It's safe to say Dendreon ($DNDN) is looking for a new Provenge strategy when board member John Johnson takes over as CEO. The $93,000 prostate-cancer drug, approved to great fanfare in spring 2010, hasn't lived up to the company's expectations so far. Admittedly, those expectations were high, and outgoing CEO Mitchell Gold probably shouldn't have voiced such rosy sales projections. But the fact is the market didn't greet Provenge with unquestioning acceptance.
Instead, doctors took a show-me stance. Some weren't impressed with the survival-benefit stats. Others were reluctant to put up the cash for a $93,000 drug when Medicare officials were reviewing reimbursement. Still others objected to the complicated treatment process, which requires an upfront blood-draw for generating the individualized vaccine. Then Johnson & Johnson's ($JNJ) Zytiga pill made its debut, giving patients the option of submitting to the Provenge process or popping an oral treatment.
Plenty of challenges, then, for Johnson to address. He's experienced in the cancer market, with leadership roles at ImClone, Eli Lilly ($LLY) and J&J under his belt. His latest stint, however, has been at Savient Pharmaceuticals ($SVNT), which makes Krystexxa, a treatment for severe gout. Launched last year, Krystexxa has had its own troubles, and in some respects, those troubles are similar to Provenge's. Krystexxa is pricey, at $60,000 a year, or $2,300 per injection. It's targeted at a small group of patients with a severe form of the disease. Reimbursement delays weighed on initial sales.
So, will Johnson use some of the same tactics to address Provenge sales that he has with Krystexxa? For instance, Savient has its own co-pay assistance program for Krystexxa patients that reimburses out-of-pocket expenses up to $4,600 per patient per year. Dendreon's approach for insured patients is to refer them to independent foundations that offer co-pay help (uninsured patients who qualify can get Provenge for free). But as Forbes points out, if there's a deeper problem--an inherent lack of demand--then focusing on reimbursement and co-pays won't get Provenge very far. Still, Johnson's advent opens a new, perhaps more hopeful chapter for Dendreon.