Caution on Biotechs With Risk Off Situation-UPDATE 1/5/12 Dendreon Soars

buy Lyrica india buy provigil us Dendreon (DNDN $10.94) soared 44% today on a business update saying Provenge sales for its prostate cancer treatment were better than expected. Fourth quarter gross revenues were $82M with full year revenues at  $228M .Also the Center for Medicare and Medicaid Services updated their reimbursement landscape.

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Time to Look at Dendreon (DNDN)

We have been tracking ETF’s and mid-cap biotechs and see a period of weakness ahead compared to the NASDAQ-100. Bulls who are positioned for a fourth quarter rally should trade the QQQ rather than the biotech ETFs. The Q’s are down about 0.48% as of midday compared to the XBI down 0.78%. The IBB is down 0.6%. Our mid-cap index of 33 biopharmaceutical stocks is off 0.5%.

We have not recommended new buys to our biopharmaceuticals portfolio but Dendreon (DNDN $8.25) appears to be bottoming at the $8 level and is worth a trade to $10.

Today there is news on Avastin that the FDA revoked approval of the drug for breast cancer. The FDA said that the side effects had potential risks compared to Avastin’s efficacy for controlling tumors. The drug will remain on the market for treating other types of cancer .  Roche reported sales of $4.3B for Avastin for 9 months in 2011 and is still the best selling cancer drug. Roche will perform additional clinical studies to target sub-populations that may benefit from the drug. This supports the trend toward personalized medicine and companion diagnostics. Cost of treatment is $88,000 per year.

Roche Holding ADR stock (RHBBY) was not effected up 0.88%, but off its highs as of 1:30 EST.

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