Updated with stock price.
SEATTLE ( TheStreet) -- Dendreon (DNDN) shares fell sharply Wednesday night after the company reported weaker-than-expected Provenge sales of $49.6 million in the second quarter and withdrew revenue guidance for the remainder of the year due to reimbursement issues.
Dendreon shares are down $21.89, or 61%, to $13.95 in after-hours trading. The stock closed the regular session at $35.84.
Provenge sales in the quarter totaled $49.6 million included a nearly $2 million reserve for chargebacks and rebates, but still fell far below Wall Street's expectations that ranged from $55 million to $60 million."We believe the market potential for Provenge is substantial, and the primary issue affecting the dynamics of our launch is the reimbursement knowledge around Provenge," said Dendreon CEO Mitch Gold, in a statement. As a result, Dendreon withdrew its previous guidance calling for 2011 Provenge sales in the range of $350 million to $400 million and now expects "modest" quarter over quarter revenue growth for the remainder of this year. To cope with lower Provenge sales, Dendreon will cut costs, including firing an undisclosed number of employees, the company said. Wall Street has paid close attention to Dendreon's commercial launch of Provenge since the first-of-its-kind prostate cancer cancer immunotherapy received FDA approval last year. But Provenge's performance is receiving even more attention today from investors wanting to see demand for Provenge take off now that Dendreon's manufacturing supply constraints are lifting. At the end of June, FDA approved a second Provenge manufacturing facility. At the same time, the government agency overseeing Medicare announced a favorable coverage decision for the drug and granted Dendreon a temporary code to speed reimbursement payments to doctors. The latter is particularly important given Provenge's $93,000 price tag. But what can only be described as a shocking turn of events, Dendreon confessed Wednesday that reimbursement concerns and issues are dragging on Provenge sales. A third Provenge manufacturing facility is under construction with FDA approval expected on August 28. Dendreon narrowed its second quarter net loss to $114.6 million, or 79 cents a share from a net loss of $142.6 million, or $1.04 a share in the June 2010 quarter. Looking further ahead, Provenge could see increased competition from other companies developing drugs on their own, including Johnson & Johnson (JNJ), Medivation (MDVN) and Exelixis (EXEL). --Written by Adam Feuerstein in Boston.
>To contact the writer of this article, click here: Adam Feuerstein. >To follow the writer on Twitter, go to http://twitter.com/adamfeuerstein. >To submit a news tip, send an email to: email@example.com.
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV