Market Playground

By VFC’s Stock House

The troubles encountered by Dendreon (NASDAQ:DNDN) over the past months have made it increasingly difficult for investors and followers of the cancer immunotherapy sector to stand behind the technology unabated, but as the market dropped and shares of Dedreon were crushed, opportunities may have opened up as quickly as investor hopes dissipated.

Dendreon itself, even in the midst of its own share price collapse, may still be quite the recovery story as issues of compensation for Provenge treatment are resolved. The company’s best days might still lie ahead as trials are planned to measure the effectiveness of the Provenge technology on patients whose immune systems are still strong, before they’ve been beaten down by chemo and radiation-based treatments.

Common sense has long indicated that a treatment based on the strength of a patient’s immune system should be tested while the immune system is still strong, and finally that theory is being put to the test.

Any success in the new era of cancer immunotherapeutic trials could quickly reinstall investor and community confidence back into Dendreon’s Provenge technology,  and bring renewed light to the cancer immunotherapeutic sector as a whole, as other companies, such as Immunocellular Therapeutics (OTC:IMUC) stand to build on the technology that Dednreon first brought to market.

As I’ve previously noted, Immunocellular views the technnology behind Provenge as a starting point in the development of cancer immunotherapeutic treatment. Where IMUC has the advantage, however, may be in the logistical design behind its, where a patient’s cells do not need to be ‘harvested’ on multiple occasions, as they do with Provenge treatment. The logistical and manufacturing savings – in terms of cost and convenience – give IMUC a leg up in ushering in the next generation of cancer immunotherapeutic treatments, and provide a near certainty that the costs associated with its Phase II ICT-107 treatment may be far less than that of Dendreon. These facts could significantly reduce the cost of treatment and alleviate the obstacles of reimbursement encountered by Dendreon this year.

Immunocellular’s ICT-107 is currently being investigated in a Phase II trial in the treatment of the highly-aggressive brain cancer glioblastoma (GBM).  The technology behind the treatment attacks the stem cells that lead to the growth and spreading of cancer. This unique approach has been put to the test in a successful Phase I trial where 100% of the 16 patients administered Immunocellular’s potentially ground-breaking ICT-107 were still alive after one year, and 80% after two.

Those positive results were overwhelming enough to warrant the quick transition into the ongoing Phase II trial, which commenced earlier this year. Full enrollment is expected to be achieved early in 2012, with results rolling out the following year. The Phase II was originally planned for 15 sites, but a recent announcement by Immunocellular stated that more than 20 sites would soon be available for enrollment.

Like many other companies whose stocks have fallen during the latest round of economic uncertainty, Immunocellular – with its ‘next generation’ technology – may be looked at as a potential buyout candidate, and also as a potential growth play with multiple catalysts coming due in 2012.

Given the troubles by Dendreon since restating Provenge sales estimates for 2011 this summer, the cancer immunotherapy sector has been beaten down. As Dendreon resolves its pricing and reimbursement problems, it’s possible that the sector as a whole could also rebound.

That’s where a company such as Immunocellular comes into play; due to the noted logistical and manufacturing advantages, the same pricing issues encountered by Provenge may never become a factor for this company.

Worth watching.

Disclosure: No position

VFC’s Stock House offers investing opinions, insight and ideas on a variety of different stocks, options and ETF’s, as well as commenting on news that effects the market.