Dendreon sees Provenge contraints over by year end
Tue Mar 1, 2011 6:48pm EST
* Q4 EPS loss $0.64 vs Street view loss of $0.49
* Sees half of 2011 forecast revenue coming in Q4
* Sees 500 infusion accounts ready to treat by year end
* Shares slip after hours (Recasts first paragraph, adds analyst, company comment, updates shares)
By Bill Berkrot
NEW YORK, March 1 (Reuters) - Dendreon Corp DNDN.O said it expects to have all three of its manufacturing plants on line and shipping its prostate cancer vaccine by the end of the year, and expressed confidence it will meet its full year revenue forecast of of $350 million to $400 million.
The company also plans to significantly expand the number of infusion accounts, or sites where patients can be treated with Provenge, throughout the year. And it is working to speed up the reimbursement timelines for its expensive product, which costs about $93,000 per patient for a course of three infusions.
Dendreon said it expects to have 225 accounts prepared to treat patients by the end of the second quarter, 450 at the start of the fourth quarter and 500 by year end, or 10 times the number at the end of 2010.
"I think the revenue projections are ambitious, like Provenge is, but they're lining up all the ducks to get there," said Mark Monane, an analyst for Needham & Co.
"The data are there and we believe the data drives physician practices. They are a biotech that's become a commercial company now," Monane said.
Provenge is the first approved cancer vaccine to treat rather than prevent the disease and has shown in clinical trials that it can extend the lives of patients with advanced prostate cancer.
But Provenge sales have been held back by supply constraints as Dendreon works to expand capacity at its New Jersey plant and gain regulatory approvals for plants in California and Georgia.
Currently it can produce only enough of the vaccine for sales of $9 million to $10 million a month, which is what it forecast for the current quarter. Dendreon said it expects about half of its 2011 revenue to come in the fourth quarter, when its manufacturing capacity will be greatly expanded.
"We are well positioned to meet our revenue guidance," Chief Executive Mitchell Gold told analysts on a conference call.
In Provenge's second full quarter on the market, Dendreon posted sales of $25 million, in line with Wall Street forecasts of $24.8 million. The company began selling the vaccine last May and now has more than 100 Provenge sales representatives, most of them only recently deployed.
The Seattle-based biotechnology company said its fourth-quarter net loss rose to $91.8 million, or 64 cents per share, compared with a net loss of $32.5 million, or 28 cents per share, a year ago. Analysts on average expected a loss of 49 cents per share, according to Thomson Reuters I/B/E/S.
Selling, general and administrative costs for the quarter jumped to $97.9 million from $36.4 million in the year-ago quarter due to expenses associated with the commercial launch of Provenge and for establishing a manufacturing infrastructure.
The company reiterated its full-year forecast for a net loss of $310 million to $350 million, but said it expects to be well positioned for solid growth in 2012.
Dendreon shares slipped to $33 in extended trading from their Nasdaq close at $33.19, which was down 1.2 percent for the day. (Reporting by Bill Berkrot and Ransdell Pierson; editing by Gerald E. McCormick, Bernard Orr)