Dendreon to Cut 15% of Jobs as Provenge Sales Disappoint
Dendreon Corp. (DNDN) plans to cut 150 jobs, or about 15 percent of its workforce, to trim operating expenses after sales of its prostate-cancer drug Provenge missed analysts’ estimates.
Dendreon will take a $7.5 million charge related to severance this quarter and next, the Seattle-based company said in a regulatory filing today. The reductions will help save about $125 million in operating expenses, with cost of goods sold being reduced by about $30 million.
The drugmaker is cutting costs as sales of Provenge, approved in 2010, fail to meet expectations. The drug, Dendreon’s only marketed product, generated third-quarter revenue of $68 million, the company reported today, missing the $75 million average estimate of analysts. That’s a 13 percent decline from a year earlier. Dendreon said in early August that the medicine’s revenue wouldn’t increase this year as forecast.
“Despite the restructuring to save cash and runway, we believe the negative sales trajectory will put pressure on the stock today,” ISI Group analyst Mark Schoenebaum wrote in a note to clients today.
Dendreon said in July 2012 that it would cut more than 600 jobs and reduce costs by $150 million as it sought to reach profitability.
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