4 Stocks to Watch on Dendreon Earnings

by Serge Berger | February 24, 2012 9:50 am

Serge Berger is the head trader and investment strategist for The Steady Trader[1]. Sign up for his free weekly newsletter[2].

Biotechnology company Dendreon (NASDAQ:DNDN[3]) 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.

DNDN recovering 4 Stocks to Watch on Dendreon Earnings

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.

DNDN falling off cliff 4 Stocks to Watch on Dendreon Earnings

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[4]).

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:

ImmunoCellular Therapeutics

DNDN vs IMUC 300x214 4 Stocks to Watch on Dendreon Earnings
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Market Cap: $70M

Description from Yahoo! Finance

ImmunoCellular Therapeutics (NASDAQ:IMUC[5]), a development stage company, focuses on developing and commercializing therapeutics to treat cancer using the immune system. Its product candidate portfolio includes cellular immunotherapies targeting cancer and cancer stem cell antigens; peptide based immunotherapies targeting cancer stem cells; and monoclonal antibodies to diagnose and treat various cancers.

IMUC 300x270 4 Stocks to Watch on Dendreon Earnings
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Technical Analysis

The stock has been trading in a wide range since early 2010 and so far this year has made a big move to the upper end of this trading channel. Currently it is consolidating nicely, and as such, is working off its near-term overbought levels. Next big support is around the $1.50 level. On a break above the $1.90 level, the stock could accelerate and move toward $2.30 and eventually $2.60.

Agenus

DNDN vs AGEN 300x214 4 Stocks to Watch on Dendreon Earnings
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Market Cap: $65M

Description from Yahoo! Finance

Agenus (NASDAQ:AGEN[6]), a biotechnology company, engages in developing and commercializing technologies to treat cancers and infectious diseases. It offers oncophage vaccine for the treatment of adjuvant renal cell carcinoma.

AGEN 287x300 4 Stocks to Watch on Dendreon Earnings
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Technical Analysis

The stock trades both above its 200- and 50-day moving averages and is consolidating above $3. A move above $3.50 could swing the stock much higher while a close below $2 puts the stock in danger of filling at least part of the gap dating back to September 2011 (gray box).

Celldex Therapeutics

DNDN vs CLDX 300x214 4 Stocks to Watch on Dendreon Earnings
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Market Cap: $215M

Description from Yahoo! Finance

Celldex Therapeutics (NASDAQ:CLDX[7]), a biopharmaceutical company, engages in the development, manufacture and commercialization of novel therapeutics for human healthcare.  The company offers Rotarix for the treatment of rotavirus infection. Its clinical development program includes CDX-110 which is in Phase IIb clinical trial for the treatment of glioblastoma multiforme.

CLDX 287x300 4 Stocks to Watch on Dendreon Earnings
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Technical Analysis

The stock also trades nicely above its 50- and 200-day moving averages and finds next support at its 50% and 61.8% retracement levels of its latest upswing. The 61.8% retracement level also coincides with the 50-day moving average.

Galena Biopharma

DNDN vs GALE 300x214 4 Stocks to Watch on Dendreon Earnings
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Market Cap: $45M

Description from Yahoo! Finance

Galena Biopharma (NASDAQ:GALE[8]), a biotechnology company, engages in discovering, developing and commercializing innovative therapies addressing unmet medical needs using targeted bio therapeutics. The company is pursuing the development of cancer therapeutics using peptide-based immunotherapeutics, including its main product candidate, NeuVax (E75) for the treatment of various cancers.

GALE 300x270 4 Stocks to Watch on Dendreon Earnings
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Technical Analysis

The stock is making a series of higher highs and higher lows and currently is forming a bull flag that should resolve to the upside on a trade through $1.15.

As of this writing, Serge Berger did not hold a position in any of the aforementioned securities.

Endnotes:
  1. The Steady Trader: http://thesteadytrader.com/
  2. free weekly newsletter: http://thesteadytrader.com/newsletter/
  3. DNDN: http://studio-5.financialcontent.com/investplace/quote?Symbol=DNDN
  4. LLY: http://studio-5.financialcontent.com/investplace/quote?Symbol=LLY
  5. IMUC: http://studio-5.financialcontent.com/investplace/quote?Symbol=IMUC
  6. AGEN: http://studio-5.financialcontent.com/investplace/quote?Symbol=AGEN
  7. CLDX: http://studio-5.financialcontent.com/investplace/quote?Symbol=CLDX
  8. GALE: http://studio-5.financialcontent.com/investplace/quote?Symbol=GALE

Source URL: http://investorplace.com/2012/02/4-stocks-to-watch-on-dendreon-earnings-dndn-imuc-agen-cldx-gale/
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