Dendreon: 3 Areas You Must Watch

In the following video, Fool analysts David Williamson and Austin Smith discuss Dendreon and some key areas for investors to watch.

For many investors, the health-care market can be an intimidating place. David says there are a few things Dendreon investors can focus on to avoid all the noise around the company.

Dendreon is currently testing its Provenge prostate cancer treatment against two other drugmakers' treatments for the disease. Showing a clinical benefit for using Provenge first would be huge, David says. It could hush skeptics and drive sales of the drug, which, at $93,000 a treatment, costs significantly more than the other drugs.


The company is also awaiting EU approval for its drug. Analysts are skeptical about that market, and for good reason, David says. Decisions on treatment are made by state-run health-care plans, which are typically much tougher negotiators. Dendreon might be forced to offer significant discounts.

That would put additional pressure on the company's already small margins, David says.

While you can certainly make huge gains in biotech and pharmaceuticals, the best investing approach is to choose great companies and stick with them for the long term. Make sure you start 2013 with a bang and get the inside scoop on what Motley Fool superinvestor David Gardner will be buying this year. He's crushed the market in his Stock Advisor and Rule Breakers portfolios for years, and now you can take a personal tour of his flagship stock-picking service, Supernova. Just click here now for instant access.

The article Dendreon: 3 Areas You Must Watch originally appeared on Fool.com.

Austin Smith owns shares of Johnson & Johnson. David Williamson has no position in any stocks mentioned. The Motley Fool recommends Johnson & Johnson and owns shares of Dendreon and Johnson & Johnson. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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