) reported third quarter 2012 adjusted loss of 86 cents per
share, wider than the Zacks Consensus Estimate of a loss of 83
cents but narrower than the year-ago loss of 89 cents per
Total revenue in the reported quarter climbed 21.2% year over
year to $78 million. Revenues in the reported quarter were driven
by a rise in Provenge sales. Revenues, however, were below the
Zacks Consensus Estimate of $81 million.
Quarter in Details
Dendreon's sole marketed product is Provenge (sipuleucel-T), a
therapeutic vaccine for treating advanced prostate cancer, which
was launched in the US in May 2010.
Dendreon reported net product revenues of $78.0 million, up
27% from the comparable quarter of 2011. Product revenues were
down 2.5% sequentially.
Research & development (R&D) expenses were $18.6
million, down 8.8% year over year. The company expects R&D
expenses to be around $20 million in the next quarter. Selling,
general & administrative (SG&A) expenses for the third
quarter decreased 19.8% to $68.1 million. Dendreon expects
SG&A expenses to be around $75 million in the next
We note that in July this 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.
Management noted an improvement in the reimbursement
environment. The physicians are comfortable prescribing Provenge,
as the average time to payment for physicians remains less than
Academic medical centers' performance decreased 25% from the
last quarter. The company managed to add 54 net new accounts
during the reported quarter taking the total of infusing accounts
to 741 since its launch.
Based on Provenge's disappointing track record, we do not see
significant sales growth in the near future. Currently approved
prostate cancer treatments include
Johnson & Johnson
) Zytiga, which has been putting up an impressive performance.
Moreover, the prostate cancer market saw a new entrant this
August in the form of
) Xtandi (enzalutamide).
We remind investors that Dendreon is currently conducting six
phase III and phase II clinical trials in the advanced prostrate
cancer area. Dendreon also completed treatment of the first
patient in an open-label study of Provenge in the EU. The company
expects a decision in mid-2013.
We currently have a Neutral recommendation on Dendreon. The
stock carries a Zacks #2 Rank (Buy rating) in the short run.
The successful commercialization of Provenge is crucial for
the financial performance of Dendreon as it can drive the company
to profitability. We prefer to remain on the sidelines until we
see meaningful improvement in Provenge sales.
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