Research analysts are often criticized for overly promoting companies they follow despite obvious risks, but they missed the boat with an uncharacteristically conservative stance on Dendreon Corp.

Not one of seven analysts who published a rating on Dendreon's stock recommended buying it ahead of the release of positive results on the prostate cancer vaccine Provenge that more than doubled the share price on Tuesday. For a time the price more than tripled.

If you did your homework, you would have seen a great risk return given Provenge's success in earlier trials, said Sven Borho, a portfolio manager with OrbiMed Advisors that holds about 2.5 million Dendreon shares.

There's a lot of upside still, said Borho, noting that details of the pivotal late-stage study are due to be presented at a medical meeting at the end of the month, providing another potential catalyst for the shares. The company announced that the drug met its primary survival extension goal without reporting the specific data.

If there are no flaws in the scientific data, there could be an immediate 50 percent upside April 28 in Chicago, Borho said.

In addition to institutional investors who bet on Provenge, some insiders in the small biotechnology company found themselves quite a bit more financially comfortable Tuesday.

Dendreon's chief science officer, David Urdal, holds 662,599 shares and CEO Mitchell Gold owns 551,078 shares of his company, according to recent filings.

To be fair, Provenge was an incredibly risky bet given the 100 percent failure rate of prospective cancer vaccines that had previously reached late stage testing.

Should Provenge gain U.S. approval for advanced prostate cancer, which now seems increasingly likely given the survival benefit demonstrated in clinical trials, it would be the first therapeutic cancer vaccine to reach the market.

If the result would have been negative, (the share price) probably would have dropped down to cash value, which is about $1 a share, said Paul Latta, an analyst with McAdams Wright Ragen, who rates the stock hold.

It was kind of a roulette type of game here -- all or none.

Merriman Curhan Ford analyst Joe Pantginis, one of two analysts who had a sell rating on Dendreon shares, admitted to getting it wrong.

While we were wrong on our call for the outcome of the story, seeing the risk as too high, today's news is a great outcome for Dendreon, Pantginis said.

We are especially excited that the cancer immunotherapy space has finally seen a win in a Phase III study. Importantly, we can now envision the first cancer immunotherapy on the market, he added.

Yet Pantginis was not willing to go out on what now seems like a much less shaky limb and recommend buying Dendreon shares, instead joining most of his peers by bumping his rating up to neutral.

Other analysts with hold or sell ratings on Dendreon, who watched as the shares jumped from Monday's $7.30 close to as high as $22.10 before settling back to around $17, maintained their conservative stance.

Given the remaining regulatory hurdles for Provenge and in the absence of full presentation of the final data, we view Dendreon shares as fairly valued at the current level, which is a premium to the peer-group average that includes profitable companies, wrote Lazard Capital Markets analyst Joel Sendek, who has a hold rating on the shares.

However, had Sendek recommended buying Dendreon last week, his clients would have made a tidy profit at the current level.

Brean Murray Carret & Co analyst Jonathan Aschoff was unmoved by Tuesday's news and remains downright bearish on Dendreon.

We remain unconvinced until details are provided, Aschoff wrote in a research note.

We are sticking with our (sell) rating and $1 price target given the lack of details and will revisit our rating and target price on April 28, he said.

(Reporting by Bill Berkrot; additional reporting by Ransdell Pierson and Lewis Krauskopf; editing by Gerald E. McCormick)

Medicine