Dendreon's CEO Departs at Critical Juncture - Analyst Blog
Dendreon Corporation (NASDAQ: DNDN) is now faced with a difficult time with its chief executive officer and president John H. Johnson having informed the board of his decision to step down on personal reasons.
Although Mr. Johnson will be serving as the chief executive officer until August 15 this year, Dendreon is expected to have a tough time looking for a successor. Investors will surely be concerned about Dendreon's future course of action.
The Dendreon board, in the wake of the departing CEO, might also consider a buy-out option. We remind investors that there were rumours last year that Dendreon was putting itself up for sale. However, nothing was declared officially.
Dendreon has been struggling with its only product, Provenge. The drug was approved in the U.S. for treating advanced prostate cancer in May 2010. Provenge has performed below expectations since its launch. Provenge's performance was hit by the entrance of Johnson & Johnson's (NYSE: JNJ) Zytiga in the prostate cancer market. Zytiga, launched in the second quarter of 2011, has been putting in an impressive performance.
Last year, Provenge was approved in the EU for the treatment of asymptomatic or minimally symptomatic metastatic (non-visceral) castrate resistant prostate cancer in adults. Provenge is expected to be available in the EU through a cost-effective approach. Dendreon plans to launch the product there later in the year. The EU launch of the drug may boost Dendreon's top line. Provenge sales came in at $68.8 million in the first quarter of 2014.
At present Dendreon is entirely dependent on Provenge for growth. Moreover, the company lacks a decent pipeline with none of its candidates likely to hit the market in the near future. Even if Dendreon elects a new chief executive officer at this point, taking the company forward would be a daunting task.
Dendreon carries a Zacks Rank #3 (Hold). Some better-ranked stocks include Gilead Sciences Inc. (NASDAQ: GILD) and Alexion Pharmaceuticals, Inc. (NASDAQ: ALXN). While Gilead carries a Zacks Rank #1 (Strong Buy), Alexion holds a Zacks Rank #2 (Buy).
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