Shares of Dendreon Corporation (DNDN) are higher again on Thursday, gaining 3.46 percent to $36.77, after rising to $37.03 earlier, the highest PPS intraday since Jan. 18. The stock is attracting significant volume after Dendreon’s Provenge prostate cancer treatment, which costs $93,000 per patient, was approved to be covered by Medicare.
The Centers for Medicare and Medicaid Services (CMS) announced that based on the evidence the agency has received “is adequate to conclude that the use of… Provenge® improves health outcomes for Medicare beneficiaries with asymptomatic or minimally symptomatic metastatic castrate-resistant (hormone refractory) prostate cancer, and thus is reasonable and necessary for that indication under 1862(a)(1)(A) of the Social Security Act (the Act).”
Now that the CMS decided that Provenge is worth reimbursing, the stock should start heading higher, analysts say.
[From Minyanville]: “We sensed a high degree of investor anxiety around this event,” Robert W. Baird analyst Christopher Raymond says. “As a result, an important overhang has now been removed.” This is a positive because with growing capacity DNDN will now be able to fully market the drug across the United States and meet or beat Street estimates over the next fiscal year.
Leerink Swann analyst Howard Liang recommends buying Dendreon with a price target of $55, which is also Wall Street’s median price target on the co.’s stock. High target is $66.00 a share.
More than 6 million DNDN shares have already traded hands on the session compared to a 3-month daily average of 3 million. Over the last 5 trading sessions, DNDN shares have risen nearly 10%.
Dendreon Corporation is a biotech co. that engages in the development and commercialization of therapeutics that may improve cancer treatment options for patients. The company was founded in 1992 and is headquartered in Seattle, Washington.