Dendreon’s Provenge Launch Story Enters Second Chapter, With Today’s Earnings Call
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about how the drug may be used for patients beyond the strict group of people outlined in the FDA-approved prescribing information.
The drug is approved for patients who have prostate cancer that has spread, and no longer responds to standard hormone-blocking therapies. Many researchers, even though this hasn’t been proven and it’s extremely difficult to prove in a clinical trial, believe an immunotherapy approach like Dendreon’s is likely to be even more effective in patients with earlier stages of disease. That could get expensive in a hurry at $93,000 a patient, but it’s a disease that kills about 30,000 men in the U.S., and is diagnosed in many more. About 217,000 patients are diagnosed with prostate cancer every year, according to the American Cancer Society.
David Miller, the president of Biotech Stock Research in Seattle and a longtime Dendreon bull, has said it’s unlikely that Medicare will crack down too hard on reimbursement. Essentially, while it’s politically difficult for an agency to shell out billions of tax dollars for a single drug made by one company, it’s even more politically controversial to deny dying constituents access to a potentially life-saving therapy in the name of saving some money.
While there’s much fretting on the Internet about what Medicare will do, fewer people realize that Dendreon said back in August that nine of the 15 regional Medicare units had published reimbursement guidelines, and five more had given e-mail or verbal assurance to doctors in their regions that it was coming soon. Dendreon disclosed that rate of progress in its last quarterly earnings call.
“Our sense is there is an 80 percent chance nothing will come of the whole [Medicare coverage analysis] except coverage of Provenge on label, and a higher hurdle (clinical trials instead of compendia listings) for off-label reimbursement,” Miller wrote in a note to clients Oct. 8.
Manufacturing may be an even bigger deal. Dendreon has said it plans to spend $460 million of its cash and investments this year on the Provenge rollout, including $200 million on capital spending for its new two factories in Georgia and southern California. By the middle of 2011, Dendreon hopes to have those facilities up and running, and to be operating its current facility in New Jersey at full capacity. All three of those plants, operating at full tilt, should be able to provide the U.S. market with between $1.2 billion to $2.5 billion worth of Provenge supplies, the company has said.
Any slippage in the timelines for getting those factories operational would certainly send fearful shivers down the spines of Dendreon lovers, and a shot of excitement for the Dendreon haters. It may still be too early for the company to say much with clarity about how the factory preparations are going. But it will be an absolute key over the next couple quarters if Dendreon is going to deliver on the high hopes that so many people have for it.