) recently announced preliminary results for the fourth quarter
Fourth quarter 2012 Preliminary Results
Dendreon expects to generate net product revenues of around
$85.5 million, including approximately $3.8 million as favorable
adjustments to the company's charge backs reserve for a change in
estimate. Excluding this adjustment, Dendreon expects revenues to
be around $81.6 million which represents sequential growth of
Dendreon experienced strong growth in community accounts.
Dendreon recorded 25% and 4% overall sequential growth in
community urology and community oncology accounts, respectively.
Community accounts accounted for 71% of total sales compared to
58% in the year ago period.
The company added 61 net new accounts for Provenge during the
quarter, which means the total number of infusing accounts is
We remind investors that the company sold its immunotherapy
manufacturing facility (IMF) to
Novartis Pharmaceuticals Corporation
) for $43 million in cash last month.
In July 2012, Dendreon announced a restructuring plan for 12
months. It was during that time the company decided to close down
its Morris Plains unit. The company decided to operate through
its Union City, GA and Seal Beach, CA facilities, which have a
manufacturing capacity of approximately $1 billion of Provenge
and can be doubled with the implementation of automation.
We believe Dendreon's strategic restructuring plan may help
the company to swing to profitability. Dendreon's growth is
dependent on its prostate cancer drug Provenge. Hence, the
successful commercialization of Provenge is crucial for the
financial performance of Dendreon.
While Provenge's fourth quarter performance is encouraging, we
prefer to remain on the sidelines until we see a sustained
improvement in performance. We are also concerned about
Dendreon's high dependence on Provenge for long-term growth.
We currently have a Neutral recommendation on Dendreon. The
stock carries a Zacks #3 Rank (Hold). However, other stocks in
the pharma sector such as
) carry a Zacks #1 Rank (Strong Buy).
DENDREON CORP (DNDN): Free Stock Analysis
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