Dendreon to slash 25% of work force under restructuring plan; updates on Provenge

US biotech firm Dendreon (Nasdaq: DNDN), which last month scaled back expectations for its novel prostate cancer treatment Provenge (sipuleucel-T) - resulting in a 64% plunge for its share price (The Pharma Letter August 5), last week announced restructuring plans, overall cost reductions and an update on the drug’s sales.

Dendreon reported August gross revenues of around $22 million up 16% on July, but still a far cry from the annual peak US sales forecast of $2.25 billion for Provenge. The company says it continues to expect modest quarter-over-quarter growth as it works to educate physicians on the improved reimbursement paradigm under the Centers for Medicaid and Medicare Services (CMS) recently established National Coverage Decision (NCD) and issue of a product specific Q-code for Provenge, which costs $93,000 per treatment regime.

As of August 31, the company had cash, cash equivalents, and short and long term investments of approximately $600 million. Given the current cash balance and the reduced levels of spending following the restructuring, Dendreon expects to have sufficient cash to enable the company to achieve a cash flow break even position in the USA at an annual run rate of around $500 million in revenue.