Dendreon Falls After Medicare, Medicaid Begin Analysis of Provenge Drug
Dendreon Building
Kevin P. Casey/Bloomberg
Pedestrians walk past the Dendreon building in Seattle, Washington.
Pedestrians walk past the Dendreon building in Seattle, Washington. Photographer: Kevin P. Casey/Bloomberg
Provenge
Dendreon Corp. via Bloomberg
Cell separation process during the manufacturing of Dendreon Corp.'s Provenge vaccine for prostate cancer.
Cell separation process during the manufacturing of Dendreon Corp.'s Provenge vaccine for prostate cancer. Source: Dendreon Corp. via Bloomberg
Dendreon Corp. fell as much as 13 percent in stock trading after the U.S. agency supervising Medicare and Medicaid said it would review coverage of the company’s Provenge prostate-cancer treatment.
Dendreon declined $2.95, or 9.1 percent, to $29.38 at 10:08 a.m. in Nasdaq Stock Exchange composite trading. Earlier, the shares plunged to $28.01, for the biggest drop in two months.
The analysis by the Centers for Medicare and Medicaid Services will look at the medicine’s effectiveness in determining whether to reimburse patients, and won’t factor in the drug’s cost. The review also won’t affect existing insurance coverage for the product, priced at about $93,000 for an average course of treatment, Dendreon said yesterday in a statement.
“While we recognize keeping the faith here is difficult,” a decision not to cover Provenge is “highly unlikely,” said Christopher Raymond, an analyst with Robert W. Baird & Co., in a note to clients.
Dendreon, based in Seattle, said it will work with the U.S. agency during the review to “ensure patients with advanced prostate cancer have broad access to Provenge.” Medicare covers the elderly and disabled with federal money, while Medicaid is a federal and state program providing health insurance for the poor.
Provenge takes a new approach to treating cancer, drawing blood from the patient’s body and training the immune system to attack malignant cells. On average, the medicine helped patients live an extra four months in testing, or twice the benefit of chemotherapy, and with fewer side effects.
The shares have declined 42 percent since Provenge received U.S. regulatory approval on April 29 on concerns that Dendreon won’t have enough supply of the drug to meet demand. Dendreon can make enough Provenge to treat only about 2 percent of eligible patients until manufacturing increases in mid-2011, the company has said. Hospitals are rationing the drug and setting up waiting list for patients.
Each year, more than 27,000 men die of prostate cancer in the U.S. and about 200,000 new patients are identified, according to the American Cancer Society, based in Atlanta.
Editors: Bruce Rule, Jeffrey Tannenbaum
To contact the reporter responsible for this story: Shannon Pettypiece at spettypiece@bloomberg.net.
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