Tomahawk, WI 8/15/2013 (Basicsmedia) – Although there are many biotechnology companies which are publicly quoted, very few of these manage to declare profits whenever they announce their financial results. As a matter of fact, it has been reported that only a mere 12% of these companies manage to show profits either on a quarterly or yearly basis. What this means is that roughly nine out of every ten companies in the biotechnology industry make losses and not profits. There are close to 241 companies in this industry, and the fact that they are not profitable, is sad for investors and top executives alike.

As from Jan 2012, this industry has encountered around 22 IPOs, which, however, seem to have been outpaced by acquisitions and bankruptcies. The reason behind this line of thought, is because there were more than 241 biotechnology companies which were publicly quoted. The fact that there are only 241 companies in this sector is a sign that perhaps, things are not going as well as might have been planned. By May 2013, only 28n companies out of the 241 reported profits, and only four companies out of these declared net income of $1 billion and above.

Why DNDN Must Be Transformed Into A Profit Making Company

The challenge facing Dendreon Corporation (NASDAQ:DNDN), is to work hard to be among the 12% which report profits whenever they release their latest quarterly financial results. Every time when a biotechnology company succeeds in declaring profits, the return on investments for its investors is huge. Some of the companies which have achieved sustained profitability within this industry and have rewarded investors massively include Celgene (NASDAQ:CELG). Another company which has great potential includes Exelixis (NASDAQ:EXEL).

If you look at the performance of Dendreon for the week ending August8, 2013 you will notice that it was listed as one of the biggest losers. It experienced a loss of around 26% in its stock price, and this is simply one indicator of how much work the company still needs to carry out in order to prove its worth to investors. The fact that investors are yet to be convinced about its profitability is something which has to be looked at very closely, and the company must demonstrate that it is working hard to address this situation.

The current level at which Dendreon shares is being traded, is considered to be the lowest in the last four years. This scenario emerged after the company stated that it expects to see a poor performance from Provenge, one of the products it had brought into the market. The future outlook for this product is quite poor, and when the market heard this report, it responded by engineering a fall in the company’s shares, which are quoted at NASDAQ. Provenge had been introduced to help prostrate cancer patients fight off this disease.

If Dendreon can successfully find a way of penetrating the European market with this product, it has a chance of reporting financial results which are not as depressing as the ones it recently published. Analysts are united in their classification of Dendreon stock as an underperformer.

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