check out the press release.

Previous VRTX-related posts:

• BUY Vertex Pharmaceuticals (VRTX)—Hepatitis C Play (17 Apr 07)
• Vertex (VRTX) update—PROVE 1 trial news and 2Q07 results (25 Jul 07)
• Vertex (VRTX) update #2—down 13% on good boceprevir (SGP) results (18 Oct 07)
• Vertex (VRTX) update #3—3Q07 results (30 Oct 07)
• Vertex (VRTX) update #4—concerns about telaprevir Phase 3 trial delay and competition (5 Nov 07)
• Vertex (VRTX) update #5—still no word on start of telaprevir Phase 3 trial (9 Jan 08)
• Vertex (VRTX) update #6—down 10% on apparent FDA preference for 48-week Phase 3 (23 Jan 08)
• Vertex (VRTX) update #7—4Q07 results (11 Feb 08)
• Vertex (VRTX) update #8—Seven million shares sold to raise cash (19 Feb 08)
• Vertex (VRTX) update #9—up 8% on good Phase 2 results for cystic fibrosis drug (27 Mar 08)
• Vertex (VRTX) update #10—up 28% on excellent Phase 2 results for telaprevir (31 Mar 08)
• Vertex (VRTX) update #11—more good telaprevir Phase 2 data and 1Q08 results (27 Apr 08)
• Vertex (VRTX) update #12—up 13% on Cowens upgrade; still more good telaprevir Phase 2 data (9 Jun 08)
• Vertex (VRTX) update #13—down 5% on unattractive FDA Phase 3 parameter preferences (24 Jun 08)
• Vertex (VRTX) update #14—2Q08 results (1 Aug 08)
• Vertex (VRTX) update #15—telaprevir Phase 3 trial for SOC-resistant patients launched (19 Aug 08)
• Vertex (VRTX) update #16—nine million shares sold to raise cash (22 Sep 08)
• Vertex (VRTX) update #17—up 16% on Phase 2 results showing 2x daily telaprevir works (24 Sep 08)
• Vertex (VRTX) update #18—final Phase 2a trial results on VX-770 (CF)…on to Phase 3! (20 Oct 08)
• Vertex (VRTX) update #19—3Q08 results (27 Oct 08)
• Vertex (VRTX) update #20—up 5% on fresh telaprevir Phase 2 results (3 Nov 08)
• Vertex (VRTX) update #21—down 11% on concerns about Obama’s drug reimbursement policies (21 Nov 08)
• Vertex (VRTX) update #22—Vertex founder Joshua Boger to retire (5 Feb 09)
• Vertex (VRTX) update #23—4Q08 results (9 Feb 09)
• Vertex (VRTX) update #24—ten million shares sold to raise cash (18 Feb 09)
• Vertex (VRTX) update #25—Vertex to acquire ViroChem Pharma for ten million shares (3 Mar 09)
• Vertex (VRTX) update #26—1Q09 results (16 Apr 09)
• Vertex (VRTX) update #27—seven million shares exchanged for notes (8 Jun 09)
• Vertex (VRTX) update #28—sale of future JNJ milestone payments (12 Jul 09)

Vertex (VRTX) update #28

Yay!

Vertex Pharmaceuticals (VRTX) have come up with a cash-raising mechanism that does not require the dilution of all existing shares: they are selling their rights to receive $250 million in milestone payments from Janssen Pharmaceutica N.V., a Johnson & Johnson (JNJ) company, for the successful development and launch of their hepatitis C drug, telaprevir, in the European Union. Shareholders reeling from a succession of dilutive secondaries and other transactions—seven million shares sold in Feb 08, nine million shares sold in Sep 08, ten million shares sold in Feb 09, ten million shares issued to the owners of ViroChem Pharma in Mar 09 to acquire that company, seven million shares exhanged with bondholders to retire convertible notes due 2013 in Jun 09—were presumably happy to see the company raise funds without issuing any new shares for once.

According to the press release, “Morgan Stanley is acting as a structural advisor to Vertex in connection with this transaction.”

Previous VRTX-related posts:

• BUY Vertex Pharmaceuticals (VRTX)—Hepatitis C Play (17 Apr 07)
• Vertex (VRTX) update—PROVE 1 trial news and 2Q07 results (25 Jul 07)
• Vertex (VRTX) update #2—down 13% on good boceprevir (SGP) results (18 Oct 07)
• Vertex (VRTX) update #3—3Q07 results (30 Oct 07)
• Vertex (VRTX) update #4—concerns about telaprevir Phase 3 trial delay and competition (5 Nov 07)
• Vertex (VRTX) update #5—still no word on start of telaprevir Phase 3 trial (9 Jan 08)
• Vertex (VRTX) update #6—down 10% on apparent FDA preference for 48-week Phase 3 (23 Jan 08)
• Vertex (VRTX) update #7—4Q07 results (11 Feb 08)
• Vertex (VRTX) update #8—Seven million shares sold to raise cash (19 Feb 08)
• Vertex (VRTX) update #9—up 8% on good Phase 2 results for cystic fibrosis drug (27 Mar 08)
• Vertex (VRTX) update #10—up 28% on excellent Phase 2 results for telaprevir (31 Mar 08)
• Vertex (VRTX) update #11—more good telaprevir Phase 2 data and 1Q08 results (27 Apr 08)
• Vertex (VRTX) update #12—up 13% on Cowens upgrade; still more good telaprevir Phase 2 data (9 Jun 08)
• Vertex (VRTX) update #13—down 5% on unattractive FDA Phase 3 parameter preferences (24 Jun 08)
• Vertex (VRTX) update #14—2Q08 results (1 Aug 08)
• Vertex (VRTX) update #15—telaprevir Phase 3 trial for SOC-resistant patients launched (19 Aug 08)
• Vertex (VRTX) update #16—nine million shares sold to raise cash (22 Sep 08)
• Vertex (VRTX) update #17—up 16% on Phase 2 results showing 2x daily telaprevir works (24 Sep 08)
• Vertex (VRTX) update #18—final Phase 2a trial results on VX-770 (CF)…on to Phase 3! (20 Oct 08)
• Vertex (VRTX) update #19—3Q08 results (27 Oct 08)
• Vertex (VRTX) update #20—up 5% on fresh telaprevir Phase 2 results (3 Nov 08)
• Vertex (VRTX) update #21—down 11% on concerns about Obama’s drug reimbursement policies (21 Nov 08)
• Vertex (VRTX) update #22—Vertex founder Joshua Boger to retire (5 Feb 09)
• Vertex (VRTX) update #23—4Q08 results (9 Feb 09)
• Vertex (VRTX) update #24—ten million shares sold to raise cash (18 Feb 09)
• Vertex (VRTX) update #25—Vertex to acquire ViroChem Pharma for ten million shares (3 Mar 09)
• Vertex (VRTX) update #26—1Q09 results (16 Apr 09)
• Vertex (VRTX) update #27—seven million shares exchanged for notes (8 Jun 09)

Golden Star Resources (GSS) update #12

Our patience with our underperforming gold mining spec play, Golden Star Resources (GSS) is palpably closer to paying off in the wake of Friday’s announcement by management that “the long awaited Ghana grid power cost reduction is being implemented.” Electricity rates will be lowered from 14.5 cents per kWh to approximately 8 cents and this rate will be retroactive to 1 Jan 09. This is an interim rate which will be in effect until a final power rate formula is implemented.

“Based on the new power rate, Golden Star’s reported overall cash cost of production for the first quarter of 2009 would have been reduced approximately $56 per ounce to $515 per ounce. Assuming this rate will not change during the year, we expect an overall reduction in cash operating costs of $60 per ounce and $20 per ounce for Bogoso and Wassa, respectively, resulting in an expected $40 per ounce company-wide reduction in 2009 cash operating costs,” according to the press release (click on this link and then select “Golden Star Reports Significantly Lower Power Costs in Ghana”).

Previous GSS-related posts:

• BUY Golden Star Resources (GSS)—Ghanian gold (19 Jul 07)
• Golden Star Resources (GSS) update #1—2Q07 results (8 Aug 07)
• Buy Golden Star Resources (GSS)—yep, again! (24 Aug 07)
• Golden Star Resources (GSS) update #2—unexpected debentures sale (24 Oct 07)
• Golden Star Resources (GSS) update #3—3Q07 results (7 Nov 07)
• Golden Star Resources (GSS) update #4—new CEO (20 Dec 07)
• Golden Star Resources (GSS) update #5—record production…is BIOX® finally working? (17 Jan 08)
• Golden Star Resources (GSS) update #6—4Q07 results (28 Feb 08)
• Golden Star Resources (GSS) update #7—1Q08 results (6 May 08)
• Golden Star Resources (GSS) update #8—2Q08 results (9 Aug 08)
• Golden Star Resources (GSS) update #9—3Q08 results (4 Nov 08)
• Golden Star Resources (GSS) update #10—4Q08 results (25 Feb 09)
• Golden Star Resources (GSS) update #11—1Q09 results (6 May 09)

Vertex (VRTX) update #27

Yet another seven million shares of dilution for our biotech spec play Vertex (VRTX) with the promising hepatitis C drug, telaprevir, in Phase 3 trials. They are issuing the shares to bondholders in exchange for $143.5 million worth of 4.75% Convertible Senior Subordinated Notes due 2013. The deal improves the company’s balance sheet and cash position.

Vertex now have about 180 million shares outstanding, which is about 2.6 million shares fewer than we had projected by the end of 2009 in our latest valuations projections spreadsheet (which is a good thing, presuming no more shares are issued by year-end).

Previous VRTX-related posts:

• BUY Vertex Pharmaceuticals (VRTX)—Hepatitis C Play (17 Apr 07)
• Vertex (VRTX) update—PROVE 1 trial news and 2Q07 results (25 Jul 07)
• Vertex (VRTX) update #2—down 13% on good boceprevir (SGP) results (18 Oct 07)
• Vertex (VRTX) update #3—3Q07 results (30 Oct 07)
• Vertex (VRTX) update #4—concerns about telaprevir Phase 3 trial delay and competition (5 Nov 07)
• Vertex (VRTX) update #5—still no word on start of telaprevir Phase 3 trial (9 Jan 08)
• Vertex (VRTX) update #6—down 10% on apparent FDA preference for 48-week Phase 3 (23 Jan 08)
• Vertex (VRTX) update #7—4Q07 results (11 Feb 08)
• Vertex (VRTX) update #8—Seven million shares sold to raise cash (19 Feb 08)
• Vertex (VRTX) update #9—up 8% on good Phase 2 results for cystic fibrosis drug (27 Mar 08)
• Vertex (VRTX) update #10—up 28% on excellent Phase 2 results for telaprevir (31 Mar 08)
• Vertex (VRTX) update #11—more good telaprevir Phase 2 data and 1Q08 results (27 Apr 08)
• Vertex (VRTX) update #12—up 13% on Cowens upgrade; still more good telaprevir Phase 2 data (9 Jun 08)
• Vertex (VRTX) update #13—down 5% on unattractive FDA Phase 3 parameter preferences (24 Jun 08)
• Vertex (VRTX) update #14—2Q08 results (1 Aug 08)
• Vertex (VRTX) update #15—telaprevir Phase 3 trial for SOC-resistant patients launched (19 Aug 08)
• Vertex (VRTX) update #16—nine million shares sold to raise cash (22 Sep 08)
• Vertex (VRTX) update #17—up 16% on Phase 2 results showing 2x daily telaprevir works (24 Sep 08)
• Vertex (VRTX) update #18—final Phase 2a trial results on VX-770 (CF)…on to Phase 3! (20 Oct 08)
• Vertex (VRTX) update #19—3Q08 results (27 Oct 08)
• Vertex (VRTX) update #20—up 5% on fresh telaprevir Phase 2 results (3 Nov 08)
• Vertex (VRTX) update #21—down 11% on concerns about Obama’s drug reimbursement policies (21 Nov 08)
• Vertex (VRTX) update #22—Vertex founder Joshua Boger to retire (5 Feb 09)
• Vertex (VRTX) update #23—4Q08 results (9 Feb 09)
• Vertex (VRTX) update #24—ten million shares sold to raise cash (18 Feb 09)
• Vertex (VRTX) update #25—Vertex to acquire ViroChem Pharma for ten million shares (3 Mar 09)
• Vertex (VRTX) update #26—1Q09 results (16 Apr 09)

Golden Star Resources (GSS) update #11

Our gold mining spec play, Golden Star Resources (GSS), released 1Q09 results today and although the bottom line was more red ink—the ninth consecutive losing quarter—things are definitely looking up. The company lost $1.1 million (half-a-cent per share) on record sales of 96,971 ounces of gold, at an average price of $904/oz. It was the narrowest loss the company has had since the progression of consecutive red-ink quarters began 1Q07. The record production amounted to a 69% year-over-year improvement, and was up 13% from 4Q08. Even better, production costs were $571/oz, which was the second lowest quarterly cost performance since commercial-scale BIOX® processing began at the Bogoso mine in early 2007, and a healthy improvement over last quarter (-10%) and a year ago (-12%). The 1Q09 decrease in production costs was also the second consecutive…one more data point and we will have us a bona fide trendline!

It still ain’t all roses. Bogoso continues to lag expectations. Production this quarter was lower than projected, principally due to a two-week hiatus “due to electrical issues including an electrical fire in the liquid resistance starter and continuing poor quality power from the VRA,” according to the press release (click here and on “Golden Star Reports Record Quarterly Gold Sales of 96,971 Ounces”). And costs are still high, running $813/oz for the quarter, which was not even an improvement over last quarter’s $799. (Fortunately, costs at Wassa came in quite low at $397/oz.) Management expect the Genser power plant being constructed cooperatively by several mining companies to come online during 2Q09, which should improve the power reliability problems.

Still, it is hard to see how the company will meet their target cash cost of $650/oz for all of 2009 at Bogoso. FWIW, management are still projecting production of 400,000 ounces for the year. Be that as it may, the prospects of increased production at a profitable cost has the stock up 46% YTD as of today’s close, and with these improved 1Q09 results (announced after the market closed), tomorrow should see further gains. For now, we are staying on this train; it’s running way late and the amenities are considerably poorer than advertised, but at least it is now headed in the right direction, and appears to be picking up steam.

Previous GSS-related posts:

• BUY Golden Star Resources (GSS)—Ghanian gold (19 Jul 07)
• Golden Star Resources (GSS) update #1—2Q07 results (8 Aug 07)
• Buy Golden Star Resources (GSS)—yep, again! (24 Aug 07)
• Golden Star Resources (GSS) update #2—unexpected debentures sale (24 Oct 07)
• Golden Star Resources (GSS) update #3—3Q07 results (7 Nov 07)
• Golden Star Resources (GSS) update #4—new CEO (20 Dec 07)
• Golden Star Resources (GSS) update #5—record production…is BIOX® finally working? (17 Jan 08)
• Golden Star Resources (GSS) update #6—4Q07 results (28 Feb 08)
• Golden Star Resources (GSS) update #7—1Q08 results (6 May 08)
• Golden Star Resources (GSS) update #8—2Q08 results (9 Aug 08)
• Golden Star Resources (GSS) update #9—3Q08 results (4 Nov 08)
• Golden Star Resources (GSS) update #10—4Q08 results (25 Feb 09)

Dendreon (DNDN, again) update #3

Our biotech speculative play Dendreon (DNDN) today revealed the details of the results of their IMPACT Phase 3 trial of Provenge at the American Urological Association’s annual meeting in Chicago and…they look great!

Provenge reduced the risk of death from prostate cancer by 22.5%—comparing the Provenge arm of the trial with the placebo arm—which beat the 22% bogey which had been set by the FDA in order to prove that the survival advantage was real. Provenge also extended median survival by 4.1 months compared to the placebo (25.8 months versus 21.7 months) and improved three-year survival by 38% compared to the placebo (31.7% versus 23.0%).

The results were revealed at 2pm EDT; the stock was halted at 1:27pm (the timestamps in the table below reflect CDT) after trading became disorderly, with the price of the stock dropping from $24 to $7.60 in the space of 74 seconds on huge volume. About 20% of the outstanding shares are sold short, so an attack by shorts to drive down the share price prior to the news release might have been the cause. Here is a transcript of trades of 5000 shares or higher for that time span (welcome to the thrills of speculation in individual stocks):

Date               Time         Price     Bid        Ask       Volume
04/28/09    12:25:32    24.00    24.00    24.00    23241
04/28/09    12:25:33    23.9009    23.90    23.91    34558
04/28/09    12:25:34    23.87    23.85    23.86    16939
04/28/09    12:25:35    23.8201    23.82    23.83    10160
04/28/09    12:25:36    23.79    23.79    23.80    19824
04/28/09    12:25:37    23.74    23.74    23.75    17934
04/28/09    12:25:38    23.69    23.69    23.70    14608
04/28/09    12:25:38    23.50    23.54    23.52    22705
04/28/09    12:25:39    23.48    23.49    23.49    45632
04/28/09    12:25:40    23.39    23.36    23.36    13547
04/28/09    12:25:41    23.26    23.28    23.28    6713
04/28/09    12:25:42    23.16    23.18    23.16    41351
04/28/09    12:25:43    23.10    23.10    23.11    8625
04/28/09    12:25:44    23.06    23.07    23.03    7340
04/28/09    12:25:45    22.94    22.95    22.95    23119
04/28/09    12:25:45    22.88    22.88    22.88    18915
04/28/09    12:25:46    22.80    22.80    22.81    32609
04/28/09    12:25:47    22.70    22.73    22.74    56962
04/28/09    12:25:48    22.65    22.65    22.65    10025
04/28/09    12:25:49    22.60    22.60    22.61    49777
04/28/09    12:25:50    22.48    22.50    22.49    22448
04/28/09    12:25:51    22.27    22.26    22.26    8835
04/28/09    12:25:52    22.20    22.21    22.22    16603
04/28/09    12:25:53    22.17    22.14    22.14    12542
04/28/09    12:25:54    22.04    22.02    22.03    20680
04/28/09    12:25:55    21.91    21.90    21.89    24770
04/28/09    12:25:55    21.75    21.78    21.76    12600
04/28/09    12:25:56    21.67    21.67    21.67    18270
04/28/09    12:25:57    21.57    21.55    21.57    20541
04/28/09    12:25:58    21.57    21.55    21.56    27660
04/28/09    12:25:59    21.51    21.51    21.50    27494
04/28/09    12:26:00    21.47    21.45    21.46    24030
04/28/09    12:26:01    21.40    21.38    21.40    30947
04/28/09    12:26:02    21.31    21.31    21.32    15008
04/28/09    12:26:03    21.12    21.14    21.16    21697
04/28/09    12:26:03    21.02    21.01    21.02    10050
04/28/09    12:26:04    20.95    20.96    20.96    18694
04/28/09    12:26:06    20.70    20.73    20.71    8772
04/28/09    12:26:07    20.45    20.47    20.45    12111
04/28/09    12:26:09    20.15    20.25    20.24    21126
04/28/09    12:26:09    20.00    20.00    20.00    35143
04/28/09    12:26:09    19.88    19.83    19.82    11400
04/28/09    12:26:10    19.66    19.69    19.61    6941
04/28/09    12:26:11    19.51    19.51    19.51    11095
04/28/09    12:26:12    19.28    19.26    19.30    11767
04/28/09    12:26:12    18.95    18.92    18.93    24888
04/28/09    12:26:14    18.48    18.50    18.45    22455
04/28/09    12:26:14    18.31    18.05    18.20    13100
04/28/09    12:26:15    17.69    17.90    17.77    32711
04/28/09    12:26:16    17.42    17.44    17.43    8612
04/28/09    12:26:18    16.92    16.92    16.91    56096
04/28/09    12:26:18    16.50    16.59    16.58    25823
04/28/09    12:26:19    16.33    16.31    16.31    30658
04/28/09    12:26:20    15.93    15.92    15.93    73598
04/28/09    12:26:21    15.80    15.79    15.84    29116
04/28/09    12:26:22    15.30    15.30    15.30    42013
04/28/09    12:26:23    15.02    15.01    15.02    14536
04/28/09    12:26:23    14.92    15.00    14.95    26936
04/28/09    12:26:24    14.76    14.73    14.76    11981
04/28/09    12:26:25    14.28    14.56    14.27    11931
04/28/09    12:26:25    13.95    14.00    13.96    20961
04/28/09    12:26:26    13.51    13.30    13.39    19480
04/28/09    12:26:27    13.02    13.01    13.06    17296
04/28/09    12:26:27    12.62    12.82    12.60    46168
04/28/09    12:26:28    12.16    12.44    12.16    20999
04/28/09    12:26:29    11.95    11.94    11.94    18971
04/28/09    12:26:29    11.77    11.79    11.78    16200
04/28/09    12:26:30    11.41    11.49    11.49    8142
04/28/09    12:26:31    11.16    11.15    11.16    17261
04/28/09    12:26:31    11.03    11.02    11.03    29270
04/28/09    12:26:32    10.90    10.88    10.69    15902
04/28/09    12:26:33    10.31    10.31    10.31    35576
04/28/09    12:26:34    10.08    10.07    10.07    8750
04/28/09    12:26:34    10.03    10.03    10.03    12385
04/28/09    12:26:35    9.99    9.99    10.00    50073
04/28/09    12:26:36    9.69    9.70    9.71    84899
04/28/09    12:26:37    9.48    9.46    9.68    43556
04/28/09    12:26:38    9.46    9.47    9.66    33019
04/28/09    12:26:38    9.43    9.43    9.50    19150
04/28/09    12:26:39    9.50    9.48    9.48    21582
04/28/09    12:26:40    9.42    9.42    9.51    13484
04/28/09    12:26:40    9.47    9.30    9.64    31351
04/28/09    12:26:41    9.36    9.28    9.37    61854
04/28/09    12:26:42    9.10    9.11    9.31    93575
04/28/09    12:26:42    8.98    9.00    9.00    36403
04/28/09    12:26:43    8.30    8.26    8.38    16609
04/28/09    12:26:44    8.15    8.15    8.20    16119
04/28/09    12:26:45    8.20    8.01    8.19    30193
04/28/09    12:26:45    8.01    8.00    8.01    23407
04/28/09    12:26:46    7.60    7.60    7.81    39797
04/28/09    12:26:47    8.51    8.02    8.29    82362
04/28/09    12:26:48    8.27    8.21    8.28    36652
04/28/09    12:26:48    8.87    8.56    8.79    73551
04/28/09    12:26:49    9.31    9.31    9.03    43732
04/28/09    12:26:50    9.61    9.63    9.87    23041
04/28/09    12:26:51    9.79    9.78    9.93    24426
04/28/09    12:26:51    10.00    10.07    10.34    23907
04/28/09    12:26:52    11.79    11.40    10.93    17420
04/28/09    12:26:53    11.45    11.38    11.74    12500
04/28/09    12:26:53    11.39    11.37    11.39    17057
04/28/09    12:26:54    11.18    11.17    11.23    21089
04/28/09    12:26:55    11.25    11.25    11.26    12900
04/28/09    12:26:56    11.37    11.35    11.45    28234
04/28/09    12:26:56    11.92    11.75    12.00    23090
04/28/09    12:26:57    11.79    11.78    11.80    18751
04/28/09    12:26:58    11.76    11.76    12.25    18768
04/28/09    12:26:58    11.77    11.77    12.32    9855
04/28/09    12:26:59    12.28    12.01    12.31    17050
04/28/09    12:27:00    12.37    12.37    12.43    17831
04/28/09    12:27:01    12.43    12.75    12.99    20971
04/28/09    12:27:02    12.36    12.28    12.00    32756
04/28/09    12:27:02    11.841    11.841    11.841    10900
04/28/09    12:27:04    11.81    11.81    11.81    100

If the stock opens again today—it is still halted pending the completion of the Dendreon presentation at the AUA meeing—it will be interesting to see where it settles. The company has scheduled a conference call to discuss the results at 1730 EDT today. If there is anything interesting to report, we will add a comment to this post.

Previous DNDN-related posts:

• BUY Dendreon (DNDN)—potential cure for cancer (10 Jan 07)
• Dendreon (DNDN) update #1—FDA agrees to fast-track review for Provenge (16 Jan 07)
• Dendreon (DNDN) update #2—FDA appoints advisory committee to review Provenge (2 Mar 07)
• BUY Dendreon puts and calls—straddle play (9 Mar 07)
• Dendreon (DNDN) update #3—Feuerstein’s revenue projections (23 Mar 07)
• Dendreon (DNDN) update #4—reviewing the bidding heading into the AC meeting (28 Mar 07)
• SELL Dendreon (DNDN) puts and calls—AC recommends approval! (30 Mar 07)
• Dendreon (DNDN) update #5—we got lucky (30 Mar 07)
• Dendreon (DNDN) update #6—+488% in four months! (10 Apr 07)
• Dendreon (DNDN) update #7—any buy here is speculative (11 Apr 07)
• Dendreon (DNDN) update #8—intelligent debate on Provenge (12 Apr 07)
• Dendreon (DNDN) update #9—why Provenge should be approved (26 Apr 07)
• SELL Dendreon (DNDN)—FDA issues approvable letter (9 May 07)
• Provenge and the FDA—frog meets scorpion (25 May 07)
• The Provenge ad in the Washington Post (15 Jul 07)
• BUY Dendreon (DNDN) puts and calls—straddle play (again) (29 Jan 09)
• Dendreon options (UKOHA & UKOTA) straddle play update #1—4Q08 results (12 Mar 09)
• Dendreon options (UKOHA & UKOTA) straddle play update #2—did interim data release compromise IMPACT? (25 Mar 09)
• Dendreon options (UKOHA & UKOTA) straddle play update #3—DNDN shares surge 38% (3 Apr 09)
• Dendreon options (UKOHA & UKOTA) straddle play update #4—IMPACT results tomorrow! (13 Apr 09)
• SELL Dendreon options (part UHOHA & all UKOTA)—IMPACT study “met its primary end point”! (14 Apr 09)
• BUY Dendreon (DNDN)—potential cure for cancer (again) (14 Apr 09)
• Dendreon (DNDN, again) update #1—will another Phase 3 trial be required? (15 Apr 09)
• Dendreon (DNDN, again) update #2—press release re: “long-term memory immune responses” (19 Apr 09)

Dendreon (DNDN, again) update #2

Another feather floated onto the camel’s back earlier today when Dendreon released an unusual Sunday press release announcing that data from an earlier Phase 3 Provenge study (not the just-completed IMPACT study) suggest “that PROVENGE® (sipuleucel-T) induces long-term memory immune responses that are durable and can be maintained following boosting.”

The data were presented this morning at the annual meeting of the Association for Cancer Research in Denver (hence the timing of the press release, which as of this evening was still not posted on Dendreon’s website…unlike we investors, the marketing staff must take weekends off). The study measured the immune response in 176 patients—half of whom were treated with Provenge and half with a placebo—with non-metastatic androgen-dependent (hormone sensitive) prostate cancer who have had a prostate-specific antigen (PSA) recurrence following surgical removal of the prostate.

The press release quoted David Urdal, the company’s chief science officer, as stating, “We are encouraged to see that CD54 upregulation in APCs is maintained after boosting in men with androgen-dependent prostate cancer. This pattern of CD54 upregulation suggests that the first dose ‘primes’ the immune system for subsequent ‘memory’ responses and is consistent with that observed in our studies of men with androgen-independent disease where the cumulative CD54 upregulation dose correlated with survival. We also are encouraged by these data which suggest that the immune response generated by PROVENGE is durable for a year or more after initial treatment and that it can be maintained following boosting.”

Previous DNDN-related posts:

• BUY Dendreon (DNDN)—potential cure for cancer (10 Jan 07)
• Dendreon (DNDN) update #1—FDA agrees to fast-track review for Provenge (16 Jan 07)
• Dendreon (DNDN) update #2—FDA appoints advisory committee to review Provenge (2 Mar 07)
• BUY Dendreon puts and calls—straddle play (9 Mar 07)
• Dendreon (DNDN) update #3—Feuerstein’s revenue projections (23 Mar 07)
• Dendreon (DNDN) update #4—reviewing the bidding heading into the AC meeting (28 Mar 07)
• SELL Dendreon (DNDN) puts and calls—AC recommends approval! (30 Mar 07)
• Dendreon (DNDN) update #5—we got lucky (30 Mar 07)
• Dendreon (DNDN) update #6—+488% in four months! (10 Apr 07)
• Dendreon (DNDN) update #7—any buy here is speculative (11 Apr 07)
• Dendreon (DNDN) update #8—intelligent debate on Provenge (12 Apr 07)
• Dendreon (DNDN) update #9—why Provenge should be approved (26 Apr 07)
• SELL Dendreon (DNDN)—FDA issues approvable letter (9 May 07)
• Provenge and the FDA—frog meets scorpion (25 May 07)
• The Provenge ad in the Washington Post (15 Jul 07)
• BUY Dendreon (DNDN) puts and calls—straddle play (again) (29 Jan 09)
• Dendreon options (UKOHA & UKOTA) straddle play update #1—4Q08 results (12 Mar 09)
• Dendreon options (UKOHA & UKOTA) straddle play update #2—did interim data release compromise IMPACT? (25 Mar 09)
• Dendreon options (UKOHA & UKOTA) straddle play update #3—DNDN shares surge 38% (3 Apr 09)
• Dendreon options (UKOHA & UKOTA) straddle play update #4—IMPACT results tomorrow! (13 Apr 09)
• SELL Dendreon options (part UHOHA & all UKOTA)—IMPACT study “met its primary end point”! (14 Apr 09)
• BUY Dendreon (DNDN)—potential cure for cancer (again) (14 Apr 09)
• Dendreon (DNDN, again) update #1—will another Phase 3 trial be required? (15 Apr 09)

Vertex (VRTX) update #26

Our development-stage biotech company, Vertex Pharmaceutical (VRTX), announced their 1Q09 results today: the company lost $161.5 million, or $1.04 per share compared to a net loss for 1Q08 of $96.2 million, or $0.72 per share. According to the press release, the increased red ink “was principally attributable to a decrease in collaborative revenues and an increase in total operating expenses to support telaprevir’s global Phase 3 registration program and commercialization, and preparation for advancement of VX-770 [the anti-cystic fibrosis drug that is due to start a Phase 3 trial later this quarter] into a registration program.”

The company ended the quarter with $869.2 million in cash, so at least we have something to show for all the dilution we have endured. The money will come in handy as management now project a loss of $500-to-$535 million for all of 2009. And we still have to get through 2010—Phase 3 trial results for telaprevir are expected mid-2010—and probably into 2011 before an FDA approval could occur and serious revenue (and black ink) starts to flow…so more dilution in 2010 is likely.

In addition to the ongoing Phase 3 trials, management expect completion of a Phase 2 study examining the effectiveness of telaprevir with a two-dose-per-day regimen by the end of 2009. The Phase 3 trials utilize three-doses-day, and it would obviously be better if patients could achieve comparable results on a two-dose regimen.

Previous VRTX-related posts:

• BUY Vertex Pharmaceuticals (VRTX)—Hepatitis C Play (17 Apr 07)
• Vertex (VRTX) update—PROVE 1 trial news and 2Q07 results (25 Jul 07)
• Vertex (VRTX) update #2—down 13% on good boceprevir (SGP) results (18 Oct 07)
• Vertex (VRTX) update #3—3Q07 results (30 Oct 07)
• Vertex (VRTX) update #4—concerns about telaprevir Phase 3 trial delay and competition (5 Nov 07)
• Vertex (VRTX) update #5—still no word on start of telaprevir Phase 3 trial (9 Jan 08)
• Vertex (VRTX) update #6—down 10% on apparent FDA preference for 48-week Phase 3 (23 Jan 08)
• Vertex (VRTX) update #7—4Q07 results (11 Feb 08)
• Vertex (VRTX) update #8—Seven million shares sold to raise cash (19 Feb 08)
• Vertex (VRTX) update #9—up 8% on good Phase 2 results for cystic fibrosis drug (27 Mar 08)
• Vertex (VRTX) update #10—up 28% on excellent Phase 2 results for telaprevir (31 Mar 08)
• Vertex (VRTX) update #11—more good telaprevir Phase 2 data and 1Q08 results (27 Apr 08)
• Vertex (VRTX) update #12—up 13% on Cowens upgrade; still more good telaprevir Phase 2 data (9 Jun 08)
• Vertex (VRTX) update #13—down 5% on unattractive FDA Phase 3 parameter preferences (24 Jun 08)
• Vertex (VRTX) update #14—2Q08 results (1 Aug 08)
• Vertex (VRTX) update #15—telaprevir Phase 3 trial for SOC-resistant patients launched (19 Aug 08)
• Vertex (VRTX) update #16—nine million shares sold to raise cash (22 Sep 08)
• Vertex (VRTX) update #17—up 16% on Phase 2 results showing 2x daily telaprevir works (24 Sep 08)
• Vertex (VRTX) update #18—final Phase 2a trial results on VX-770 (CF)…on to Phase 3! (20 Oct 08)
• Vertex (VRTX) update #19—3Q08 results (27 Oct 08)
• Vertex (VRTX) update #20—up 5% on fresh telaprevir Phase 2 results (3 Nov 08)
• Vertex (VRTX) update #21—down 11% on concerns about Obama’s drug reimbursement policies (21 Nov 08)
• Vertex (VRTX) update #22—Vertex founder Joshua Boger to retire (5 Feb 09)
• Vertex (VRTX) update #23—4Q08 results (9 Feb 09)
• Vertex (VRTX) update #24—ten million shares sold to raise cash (18 Feb 09)
• Vertex (VRTX) update #25—Vertex to acquire ViroChem Pharma for ten million shares (3 Mar 09)

Dendreon (DNDN, again) update

An article posted earlier today on the Financial Times website suggests “that FDA almost always requires multiple Phase III trials, making rare exceptions for drugs that are already on the market for different indications…. [A]s a bureaucracy, the agency would choose caution over risk, following rules and regulations as closely as possible with very few exceptions, and that in the case of a new chemical entity, it is expected that extra care would be taken to ensure that the proper decision is made.”

While technically, the just-completed 500-patient IMPACT study is the third Phase 3 trial Dendreon have conducted for Provenge, the first two were small studies and both failed to meet their primary endpoint, which—inappropriately, we would say—was time-to-progression for tumors. While retrospectively pooling the data from those two studies uncovered an apparent survivor benefit, that did not suffice to persuade the FDA to approve Provenge in 2007. And, the article cited one anonymous industry executive as opining, “the initial Phase III studies that pooled data from two studies together to form a larger trial is a point of concern, and would not be considered a second Phase III trial. The only Phase III trial that has [overall survival] as an endpoint is the IMPACT trial, and nothing will settle the question of whether the results can be reproduced, unless another well controlled Phase III trial is conducted.”

We’d like to dismiss this out of hand as totally contrary to what Dendreon were told in 2007…however, the FDA has already proven to be shaky at best in dealing with an innovative mode of treatment such as Provenge. Plus—yeah, we know it’s just a sleep remedy, not a therapy for a life-threatening illness—we still get tremors when we consider the Indiplon fiasco, where the FDA kept moving the goal posts after Neurocrine (NBIX) scored each touchdown until finally management realized they were throwing good money after bad…and no matter what hurdles they successfully cleared, the FDA were never going to approve. Pregnant animal studies for a drug not indicated for pregnant humans in a drug class not indicated for pregnant humans where none of the dozens of previously approved drugs in that class had been so burdened! There’s a message there for biotech investors, folks.

Even if this is needless worry, even if everything is copacetic, even if Provenge approval by June 2010 is in the bag, then we still believe the takeaway from 9 May 07 remains that we need to pay more attention to the incapability of the FDA to deal with innovation.

Dendreite conspiracy theorists maintain an elaborate fantasy construct of an epic plot to suppress Provenge hatched by shortsellers and big pharma drug companies and incorporating journalists who publish “bad” articles, advisory committee members who voted “no” on efficacy (one or two of whom do appear to have at least potential conflicts of interest, not that that necessarily proves their opinions insincere or their analysis tainted), analysts who issue negative opinions, and most critically, FDA staffers working at the behest of these evildoers. But we seriously doubt anyone in the FDA gives a hoot about the fate of chemotherapy. We believe the problem is simply that dedicated and well-meaning agency personnel have too much incentive to be cautious, and are conditioned to be so zealous at rejecting dirt that they can’t see the babies for the bathwater.

That condition is a threat not only to prostate cancer victims and Dendreon investors, but to the viability of a US-based biotech industry.

In the meantime, we believe that the immunotherapeutic mechanism Dendreon are employing works at some level with Provenge, and that whether or not the FDA ultimately require another Phase 3 trial, the IMPACT results will prove sufficient for them to approve at least a limited label use of Provenge for advanced prostate cancer patients who have no other options by next June. And we believe there is a significant likelihood that Dendreon’s immunotherapeutic mechanism will prove to have wide utility in fighting various and sundry cancers—breast, cervical, kidney, colon, et al—and that ultimately prophylactic treatments with successor immunotherapies might become standard for everyone.

If those eventualities pan out, it won’t make much difference if you bought DNDN stock at $4, $16, or $28, because it is headed way, way higher.

Previous DNDN-related posts:

• BUY Dendreon (DNDN)—potential cure for cancer (10 Jan 07)
• Dendreon (DNDN) update #1—FDA agrees to fast-track review for Provenge (16 Jan 07)
• Dendreon (DNDN) update #2—FDA appoints advisory committee to review Provenge (2 Mar 07)
• BUY Dendreon puts and calls—straddle play (9 Mar 07)
• Dendreon (DNDN) update #3—Feuerstein’s revenue projections (23 Mar 07)
• Dendreon (DNDN) update #4—reviewing the bidding heading into the AC meeting (28 Mar 07)
• SELL Dendreon (DNDN) puts and calls—AC recommends approval! (30 Mar 07)
• Dendreon (DNDN) update #5—we got lucky (30 Mar 07)
• Dendreon (DNDN) update #6—+488% in four months! (10 Apr 07)
• Dendreon (DNDN) update #7—any buy here is speculative (11 Apr 07)
• Dendreon (DNDN) update #8—intelligent debate on Provenge (12 Apr 07)
• Dendreon (DNDN) update #9—why Provenge should be approved (26 Apr 07)
• SELL Dendreon (DNDN)—FDA issues approvable letter (9 May 07)
• Provenge and the FDA—frog meets scorpion (25 May 07)
• The Provenge ad in the Washington Post (15 Jul 07)
• BUY Dendreon (DNDN) puts and calls—straddle play (again) (29 Jan 09)
• Dendreon options (UKOHA & UKOTA) straddle play update #1—4Q08 results (12 Mar 09)
• Dendreon options (UKOHA & UKOTA) straddle play update #2—did interim data release compromise IMPACT? (25 Mar 09)
• Dendreon options (UKOHA & UKOTA) straddle play update #3—DNDN shares surge 38% (3 Apr 09)
• Dendreon options (UKOHA & UKOTA) straddle play update #4—IMPACT results tomorrow! (13 Apr 09)
• SELL Dendreon options (part UHOHA & all UKOTA)—IMPACT study “met its primary end point”! (14 Apr 09)
• BUY Dendreon (DNDN)—potential cure for cancer (again) (14 Apr 09)