DNDN

Dendreon Corporation (DNDN)

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Dendreon Corp. (DNDN)

Q4 2011 Earnings Call

February 27, 2012 09:00 am ET

Executives

John H. Johnson – President and Chief Executive Officer

Greg Schiffman – Executive Vice President and Chief Financial Officer

Mark Frolich M.D. – Executive Vice President and Chief Medical Officer

Katherine Stueland – Vice President, Corporate Communications and Investor Relations

Analysts

Rachel McMinn – Bank of America Merrill Lynch

Ying Huang, Ph.D. – Barclays Capital

Geoffrey Porges – Bernstein

George Farmer, Ph.D. – Canaccord Adams

Mara Goldstein – Cantor Fitzgerald

Salveen J. Richter – Collins Stewart

Lee Kalowski – Credit Suisse

Robyn Karnauskas, Ph.D. – Deutsche Bank

Sapna Srivastava – Goldman Sachs & Co.

Mark Schoenebaum – ISI

Cory Kasimov – J.P. Morgan

Ryan Martins – Lazard Capital

Howard Liang, Ph.D. – Leerink Swann

Michael J. Yee – RBC Capital Markets Corp.

Ren Benjamin, Ph.D. – Rodman & Renshaw

Marko Kozul, M.D. – ThinkEquity LLC

Katherine Xu – William Blair

David Nierengarten – Wedbush Securities

David Miller – Biotech Stock Research

Brian Hong – Citigroup

Presentation

Operator

Good afternoon, ladies and gentlemen, and welcome to the fourth quarter and 2011 year-end Dendreon earnings conference call. (Operator instructions) Later we will conduct a question and answer session and instructions on how to participate will be given at that time. (Operator instructions)

As a reminder, today’s conference call is being recorded. Now I would like to turn the conference over to your host, Katherine Stueland. Please go ahead.

Katherine Stueland

Thank you, and good morning, everyone. Joining me today is Mr. John Johnson, President and CEO, Mr. Greg Schiffman, Executive Vice President and Chief Financial Officer, and Dr. Mark Frolich, Executive Vice President and Chief Medical Officer.

Before we begin, I’d like to remind you that during this call we will be making forward-looking statements that are subject to risks and uncertainties that may cause actual results to differ from the results discussed in the forward-looking statements. Reference to these risks and uncertainties is made in today’s press release and they are disclosed in detail in our periodic and current event filings with the U.S. Securities and Exchange Commission.

Now, with that, I will turn the call over to John.

John Johnson

Thank you, Katherine, and thank you all for joining us today. It has now been 27 days since I took the helm at Dendreon and begun the transition with Mitch. Since then, I have spent time meeting with many of our employees at each of our sites across the country, and just as important, I had the opportunity to spend four days with customers at ASCO GU and was impressed with the positive feedback I received from them around the long term potential of PROVENGE.

Based on this experience, I’m encouraged with the potential of PROVENGE to become a foundation of care for men with advanced prostate cancer. While it’s not easy to introduce an entirely new treatment paradigm or an entirely new market, we have made important progress towards establishing PROVENGE as a foundation of care.

What is resonating with physicians are all the unique aspects of PROVENGE – the meaningful survival benefit, the tolerable safety profile, the short duration of therapy and a distinct mechanism of action that sets PROVENGE apart from other therapies, yet at the same time, allows for the use of multiple therapies with these patients. This is particularly important as they are being confronted with an increasing number of treatment options. PROVENGE is being well positioned to be the foundation of care for these men.

It is also fair to say that we’re just beginning to see the benefits of an improved reimbursement environment. Although we know that some customers still have some challenges, especially in the verification of benefits phase, consistent with the past few months, we expect that new customers that we bring online will continue to demonstrate a slow uptake in PROVENGE use as they need a few positive reimbursement experiences before they can steadily increase utilization.

Given all these factors, the single most important area of focus for us right now is new patient enrollments, which includes deeper penetration in existing accounts and positioning PROVENGE appropriately. As I said when I first took the helm, I will be laser-focused on three areas.

Number one, we plan to expand the use of PROVENGE among physicians both in the US and globally, we have clear plans in place for the commercialization of PROVENGE here in the states, and with our European application now validated, we need to begin to enter that market. Number two, we need to execute on our plans to reduce the cost of goods.

Greg will give you an update on those efforts today, but suffice it to say we have a comprehensive effort underway to address this and this is one of my top priorities. And while these two priorities are near-term imperatives, we also need to appropriately advance our pipeline. We need to take the ACI platform and find ways to treat other cancers. I plan to spend some time with Mark and our team assessing how we can maximize these opportunities.

As you’ll hear from Mark, we’re building a pipeline of data for PROVENGE including recent date presented at ASCO GU as well as upcoming medical meetings. Based upon the above priorities, I’ve worked with our executive team to restructure organization to optimize how we execute against these plans. I’m flattening the organization to increase focus in speed decision-making and we will no longer have a chief operating officer.

As of today, the head of commercial operations and the head of manufacturing and technical operations will now report directly to me. This will provide a seat at the table for these functions, which are responsible for our top two priorities and will help us continue to be laser-focused on our execution against these plans.

Looking at the fourth quarter of 2011, we reported net product revenue of approximately $77 million and full year net revenues from PROVENGE of approximately $214 million. As we indicated in January, our December numbers were higher than expected and we believe our customers accelerated some January business into December, probably to the tune of $2 million to $3 million.

As I took a closer look at the fourth quarter, I believe this is a result of certain end-of-the-year factors such as patient deductibles and a desire by customers to have patients treated prior to the January updates in some of the health plans, and also a desire by our patients to have their treatment completed by the holidays. This resulted in the pull through of some of our January sales into December through tighter scheduling of infusions.

Read the rest of this transcript for free on seekingalpha.com