Drug developer Dendreon Corp. announced that sales of its prostate-cancer therapy Provenge kept growing in the fourth quarter.

The Seattle company announced that Provenge revenue climbed to $82 million in the quarter, better than the projections of several analysts. That represented a 25% increase over sales in the previous quarter and more than triple the drug’s total from the fourth quarter of 2010.

The drug’s annual revenue total of $228 million fell far below an old forecast for $350 million to $400 million that Dendreon withdrew in August.

Provenge is used as a treatment for prostate cancer that has not responded to previous therapies. The drug is designed to train a patient’s immune system to fight the cancer. It was approved in April 2010, and it is the company’s only marketed product.

A round of treatment with Provenge costs $93,000, and Medicare conducted a long review of the drug before deciding to cover it in June.

Wedbush analyst David M. Nierengarten said the better-than-expected sales appear to be driven by an unexpectedly large jump in the number of clinics signed up to infuse Provenge. He expects a return to more moderate, quarter-to-quarter growth rates of less than 10% in the coming quarters.

“It is likely that the incremental clinics represent the ‘waiters’ who watched how their peers established reimbursement practices,” Nierengarten wrote in a research note.

William Blair analyst Y. Katherine Xu said Provenge could face tough competition if other options like Johnson & Johnson’s Zytiga receive regulatory approval.

“Despite encouraging growth in the fourth quarter and a potential upswing in early 2012, we continue to be concerned with Provenge’s eventual potential and profitability, and believe the surge in the stock today based on the fourth-quarter (announcement) is unjustified,” the analyst wrote in a research note.

Date: January 6, 2012
Source: Associated Press