Dow Jones 8,743.31 +260.92  7:25 pm EST, Wed., August 14, 2002  NASDAQ 1,334.30 +65.02  For info, visit access.smallcapnetwork.com .  S & P 500   919.62 +35.41  To be removed, please click here .  Russell 2000 389.41 +11.65  VOLUME 02: ISSUE 56 When Unexpected Profit Strikes Investing in the biotech sector has always been volatile but for shareholders of Dendreon (DNDN) the past few weeks have been gut wrenching.  How so?  Imagine owning a company that everyone including individuals to fund managers has all but given up on.  The company's market capitalization was less than half the cash Dendreon had in the bank.  Then one day, Genentech (DNA) the most respected biotech company in the world decides that you have something worthwhile. So far nothing sounds too out of the ordinary.  Well, this is where the story gets interesting.  Dendreon's core drugs have basically been failures.  The company's prostate cancer vaccine Provenge has not shown much effectiveness in Phase III trials.  This failure is a big part of why the company was left to perish in the biotech cemetery. Then a miracle occurred when Genentech showed interest in one of Dendreon's patents and a marriage was born. The agreement concerns the development of monoclonal antibodies, small molecules and other products derived from Dendreon's Trp-p8 gene platform. Trp-p8 has so far just been a patent in Dendreon's intellectual property portfolio that has not even entered pre clinical trials.  Surely, someone at Dendreon will say they knew this patent was valuable all along but the market certainly did not price it into the company's stock. It looks like someone knew about the importance of Trp-p8 and picked some up at the $1.50 per share range around July 23rd to August 6th.  Looking at the way the stock traded prior to the formal announcement a whole lot of people did purchase Dendreon.  The stock rocketed up to $2.02 on August 7th and then to $2.90 on August 9th eventually printing at $4.25 per share after the Genentech announcement. For those of you keeping score at home that is a gain of 183% in less than a week.  In our August 3rd edition "A Safer Way To Invest In Biotech" we actually were going to include Dendreon in the list of cash rich biotechs to invest in.  Like everyone else we also gave up on the company.  So we are not going to hold any punches.  The following is a list of biotechs that have lots of cash and some potential blockbuster drugs that they may or may not know about.  Patent portfolio has always been a very popular buzz word in the biotech sector.  Reason being, the more patents a company has the higher likelihood of someone figuring out its worth something.  Notice you will just find the company name, cash to market cap ratio, and then a link to the company's website.  We suggest our readers conduct dude diligence on their own because the SmallCap Digest does not want to resemble a 100 page term paper.     Medarex (MEDX), cash $428 million/market cap $589 million, homepage Maxim Pharmaceuticals (MAXM), cash $119.9 million/market cap $68.7 million, homepage Pharmacyclics, Inc. (PCYC), cash $121 million/market cap $53.9 million, homepage Praecis Pharmaceuticals (PRCS), cash $237 million/market cap $168.3 million, homepage Corvas International (CVAS), cash $85 million/market cap $40.7 million, homepage Arena Pharmaceuticals (ARNA), cash $214 million/market cap $201.1 million, homepage   There is a start and if any of our readers out there have more to add then email us at editor@smallcapnetwork.com. D I S C L A I M E R : The SmallCap Digest is an independent electronic publication committed to providing our readers with factual information on selected  publicly traded companies. SmallCap Digest is not a registered investment advisor or broker-dealer. 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