Dendreon Meets Expectations with $82M in 1st Quarter Provenge Sales

5/7/12Follow @xconomy

Seattle-based Dendreon said back in February that it expected “moderate” first quarter sales growth with its prostate cancer drug, and now it’s reporting it delivered on that projection, generating just enough sales to meet Wall Street expectations.

Dendreon (NASDAQ: DNDN) said today it generated $82 million in first quarter net sales of sipuleucel-T (Provenge). That was 6.5 percent higher than the $77 million of sales it reported in the fourth quarter. Analysts had been expecting about $82 million in first quarter, according to Mark Schoenebaum of ISI Group.

New CEO John Johnson said on a conference call with investors that the company expects to continue to see “modest” sales growth each quarter throughout 2012.

“We continue to see growth in the demand for Provenge,” Johnson said.

Dendreon stumbled in its first couple of years on the market after winning FDA approval for the first-of-its-kind immune boosting treatment for cancer. The company has worked to boost its manufacturing capacity and assure physicians they can get timely reimbursement for a product that costs $93,000 per patient.

Dendreon lost more than two-thirds of its value last year when it delivered $213 million in full-year sales, after projecting $350 million to $400 million. Now, just as Dendreon is seeking to get some momentum back with new management, it is facing emerging competition from Johnson & Johnson’s abiraterone (Zytiga) and potentially another drug on the way from Medivation.

Joe DePinto, Dendreon's EVP of commercial operations

New commercial head Joe DePinto, in his first conference call with analysts, talked about some of the new hires he has made to help make the most of the new drug. DePinto also discussed the company’s preparations for big upcoming medical meetings, and sought to manage expectations. “We continue to face challenges,” DePinto said. “It will take time and continued education, especially for those unfamiliar with immunotherapy.”

Demand for Provenge is gaining the fastest among urologists, who now account for 28 percent of the drug’s prescriptions, compared with 72 percent for oncologists. While sales through major academic institutions remains “steady,” the company is seeing growth among smaller, community-based oncology practices, DePinto said.

The whole enterprise is still losing considerable amounts of money. The quarterly net loss was $103 million, and Dendreon said it burned through about $58 million of its cash reserves in the first three months of the year. The costs of producing Provenge are still around 70 percent of sales. The company is working to get that number down to 50 percent, and eventually as low as 20-30 percent once it fully takes advantage of automation and large economies of scale, chief financial officer Greg Schiffman said.

Dendreon said it still has $559 million left in cash reserves, and while it didn’t say when it expects to reach cash-flow break-even, it does expect to reach that goal in the U.S. with the existing cash reserves it has in the bank, Schiffman said.

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