Dendreon Falls After Projecting ‘Modest’ Growth for Provenge Medicine
Dendreon Corp. (DNDN), maker of the prostate-cancer drug Provenge, plunged 37 percent after the company said it expected “modest” fourth-quarter sales of the therapy.
Dendreon fell $3.91 to $6.55 at 4 p.m., the biggest drop since Aug. 4. Provenge revenue rose 5.6 percent in October to $26.4 million, from a month earlier, and November’s sales will be “slightly below” October’s, Mitchell Gold, chief executive officer of the Seattle-based company, said on a conference call yesterday.
“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.
The company’s shares had declined 70 percent this year before today.
“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.
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