Dendreon Corp. said Thursday that it will eliminate 500 jobs, or more than a quarter of its work force, as it reduces costs to compensate for disappointing sales of its prostate cancer therapy Provenge.
Dendreon also said Chief Operating Officer Hans Bishop is leaving the company. Dendreon said the job cuts will cost it $21 million. It did not say how much money it expects to save by eliminating the jobs. As of June 30, the company said it had 1,915 employees. Bishop has been its COO since December 2009.
Dendreon also reported that sales of Provenge grew to $22 million in August, up from $19 million in July.
Provenge is Dendreon's only marketed product. It is designed to train the immune system to fight cancer. Through August, net sales were about $120.5 million. Dendreon once expected sales to reach $350 million to $400 million in 2011, with most of that revenue coming in the fourth quarter. It now expects much slower growth.
The company said sales are being hurt by concerns about government reimbursement: A round of treatment with Provenge costs $93,000, and Medicare only recently confirmed it will cover the therapy.
Dendreon said that after the job cuts, it should be able to break even with about $500 million in annual sales of Provenge. The company said it has about $600 million in cash and cash equivalents.
Shares of Dendreon fell 74 cents, or 6.3 percent, to $10.88 on Thursday, and they have declined 69.6 percent since Aug. 3. The stock rose 50 cents, or 4.6 percent, to $11.45 in aftermarket trading.