Tuesday, May 3, 2011

Dendreon On Plan for Q1, full 2011

Yesterday Dendreon held its analyst conference call and released its Q1 2011 results. The key take away is that everything is going according to plan. For a company that spent years in the wilderness wondering if they would ever get FDA approval of Provenge active immunotherapy for prostate cancer, making and staying on plan seems to be an obsession.

Dendreon is a long way from profitability as it ramps up its Provenge system. The GAAP net loss for the quarter was $111.8 million, or $0.77 per share on revenue of $28 million.

Provenge is a process in which a prostate cancer patient's blood is activated to get the immune system to attack the cancer. Some blood is withdrawn at a clinic, flown to the New Jersey manufacturing facility, treated at a workstation, and then flown back to be infused in the patient. The initial launch was done with just 12 workstations. In Q1 the FDA approved an additional 36 workstations for New Jersey, but the ramp up did not come until near the end of the quarter. In April, however, more of the machines were working, so the revenue run rate grew to $15 million for the month. On average in Q2 Dendreon expects to run 24 machines.

The new machines can take on a higher flow of patients, which in turn means allowing more doctors and clinics to provide the therapy. Two additional manufacturing facilities, near Los Angeles and Atlanta, hope to be approved by the FDA this summer and fall.

Guidance remains that for full 2011 revenue will run $350 to $400 million. Half that will come in Q4, if workstations in all 3 facilities are available. My read on that is not that $200 million per quarter is the top run rate. All machines will not be online at the beginning of Q4 and their will be room for higher run rates as the machines are made more efficient and run multiple shifts per day.

Apparently men with (the appropriate stage of) prostate cancer want to try Provenge, which has few side effects.

Global expansion will take years, but Dendreon is already spending money to get ready for a European launch. A global trial of Provenge will also get underway this year.

See my Dendreon Analyst Call for Q1 2011 notes more detail.

See also: Dendreon

And keep diversified!

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