Following yesterday's disclosure that Dendreon had fallen short of its revenue targets with its new drug Provenge, and that it was backing away from its previous sales forecasts for $350-$400 M for the year with no replacement guidance, the market dropped its stock price by 60% in after market trading. That's nearly $2.5 B in market cap folks if it translates to today.
The failure in revenue uptake is not being blamed on supply limitations. Rather, Dendreon said that physicians were being conservative in prescribing the $93,000 per patient drug due to concerns about reimbursement. This is despite the fact that Medicare has agreed to reimburse and set up a more streamlined procedure to process payments. The reluctance may be tha the $93,000 price tag hits very quickly -- in a month of treatment -- compared to other expensive cancer drugs that spread costs out more over the course of a year.
"We see this as a shift of the growth curve to the right" said Gold. And apparently a shift of the stock price towards the X-axis. See Xconomy.
Posted by Bruce Lehr Aug 4th 2011.