Dendreon Rival Suffers Meltdown, Investors Sitting Tight For Next Big Clinical Trial News

One of the high-profile competitors to Dendreon suffered a major meltdown yesterday in a clinical trial. Cell Genesys, (NASDAQ: CEGE), a developer of treatments to stimulate the immune system against cancer, said yesterday that a clinical trial of 600 prostate cancer patients was halted early after a safety monitoring board found a higher risk of death among patients taking its treatment, called GVAX.

The stock of South San Francisco-based Cell Genesys collapsed, falling 66 percent since the announcement to 94 cents at 11:42 am Eastern time today. Like a lot of people, I wondered if investors would run scared from Seattle-based Dendreon (NASDAQ: DNDN) as well, since the small group of companies working on immune-boosting therapies for cancer sometimes move up and down in synch. So far, Dendreon has held its ground, losing 21 cents since the news broke to trade at $5.73 today.

Nobody really knows yet why the patients had the higher risk of death in the GVAX group, so Cell Genesys and its investigators will have to comb through the data for some answers. It’s especially hard to explain on the surface, at least, because clinical trials of immunotherapies tend to show they have very mild side effects, like fever and chills. Whatever really happened will be of keen interest to the field, sometimes known as cancer vaccines, says Martin Simonetti, a former Dendreon CFO who’s now the CEO at VLST (and an Xconomist.)

Dendreon’s own big news event is approaching sometime in October. It will find out whether an early peek at survival data from its 500-patient Impact study can show that its drug, Provenge, is extending lives. If the data aren’t conclusive on that point, Dendreon will have to wait another year for the final analysis before it can take another shot at winning FDA approval.

A lot of comments I’ve seen from analysts are pretty tentative about making bold predictions on Dendreon’s trial. As the experience with Cell Genesys shows, strange, unexpected things can happen in this business.

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