Dendreon Corporation (DNDN) Prompts Analyst to Make Rare Admission  
3/7/2013 8:16:32 AM

The sharp elbows world that is Wall Street does not take kindly to mistakes and, still rarer, are public admissions when a blunder is made. But in a refreshing bit of candor, ISI Group analyst Mark Schoenebaum, who works the sell side of the Street, did something unusual this morning – he apologized for his earlier recommendations for shares in Dendreon. Why? The controversial maker of the Provenge prostate cancer vaccine, which has been having a rough time generating patients and revenue in the face of stiffening competition, yesterday warned investors that first-quarter sales estimates were now too high. Dendreon had previously told analysts and investors to expect first- quarter sales that would be lower than the $81.6 million notched in the fourth quarter. In response, Schoenebaum downgraded Dendreon stock. “Given Dendreon’s disclosure yesterday that 1Q consensus Provenge sales estimates are too high, we think it’s prudent to move to a Hold rating. As a reminder, the company’s cfo yesterday explicitly said that 1Q consensus sales estimates need to come down. Previously, the company had commented that 1Q sales would be sequentially below 4Q sales – but the company appears to be saying that the decline could be far more significant than the Street is currently estimating,” he wrote in a client note. “Clearly this stock has not been a good call for me over the past (about) 2 years. In fact, it’s been my worst call of my 13 year career – by far (yes – even worse than NABI in 2005),” he continued, noting he gave the stock a ‘hold’ rating. “We all make mistakes, but this mistake bothers me more than all others since, in retrospect, I really did have all the information in front of me I needed in 2011 to be suspicious of eventual Provenge uptake. But, alas, for reasons that will forever elude and haunt me, I missed it… And, for this, I apologize.”