On May 9, 2007, when Dendreon announced to the public that the FDA had issued the company a Complete Response Letter instead of an approval letter, the market value of Dendreon dropped more than 60% in one day.
The known people behind the "leaks" in this case are Dr Pazdur, along 2 members of the Advisory Committee who were chosen to participate on the panel by Dr Pazdur. When persons serve on these committees, they become "special government employees," and are subject to the same rules and regulations as all government employees.
When the Provenge Committee recommended approval, there were two votes taken. The first was on safety and the vote was 17-0 that the drug was safe. The second was on efficacy and the vote was 13-4 that the drug demonstrated "substantial evidence" of efficacy, the federally mandated standard.
The approval of this new cancer vaccine represented a grave threat to the multi-billion dollar chemotherapy industry. Dendreon is the first company to seek approval of a drug in a promising new class of immunotherapies that direct the body's own immune system to attack only cancer cells, unlike chemotherapy which destroys cancer cells but damages healthy cells and the immune system as well.
Provenge sought approval to treat men in the final stage of prostate cancer whose only option is months of chemotherapy with the drug Taxotere, which causes debilitating side effects and extends life on average 2.5 months.
In applying for approval, Dendreon submitted a study that showed 3 injections of Provenge extended life by nearly double that chemotherapy and the side effects, if any, consisted of flu-like symptoms for one or 2 days.
If the new immunotherapies turn out to be as effective as some experts claim, chemotherapy and radiation treatments could become obsolete in the not to distant future. Dr Pazdur knew this all too well. In fact, his fear was that if Provenge were to be approved, it would establish a new standard of care for late stage prostate cancer patients and from then on testing of new therapies would be up against Provenge.
He was also ticked off about the fact that the FDA had chosen the Center for Biologics Evaluation and Research to control the Provenge Advisory Committee instead of the Center for Drug Evaluation and Research, which he controlled.
So as a back-door means of regaining control, he recruited his two partners in crime, Dr Howard Scher, from the Memorial Sloan-Kettering Cancer Center, and Dr Maha Hussain, from Michigan University, to serve on the Advisory Committee to assist him in thwarting Dendreon's bid for the approval of Provenge.
Both of these doctors have made a fortune from their involvement in the cancer treatment and research racket over the past 2 decades. And they also stood to lose a fortune if the chemo-cartel was dismantled.
Investors had every reason to believe that Provenge would be approved once the Advisory Committee voted for approval. The FDA had never refused to follow a recommendation by its own experts to approve a drug for dying cancer patients who had no other options.
While testifying at the hearing, Dr David Penson, Associate Professor of Urology and Preventative Medicine at the University of Southern California, told the panel: "If you turn this drug down, it will likely set back the innovative field of active cellular immunotherapy in cancer many, many years."
He warned that the Committee's decision "will not only affect prostate cancer patients, but it may have an effect on the larger population of oncology patients in general."
Dr Hussain and Dr Scher were positioned on the panel to do everything in their power to make sure the vaccine was not approved. But their best efforts failed and within two weeks after the panel voted to approve the Provenge, Dendreon stock had nearly tripled in value and analysts were predicting that the vaccine could bring in $1 billion annually.
However, it was soon obvious that something was up, because the short sellers were still betting millions that the stock value would fall. On April 29, 2007, Bloomberg reported that shares were being sold short "at a record pace" as investors "bet the company's experimental prostate-cancer drug will fail to win approval from U.S. regulators."
All totalled, 33.9 million shares were sold short by the end of April. In hindsight, figuring out why people would engage in such risky betting was a no-brainer. The only people who could have known that Dendreon stock was headed for a nose-dive on May 9, 2007, because the FDA was going to overrule it's own panel by denying the approval of a cancer drug for dying patients for the first time in history, were the people who made it happen.
