NEW YORK (Reuters) - Dendreon Corp DNDN.O shares jumped more than 17 percent on Wednesday as investors were encouraged by details of the launch of the company’s new prostate cancer vaccine Provenge and news that it was piling up favorable reimbursement notices from health plans.
Dendreon, which began selling Provenge in May, said on Tuesday that more than 500 prescriptions had been written so far and that sales rose to $5.2 million in July from $2.5 million in June.
The tiny biotechnology company also said expansion of manufacturing facilities was progressing on schedule and that several national health plans and the majority of Medicare Administrative Contractors (MACs) were on board to provide reimbursement for use of the drug to treat advanced prostate cancer.
“We believe the most important disclosure on the second quarter (conference) call was the broad Medicare coverage already available,” Leerink Swann analyst Howard Liang said in a research note.
“The current coverage is much broader than we expected based on our search of announced CMS coverage, which we already viewed positively,” Liang said, adding that the 500 prescriptions written was impressive and that sales for the rest of the year will be limited only by manufacturing capacity.
Dendreon said it still expects expansion and licensing of its New Jersey plant in early 2011 and of manufacturing facilities in Atlanta and Southern California in mid-2011. It expects to be able to supply the drug to about 2,000 patients over the first 12 months.
Provenge in April received U.S. approval for advanced prostate cancer, making it the first therapeutic vaccine that actually treats cancer, rather than preventing a disease like traditional vaccines.
But Dendreon shares, which soared to above $57 immediately after the approval, had tumbled since over concerns about reimbursement and the company’s ability to provide an adequate supply of the drug.
Dendreon shares rose $5.90, or 17.4 percent, to $39.73 in late-morning trading on Nasdaq.
Reporting by Bill Berkrot; editing by John Wallace