Dendreon has made a habit of disappointing investors, and it did so again today.
The Seattle-based biotech company (NASDAQ: DNDN) said today it generated $67.6 million in first quarter sales of sipuleucel-T (Provenge), down a whopping 17.6 percent from the $82 million in sales it reported for the same period a year ago. The company, which won FDA approval for its lone marketed drug three years ago, is still reporting rivers of red ink. It reported a $72 million net loss for the first quarter.
Wall Street analysts who follow Dendreon had been expecting the company to generate about $80 million in first quarter sales, according to Mark Schoenebaum, an analyst with ISI Group. Given that CEO John Johnson has said he expects this year’s Provenge sales to exceed the $325 million it reported a year ago, that means the company needs to boost sales by about $9 million a quarter the rest of the year, Schoenebaum said in a note to clients today.
Dendreon stock fell 11 percent, to $4.22 a share, at 12:34 pm Eastern time. The company’s market valuation is now below $650 million. It was worth more than $6.7 billion three years ago when Provenge was first approved by the FDA.
The company’s woes have been well-documented, but for those unfamiliar, here’s a quick recap. Dendreon’s drug won FDA approval on a 500-patient trial that showed it could extend lives of prostate cancer patients by a median time of four months, but the company’s data has long had its skeptics in the world of oncology. The product then ran into reimbursement snags with Medicare, the most important payer for a drug that primarily is aimed at men 65 and older. The price, $93,000 per patient, caused sticker shock among many physicians and patients. And while the company had a first mover advantage for a brief time, it now faces tough competition from Johnson & Johnson’s abiraterone (Zytiga) and Medivation and Astellas Pharma’s enzalutamide (Xtandi) for the treatment of prostate cancer.
The company is under significant pressure to reverse the trend of declining sales. It burned through $92.5 million of its cash reserves in the first three months of the year, leaving it with $337.3 million in the bank at the end of March, according to its quarterly report. With a stock price in the tank, Dendreon can no longer simply raise more cash from investors at the favorable terms it was able to get. While the company has made significant layoffs to cut costs in the past year, cost-cutting wasn’t mentioned in today’s release.