DNDN - Sector: Healthcare---Industry: Biotechnology & Drugs

[bigdogs99999]

   Finally log in this morning, and there is DNDN in the pits, and once again (per Michael's long post of a few days ago), UBS is in the middle of it again.  Should have known and waited to buy until that charade played out.  Interesting that as the scandral who decided to downgrade, during the Q&A session during yesterday's conference call with DNDN, UBS was strangely silent, asking only:

Magnate Shoboda/UBS
Q -- Status of enrollment in 9902B study?
Tough study to enroll due to Gleason score of less than seven. Will announce when complete, but in the meantime, hope to open it up to all Gleason scores now that we are confident survivor benefit applies to all.

[fill_the_gap]

Looking good.
Large block buying coming in.
People over react to news and it presents a Buying opportunity for a day trade.

But will have to see how people react next week with the possible new time frame.

Good Luck.

-Jeff-

[Michael]

LOL the release should read:
UBS pissed off that they hadn't accumulated enough stock below $7 as they 'know' the real value is around $10.
You have to laugh at this stock game when BS downgrades like this actually impact the price, personally I think this makes it more of a buy as UBS want retail customers to sell their shares to them

absolutely agreed!  I mean man... they are stretching on this one.

"UBS cut biotech company Dendreon Corp. to reduce from buy, saying it is likely that the U.S. Food and Drug Administration will require a confirmatory trial for Provenge and thus delay the product launch to the first quarter of 2008 from the first quarter of 2007."

?

So when this doesn't happen they are just gonna say, "Oh woops, I guess we were wrong." .. no accountability.  Someone needs to take statistics on this sort of thing.

  I better not meet someone from UBS today.

hmm...noticed that the volume is light...

Lack of accountability is the key here! Maged Shenouda has a spectacular record of getting recommendations wrong:

GLFD: neutral rating on March 28 at around 2.2 it is since up 50% on a buy out offer
ARRY: buy on February at around 8.5 it is since down 15% to 7.25
DNDN: Neutral on March 15 at around 5.8 it is since up 8% to 6.27
LGNDE: Neutral on March 31 at around 6.7 it is since up 20% to 8.09

His star pick is ICOS: BUY on March 28 at around 22.5 it is since up 1.8% (Not a stellar performance especially as he had to make 23 recommendation since January to achieve this increase!!!)

His reduce recommendation on DNDN is indeed very strange:

"Importantly, from our perspective, neither trial has met statistical significance on the primary efficacy endpoint of time to disease progression," Shenouda told investors in the note, and suggested that his revised launch timeline may be optimistic if the agency requires a new trial that has to track patients' survival rates over three years.

Anybody who have followed DNDN have known for the last 6 month that the phaseIII study wouldn't support time to disease progression endpoint. The time to disase progression is a surrogate for the more important endpoint which is survival rate and here the result is statistical signifcant.

Why suddently use something everybody already knew as an excuse to downgrade the stock.....

This is yet another step up the FDA approval ladder. For each step you will see a nice increase in the PPS but you will also see shorts making all kind of tricks to limit the damage.

Be prepared for unfunded rumours, pseudo scintific interpretation of phase III results etc. etc.

[Michael]

Lack of accountability is the key here! Maged Shenouda has a spectacular record of getting recommendations wrong:

GLFD: neutral rating on March 28 at around 2.2 it is since up 50% on a buy out offer......

As always there are more to the story than what meet the eyes. So here we go:

You are probably shocked and surprised that such a distinctive analyst as Maged Shenouda could be so wrong on GLFD after all his clients missed a profit of 50%.

Well maybe they didn't at least we know that UBS didn't miss any profit!

Guilford is being bought by MGI Pharma at a premium of 55.6%. So somebody must have advised them that Guilford was worth much more than the market cap of the company. I am sure you are thinking this couldn't be UBS after all they had just given Guilford a neutral rating.

Wrong of course it was UBS. (Do you really believe that there is a wall between the analysts and the rest of the banks organization?)

If you read MGI's SEC filing of the AGREEMENT AND PLAN OF MERGER you will read:

Section 3.22 Opinion of Financial Advisor. The Board of Directors of the Company has received the opinion of UBS Securities LLC to the effect that, as of the date of such opinion, the Merger Consideration is fair from a financial point of view to the holders of Company Common Stock, a complete copy of which opinion will be made available to Parent solely for informational purposes as soon as practicable after the date of this Agreement.

Now why would UBS do something like this. Well maybe there is a clue here:

Section 3.21 Brokers and Other Advisors. No broker, investment banker, financial advisor or other person, other than UBS Securities LLC, is entitled to any broker's, finder's, financial advisor's or other similar fee or commission, or the reimbursement of expenses, in connection with the transactions contemplated by this Agreement based upon arrangements made by or on behalf of the Company or its Subsidiaries.

You will probably ask what this has to do with the downgrade of DNDN!

Hmmmm..... dig deeper and you will find.

Dendreons arranged to have UBS underwrite a stock offering which was oversubscribed. ........The plan was the company would seek FDA approval for Gleason scores of 7 and under and was negotiating in advanced talks with two potential partners. The partnership was never inked because Dendreon wanted too much of the U.S. market for itself. This was perceived as a negative by Wall Street.

So UBS was underwriter for Dendreon and they were involved in two buy-out offers. So not only do they have detailed knowledge about the company but they also know who might be interested in buying them. (somehow this story reminds me about Guilford!)

The world of analysts is interesting. I sometimes have the feeling that what interests them the least is the fundamentals of the companies. It is therefore surprising that they still are able to make investors panick selling their shares just by releasing a recommendation with a short write up when there is so much information available for the investor to make their own analysis.

Now let me make it absolutely clear that I have no proof whatsoever that anything wrong have happened in the case of UBS and Guilford or UBS and Dendreon. I just thought it might be relevant information if you want to have the full picture.

Sorry to clutter the board with all this fundamental stuff 

[stockpicker]

Michael,

GREAT GREAT call!

A-P-P-L-A-U-D[/font]

Can it get any uglier from UBS' perspective?

[Michael]

Thanks a lot Stockpicker! (nice grafix!)

My runing rate is 5 smite points per day so every applauds is appreciated. I have to run fast just to stay at the same place 

I most really have pissed off somebody on the board. Just strange they don't tell why - that at least would help me improve my writting!

Mike

[Michael]

Hmmm.... Would UBS really be involved in manipulation of stocks? We all know that Banks have a very high business ethics.

Wrong again! UBS has admitted to be lying, having criminal conduct. They have been found guilty of felony, making false statements, violated SEC regulation etc. etc. etc.

Just try to see what UBS International Inc has admitted to in their SEC disclosure:

A.  In the past ten years, have you or any advisory affiliate:
(1)  been convicted of or plead guilty or nolo contendere ("no contest") in a domestic, foreign, or military court to any felony?    YES
(2)  been charged with any felony?  YES

B.  In the past ten years, have you or any advisory affiliate:   
(1)  been convicted of or plead guilty or nolo contendere ("no contest") in a domestic, foreign, or military court to a misdemeanor involving: investments or an investment-related business, or any fraud, false statements, or omissions, wrongful taking of property, bribery, perjury, forgery, counterfeiting, extortion, or a conspiracy to commit any of these offenses? YES

C.  Has the SEC or the Commodity Futures Trading Commission (CFTC) ever: 
(1)  found you or any advisory affiliate to have made a false statement or omission?  YES  
(2)  found you or any advisory affiliate to have been involved in a violation of SEC or CFTC regulations or statutes?   YES
(3)  found you or any advisory affiliate to have been a cause of an investment-related business having its authorization to do business denied, suspended, revoked, or restricted?    NO
(4)  entered an order against you or any advisory affiliate in connection with investment-related activity?   YES
(5)  imposed a civil money penalty on you or any advisory affiliate, or ordered you or any advisory affiliate to cease and desist from any activity? YES

D.  Has any other federal regulatory agency, any state regulatory agency, or any foreign financial regulatory authority:   
(1)  ever found you or any advisory affiliate to have made a false statement or omission, or been dishonest, unfair, or unethical?    YES
(2)  ever found you or any advisory affiliate to have been involved in a violation of investment-related regulations or statutes?    YES
(3)  ever found you or any advisory affiliate to have been a cause of an investment-related business having its authorization to do business denied, suspended, revoked, or restricted?    NO
(4)  in the past ten years, entered an order against you or any advisory affiliate in connection with an investment-related activity?    YES
(5)  ever denied, suspended, or revoked your or any advisory affiliate's registration or license, or otherwise prevented you or any advisory affiliate, by order, from associating with an investment-related business or restricted your or any advisory affiliate's activity? YES

The list goes on. You can read the whole disclosure here:
http://adviserinfo.sec.gov/IAPD/Content/ViewForm/ADV/Sections/iapd_AdvDisciplinarySection.aspx

The latest case against UBS is from December when they received notice from SEC notifying them that the SEC staff is considering recommending that the SEC bring civil enforcement proceedings against UBS for possible violations of federal securities laws arising from work performed by UBS's Investment Bank for HealthSouth Corp., a US healthcare company.

And this is the kind of company that people listen to when they make investments decision. For Christ sake I wouldn't even invite them to a dinner party - they might run off with the silverware!

[cumulina]

HI, Michael!

If I was a bank or investment comp. I'd make sure to be on good terms with you 

When you dig, you DIG DEEP!

Maybe one could use UBS' recommandations inverted?
Buy, when they advocate sell. 
Sell, when they advocate buy. 

I'll take a look at these guys too.

Thanks for your hard work!

APPLAUSE!

Cheers. 

[stocky]

Again mike, applaud for deep trench analysis.

[AussieTrader]

Great info Michael. A real interesting read thanks.

[Melf Elf]

I don't know what effect the UBS call will have, but those of you who are long DNDN might enjoy this story. 

In late April of this year, the Broker/Dealer Index (XBD) had hit the downside target off a Double Top, so I was looking for signs of a bottom.   The P/E ratios in the brokers looked very good.  Even E-Trade (ET) had a P/E of only 12.  Very short-term, it looked like the index was trying to Double Bottom for some kind of rally.

On May 2, UBS came out and downgraded three of the big brokers.  The XBD tanked that day on the call, and it fell to a new low for 2005.  Here's how the Broker/Dealers did after the UBS call:

[eagerlearner]

michel, applaud! 
enojoyed your posts, as always!

Thanks and have a good weekend folks!

[Michael]

Thanks for the support. That really gives confidence for next week's epic battle between good and evil 

It will be an interesting week for DNDN. Even though UBS certainly can move shares the long-term effect seem to wear out as time pass (as Melf Elf showed nicely!)

I personally believe UBS has a hidden agenda but we will see. Compared to some of you tech guys I really go into the details when I commit my money, which is the result of a lot of blood, sweat and tears (except the money i have earned following David's recommendation off course ). So when somebody says that I am wrong I want to understand why. Sometimes they are right, sometimes fundamentals change and the immediate ruthless response is to sell the shares. But sometimes they are wrong and in the case of DNDN everything including the latest announcement support the long case which has repeatedly been put forward in this thread. So why sell?

For now we can look forward to the detailed information about the phase III results. There might be some volatility on Monday in both directions but I don't expect the stock to make a real move to the upside before we have more information.

I have used today to look into Broadband, VoIP and IPTV. One of the esteemed members of 3SOF emailed some interesting picks today but I haven't made my mind up yet!

Let me finish by showing a nice picture of Maged Shenouda. Before he started his career as analyst he was a sales representative for Abbott Labs. I assume he is using his sales experience to earn money from his recommendations. I can already hear the sales pitch: I have a very good company for you and I can sell it cheap if you decide fast. Buy now and I can offer you 50% discount 

[David Randolph]

Spectacular research by Michael on DNDN, thanks a lot ! 

This downgrade from UBS was so strange that I feel we should go back to some basics about stock speculation:

1) The market is always right
2) The market always knows better
3) Nothing new ever occurs in the market
4) If the stock is up on strong volume usually it is because good news is coming, not bad.
5) If bad news comes on the middle of a strong uptrend probably those bad news are not  relevant and a speculator should buy on bad news in an uptrend.

In light of this downgrade from UBS, and reading Michael's analysis on the subject, I will make a change in my trading plan for DNDN:

1) Sell if the stock ever closes below the ascending blue trendline.
2) Sell with a profit at the close of a gap around $10.26

My reasoning for «upgrading» DNDN is that if someone has the motivation to take it down, and lose reputation because of that wrong call, it probably is because there's a lot of money to be made on the long side 

[David Randolph]

Don't tell me this guy was right on DNDN  :



I don't think so, but the market knows better. The market will tell us who was right. I see support coming only at around $5.40 on DNDN, so I'm ready to take another 10% punch with a smile on my face 

I will maintain my trading plan whatever happens:

1) Sell with a small loss if we ever get a close below the blue ascending trendline
2) Sell with a big profit at the close of a gap, at $10.26