Dendreon Edges Past Street Expectations With Third Quarter Provenge Sales, Shares Still Fall
[Update: 2:55 pm PT] Seattle-based Dendreon deeply disappointed investors with its last quarterly financial report, but today it reported sales of its prostate cancer drug continued to grow in the third quarter, slightly exceeding Wall Street forecasts. Shares fell about 20 percent in after-hours trading, though, as the company said it expects to see “modest” quarterly sales growth in the foreseeable future.
Dendreon (NASDAQ: DNDN) said today it generated $64.3 million in net product sales in the quarter that ended Sept. 30, which beat the $59.5 million average estimate from analysts, according to Bloomberg. The company still reported a net loss of $147.1 million in the third quarter as it continued to spend big bucks on the sales push for sipuleucel-T (Provenge), its lone marketed product.
“We have made important progress this quarter with the launch of Provenge that is foundational for the long-term success of Dendreon,” said CEO Mitch Gold, in a statement.
The company lost more than two-thirds of its market valuation back in August when it said second-quarter sales fell short of expectations, and when it withdrew its highly-publicized full-year sales forecast of $350 million to $400 million. Dendreon has been tripped up this year by uncertainty among physicians about whether they will get reimbursed for prescribing the company’s product, which costs $93,000 per patient. After getting blindsided by the reimbursement concern—which many analysts thought had been fully laid to rest by a national policy determination by Medicare—forecasts have generally backed off into the $200 million range for the full year 2011. Dendreon responded by cutting 500 jobs from its payroll, largely in manufacturing, to control costs until it can assure more doctors to start prescribing the product with confidence they will get timely reimbursements.
Through the first nine months of the year, Dendreon said it has generated $139.5 million in net revenues.
Dendreon’s product is a first-of-its-kind treatment that stimulates a patient’s own immune system to fight cancer cells as if they were an invading virus. The product was first cleared for sale in the U.S. by the FDA in April 2010.
[Update 2:55 pm PT] Dendreon shares initially climbed in after-hours trading after the press release, but then fell about 20 percent following the company’s conference call with analysts. Gold said analysts should continue to expect “modest” quarter-over-quarter sales growth, and cautioned that there could be dips in sales for the infusion-based medicine around the upcoming holidays.
Dendreon also said it burned through $106 million of cash in the most recent quarter, and that it had $568 million in cash and investments left in the bank at the end of September.