(Updates with closing shares in second paragraph.)
Jan. 5 (Bloomberg) -- Dendreon Corp., maker of the prostate-cancer drug Provenge, rose the most in almost three years after saying fourth-quarter revenue for its only product more than tripled from a year earlier.
Dendreon gained 40 percent to $10.62 at the close of trading in New York, the biggest single day increase since April 2009. Fourth-quarter gross revenue was about $82 million, the Seattle-based biotechnology company said in a statement today. An average reimbursement time for physicians of less than 30 days helped sales, Dendreon said.
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.
“These results in the fourth quarter obviously exceeded our expectations, and I think it was really driven by increased physician interest in prescribing Provenge,” Mitchell Gold, Dendreon’s chief executive officer, said today in an interview.
Because the drug is the first of its kind, doctors need time to get comfortable prescribing the treatment and to understand the reimbursement system, Gold said.
“Once they do, they tend to get be able to utilize it more broadly in their practice,” he said.
“There’s a lot of exuberance today,” said Joseph Pantginis, an analyst for Roth Capital Partners in New York, in a telephone interview. “The most important thing is that people are gathering some comfort because they look like they’re on the right track with regard to reimbursement. That had been a major overhang.”
The short reimbursement period means that doctors are more likely to use the expensive treatment, Pantginis said.
Full-year gross revenue from Provenge was about $228 million, the company said.
A decision by the Centers for Medicare and Medicaid Services to cover the infusion costs associated with the use of Provenge also helped sales, the company said. The agency oversees Medicare, the U.S. health program for the elderly and disabled, and Medicaid, the plan for the poor.
Growth is coming from an increase in new accounts, said Robyn Karnauskas, an analyst with Deutsche Bank in New York, n a note to investors. Dendreon expects to add as many sites providing Provenge this year as in 2011, Karnauskas said. About 615 sites have either infused the product or have patients scheduled for their first infusion, the company said today.
“A large source of the surprise here is because they signed up more accounts than probably they, or anyone, expected,” said David Nierengarten, a San Francisco-based analyst with Wedbush Securities Inc., in an interview. “But the repeat business here is not going to sustain this kind of quarter-over-quarter growth in the future.”
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