Dendreon’s drug isn’t as simple as a pill in a bottle, and neither is telling the story about how it performs in the marketplace. But the Seattle-based biotech company offered a lot of information in a conference call today about how its groundbreaking prostate cancer drug is performing in its first few months on the market, which goes way beyond a simple sales number.
The sales, as we reported earlier today, fell short of Wall Street’s expectations. But there is important context to note here. The drug won FDA clearance for sale in the U.S. market on April 29, and began generating sales in the first week of May. The company recorded $340,000 in sales that month, as it spent most of its time training the 50 U.S. clinical sites that are equipped to prescribe this first-of-its-kind immune-boosting drug for prostate cancer. The company generated $2.45 million in sales in June, and then doubled that performance in the month of July, with $5.2 million in sales.
Dendreon repeated on today’s conference call that because of the supply constraints at its lone U.S. factory in New Jersey, it will only be able to serve about 2,000 patients in Provenge’s first 12 months on the market. Already, doctors have prescribed the product to 500 patients, and a number of the U.S. clinical sites have waiting lists for patients who want to get the drug. For a drug that costs $93,000 for a full 3-dose, one-month course of therapy, that represents as much as $46 million worth of current and potential sales in the queue.
Chief operating officer Hans Bishop, who oversees the launch, pointed out in the conference call and in a follow-up interview that three things were most important to Dendreon in the early days of the launch. It was vital for the company to win over the hearts and minds of prescribing physicians—and it took a couple major steps in that direction by getting the National Comprehensive Cancer Network to incorporate Provenge into its influential prescribing guidelines for cancer physicians, and by getting the pivotal clinical trial data published in the New England Journal of Medicine. The second important item on Bishop’s list was winning reimbursement from insurers—which was positive on the local level where it counts in the early going, but not so positive when some national uncertainty was injected into the process. And the third key was staying on schedule with the expansion of the company’s factory in New Jersey. The plant right now operates at one-fourth of its total capacity, and the remainder is on track to be ready in “early 2011,” Bishop says.
Taking those three factors together, Dendreon still says it can hit its stated goal of treating 2,000 patients in Provenge’s first 12 months. While the second-quarter sales of $2.8 million missed the $4.4 million average estimate of Wall Street analysts, Dendreon insists that most of the expected revenue, and the bulk of the expected first-year patients, should come in early 2011 when it has a bigger factory to work with.
“We are very encouraged,” Bishop says.
Here are the highlights from the call, and my follow-up conversation with Bishop.
—Dendreon stock tanked in early July
