Dendreon Scouts for Next Manufacturing Plant, Probably Far From Salmon and Evergreens

7/22/09Follow @xconomy

Dendreon takes pride in being a Seattle-based company, and CEO Mitchell Gold likes to say he envisions building it into the Northwest’s next biotech powerhouse, like Immunex in the 1990s. But compared to the rest of the country, Seattle just doesn’t have that many people ill with prostate cancer. So it’s a safe bet he will look a few thousand miles away, in the southeastern U.S., when Dendreon moves to build a second factory for the company’s immune-boosting drug for prostate cancer.

The first inkling that Dendreon (NASDAQ: DNDN) has its eyes on the south broke last week in the Atlanta Business Chronicle, which reported that Dendreon is considering building an $80 million manufacturing facility in that city that might create 300 jobs. The company didn’t comment for the story, and the paper didn’t cite its sources.

The report may be unconfirmed, but it is plausible, based on what Dendreon itself has had to say in the past. The company already has its first manufacturing plant for sipuleucel-T (Provenge) in Morris Plains, NJ, which, not coincidentally, is smack in the middle of the biggest concentration of prostate cancer patients in the U.S., according to this slide that Dendreon prepared for its investors several years ago. Because of the nature of Dendreon’s manufacturing process, in which it is important to be close to patients, then it almost has to look in the southeastern U.S., based on this company-produced map, and this report on geographic distribution of prostate cancer incidence in the U.S. created by the Centers for Disease Control and Prevention.

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The Dendreon map in particular, as you can see, shows a tight concentration of prostate cancer drug sales in the New York/New Jersey corridor, the retirement communities of south Florida, and in the Upper Midwest population centers of greater Chicago and Detroit. Inside that geographic triangle in the east, you have one of the world’s busiest airports at Atlanta’s Hartsfield International, and you have Memphis, TN, home of FedEx. Greater Los Angeles is the only fairly big prostate cancer sales center West of the Mississippi, according to the company.

Dendreon chose not to comment for this story, although company spokesman Jennifer Williams said questions about the company’s manufacturing plans will be addressed at a Dendreon analyst summit being planned for September. The company raised $221 million from investors after it presented clinical trial results in April showing Provenge helped men with terminal prostate cancer live longer. And Dendreon has made clear it will use the money for manufacturing and marketing the drug.

Why does location matter to Dendreon in this globalized economy? It’s because … Next Page »

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