Tuesday, November 2, 2010

Dendreon Corp. (NASDAQ: DNDN): Q3 Quarter Earnings Preview 2010

Dendreon Corp. (NASDAQ: DNDN) is scheduled to release its third quarter earnings on Wednesday, November 3, 2010. Analysts, on average, expect the company to report a loss of 44 cents per share on revenue of $23.83 million. In the year ago quarter, the company reported a loss of 40 cents per share on revenue of $25,000. 

Dendreon Corporation is a biotechnology company focused on the discovery, development and commercialization of therapeutics that may improve cancer treatment options for patients. The Company’s product portfolio includes active cellular immunotherapy and small molecule product candidates to treat a range of cancers. Dendreon's first product, sipuleucel-T (marketed in the U.S. as PROVENGE(R)), was approved by the U.S. Food and Drug Administration (FDA) in April 2010 and was subsequently launched by the company on May 3, 2010. Unlike traditional vaccines that prevent diseases, Provenge treats by stimulating the body's own immune system to attack cancer cells. Prostate cancer is the second most common type of cancer among men in the U.S., after skin cancer. The drug is also being tested for treatment of other types of cancer including bladder, colon, colorectal, and breast. 

In August, the company said that more than 500 prescriptions had been written so far and that sales rose to $5.2 million in July from $2.5 million in June. Dendreon also said that the majority of Medicare Administrative Contractors (MACs) were on board to provide reimbursement for use of the drug to treat advanced prostate cancer. The company expects the product to reach blockbuster sales status as it expands production capacity.

Few skeptics however point out that the $93,000 price for the three-treatment regimen is a big hurdle despite the company’s argument that when overall costs of care are accounted for, Provenge’s price is comparable to that of other available treatment options.

On Wednesday, investors would like to hear about progress on the front of expansion its New Jersey manufacturing plant. Provenge sales have been constrained by limited production capacity, an issue the company expects to resolve by the middle of next year. Early this year, Dendreon told investors that limited manufacturing capacity would only allow about 2,000 patients to be treated in the first 12 months of the launch. By the middle of 2011, Dendreon hopes to have two more factories in southern California and Georgia, as well as the New Jersey plant, operating at full tilt. That should enable the company to sell about $1.2 to $2.5 billion worth of Provenge per year.

In the preceding second-quarter, the Seattle, Washinton-based company's net loss was $142.6 million, or $1.04 per share, compared to a loss of $126.7 million, or $1.04 per share, in the year-ago period. Revenue for the quarter was $2.81 million, compared to $25 thousand in the prior year period.  Analysts, on average, expected the company to report to report a loss of 51 cents per share on revenue of $4.40 million. 

Meanwhile, the U.S. Centers for Medicare and Medicaid Services has called a meeting of advisors on November 17 to assess Dendreon's Provenge as a treatment for patients with metastatic prostate cancer.

In terms of stock performance, Dendreon shares are up nearly 33% since the beginning of the year.

Full Disclosure: None.
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