Dendreon's Provenge sales disappoint once again with 17% decline

Dendreon ($DNDN) has posted another woeful set of quarterly numbers. The company's new efforts to pump up sales of its prostate cancer vaccine, Provenge, had little to show: Product revenue actually fell 18%, to $67.6 million. Management-wise, it's a good thing Dendreon took an ax to its expenses. Lower costs helped the company whittle away its losses, enough to meet analyst expectations.

Cutting costs is a stop-gap at best, though; Dendreon investors had really been hoping that sales would begin to turn around. Early this year, an analyst fueled hopes with a survey showing urologists intended to step up their Provenge prescribing, and Dendreon rolled out a new direct-to-consumer ad campaign. The first nationwide Provenge commercial aired March 8.

CEO John Johnson said he's still hopeful, himself. He cited new physician interest, with 33 new accounts added to the Provenge network, improvement reimbursement for doctors, and an increase in contacts from patients. "Currently, we are seeing an improvement in enrollments, a trend which began midway through the first quarter," Johnson said in a statement. "As we leverage the power of our DTC campaign, we are confident in our ability to grow Provenge year over year."

Investors weren't so sanguine. Dendreon shares dropped as low as $3.95, more than 15% off yesterday's close.

Dendreon has already tried various tactics to jump-start sales: It has revamped its doctor-detailing program, stepped up DTC advertising, worked with reluctant payers, and so on. It recruited Johnson to take over as CEO last year, replacing Mitchell Gold, the architect of early, too-optimistic sales forecasts.

But Provenge comes with lots of baggage: Its $93,000-per-year price; its complex manufacturing and infusion processes; its head-to-head rival, Johnson & Johnson's ($JNJ) oral treatment Zytiga, which recently won a new indication for first-line treatment in prostate cancer; and some skepticism from doctors unimpressed by its 4-month survival benefit.

Hence the cost-cutting. Dendreon said last July that it would lay off 600 workers, on top of the 500 job cuts announced the previous September. The company also sold off a New Jersey manufacturing facility, to Novartis ($NVS). The latest round of job cuts, plus off-loading the plant, were designed to save $150 million annually.

The cuts have saved the company millions already. For the first quarter, Dendreon went into the red by $72 million, or 48 cents per share, meeting analyst expectations, Reuters says. Last year, first-quarter losses amounted to $103.9 million.

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