* Q3 EPS net loss $1.00
* Q3 Provenge sales $66 million
* Shares fall 23 percent
By Bill Berkrot
Nov 2 Dendreon Corp forecast only
modest sales growth for its Provenge prostate cancer vaccine
for the next several quarters, and its shares fell 23 percent.
The drug began selling in May of 2010 amid much fanfare
after it increased survival in clinical trials, but has so far
been a disappointment in part due to physician uncertainty over
reimbursement for the high-price treatment.
Dendreon, which had previously disclosed Provenge sales for
July and August, reported gross third-quarter sales of about
$66 million, slightly ahead of analysts' average expectation of
It said October Provenge sales were $26.4 million, but
estimated a likely decline in November due to the Thanksgiving
Dendreon shocked investors in August when it withdrew its
long-held bullish full-year sales forecast for the vaccine and
said it instead expected only modest quarter-over-quarter
revenue growth for the rest of the year. On Wednesday, it
extended that view well into 2012, and perhaps beyond as it did
not specifically define several quarters.
"I don't think anyone really knows where this drug is
heading," said Cowen and Co analyst Eric Schmidt, calling
positive comments by the company "hope and not confidence."
Schmidt expressed concern over the erosion in Dendreon's
gross margin for the quarter, calculating that it went from 42
percent in the previous quarter to about 10 percent.
"We didn't expect nearly as much gross margin
deterioration," he said. "Can you really make a business unless
that gross margin dramatically improves?"
Dendreon shares fell to $8.05 in extended trading after
closing at $10.46 on Nasdaq.
The Seattle-based biotechnology company posted a net loss
of $147.1 million, or $1.00 per share, compared with a loss of
$79.3 million, or 56 cents per share, a year earlier.
Dendreon said by the end of the third quarter about 470
sites had either infused Provenge or had scheduled their first
patient to receive the vaccine, which costs about $93,000 for a
course of three treatments.
The company had forecast 2011 revenue of $350 million to
$400 million with about half coming in the fourth quarter, when
all three of its production plants would be up and running and
capacity constraints would no longer be a problem.
After pulling that forecast Dendreon's stock lost about
two-thirds of its value, and the company announced the
departure of its chief operating officer and said it would cut
500 jobs in a restructuring.
Unlike traditional vaccines that prevent disease, Provenge
stimulates a patient's own immune system to attack tumor cells,
creating a new way to approach prostate cancer treatment.
In withdrawing the bullish outlook Dendreon blamed the slow
sales ramp on slow physician acceptance and uncertainty that
they would be reimbursed for the expensive treatment.
Dendreon said far more doctors were now aware of the
positive Medicare and Medicaid coverage decisions and it
believes that will translate into greater acceptance of