Momentum favorite Dendreon (DNDN:NASDAQ) is surging north on news that members of Congress have ask for hearings into why the company’s Provenge drug was not approved. Volume of 10.7 million is crushing average daily volume of 2.3 million shares as we speak.
It was March 2007 when the stock surged 165% in a single day on an FDA panel’s recommendation that the drug be approved. It was May 2007, when the stock tanked from $20 to $5 – a bearish move that I can proudly say my former readers, with put options, were in line to profit from.
But given the volatile nature of Dendreon, a Congressional move could be enough to fuel near-term momentum. Some of the move may even come from the 29.62 million shares (84.5 million share float) that are short.
Rep. Dan Burton, Rep Mike Michaud, and Rep. Tim Ryan reportedly sent a letter to the House Energy and Commerce Committee Chairman John Dingel requesting the investigation into conflicts on interest and other violations against two members of the FDA team involved with Provenge.