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Originally published Friday, January 11, 2013 at 1:35 PM

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Dendreon shares jump 21 percent on analyst’s upgrade

Dendreon stock surged 21 following a rating upgrade by a Bernstein analyst who sees a brighter future for the company’s Provenge treatment.

The Associated Press

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Shares of Dendreon soared Friday following a rating upgrade by a Bernstein analyst who sees a brighter future for the company’s prostate cancer treatment, Provenge.

The stock of the Seattle biotech jumped $1.07, or 21 percent, to close Friday trading at $6.17. Dendreon shares had lost about 64 percent of their value over the past 52 weeks.

The shares surged after analyst Geoffrey Porges raised the rating on Dendreon to “Outperform” and upped his target price to $10 from $7 based on recent feedback from urologists about competing drugs.

Provenge faces increased competition from other drugs, such as Johnson & Johnson’s Zytiga, which was recently approved for pre-chemo use.

Dendreon forecast better-than-expected fourth-quarter adjusted revenue earlier this week, saying that Provenge is starting to be used more often in community oncology and urology practices.

Porges said that based on feedback from urologists in recent months, he believes Provenge is not going to disappear but will grow steadily in the near future.

The analyst has been talking to urologists to monitor the adoption of Zytiga and another competing drug, Xtandi by Medivation. Based on these conversations, Porges said that doctors expect a 10 to 20 percent increase in the frequency of Provenge use this year and further gains next year.

Dendreon has been one of the worst performing stocks in biotech for the past two years, the analyst said, languishing between $4 and $5.50 since mid-2012, compared with prior highs of $40 to $45 in 2011. Porges said the low price means there is an opportunity for upside movement when the market realizes the potential for growth.

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