Short supply of Provenge constrains Dendreon's ($DNDN) Q3 sales

Dendreon's much-watched cancer vaccine Provenge delivered some good news and bad news to the company's third-quarter earnings release. The bad news first--the drug didn't bring in as much money as analysts had expected for Q3. Sales amounted to $20.2 million for the first full quarter Provenge has been on the market, some $3.6 million less than analysts estimated, as Dendreon struggled to supply patients who've been prescribed the drug so far.

Those supply problems are well known; Dendreon doesn't expect to be able to distribute nearly enough Provenge to satisfy demand until its manufacturing facilities come fully on-line late next year. Indeed, doctors have written more than 1,000 scrips for the treatment, so the sales so far have only dented the waiting lists at clinics across the country.

The good news? Supplies have already ticked upward since the quarter ended, with sales amounting to $9.5 million for October, or about 100 patients' worth. And although production won't quite reach that level this month or next, Dendreon is on track to boost production in March--when additional capacity at its New Jersey plant comes on line--and again midyear or so, when facilities in Atlanta and Los Angeles are set to start turning out product.

Altogether, the company estimates sales of $350 million to $400 million for 2011, with much of that coming in the fourth quarter when production is running on all cylinders. And those estimates are close to analysts' expectations, which come in at $401 million.

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