UPDATE 3-US FDA sees no public hearing for Dendreon vaccine

* No advisory meeting planned, FDA spokeswoman says

* Dendreon shares close up 2.3 percent (Updates shares; adds background on previous panel meeting)

WASHINGTON, March 2 (Reuters) - The U.S. Food and Drug Administration is not planning to seek advice from its outside advisers over Dendreon Corp's DNDN.O experimental prostate cancer vaccine, fueling investor speculation about the product and sending company shares higher.

“There is not going to be an advisory committee meeting,” FDA spokeswoman Shelly Burgess said on Tuesday.

The vaccine, Provenge, would be the first cancer vaccine aimed at treating a condition, rather than preventing a disease as traditional vaccines do.

The closely watched product could be a blockbuster for the biotech company, which has said it would ramp up production to handle an expected $1.2 billion to $2.5 billion of annual sales by late 2011.

Prostate cancer is diagnosed in one of every six American men and is the second-leading cause of cancer death among men.

Dendreon’s shares had fallen earlier on Tuesday over speculation that Provenge, also known chemically as sipuleucel-T, might have to face public scrutiny at an FDA advisory panel, but the shares later recovered to trade up as much as 8.5 percent.

The FDA often seeks advice on whether to approve products from its panels of outside experts and usually, but not always, follows their recommendations.

An FDA advisory panel previously met in May 2007 said Dendreon provided favorable efficacy and safety results from an earlier study of Provenge. The FDA declined to approve the product, however, until data from the Impact trial confirmed earlier trends.

Roth Capital Partners analyst Joseph Pantginis, in a note issued before the FDA said it would not convene a panel, said he expected Provenge to win the agency’s clearance. He pointed to positive results released in April from a study called Impact.

“We believe Provenge will be approved on or about” May 1, the FDA’s target date for a decision, Pantginis said. He reiterated his “buy” rating on Dendreon shares and a $50 price target.

Last April, data from the 512-patient Impact study showed the vaccine improved three-year survival of men with advanced prostate cancer by 38 percent compared with a placebo.

Dendreon shares gained 2.3 percent, or 75 cents, to close at $33.26 on Nasdaq. (Reporting by Susan Heavey and Lisa Richwine; Additional reporting by Esha Dey in Bangalore; Editing by Robert MacMillan, Steve Orlofsky, Gary Hill)