Dendreon can’t reap the full potential of its pioneering treatment for prostate cancer until it gets more manufacturing capacity built up, but it’s making enough progress to project how this supply-constraint story will play out over the coming year.
The Seattle-based biotech company (NASDAQ: [[ticker:DNDN]]) said today that it generated $20.2 million in the most recent quarter which ended on September 30. Demand for the drug, sipuleucel-T (Provenge) climbed each month during the quarter, and kept climbing until the company essentially maxed out its current capacity with $9.5 million in sales in October.
Dendreon’s ability to handle this manufacturing shortage is critical, as prostate cancer patients, physicians, shareholders, and many other aspiring immunotherapy companies will be hugely disappointed if it can’t solve the shortage on schedule. The company, which won FDA approval of the first-of-its-kind immune boosting therapy for prostate cancer in April, reaffirmed that it is spending $460 million in cash this year as it gets fully equipped with factories in New Jersey, Atlanta, and Los Angeles. Based on projections of demand from patients, and the company’s projected supplies, the company now expects to sell $350 million to $400 million worth of Provenge in 2011, with about half of that coming in the final three months of next year, when its factories will be operating at full tilt.
As I’ve written in this space many times, Dendreon’s drug isn’t as simple as a pill in a bottle or a liquid in a vial. It’s based on an intricate process in which blood is withdrawn from a patient, and certain immune system cells get “taught” to recognize markers of prostate cancer like a foreign invader. The cells are shipped to a Dendreon factory, where they get revved-up to fight cancer, and shipped back for re-infusion into the patient.
“It’s one thing to launch a new drug, and an entirely different thing to launch a new class of therapies,” Dendreon CEO Mitchell Gold said on a quarterly conference call today. “It’s a great responsibility we have.”
Today’s call was just the second time the company has reported on the market rollout of Provenge. The drug generated increasing sales each month—$5.2 million in July, $7.2 million in August, $7.8 million in September, and $9.5 million in October. The quarterly revenue of $20.2 million was a bit below the $24 million that Wall Street analysts had been expecting.
| Month | Provenge Sales |
| May | $340k |
| June | $2.5m |
| July | $5.2m |
| August | $7.2m |
| September | $7.8m |
| October | $9.5m |
Dendreon spent a lot of time on today’s conference call walking through the demand and supply situation it is facing. About 1,000 prescriptions have been written by doctors, although not all of them have been fulfilled, because many patients have to go on waiting lists, said Dendreon’s chief operating officer, Hans Bishop. That means some patients won’t wait, and will end up seeking another form of treatment.
Dendreon’s three factories, when they are fully licensed and operating, are supposed to be able to supply the U.S. market with $1.25 billion to $2.5 billion worth of Provenge each year. Construction of the plants is “substantially complete,” and the company is working on typical activities to validate that it can produce the drug consistently at high quality, to satisfy regulators, Bishop said. Dendreon plans to seek FDA clearance to unleash the remaining 75 percent of its future capacity in New Jersey sometime this month, meaning that after a four-month regulatory review, that plant should be ready to boost output in March.
Still, that doesn’t mean Dendreon will instantly turn on the fire hose of more Provenge to clear out its waiting list of patients. The company actually plans to ramp up
