Biotechnology company Dendreon (NASDAQ:DNDN) reports earnings on Monday, Feb. 27, before the market opens. In the past two months or so, Dendreon shares have approximately doubled because of what appears to be increased confidence in the Provenge commercial opportunity.
Provenge is an immunotherapy for Prostate Cancer recently approved by the FDA; but in August of 2011, Dendreon lost two-thirds of its market capitalization when it reported disappointing Provenge sales and removed financial guidance for this product.
In the subsequent quarters after the disappointing report, the company has changed its CEO and COO. The new CEO, John Johnson, was the former CEO of Imclone, which was sold to Eli Lilly (NYSE:LLY).
If the launch progress is satisfactory to investors, the stock could continue to retrace some of its losses and lift toward where it traded before Dendreon withdrew guidance, which was around the $35 mark. A large gap still remains from the August 2011 selloff in the second chart.
From a technical perspective, the stock shows good immediate-term support at $13.50 but is wedged between its 50- (yellow line) and 200-day (red line) simple moving averages. Any further positive news could propel the stock further into the still-unfilled gap dating back to last August. The 200-day moving average currently sits around $19.30, which might be a good upside target should the stock be able to clear the $15 level.
Also, it might be worth taking a look at similar earlier-stage companies for potential trading opportunities. Technically speaking, many of those smaller companies have been tending to follow what happens with Dendreon (i.e. are positively correlated to Dendreon).
Here are some names we’ll be watching for trades after Dendreon reports for potential trading opportunities: