Is There Any Hope Left For Dendreon

Dendreon Corporation  (NASDAQ: DNDN  )  shareholders have been on a rollercoaster over the past few years. Dendreon got their lead product Provenge approved for use in metastatic castration-resistant prostate cancer, but has been unable to profitably produce and market the drug, reporting net losses every year that Provenge was on the market. With this in mind, we need to ask ourselves whether this is the end of the line for Dendreon.

Dendreon's debt situation
The biggest indicator of success moving forward will be whether or not Dendreon will be able to meet its rather substantial debt obligations. Dendreon recently announced the payment of its 2014 notes, but these notes are just a tiny fraction of what they will have to pay in 2016.

The 2016 notes represent a large catalyst for shareholders, with $620 million due -- significantly more than the $155 million Dendreon has in cash. Dendreon’s cash position continues to worsen, as cash burn was around $30 million last quarter; management estimates a similar burn this coming quarter. And Provenge sales haven’t impressed – last quarter, company revenue was $68.8 million, roughly in line with revenue over the past five quarters.

Investors who still hang onto hope regarding Dendreon will point to the opening of the European market. They hope to see significant new sales in Europe, which will begin to ramp up in the fourth quarter of this year. But those sales will require infrastructure, production, and sales force investments that may further strain Dendreon’s resources.

What about other options?
The recent departure of Dendreon’s CEO John Johnson has left investors hoping for a buyout. But I don’t see an unprofitable drug and a large debt pile as attractive to a potential acquirer. Even if another company stepped in to buy Dendreon, I don’t think it would necessarily be for any sort of premium -- after all, the company doesn’t appear to have many options given its financial straits. And given Dendreon’s current market cap of under $400 million, share dilution sufficient to pay off the debt seems like an unattractive alternative for shareholders.

Bottom line
Dendreon will have a hard time meeting its 2016 debt obligations. With continuing losses and no immediate hope to turn them around, I’m not sure that Dendreon will have the cash needed to keep operating. While some investors might see this as a turnaround opportunity, I don’t see the oncoming barriers as surmountable, and I think that biotech investors have better places to park their money.

Will FDA Labeling Be Mannkind's Downfall

MannKind Corporation   ( NASDAQ: MNKD    ) Investors were finally successful, after multiple Attempts horse in obtaining FDA approval for Afrezz. There have been many different articles recently about the potential for partnerships for MannKind. However, I believe that importante These authors are missing the point - the hinderances to a partnership. The FDA  labeling  of Afrezz restricted mayer have a partnership, and may hobble to the launch of Afrezz before it even started.

Post-approval requirements are troubling One of the most notable parts about it was that the FDA label Explicitly told doctors to prescribe notes Afrezz tour Hasta with respiratory issues. The FDA went even further, requiring doctors to have to Afrezz spirometry tests before prescribing, and every six months thereafter. Looking forward to long term effects, as a  post approval commitment  MannKind is required to educate doctors about this risk and to conduct additional post approval studies Evaluating the long term effect of Afrezz on lung function and cardiovascular risk, as well as safety and efficacy in children. These post approval studies will likely cost millions of dollars, any partner, and years in terms of the time needed to monitor all of the Patients in the trial. And if the data comes back negative cardiovascular and lung function in the study, it could give reason to withdraw the FDA for marketing approval or slap it with a stronger warnings to Afrezz.

Other warnings The FDA was also concerned about the Increased risk of lung cancer. This could be a hidden dagger for MannKind to Afrezz should be shown to the increased risk of lung cancer in the post-approval studies. This would be a substantial risk to any site, as it would mean huge marketing give this down the toilet. Even more Importantly, it is a red flag for doctors. Even though the label notes that "in Patients with a history of lung cancer or at risk for lung cancer, the benefit should outweigh this potential risk of Afrezz user," why take the risk? With a myriad of other treatment options available, I would expect doctors to turn to what they know works. Exubera encountered similar problems with its label, which helped me to Contribute to its downfall.

The FDA even MannKind required to include in their labeling a risk of hypoglycemia. All insulin, carry this warning, however, the issue is that for MannKind, without labeling reflecting enhanced control of hypoglycemia, the risk / reward proposition may be further complicated for doctors. And again, there is the overhang of those post-marketing trials.

How partnerships are affected MannKind is planning on bringing in a partner to market to Afrezz. However, the less than favorable label and the fact that it lacks the financial resources MannKind likely to launch the drug itself will likely weaken in partnership Negotiations MannKind's hand. I also wonder if a partner Difficulty getting Insurers will have to go along with some recommending to Afrezz. Regardless, the fact that a partner would likely have to pay millions of dollars to fund trials of thes What Appears to be upfront and also accept a Potentially risky hurt the partnership will launch discussions, MannKind Potentially leaving in a weak position.

Bottom line in The labeling of Afrezz could make it tough to convince doctors to prescribe the product, and will make it hard for a partner MannKind to attracti. Even though the FDA's approval was welcome news for Investors MannKind, I wonder if they'll find the label to be a serious block for uptake and, by extension, in partnership discussions.