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like around $65,000 to $70,000, the company could have still made plenty of money. There would have been much less grumbling among patients, and doctors. I’m willing to wager that Medicare never would have bothered to open up that messy yearlong reimbursement review.
But even if you assume Medicare had Dendreon in its crosshairs no matter what, the reimbursement problem could have been better managed. Dendreon’s sales team had precious months this spring in which it could have explained to doctors that specific changes were coming down the pike. They certainly could have spread the word, with specific instructions, since the official decision came in writing on June 30.
Dendreon has some bright and capable people on its management team, but this series of blunders makes you wonder who’s minding the store. Even though this was one of the most anticipated cancer drug debuts in recent years, the company didn’t hire a senior vice president of sales and marketing until three weeks before the FDA approval arrived in April 2010. Many companies have a person like that on board, along with key lieutenants, at least a year before a product introduction.
The senior vice president of sales and marketing who was hired late in the game, Varun Nanda, looked like he had the perfect resume for this job, having worked on cancer drug sales and marketing at Roche’s Genentech unit. But seven months later, Nanda was gone. No official explanation was given for the departure of this executive in a critical position. Then the position—which ought to be one of the plum marketing jobs in all of biotech—remained vacant for six months. Now Dendreon said it has a new SVP of commercial on board, Robert Rosen, who Gold said has experience marketing major cancer drugs like trastuzumab (Herceptin) and sorafenib (Nexavar).
Rosen has his work cut out. Even if he and his team do a great job of explaining to doctors what the deal is with Medicare, those doctors are not taking Dendreon’s word for it, Gold said. They will want first-hand evidence, on a patient-by-patient basis, to prove that they will get reimbursed, before they get comfortable prescribing multiple patients in a row, he said.
Gold, who’s trained as a urologist, should have been able to see some of these concerns coming a mile away. When Dendreon says it didn’t really foresee how skittish urologists might be about reimbursement, it rings hollow. Equally galling, the company kept referring to how it didn’t see this coming because it only recently started moving beyond the top academic centers and pitching its drug to smaller, community-based urologists and oncologists. The billion-dollar sales projections always depended on wide adoption by community physicians. It’s hard to believe Dendreon could have been so far out of touch with the needs of their practices.
There were lots of moving parts to the Provenge launch, and Dendreon appears to have executed well on important aspects like manufacturing and supply chain logistics. But when you’re touting a company into something worth $5 billion, and hiring a staff of 2,000 people around the country, there are no excuses for major stumbles like this.
Given all the mistakes Dendreon has made, and the unique profile of its infusion-based medicine, I don’t think it means other companies are doomed to follow its lead. Just this year, Bristol-Myers Squibb successfully rolled out ipilimumab (Yervoy) and Vertex Pharmaceuticals nailed its launch with telaprevir (Incivek).
Since this is biotech, and it’s a risky business, there will always be companies like Dendreon who let big opportunities slip through their fingers. But there are also companies out there proving they can hang onto the ball, and drag a couple of tacklers into the end zone at crunch time. Let’s all hope investors can still see the difference.
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