SEC Fines Analyst as Provenge Vaccine Controversy Deepens

As reported by Reuters, former hedge-fund analyst, Marie Huber, who argued that Dendreon Corp's therapeutic vaccine for prostate cancer may hasten the death of patients, has reached a settlement with U.S. securities regulators over failure to disclose her financial interests in the company.

The SEC contended that in 2010, Huber shared a draft report about Provenge with another hedge fund analyst, who then distributed via email to several hundred people, using a false name. Both analysts then purchased put option contracts for Dendreon, in an attempt to profit as Dendreon stock fell (a put becomes more valuable as the price of the underlying stock depreciates relative to the strike price).

According to the SEC, the statements made in Huber's report "were materially misleading because the Respondents were hedge fund analysts who held Dendreon put option contracts that were about to expire."

Huber, as well as her supporters, insist that her scientific analysis is sound, and the accuracy of her research was not at issue in the SEC findings.

The extended Provenge controversy started before the Dendreon vaccine was even approved, involving an allegedly tainted FDA review process and two prominent prostate cancer experts being threatened for opposing approval of the vaccine.

As pointed out in a Pharmalot discusion, "Even after Provenge became available, though, the vaccine continued to generate debate over the extent to which patients would be helped and investors would profit."

Whether or not you agree with Huber's analysis, it seems the most unfortunate issue here is that the Provenge saga has focused more on Dendreon stock prices than on the effectiveness of treatment.

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