Themes: Provenge manufacturing in New Jersey
Last fall Dendreon ($DNDN) laid off 500 workers, when it first became apparent that Provenge was not the big success it was expected to be. Then, this summer, new management opted to trim another 600 staffers and contractors as it shuttered a factory in New Jersey. The company was satisfied that it had more than enough capacity to produce the complex prostate cancer vaccine, which has delivered disappointing results.
Dendreon achieved a true breakthrough when it persevered in its quest for a Provenge approval. But physicians and patients alike balked at the $93,000 price tag and limited average survival gains. Then Johnson & Johnson ($JNJ) and Medivation ($MDVN) followed up with new prostate cancer drugs of their own--getting good buzz about the relative benefits.
Once it completes the cuts, Dendreon believes that it can be profitable with $100 million in revenue per quarter from Provenge. But there's no precise timetable proposing when that could happen. In the second quarter Dendreon reported $80 million in Provenge sales, down slightly from the previous quarter. That's not the right direction.
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