Dendreon Crop DNDN.O said on Monday that first-quarter sales of its Provenge prostate cancer vaccine rose 6.5 percent over the prior quarter to $82 million, and that it still expects only modest sequential growth through the rest of 2012.
The company forecast second quarter sales of Provenge would grow by low single digits over first quarter sales. Its shares fell more than 11 percent. Provenge is the company's only approved product.
"The very modest quarter on quarter sales growth that they posted this quarter and that they've guided to next quarter is starting to wear a little bit thin," said Cowen and Co analyst Eric Schmidt.
"My guess is low single-digit growth for Q2 may end up being a little bit conservative, but that's not the kind of growth that's going to wow anyone," Schmidt said, adding that "they really need to do a better job of controlling costs on the current sales level."
Despite having an expensive commercial product on the market for two years, the company is still reporting quarterly losses and said that it would take time and continued physician education to gain a higher level of acceptance for Provenge.
As that process continues, however, easier to use rival products are gaining traction or moving through advanced stages of clinical testing.
Dendreon posted a first quarter net loss of $103.9 million, or 70 cents per share, compared with a loss of $112.8 million, or 78 cents per share, a year ago. Excluding items, such as severance expenses, Dendreon said it lost 59 cents per share.
"There are still some of the same questions that analysts and investors have had about where we really start to see the visibility on improved margins and profitability," said Cantor Fitzgerald analyst Mara Goldstein.
The company acknowledged a need to drive down the amount of cash it is spending as it strives to reach a breakeven point. It said it was still contemplating whether to close one of its three manufacturing plants in order to cut costs, but would not make such a decision lightly or hastily as it cost hundreds of millions of dollars to get those plants up and running.
Provenge was approved in 2010 as the first therapeutic cancer vaccine to use a patient's immune system to attack cancer. Despite its hefty $93,000 per patient price tag, revenue has been disappointing. Sales have been hurt in part due to a cumbersome manufacturing and administration process and uncertainty over reimbursement.
The company said that reimbursement of the pricey medicine has become "more consistent, reliable and fast." It said the reported time to payment was now less than 30 days.
It said it needed to work on getting physicians who had a difficult reimbursement experience early on to resume using the drug now that the payment picture has become more clear.
Dendreon said it was encouraged by growth in large community urology and oncology accounts, and that academic accounts were holding steady. It said 84 new accounts used the drug in the first quarter.
Dendreon shares fell to $10.35 in extended trading from a Nasdaq close at $11.69.
Cantor's Goldstein said she was a bit surprised by the stock sell-off. "There was no great upside in the quarter but there was no great downside, which in and of itself is a positive for this company."
(Reporting by Bill Berkrot; Editing by Gary Hill and Carol Bishopric)