Dendrion ($DNDN): Its Complex but Gold is Gone so is Platinium Ahead ?

A very significant event in the world of cell therapy occurred this week when news came that Mitch Gold, CEO of Dendreon (NASDAQ: DNDN) has left the company. Wall Street analysts reacted positively and the stock was up modestly on the news and has since settled back. Dendreon has been the shining example of what's possible in the cell therapy space until the company seemed to over-inflate expectations, and over-ramped manufacturing. When sales numbers failed to meet high expectations the stock corrected sharply (this past summer DNDN was >$40) and fell back to the $7 range. Savy investors who bought the over-sold stock at $7 have been rewarded as it bounced back to $14 (range). 

The key question now is what should we expect going forward ?

Dendreon remains a solid example of the utility a cell based immunological cancer therapy can have in the marketplace. We see Immunocellular (IMUC) as a very viable and cheaper play but granted earlier stage. PrimaBioMed (AUX: PRR) also falls into this space, chasing Ovarian cancer. Stay tuned for the results of Stimuvax, which would validate the MUC-1 antigen for Ovarian. As for Dendreon we believe a slow and steady climb back is likely as the company smooth’s out its commercialization and manufacturing ramp associated with Provenge.

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Which Cell Therapy companies present the best value?

Which Cell Therapy companies present the best value?

We developed an analysis using public filings and annualizing the most recent quarters as of 12/31/11. As such, the accuracy is subjective to our proprietary algorithm, and this list is not mean to be all comprehensive.

We conclude that ex leaders Dendreon and MesoBlast make the space very inexpensive. The sample below represents just over $500 million in market cap for eight of the selected public companies (ex DNDN and MSB). These companies have 3 - PIII trials, 5 PII trials and several P1 trials (based on these crude metrics).

We conclude that is worth investors time to understand among these companies in terms of what they are doing and the associated probabilities of success of their trials. Recent data peaks from the Cardiology space suggests that Baxter (BAX) and their CD34 cell type may be very viable. NeoStem has a very similar approach. The retrenchment in MesoBlast shares since that company presented data at AHA in November is of concern. Cytori, Aastrom, Athersys all have active programs in cardiology while Athersys lead program is partnered with Pfizer for Ulcerative Colitis and Aastrom is entering a Phase 3 trial in CLI.

By price ($), Osiris, MesoBlast, and Dendreon are the highest $ priced stocks:

But that starts to change as we migrate to market cap:

And if we eliminate Mesoblast and Dendreon we get a better picture of the rest of the field:

And that picture changes as we adjust for debt and cash: (enterprise value). In all fairness here, we know that NeoStem with $20-$30 million in value from their China generic company, could be the cheapest name and others are / will raise capital but ex China, Athersys is the “cheapest name”.

Looking at R&D spending: IMUC, Prima and NeoStem are among the most efficient but in fairness one must adjust for the fact that Aastrom is embarking on a pivotal trial versus Prima just starting their P3 and NeoStem their P2.

Revenues: Here we have excluded NeoStem’s $65 million from China which means PCT (Cell Therapy CMO) is running at close to $10 million in annual revenues (currently).

Immunocellular (IMUC) - Update(s) Phase II trial of ICT-107 for Glioblastoma

ImmunoCellular (OTCBB: IMUC) provided an update on the site and patient enrollment for ICT-107, currently in a Phase II trial for Brain Cancer. Recall that this is a dendritic cell based cancer vaccine targeting multiple tumor antigens for the treatment of glioblastoma multiforme (GBM or brain cancer).

• The company initiated the trial in 23 centers to enroll up to 160-200 patients, (100 with the HLA-A1/A2 immunological subtypes). 115 patients are enrolled in the study to date, ahead of schedule.
• Enrollment for the trial is expected to be completed by Q2 of 2012 and an interim analysis is expected when 50% of events (32 deaths) have been observed.
• NeoStem's, Progenitor Cell Therapy (PCT) is working with Immunocellular on the "manufacturing".

Conclusion: We discussed IMUC last week and we believe that this dendritic approach is showing compelling data in this unmet medical need. PCT (NeoStem) eliminates any manufacturing concerns, (PCT did most of the clinical manufacturing for Dendreon's Provenge). IMUC looks like an attractive play, and the company is financed through to proof of concept, given that capital was raised earlier in January 2012.

See all Daily Dose articles on IMUC.

ImmonoCellular (IMUC) - All Systems are Go !

ImmunoCellular Therapeutics, Ltd. (OTCBB: IMUC) presented at the Noble conference in Florida last week, and we attended their presentation. Think of IMUC as Dendrion but this time targeting brain cancer (GlioBlastoma), the same cancer that killed Ted Kennedy. This is absolutely an unmet medical need. A few points to be excited about IMUC:

1. The company has now raised capital, has a modest burn rate and as such is solidly financed to the next data point.
2. Lead product is ICT-107 (dendritic cell for glioblastoma - GBM, or Brain Cancer), and the Phase II trial has started.
3. The Phase 1 data looks pretty remarkable. Average survival in these patients is typically about 15 months. In the Phase 1 trial IMUC has reported a median over-all survival of 38.4 months.
4. Attractive valuation: $45 mln market cap, plenty of cash, Phase II trials underway, and proof of concept data in the P1 trial as well as the therapeutic area (dendritic cell approach, aka :Dendrion).

See all Daily Dose articles on IMUC.

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The TurnAround in Dendrion ? DNDN Presents at JP Morgan in SFO

Last week Dendreon NASDAQ: DNDN reported stronger than expected sales for Provenge sales at $82 Million generally above "street" consensus expectations. The company has a strong cash balance (approx. $600M) to fund the Provenge launch through to profitability. The stock rallied sharply starting the week at $8 and closing north of $12. This sets the stage for continued expansion for Dendrion and is welcome news for earlier stage cancer immune based therapies in development.

This week the JP Morgan Healthcare Conference begins in San Fransico, Monday through Thursday. Healthcare companies from all over the world converge for a week in meetings with sell side analysts, bankers and institutional portfolio managers.

We have been highlighting the Alliance for Regenerative Medicine (ARM) efforts as an industry group to highlight the progress that cell based companies have made over the past decade. To this end, ARM has organized a two day mini-conference (we have previously posted the schedule). What's special about the ARM event is that the companies will all present in a panels style format.

Industry leaders like Dendrion (presenting on a panel Wed) will be alongside other earlier stage companies in their market niche such as Immunocellular (IMUC), Coronado (CNDO), PrimaBioMed (PRR.AX) as well as other players in the space. We believe this will be a great venue for investors to learn not only about where Dendrion may be going as a stock, but what's next in the cancer-immunotherapy space.

We will be present throughout the day and blogging on the various panels as we go through the motions of comparing and contrasting the various approaches of the companies. For example we are keenly focused to listen to the cardiology panel where industry leader MesoBlast (MSB) will present alongside NeoStem (Amorcyte-NBS), Athersys (ATHX) and Cytori (CYTX).  Baxter (BAX) will not be present for the panel but investors should take note of their progress (P3 trial in cardiac ischemia).

We believe the next major breakthroughs on the regen side will likely be found in the cardiology space.

Cell Therapy - Is there value for stock market investors?

The cell therapy space has been hit hard over the past year triggered by a perfect storm of events from the macro-economic environment:

• Biotechnology has come under pressure, where investors fear not only dilution but extinction; and
• Companies in the Small-Cap Biotech space often operate with a years worth of cash, and this has made investors nervious.

We have been down this road in the past, can anybody say Y2K?

Dendreon's (NASDAQ: DNDN) rise became the rallying cry for investors so its subsequent plunge became the proof for the bears that cell therapy just doesn't work. Both examples are in our opinion false. Provenge, like so many biotech products before it, is the first in a new therapeutic category. We lived through the monoclonal antibodies in the 90's, and then the HIV market in Y2K. Most recently the success of the nucleosides (Pharmasset) is now destined to be acquired by Gilead (GILD). We hope our followers saw the run up in Inhibitex (INHX) that resulted.

What's the connection? A pattern has emerged, and Provenge is not just a cell therapy but the first of a cell based approach to immunology/cancer. The follow-on products will be better. Take a look at the work that PrimaBioMed (ASX: PRR) is doing or even better, Coronado (OTCBB: CNDO) (which we have been following for some time).

What we want to begin discussing today is cell therapy on the regenerative medicine side of the equation. Oncology has always had tough hurdles but on the regenerative side the unmet medical need is often just as great, in fact, greater in some places. 

No one yet has been able to explain Mesoblast (MSB-Australia) to us but Cephalon and now Teva are in partnership and the stock has a market cap approaching $2 billion. This is an allogenic (other peoples cells) model, which pharma likes. It is the so called pills in a bottle model. Peer companies include Pluristem (PSTI) and Athersys (ATHX), at much lower valuations ($100 million or lower). On the autlogous side no one seems to be paying any attention to NeoStem (AMEX: NBS). This company acquired Progenitor Cell Therapy the contract manufacturing company that worked on Provenge and today is working with many of the cell therapy companies we are following.

Can an autlogous model work?  Baxter thinks so, and has been highlighting their autlogous cells for cardiac ischemia. Interesting because the Baxter product is very similar to the NeoStem product - both are CD34+ cells with some differences. NeoStem is begining their Phase 2 trial for a cell therapy that promises to stabilze failing hearts after a heart attack.

We recently attended the Stem Cell Therapy on the Mesa conference, and we were "blown away" with the number of products in clinical trials. We saw companies from all over the world - some had revenues with approved products, and others had great data and proof of concept with thereapies that can work for everything from cardiovascular disease to healing damaged muscles and tendons.

Going Forward: We will be actively following the "Cell Therapy Space" now. That means we will be watching the developments on two fronts:

• Oncology/Immunology side, and
• Regenerative Medicine side.

We will be commenting on the trials, the news developments in the space, the competitive landscape, talking with managment, and posting our articles on where we believe the ground breaking science, product profiles, and catalysts lie that can trigger the next paradigm shift in the space.

Remember, Lipitor is going to leave a big hole in Pfizer's pipleine as it goes generic. Pharma and Biotech have to act. Early signs abound that cell therapies are no longer a case of if, but when, and the answer to that is tied to clinical trials, which represent a highly defined process.