Drug Maker Dendreon files for bankruptcy as cancer vaccine disappoints

Reuters ^ | 11/10/2014 | NATALIE GROVER

[SeekAndFind]

Dendreon Corp filed for Chapter 11 bankruptcy protection after sales of the world's first cancer vaccine fell short of expectations and left the company deep in debt.

More than two-thirds of the company's market value was wiped out in early trading on Monday.

Seattle-based Dendreon said it had agreed terms of a financial restructuring with certain bond holders that may involve a standalone recapitalization or the sale of the company or its assets.

After its approval by U.S. regulators in 2010, hopes were high that Provenge, Dendreon's only drug on the market, would become a blockbuster.

But adoption of the drug, an injection to reprogram the immune system to attack advanced prostate cancer cells, was hindered by its hefty price tag and uncertainty over insurance coverage.

The high cost of manufacturing also hurt margins, while Xtandi, jointly marketed by Medivation Inc and Astellas Pharma Inc, and Johnson & Johnson's Zytiga - both orally administered - emerged as competitors.

"The business is fundamentally unprofitable so, without a change to efficiencies in the manufacturing process, it's really difficult to see them coming back as a standalone company," said Wedbush Securities analyst David Nierengarten.

Dendreon's shares fell as much as 74.5 percent to 24 cents on Monday, a far cry from their peak of $57.67 in April 2010, after Provenge won U.S. approval.

The announcement, said Nierengarten, is a cautionary tale for other developers of autologous cell therapies - therapies derived from a person's own cells - which must keep manufacturing costs under control.

[outofsalt]

I was an early investor in DNDN and didn’t sell on their first FDA ad. comm. rode it up and back down when the FDA asked for more data. That was a gut punch.

I held for two years and made a killing on approval. By that point I had learned to take profits. I hope they find a buyer to keep Provenge available. Immunotherapy will be huge someday.

[struwwelpeter]

Some guys in my support group rave about it, but after some research I found that Provenge / Sipuleucel-T doesn't stop progression of the disease or improve quality of life, and costs $93,000 for each treatment.

For a life expectancy on average 4 months longer than placebo.

[cicero2k]

As an 11 year survivor, I was thinking Provenge would be on my horizon. Perhaps not. It looked like it had substantially more than 4 months benefit if it was started before initial PSA was too high.

Praying for continuing remission.

[Graybeard58]

Several years back, I invested $250 in a British pharmaceutical co. Over the next 5 years and several bassackward splits, my stock was worth less than $10. I told them to close my account. They wrote back and said there was a $10 fee for that. I ignored it but they closed my account anyway.

Yep, I lost a few quid. (Whatever a quid is.

[Tired of Taxes]

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