Will urologists breathe new life into Dendreon sales?

Analyst says docs see up to 20% increase in Provenge use, despite oral rivals
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Is there new hope for Dendreon's prostate cancer treatment? At least one analyst thinks so--and investors quickly hopped on the bandwagon. After Sanford C. Bernstein analyst Geoffrey Porges reported that urologists expect to increase their use of Provenge by up to 20% this year, Dendreon ($DNDN) stock leapt by 21%.

It was the biggest lift for Dendreon stock in a year, Bloomberg reports, following months of investor disappointment in less-than-stellar Provenge sales. Porges' reasoning in the new investor note went something like this: Urologists who use Provenge most now are planning to expand their prescribing this year by 10% to 20%, on top of increased uptake as 2012 waned.

"We were impressed by the loyalty of active users of Provenge," Porges wrote (as quoted by Bloomberg), raising his target price on Dendreon to $10 from $7. Porges also hiked his peak sales forecast to $799 million by 2017, up from $580 million.

Once widely hailed as a certain blockbuster, Provenge faltered as it hit the market in 2011, thanks to doctors' wait-and-see attitude and initial supply constraints. Then, as Johnson & Johnson's ($JNJ) oral treatment Zytiga launched, the easier-to-use pill gained strength as Provenge limped along. By September 2011 the company had made plans to cut 500 jobs. By last July, it was ready to slash 600 more and unload one of its manufacturing plants. The launch was sufficiently disappointing to rank Provenge among the 10 worst in recent memory in a FiercePharma special report.

Dendreon has worked to lower logistical hurdles to Provenge treatment. But easing reimbursement and relieving co-pay burdens don't help if the real problem is lack of demand. If Porges' optimism is justified, then we may see demand intensify soon.

Still, Provenge faces keen competition from Zytiga, which last month won FDA approval for use early in the course of the disease--and captured an OK from European regulators late last week. Meanwhile, Medivation's new therapy Xtandi has a lot of buzz, and it's widely expected to become a key weapon in the prostate cancer arsenal.

- read the Bloomberg piece
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