Seattle-based Dendreon has stumbled in early sales and marketing of its new prostate cancer drug, but the company has gone 3-for-3 in its effort to build a national network of manufacturing centers for the novel product.
Dendreon (NASDAQ: DNDN) said today it has received FDA clearance to start producing sipuleucel-T (Provenge) from a new factory in Atlanta. The new facility completes Dendreon’s national network of manufacturing plants, providing regional balance in addition to factories in New Jersey and Los Angeles. The company said it plans to scale up the new Atlanta operation “in a staged approach.”
Winning FDA clearance for all three factories has been critical to Dendreon’s growth plan all along. Dendreon won FDA approval for its new drug in April 2010, and has been working feverishly ever since to hire hundreds of people and invest hundreds of millions of dollars in a network of factories to carry out Dendreon’s unique process. Manufacturing has been especially important to Dendreon, because its drug works unlike any other on the market today, by using a genetically engineered drug to “teach” a patient’s white blood cells to recognize and fight prostate cancer.
While manufacturing has been limited in scale until now, putting a limit on Dendreon’s sales in the first year, investors only recently learned that manufacturing isn’t the only limitation holding back the company’s sales trajectory.
Earlier this month, Dendreon disclosed that physicians are reporting concerns about whether they will get reimbursed by Medicare after they prescribe a product that costs $93,000 per patient. Those concerns prompted Dendreon to withdraw its 2011 sales forecast of $350 million to $400 million, and announce plans to lay off some workers. More than $3 billion of the company’s market value was lost after the announcement.
Dendreon stock closed at $11.86 a share today, up 7 cents.
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