where to tomorrow, page-42

Annihilation of Dendreon (DNDN) on Q2 Earnings and Guidance

http://www.examiner.com/economy-in-orlando/annihilation-of-dendreon-dndn-on-q2-earnings-and-guidance

Dendreon (DNDN) released its Q2 earnings Wednesday evening and was halted at $35.28. They reported significantly lower earnings than estimated (0.57 vs 0.71 est) and announced that the sale of their prostate cancer drug, Provenge, was far less successful than anticipated due to serious issues with doctors getting reimbursed - serious enough that they are simply not using it.

Dendreon is violently cutting costs and jobs to align with near-term manufacturing requirements. Further, they withdrew their previous 2011 guidance of $300-450 million in revenue and cited new "modest quarterly revenue growth" for the rest of the year.

After reopening, Dendreon fell nearly 70% from $35.28 to $11 and traded up to its current $13.46 level.

The largest Dendreon shareholder is SAC Capital with 8.2 million shares. While SAC Capital has most likely hedged a position of that magnitude with some Puts, it seems reasonable that they would want to liquidate on this news and the new guidance. This has put it well below the $20 price-tag it gapped to when they first announced the Phase III trial results on April 14th of 2009.

As of July 15th there were 16,072,114 shares short on DNDN - a number that has held more-or-less constant throughout 2011. This is too violent a move to talk with confidence about support and resistance levels, and premarket trading provides better insight into a potential trading range for the following day, but $11 to $15 was Wednesday evening's range.





good luck