Sales of Dendreon Corp's prostate cancer vaccine Provenge declined in the first quarter despite efforts by the biotechnology drugs maker to shore up flagging volumes.
The company's shares fell 14 percent to $4.06 in morning trade on the Nasdaq. They touched a low of $3.95.
Dendreon is watched closely due to the immense potential of cancer vaccines, but Provenge sales have never really taken off due to physician uncertainty about reimbursement and limited manufacturing capacity.
The emergence of newer prostate cancer drugs have also squeezed the vaccine's potential. Competing drugs, such as Medivation Inc's Xtandi and Johnson & Johnson's Zytiga, have the added advantage of being easier to use.
Provenge is tailored for each individual patient and works by stimulating the immune system.
Competition and the lack of patient access were the main reasons for the decline in sales, Dendreon Chief Executive John Johnson said on a conference call, adding that competitors were mostly affecting its small and low-volume accounts.
Dendreon's vaccine costs more than $90,000 per patient and has been found to have extended the life of advanced prostate cancer patients by about 4 months in trials.
"Smaller accounts are more susceptible to competition for two reasons: first they are not yet as familiar with using a complex biologic as larger accounts and hence may be more drawn to oral therapies. Second, the larger competitors have a reach and frequency advantage in this setting," the CEO said.
The company expects to reach more patients through its direct-to-consumer marketing efforts, and said some of its smaller and low-volume accounts returned to Provenge in the second quarter after some initial trial with oral therapies.
"Currently, we are seeing an improvement in enrollments, a trend which began mid-way through the first quarter," Johnson said.
"As we leverage the power of our direct-to-consumer campaign, we are confident in our ability to grow Provenge year over year," Johnson said.
Product revenue, reflecting Provenge sales, fell 18 percent in the first quarter to $67.6 million.
However, lower operating expenses helped the company narrow its first-quarter loss.
The company's net loss for the quarter was $72.0 million, or 48 cents per share, compared with a loss of $103.9 million, or 70 cents per share, in the year-ago quarter.
Analysts on average were expecting a loss of 48 cents per share on revenue of $79.7 million, according to Thomson Reuters I/B/E/S.
(Reporting by Esha Dey in Bangalore; Editing by Sreejiraj Eluvangal)