The company: Dendreon
The drug: Provenge
The disease: Prostate cancer
Sales: $228 million in 2011
In many respects, Provenge's biggest problem was a matter of timing. When Dendreon ($DNDN) first went to the FDA looking for an historic approval of the first treatment in the U.S. to enlist the immune system to fight off cancer, the biotech had a truly revolutionary new product on its hands. But when it was forced to go back to the drawing board and do another late-stage study to prove that it worked as billed against prostate cancer, the delay shoved back the drug's launch to 2011, when the entire market was about to shift dramatically.
Dendreon didn't help matters when it priced the complex, personalized treatment at an eye-opening $93,000. As company chief Mitch Gold would report, many cancer doctors proved very sensitive to the notion that they would be on the hook until the reimbursement came through--the so-called price density issue that Dendreon used to explain its woes.
But there was much more to the story than Dendreon's defenders were willing to admit. Several physician surveys unveiled some deep-seated skepticism among specialists that the drug's ability to extend survival times was worth the cost. Then J&J's ($JNJ) Zytiga won approval for late-stage use, setting it up for a subsequent OK for the pre-chemo crowd. And more recently Medivation's ($MDVN) Xtandi came along to add to oral alternatives many physicians and patients clearly preferred.
The scars are visible for all to see. Dendreon's been forced to cut and cut again, scaling back efforts after a bitterly disappointing launch. Gold, who had predicted $350 million to $400 million in sales in 2011, was forced out after falling far short of that pace. And Gold's replacement, John Johnson, has been under fire from angry investors as he tries to right the ship.
Big new drug launches offer precious little leeway for mistakes of any kind. Failing to meet investors' expectations, though, is perhaps the greatest sin.
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