Is Dendreon (DNDN) A Buy Here? An Insider Thinks So

Dendreon Corporation (DNDN), a Washington state based biotechnology company saw it’s shares plummet off a cliff a few weeks ago, after pulling the plug on it’s sales forecast for it’s flagship cancer therapy Provenge.  This was done after poor initial sales due to the high cost (in the $100k ballpark) of the therapy, and the uncertainty of medicare coverage.

The cloud of uncertainty on the medicare coverage has been lifted, however the stock price has continued to languish in the $9 to $12 range since it’s fall from the mid to high $30’s a few weeks ago.  Given that Medicare has confirmed that Provenge will be covered you would think that the stock price would have recovered some.  It seems analysts and investors are still not convinced that Dendreon (DNDN) can make Provenge a homerun as initially expected.

While things seem at their bleakest, there is one recent ray of sunshine for the prospects of Dendreon’s stock price:  the recent open market purchase of $20,000 shares by a company insider.  While this in itself is no immediate buy signal, it seems at least director of the company is confident in their ability to ramp up sales of Provenge in the long run.

Director Susan Bayh purchased the 20,000 share on September 9, 2011 at a price of $11.05 for a total cost of just over $220,000.  It will be interesting to see if any of her fellow insiders share her enthusiasm and confidence over the next few weeks.