Dendreon sued after Provenge's OK put off

A shareholder lawsuit has been filed against Seattle-based Dendreon, alleging the company misrepresented its clinical trial results and didn't provide clear information about when the U.S. Food and Drug Administration (FDA) would rule on its prostate cancer drug.

The suit claims shareholders "suffered substantial losses" when the FDA on May 8 decided to delay consideration of the drug, Provenge, until further studies are completed. Dendreon "failed to disclose" that the FDA could make a ruling on Provenge before May 15, according to the suit, which seeks class-action status.

A Dendreon spokeswoman declined comment Friday on the suit, which was filed in federal court in Seattle by Oklahoma-based law firm Federman & Sherwood.

The suit also claims that Dendreon misrepresented its late-stage clinical studies of Provenge, specifically regarding their statistical significance and whether they proved the drug's effectiveness.

In addition, the suit alleges that Dendreon CEO Mitchell Gold's sale of 202,000 shares on April 2 shows that he was aware the FDA might not approve Provenge. The sale netted Gold about $2.7 million.

It was Gold's first sale of Dendreon stock during his six years at the company, and represented about 20 percent of his stock and option holdings, a spokeswoman said at the time.

The suit could be one of many filed as a result of Dendreon's stock nose-dive, said David Miller, president of Seattle-based Biotech Stock Research.

Shares of the company were trading as high as $23.53 in early April after an advisory panel to the FDA endorsed the drug on April 29. But they plunged 65 percent — wiping out almost $1 billion in market value — after the FDA decided to delay the drug.

Dendreon's stock closed at $6.53 Friday.

Over the last month and a half, the company's trading volume reached as high as 132 million shares a day. The company has an average daily trading volume of about 29 million shares, with about 81 million shares outstanding.

Kirsten Orsini-Meinhard: 206-464-2391 or kmeinhard@seattletimes.com