Dendreon Corp. said Wednesday that it expects only "modest" growth in sales of its prostate cancer therapy Provenge over the second half of 2011 because payers are uncertain about reimbursement for the costly treatment.
The Seattle drugmaker had forecast $350 million to $400 million in sales of Provenge, which trains the body's immune system to fight cancer. It is the company's only marketed product. Dendreon said it is withdrawing that forecast, and its shares fell 62 percent in aftermarket trading.
Dendreon said sales of Provenge totaled $49.6 million in the second quarter, or $51.4 million if discounts to federal and state programs like Medicaid are excluded. The result fell short of Wall Street estimates, as FactSet reports that analysts were expecting $57.8 million in revenue on average.
"We believe the market potential for Provenge is substantial, and the primary issue affecting the dynamics of our launch is the reimbursement knowledge around Provenge," said Dendreon President and CEO Mitchell Gold.
Provenge was approved in April 2010, and first-quarter 2011 sales totaled $28.1 million. The company previously said about half of its 2011 sales would come in the fourth quarter. That's because manufacturing capacity has been coming online, and because Medicare concluded on June 30 that it will cover Provenge.
A round of treatment with Provenge costs $93,000, and the therapy extends patients' lives by about four months on average.
Shares of Dendreon fell $22.38 to $13.46 in aftermarket trading. That put the stock on pace to open Thursday at its lowest price since April 2009. Shares have traded between $31.31 and $43.96 in the last year, and closed at $35.84 Wednesday.
The company said it lost $114.6 million, or 79 cents per share, in the second quarter. Excluding one-time items, Dendreon said it took a loss of 57 cents per share. A year ago it lost $142.6 million, or $1.04 per share. Analysts expected a loss of 70 cents per share in the latest quarter.