Dendreon, Resisting Urge to Sell, Eyes Opportunity to Be Seattle’s Next Immunex

6/10/09Follow @xconomy

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by Biogen, Genzyme and others? It has already happened on a small scale with a couple of former Dendreon executives: Martin Simonetti, now the CEO of Seattle-based VLST, and Rob Hershberg, the co-founder of Seattle and San Diego-based VentiRx. “We already have a history of people leaving here and keeping Seattle a vibrant place for biotech,” Gold says. “I think that will continue. It’s a hallmark of a successful company.”

Of course, Dendreon still has a to-do list that’s a mile long before it can really call itself an established commercial success. It has no products on the market yet. Importantly, it needs to fill two large gaps on its management team—a head of sales and marketing, and a manufacturing leader—to get ready for commercialization, Gold says.

Chairman Richard Brewer acknowledged all the hard work ahead, essentially saying the positive clinical trial was just a start. The company still needs to complete all the voluminous paperwork for its amended application for FDA approval. It needs to make sure physicians and patients know how to use it. It needs to manufacture enough of this drug to meet demand, which analysts predict will exceed $1 billion in annual sales a couple years after approval. It needs a partner to help it commercialize the drug overseas. (He didn’t mention pricing, but the company will need to carefully set a high price to recoup years of R&D spending, but not set it so high that insurers balk at paying it.)

One advantage Dendreon has heading into the commercial rollout of sipuleucel-T (Provenge) is enormous public awareness. Heading into its fateful FDA advisory committee hearing in March 2007, when a panel of experts debated the safety and effectiveness of the drug, only about 30 percent of physicians that Dendreon polled were aware of the product, Gold said today. That figure climbed to more than 50 percent in the controversial aftermath, when the FDA ignored the recommendation of its panel, and forced the company to wait until it could produce more evidence that its drug works.

Now that Dendreon appears to have cleared that second bar, and its story got continued airtime on almost every major business and financial media outlet, the company has done another poll of physician awareness. An amazing 93 percent of physicians that Dendreon polled are aware of the drug now—which is hard to compare with anything I’ve ever heard for a drug that’s not even on the market yet.

The company is also in the unusual position of owning 100 percent of the U.S. commercial rights to a cancer drug that is poised for FDA approval, instead of going the usual route of selling half or more of the action to a large drugmaker with the money to take it forward in development. This has forced Dendreon to raise more investment capital through its history—more than $500 million and counting—but it also means Dendreon will be able to keep the value to itself when sales start coming in.

“There’s a giant myth in our industry that if you’re a small company, you somehow need the imprimatur of a large company stamped on your forehead which says you can actually do this, because we say you can,” Brewer said during the meeting. “I’m here to tell you that’s not true. This company can take this product all the way to the commercial stage and beyond. I’m totally convinced. I’ve done it myself before with others who were just as talented as these guys are, and this is a talented group.”

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  • Pepper

    Very thoughtful article about the man and the company. Would like to hear from others who attended the meeting.

  • Holly

    Great coverage, thank you. I was there today attending my first shareholders’ meeting, and I was impressed by the whole team, both by what they said and by what they were careful not to say. I heard nothing even hinting of antagonism or arrogance about the FDA or potential competitors–no hubris. It was smart and straight. The best part, however, may have been seeing the chief scientist’s eyes light up as he answered detailed questions after the meeting. He had the look of a man who knows his team has done good work. Very good work indeed.

  • http://www.xconomy.com/author/ltimmerman/ Luke Timmerman

    Thanks for the comments. I enjoyed getting to meet a few of the avid Dendreon readers in person this morning.

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  • Gloria

    Thanks for helping to get the real story of Dendreon out to the public.

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  • http://na Steven Antonich

    Luke,

    Nice article on Dendreon. I must have been standing right next to you…after the shareholder meeting? Were you the one taking shorthand notes? There was also an investor village get together over at the Holiday Inn, the night before. Maybe you can make it to the IV party next year? About fifty regular posters showed up. I’ve now got so much information between my ears my head hurts. LOL…I think we all might need a twelve step program if things get much more involved.

    In any event, nice article. Thanks for some great, unbiased reporting…just the facts.

    Snowball…Steven

  • http://na JW

    Luke,

    Trust all is well w/ you. I’m thinking about attending this years shareholder meeting in 2010.

    Does the DNDN have a fiduciary responsibility to disclose any bid offer to the public as well?

    John

  • http://www.xconomy.com/author/ltimmerman/ Luke Timmerman

    JW–you’d have to ask a corporate lawyer to know when rules kick in about any takeover bid being publicly disclosed. I don’t really know.

    Luke

  • http://na JW

    http://www.fido.gov.au/fido/fido.nsf/byheadline/Takeovers+info+for+shareholders?openDocument

    I found the above source and it helped me out just a little bit.

    Thank you
    JW