Dendreon launched Provenge under supply constraints, telling investors that limited manufacturing capacity will only allow about 2,000 patients to be treated in the first 12 months of the launch. Moreover, Dendreon has said that the Provenge launch will be back-end loaded, meaning more patients will be treated in the first and second quarters of next year than will be treated initially in the third and fourth quarters of this year.
If you do the rough math, Dendreon should post $186 million in Provenge sales in the first 12 months (assuming a price tag of $93,000 per treatment). Wall Street takes a more short-term view, of course, which is why all eyes are on Provenge sales for the next couple of quarters.
Analysts don't seem to be easing into their Provenge sales forecasts much. Consensus revenue for the third quarter is around $29 million; for the fourth quarter it's about $50 million. If you stand around Wall Street's biotech water cooler, you'll hear grumblings about Dendreon likely to fall short of these high Provenge sales expectations.
Dendreon has not provided quarterly sales guidance, but the company is trying to temper expectations, explaining that Provenge is only being made available to a limited number of doctors and treatment centers, and even at these centers, not all eligible patients will gain access to Provenge. (Dendreon is not taking an active role in choosing patients for Provenge treatment, allowing doctors to make that call.)Like it or not, justified or not, Wall Street doesn't seem to be heeding Dendreon's warnings, placing the company in a no-win situation for the early quarters of the Provenge launch. Even if Provenge sales are on track, Wall Street appears to expect even more.
Onward. An email from Nick C: "I know you have been very bearish on Discovery Labs (DSCO) in the past. Now that the company has gotten rid of [former CEO Robert] Capetola, and appears to be working hand in hand with the FDA towards Surfaxin approval, has your opinion changed?" No. Time and time again, investors have tried to buy the bottom in Discovery, only to lose money when some setback sent the shares lower -- again.
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