Dendreon to Cut 15% of Jobs as Provenge Sales DisappointMeg Tirrell
Dendreon Corp. 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 today in a regulatory filing. 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.
“This marks the third consecutive top-line miss for the company in 2013, so we think few investors were expecting much of a turnaround story at this point,” Chris Raymond, an analyst with Robert W. Baird, wrote in a research note. “While the workforce reduction was probably well anticipated, savings from past restructuring efforts took longer to realize than anticipated.”
Dendreon rose 3.2 percent to $2.58 at the close in New York. The shares have fallen 51 percent this year.
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.
In October, Bloomberg News reported Dendreon is working with JPMorgan Chase & Co. to find a buyer. The company declined to comment at the time.
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