Updated with stock price, conference call comments.

SEATTLE ( TheStreet) -- Dendreon ( DNDN) reported second quarter Provenge sales of $2.8 million, the first financial measure of the prostate cancer therapy's commercial launch since it gained U.S. approval in late April.

On average, analysts were expecting Provenge revenue of about $4 million in the quarter, so the prostate cancer therapy's performance fell short of consensus. The black-or-white, win-or-lose nature of Wall Street earnings reports all but requires such a definitive statement.

Yet the Provenge launch isn't typical since Dendreon can't make enough to satisfy patient demand. The company long ago told investors that limited manufacturing capacity would only allow about 2,000 patients to be treated in the first 12 months of the launch.

As a signal that demand for Provenge is strong, the company said sales totaled $5.2 million in July and doctors wrote 500 Provenge prescriptions in the first three months of the drug's launch. Five hundred patients have not yet been treated with Provenge, but the number represents a proxy for future demand and revenue.

The Provenge outlook helped boost Dendreon shares 4% to $35.30 in Tuesday's after-market trading session. Prior to the earnings release, Dendreon closed flat at $33.83.

The U.S. Food and Drug Administration approved Provenge on April 29. Provenge is the first cancer drug approved that works by activating a patient's own immune system to fight the disease. Under the FDA approval, Dendreon markets Provenge as a treatment for men with advanced prostate cancer that has grown resistant to standard hormone treatment.

Despite the supply constraints, investors have been watching Provenge's commercial launch very closely to see how insurance companies react to the drug's $93,000 price tag. Wall Street is also judging Dendreon's ability to manufacture and deliver on time a cancer drug that must be customized for each patient.

On Tuesday's call, Dendreon said 14 of the 15 regional Medicare carriers have communicated in some way their intent to reimburse Provenge. Private insurance carriers are also providing reimbursement. Dendreon shares took a hit recently when the U.S. government agency that oversees the Medicare program announced plans to initiates a national coverage assessment for Provenge.

Dendreon also reiterated that expansion of the three Provenge manufacturing facilities are on track to bring supply up to full capacity in the middle of 2011.

Dendreon launched Provenge in May so the company reported less than a quarter's worth of sales Tuesday. Expectations, however, only ramp up from here. At present, consensus Provenge sales are $23 million in the current quarter and $44 million in the fourth quarter. Next year, Wall Street is looking for Provenge sales topping $360 million.

Also Tuesday, Dendreon reported a net loss of $142.6 million, or $1.04 a share, below with Wall Street's consensus forecast.

-- Reported by Adam Feuerstein in Boston.

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Adam Feuerstein writes regularly for TheStreet.com. In keeping with TSC's editorial policy, he doesn't own or short individual stocks, although he owns stock in TheStreet.com. He also doesn't invest in hedge funds or other private investment partnerships. Feuerstein appreciates your feedback; click here to send him an email.

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