Dendreon Prostate Cancer Drug Proposed in Medicare Coverage

Dendreon's Provenge
A handout photograph shows cell separation during the manufacturing process of Dendreon Corp.'s Provenge vaccine for prostate cancer. Source: Dendreon Corp. via Bloomberg

Dendreon Corp.’s prostate cancer drug Provenge should be covered by the U.S. government for use in older men, regulators said.

The $93,000 treatment regimen is “reasonable and necessary” for men with advanced, castrate-resistant prostate tumors who have minimal or no symptoms of the disease, the Centers for Medicare & Medicaid Services said today. The proposal matches the approved prescribing information and suggests that doctors may even expand use in some cases, said Michael Yee, an analyst at RBC Capital Markets in San Francisco.

The decision is critical for Seattle-based Dendreon as three-quarters of the men approved for Provenge are eligible for Medicare because they are at least 65 years old. Investors’ skepticism that Dendreon wouldn’t win reimbursement or be able to satisfy demand for the drug has pushed the shares below the traded price before Provenge was cleared for sale on April 29.

“This is a positive decision memo that clearly supports reimbursement for Provenge,” Yee said in an e-mail. It also leaves “the door open to the local carriers to even consider on a case-by-case basis, other possible off-label non-covered uses as well.”

Dendreon rose 61 cents, or 1.7 percent, to $36.15 at 5:17 p.m. New York time in extended trading on the Nasdaq Stock Market. The shares earlier closed down 34 cents, or 1 percent, to $35.54. Dendreon has dropped 36 percent from a peak of $55.43 on May 3.

$2 Billion Potential

Medicare coverage will help Provenge generate $2.3 billion in sales in 2014, according to the average estimate of four analysts surveyed by Bloomberg.

The Baltimore agency that regulates Medicare coverage began its review of Provenge last June after regional contractors voiced concerns about potential use beyond the approved patient population. The agency will seek comment on its proposal before issuing a final version by June 30. While the 15 local plans currently are paying for the drug, supplies have been limited. Dendreon aims to open new plants this year.

The American Cancer Society estimated that 217,730 U.S. men would be diagnosed with prostate cancer last year and 32,050 men would die of the disease. Symptoms typically start when patients have less than a year to live. Of more than 1 million men with the disease, about 70,000 qualify for Provenge, according to Robyn Karnauskas, an analyst at Deutsche Bank Securities in New York. Demand is the “key controversy,” she said in an e-mail.

Four More Months

Studies supporting Provenge approval showed the drug helped men with prostate cancer live a median of 4.1 months longer.

Medicare would give regional contractors “flexibility to determine local coverage without the need to reconsider” a national coverage decision if future studies show more benefits with Provenge than now supported by the prescribing information, according to the proposal.

Provenge is the first medicine that trains the body’s immune system to attack cancer cells as it would a virus. The therapy involves extracting white blood cells from a patient, mixing them with vaccine components and delivering the combination as an infusion. Treatment lasts one month with three doses, each given two weeks apart.

Outside advisers to Medicare said in November that they were confident that Provenge significantly improved survival in men with advanced tumors. The 10-member panel rated their confidence in the survival benefits a 3.6, on average, on a 1 to 5 scale with 5 being the most confident.

No cure exists for advanced prostate cancer that has spread outside the prostate gland. Patients often are given hormone therapy or chemotherapy drugs such as Paris-based Sanofi-Aventis SA’s Taxotere or Jevtana. Those drugs improved survival by 2.4 months in studies and are linked to higher rates of side effects and longer treatment regimens than with Provenge.

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