by Bryan Bottarelli

Friday, January 19, 2007

Dear Bottarelli Research Member,

 

This week, I’d like to offer you a $4.27 stock that’s near and dear to my heart. You see, prostrate cancer is one of the worst killers of men in the U.S., as it took my own grandfather’s life. With the U.S. population getting older and older, there is an urgent and unmet market need for a prostate cancer treatment, and Dendreon Corporation (DNDN — NASDAQ) could be the company that discovers the cure. This little gem has a drug called Provenge that just received priority-review status that was granted due to strong lab test results. A double, perhaps a triple, could be in the cards for this one — making it your newest small-cap pick. Here’s Bryan for all the details. Have a great week everyone.

 

Sincerely,

 

Mark Blattert

Bottarelli Research Small Caps

 

 

 

To understand the science behind Dendreon Corporation (DNDN — NASDAQ), it’s critical we begin our discussion by talking about their lead prostate cancer treatment called Provenge.

 

Provenge is so exciting because it might represent the first in a new class of active cellular immunotherapies (ACIs) that are uniquely designed to stimulate a patient’s own immune system. It has successfully made it into late-stage clinical development by treating patients with advanced prostate cancer. A complete course of therapy involves three infusions over a one-month period, and as Mark mentioned above, the FDA just granted this potential treatment priority review.

 

This is promising because a “priority review” ruling shortens the time the FDA will take to either accept or reject Provenge for marketing — trimming their study period from 10 months down to 6 months. This is the FDA’s way of saying that they recognize Provenge has the potential to treat a disease where no other treatment options are currently available — thus speeding up their research and approval process with hopes of getting the drug on the market as soon as possible. As it stands today, the FDA has set May 15^th as their tentative ruling date. If this approval comes back positive, you could see immediate upside gains in the stock.

 

After all, prostate cancer is the most common non-skin cancer in the United States. More than one million men in the U.S. have prostate cancer, and it’s estimated that 232,000 new cases of prostate cancer are diagnosed each year. Of those cases, prostate cancer claims the life of 30,000. On a worldwide scale, prostate cancer is the third most common cancer, which is why Mark has heard some experts say that an approval letter could mean a billion-dollar market for Provenge, but let’s not get caught up in that hype. At least not yet.

 

Keep in mind, Dendreon is not a one-trick pony. They’ve also completed phase 1 trials for Neuvenge (Lapuleucel-T), an investigational active cellular immunotherapy for the treatment of breast, ovarian, and colon cancers. They also have product candidates in immunotherapy targets, including lung, breast, prostate, and colon cancers.

 

They’ve also teamed up with some of the best biotech companies on Wall Street — inking collaborative agreements with Genentech (DNA — NYSE) and Abgenix for preclinical research, development, and commercialization of products derived from their prostate cancer cells.

 

Based on their promising pipeline and small per-share price, let’s add shares of DNDN to our small-cap portfolio, as the odds of an approval far out weigh the speculation. And for only $4.27 per share, Mark and I both agree that it’s worth the risk.

 

 

 

 

As you can see by the updated DNDN chart, the stock moved from our $4.27 buy price up to an intra-day high of $18.00, good for a remarkable return of 321% in only three months time. It’s this type of explosive upward potential that Bottarelli Research Small Caps members have come to enjoy.