Dendreon downsizes due to drop in vaccine sales
Written by Alyssa Clark
This company has been on the horizon of the medical field for some time now, with its revolutionary research in the potential of cancer vaccinations; however, the sales for Provenge has yet to take off because of its manufacturing capacity and inconsistency with reimbursements. The leading biotechnology company Dendreon Corp recently stated that it is going to reduce costs by $125 million and cut 150 jobs in a recent attempt at restricting— in hopes of finally raising sales of its pioneer cancer vaccination.
Provenge sales fell 13 percent this past third quarter, which affected the net product revenue dramatically, dropping the total down to $68 million in September of this year.
"It appears clearly that competition continues to affect the sales of Provenge ..." Wedbush Securities Inc analyst David Nierengarten said.
The current restructuring is not radical enough to address concerns about weak sales, he said, adding that the current restructuring effort is just "too little and too late."
Costs are high and the use of Provenge’s competition is at an all-time-high, with drugs like Medivation Inc.’s Xtandi, and Johnson & Johnson’s Zytiga standing as the go-to’s for those in this related field.
Dendreon was forced to close its New Jersey manufacturing facility in a desperate restructuring movement last July, and cut 600 jobs along with it in hopes of saving $150 million annually. The company has yet to comment on whether there will be a need to close any more of its plants in the upcoming quarter. The most recent plans for restructuring and cost-saving is said to lower expenses by at least 20 percent, and will have around 820 employees after restructuring (down more than 2,000 from its peak employment time).
The cost for the restricting with be around $7.5 million in the current quarter, and first quarter alone. Dendreon’s net loss will be narrowed to $67.2 million which will equate to about 44 cents per share. Whereas a year ago, share prices remained strong at $1.04 per share and a net total of $154.9 million annually.
About the Author
Alyssa Clark is the Editor of Healthcare Global