) reported first-quarter 2013 loss (including stock-based
compensation expenses) of 37 cents per share, narrower than the
Zacks Consensus Estimate of a loss of 47 cents and the year-ago
loss of 56 cents per share. The narrower loss was attributable to
the lower operating costs incurred in the first quarter of
Quarter in Details
Total revenues in the reported quarter declined 17.6% year
over year to $67.6 million. The decrease was primarily due to
lower product sales. Revenues were well short of the Zacks
Consensus Estimate of $81 million.
Dendreon's sole marketed product Provenge (sipuleucel-T), a
therapeutic vaccine for treating advanced prostate cancer, was
launched in the US in May 2010.
Dendreon reported net product revenues of $67.6 million, down
17.6% from the comparable quarter of 2012. The sharp decline in
Provenge sales was primarily due to the entrance of Zytiga
(abiraterone acetate) in the prostate cancer market. We note that
in Dec 2012, Zytiga's label was expanded for the treatment of
metastatic castration-resistant prostate cancer (mCRPC).
Moreover, sales were impacted by the compendium listing for
Xtandi. Dendreon mentioned in its conference call that the
company is slowly recovering from its disappointing first quarter
results. The company expects its second quarter 2013 revenues to
be in the mid-$70 million range.
Dendreon's research & development (R&D) expenses in
the reported quarter were $18.4 million, up 6.4%. Selling,
general & administrative (SG&A) expenses for the first
quarter decreased 34.5% to $62.4 million.
We note that in July last year the company initiated a
restructuring plan. The company expects to reap the results of
these initiatives from the first half of 2013 and anticipates
full benefits to be realized in the third quarter of 2013.
The company expects to reduce its cost of goods sold to below
50% of total revenues in the third quarter of this year. The
company also expects a significant decrease in total expenses as
the restructuring benefits come into effect.
We believe that the successful commercialization of Provenge
is crucial for the financial performance of Dendreon. We remain
concerned about Dendreon's high dependence on Provenge for
Dendreon carries a Zacks Rank #4 (Sell). Meanwhile, other
biotech companies such as
WuXi PharmaTech Inc.
) currently look better positioned. While WuXi Pharma and
Athersys carry a Zacks Rank #1 (Strong Buy), Elan carries a Zacks
Rank #2 (Buy).
ATHERSYS INC (ATHX): Free Stock Analysis
DENDREON CORP (DNDN): Free Stock Analysis
ELAN CP PLC ADR (ELN): Free Stock Analysis
WUXI PHARMATECH (WX): Free Stock Analysis
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