Dendreon (DNDN) fell as much as 80% in today's trading session after the company announced that it filed for Chapter 11 Bankruptcy. The company had decided this course of action because sales of Provenge fell way below Wall Street expectations. It wasn't just this sharp decline in sales that caused the company to file for bankruptcyl Provenge sales had been doing terrible since its approval by the FDA in 2010.

Provenge was the first cancer vaccine to be approved by the FDA for use in patients with prostate cancer. The stock had hit a 52 week high of $57.67 per share back in 2010 on its approval for the belief that the cancer vaccine would reach blockbuster status one day in the future, but after approval sales were never good and each year saw a continuous decline in sales of Provenge. 

The cancer vaccine Provenge deals with a new scientific approach that has been garnering huge interest over the years, known as immunotherapy. Immunotherapy is a new science where the company develops a drug or vaccine that uses the patients' own immune system to fight the disease. In the case for Dendreon's Provenge, patients' bodies were injected with modified T-cells. T-cells are what the body uses to fight off current infections, but Dendreon took T-cells out of patients and engineered them with specific antigens specifically built to target prostate cancer cells. 

The problem for Dendreon could be attributed to a few factors, one of them being that their manufacturing process was a huge burden financially. Maybe if their technology has been created in a different way with lower manufacturing costs they stood a better chance. Secondly, a lot of competition was seen from both Medivation's (MDVN) Xtandi oral prostate cancer drug and Johnson & Johnson's (JNJ) Zytiga oral prostate cancer drug. This goes to show that even if a biotechnology company makes it past all the trials and receives FDA approval it still may not succeed in the open market due too many types of risks.

We are inclined to say that investors should not attempt to invest in this stock and should probably consider selling their position in Dendreon, if appropriate for tax purposes. Right now the company is exploring strategic options to attempt to re-enter as a standalone company or completely sell all of its assets. Unless the company can change its manufacturing process for Provenge -- which we don't see happening -- then the company coming back as a stand-alone company has a slim to none chance. Keep in mind though that not all immunotherapy companies would automatically fail in the market with their compound, because it is all dependent on how the drug/vaccine is made to begin with.