Dendreon Profits Shrink Despite Product Revenue Gain
Dendreon today said it finished the fourth quarter of 2012 with a net loss that continued to widen despite an 11% jump in net product revenue, as the troubled prostate cancer drug developer continues to struggle with reversing its red ink caused by slower-than-expected sales of its flagship drug Provenge® (sipuleucel-T).
For the final three months of last year, Dendreon’s net loss grew 1.5% over Q4 2011, to $38.7 million on total revenues of about $85.5 million. That number includes a one-time $3.8 million boost to the company's chargebacks reserve due to a change in estimate. Despite the jump in net product revenue, the company’s total revenue plunged about 58% year-to-year, from $202.1 million in the fourth quarter of 2011, hurt by the near-disappearance of royalty revenue.
For all of 2012, Dendreon finished with a net loss of $393.6 million or $2.65 per share, 4.7% worse than the previous year’s net loss of $337.8 million or $2.31 per share. Total revenue slumped 16.5%, however, to $325.5 million.
Despite the numbers, Dendreon said it was encouraged by its progress in adding physician and clinical practice “community” accounts, and in its strategic restructuring launched last summer by John H. Johnson, the company’s chairman, president and CEO.
During the fourth quarter of 2012, community accounts represented 71% of total sales, up from 58% in Q4 2011, paced by a 25% overall quarter-over-quarter increase in community urology accounts and a 4% quarter-over-quarter rise in community oncology accounts. Denderon also said it added 61 net new accounts in Q4, bringing its total number of infusing accounts to 802.
The company expects these numbers to grow further in 2013 through a previously announced direct-to-consumer advertising campaign. Dendreon will spend $5 million each quarter starting early in Q2 toward a national campaign targeted to key markets and intended to address what it calls the “significant need” for patient education and awareness of Provenge. The company previewed its first commercial during its earnings conference call.
Another priority, Dendreon said, will be expanding its clinical data, with the apparent aim of expanding use of Provenge. The company said it is “actively evaluating” partnering strategies for European expansion, while continuing to enroll patients in the European Union open-label study of the prostate cancer drug. A European regulatory decision is expected in mid-2013.
The company also said it will continue to mine data presented previously at the American Society of Clinical Oncology Genitourinary Cancers Symposium, with the goal of developing investigational uses of Provenge, in combination with or sequenced with other drugs.
Dendreon also said it expects improvement in its cost of goods sold, which is on track to dip below 50% of net product revenue in the beginning of Q3 2013—by which time restructuring-related financial benefits are expected to kick in.
"As we work to drive the top line, we continue to reduce our cost of goods sold and streamline our cost position, and expect to begin to see net benefits of these actions as early as the first half of 2013," Johnson said in a statement.