In mid-2011, Dendreon stunned investors by disclosing that sales of its controversial Provence prostate cancer vaccine were slower than expected, guidance was revised and layoffs were planned. At the time, the vaccine maker claimed that many doctors, particularly those in smaller settings, were slow to adopt the $93,000 vaccine since they had to wait for reimbursement. The disclosure caused Dendreon stock to plunge nearly 60 percent. Meanwhile, Dendreon ceo Mitch Gold and other insiders had been selling stock (see this).
The stock sales caused an outcry among some shareholders and prompted calls for an investigation (back story). Now, the US Securities and Exchange Commission is following up. The investigation was apparently aided by documents that were turned over to the SEC by a former Dendreon employee, The Wall Street Journal reports, adding that Dendreon declined to comment.
Several months after the fiasco, a former Dendreon employee provided documents to SEC investigators detailing information about troubles with the vaccine, which had already been the focus of a long-running drama at he FDA. The materials pointed to stock sales by Gold and others, the paper writes. Gold, who was ceo until he was replaced in January 2012, did not respond to the paper for comment, but had created a 10b5-1 plan to sell hundreds of thousands of shares in December 2010, according to SEC filings cited by the Journal.
Dendreon managements was aware by late 2010 that Provenge faced significant sales hurdles, according to former employees of Dendreon and the whistleblower. By then, "the writing was on the wall" that Provenge sales weren't strong, Matt Shaw, a Dendreon sales rep who left the company in July 2011, tells the paper. It remains unclear how much Gold knew about the Provenge sales results when he set up his trading plan.
This is not the first time that Dendreon (DNDN) has come to the attention of the SEC. The SEC"s Office of Inspector General three years ago reviewed allegations of market manipulation and a bear raid into Dendreon shares in 2009 that caused a 65 percent drop in 75 seconds (back story).
Separately, Dendreon was the center of a spat over alleged conflicts of interest after an FDA advisory panel in 2007 recommended the agency approve Provenge. But then two FDA panel members wrote the agency urging a go-slow approach, and the FDA shortly thereafter decided to delay approval. Some cancer patients and Dendreon investors later filed a lawsuit against the FDA, claiming the two panel members held undisclosed financial conflicts of interest and alleged a Byzantine power play involving a key FDA official who sought to sway the outcome of the agency approval.
The stock sales caused an outcry among some shareholders and prompted calls for an investigation (back story). Now, the US Securities and Exchange Commission is following up. The investigation was apparently aided by documents that were turned over to the SEC by a former Dendreon employee, The Wall Street Journal reports, adding that Dendreon declined to comment.
Several months after the fiasco, a former Dendreon employee provided documents to SEC investigators detailing information about troubles with the vaccine, which had already been the focus of a long-running drama at he FDA. The materials pointed to stock sales by Gold and others, the paper writes. Gold, who was ceo until he was replaced in January 2012, did not respond to the paper for comment, but had created a 10b5-1 plan to sell hundreds of thousands of shares in December 2010, according to SEC filings cited by the Journal.
Dendreon managements was aware by late 2010 that Provenge faced significant sales hurdles, according to former employees of Dendreon and the whistleblower. By then, "the writing was on the wall" that Provenge sales weren't strong, Matt Shaw, a Dendreon sales rep who left the company in July 2011, tells the paper. It remains unclear how much Gold knew about the Provenge sales results when he set up his trading plan.
This is not the first time that Dendreon (DNDN) has come to the attention of the SEC. The SEC"s Office of Inspector General three years ago reviewed allegations of market manipulation and a bear raid into Dendreon shares in 2009 that caused a 65 percent drop in 75 seconds (back story).
Separately, Dendreon was the center of a spat over alleged conflicts of interest after an FDA advisory panel in 2007 recommended the agency approve Provenge. But then two FDA panel members wrote the agency urging a go-slow approach, and the FDA shortly thereafter decided to delay approval. Some cancer patients and Dendreon investors later filed a lawsuit against the FDA, claiming the two panel members held undisclosed financial conflicts of interest and alleged a Byzantine power play involving a key FDA official who sought to sway the outcome of the agency approval.