Dendreon scales back Provenge sales forecast; 2nd-qtr 2011 net revenue climbs to $49.6 million

USA-based biotech firm Dendreon (Nasdaq: DNDN) disappointed investors when, posting second-quarter 2011 financial results, it said that it is scaling back its previous forecasts for its new prostate cancer treatment Provenge (sipuleucel-T), causing the company’s shares to plunge 64% to $12.78 in morning trading Thursday and fuelling negative sentiment in the biotech sector, where the Nasdaq Biotechnology Index fell 4%.

At issue is the cost of Provenge, which is $93,000 per treatment regime and the US Centers for Medicare and Medicaid Services (CMS) only recently issued a final National Coverage Decision (NCD) for Provenge, Medicare contractors to cover its use for treatment of asymptomatic or minimally symptomatic metastatic castrate resistant (hormone refractory) prostate cancer (The Pharma Letter July 4). It seems that physicians have been reluctant, or unable, to fork out the cost ahead of reimbursement certainty.

"We believe the market potential for Provenge is substantial, and the primary issue affecting the dynamics of our launch is the reimbursement knowledge around Provenge. We anticipate the positive National Coverage Determination (NCD) and Q-code will have a significant impact on increased physician adoption. However, we believe this will take time, and for the remainder of 2011, the launch trajectory will reflect a more gradual adoption of Provenge as physicians gain confidence in this positive reimbursement landscape," said Mitchell Gold, president and chief executive, adding: "With the number of infusion sites increasing substantially, our principal objective continues to be ensuring all eligible patients have access to Provenge," which is the company’s only marketed product.