In the first three months following the FDA's approval of the revolutionary new prostate cancer vaccine Provenge, Dendreon was able to gin a mere $2.8 million in sales as it began to ramp up production. But sales are rising at a fast pace and July saw more than $5 million in new Provenge revenue as the Seattle-based company picks up the pace as it heads towards its blockbuster goal of $1 billion a year.
Analysts have been following every step Dendreon takes as it gears up production of Provenge at three different manufacturing sites around the country. A New Jersey facility will be online in early 2011 with two other manufacturing centers in Atlanta and Orange County beginning production by the middle of next year. Analysts appeared pleased to see that 500 prescriptions of the therapy--a three-course treatment program costs $93,000--puts it on course to treat 2,000 patients in its first year.
Every hint of trouble, including a review of the drug by Medicare, has ruffled analysts and roiled Dendreon's stock price, which soared to $57 on the euphoria over Provenge's approval and then swiftly plunged. On Wednesday the stock jumped 17 percent as investors registered their approval of the biotech's quarterly report, rising to close to $40 a share.
Leerink Swann's Howard Liang was glad to hear that most Medicare contractors are already covering the therapy in advance of next year's review. "The current coverage is much broader than we expected based on our search of announced CMS coverage, which we already viewed positively," he noted.
Concern over the upcoming review spurred the American Society of Clinical Oncology, which represents 28,000 oncology specialists, to send the agency a letter outlining its worry that Medicare may be on the verge of setting an unsettling precedent. Medicare is required to cover drugs approved by the FDA, says ASCO, urging the agency to issue clear statements on its reimbursement policy.