Bloomberg News

Dendreon Projects ‘Modest’ Growth for Prostate Cancer Therapy

November 04, 2011

Nov. 3 (Bloomberg) -- Dendreon Corp., maker of the prostate-cancer drug Provenge, fell short of expectations for the second time in three months after saying the company expected “modest” fourth-quarter sales of the therapy.

Dendreon reported Provenge revenue rose 5.6 percent in October to $26.4 million from $25 million in September. November sales will be “slightly below” October, said Mitchell Gold, president and chief executive officer of the Seattle-based company, during a conference call yesterday with analysts.

“They do have modest growth, but that isn’t sufficient for street expectations,” said David Nierengarten, an analyst with Wedbush Securities Inc. in a telephone interview. “They’re in a race now to try to get profitable. So the more modest the growth gets, the more likely it is they are going to lose that race before they need to go find some new money.”

Provenge was approved in April 2010 as the first therapy in the U.S. that trains the body’s immune system to attack cancer cells as if they were a virus. The treatment, which costs $93,000, was cleared for patients with advanced cases of the disease after the company’s three-year effort to persuade the Food and Drug Administration to back the medicine.

Dendreon initially estimated 2011 sales may reach as high as $400 million. When doctors didn’t prescribe the medicine as quickly as expected, the company withdrew its revenue estimate in August, and in September said it would cut 25 percent of its workforce.

Shares Fall

The company’s shares declined as much as 22 percent to $8.15 yesterday in extended trading after reporting its earnings. Dendreon has declined 70 percent this year.

“I tell everyone in our company we can’t focus on our stock price, we have to focus on the most important element of what we do, which is deliver an important product to patients,” Gold said in an interview. “Commercial companies are certainly under a tremendous amount of scrutiny today.”

Dendreon reported a third-quarter net loss of $147.1 million, or $1 a share, from $79.3 million, or 56 cents, a year earlier. Net revenue more than tripled to $64.3 million and operating expenses increased 64 percent to $143.7 million, the company said in a statement.

--Editors: Andrew Pollack, Angela Zimm

-0- Nov/02/2011 23:48 GMT

To contact the reporter on this story: Ryan Flinn in San Francisco at rflinn@bloomberg.net

To contact the editor responsible for this story: Reg Gale at rgale5@bloomberg.net


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