"We believe that the fourth quarter may be our strongest quarter of the year," said John Johnson, Dendreon's (NASDAQ: DNDN ) chairman, CEO, and president.
Where have we heard the fourth-quarter-comeback plan before? Oh yes, from Johnson's predecessor who issued 2011 revenue guidance of $350 million to $400 million, with half of that coming in the fourth quarter. The plan didn't go so well.
Sales of Provenge, Dendreon's prostate cancer treatment, fell from $81.6 million in the fourth quarter to $67.6 million in the first quarter of the year. The company had warned that there would be some headwinds in the first quarter, but investors weren't expecting such gale force winds.
The largest impact to sales came from competition from new prostate cancer drugs Johnson & Johnson's (NYSE: JNJ ) Zytiga and Astellas Pharma and Medivation's (NASDAQ: MDVN ) Xtandi. In December, Zytiga was approved for use in patients who haven't received chemotherapy, the same patients that Provenge is approved to treat. Xtandi is still only approved as a second-line treatment after chemotherapy, but is listed as an earlier treatment in the National Comprehensive Cancer Network Compendium, the oncologist's bible for off-label treatment that insurers often use to make coverage decisions.
Both drugs are taken orally, while Provenge has a complex process of taking immune cells from a patient, training them to attack the cancer, and then infusing them back into the patient. For smaller offices, it's much easier to hand patients a prescription than to arrange the Provenge process for three separate treatments. Johnson & Johnson and Astellas are also much larger and can therefore focus on those smaller treatment centers better than Dendreon.
In addition to drawing away patients, Zytiga and Xtandi are also siphoning off resources from foundations that offer co-pay assistance, making it harder for patients to get help paying for Provenge.
Management said it's hoping to grow Provenge sales year over year and guided for second-quarter sales in the mid-$70 million range. To hit that 2013 goal, it'll need to have sales of about $180 million in the second half of the year. That's not as bad as predicting that level of sales in a single quarter like it did in 2011, but it's still a pretty tall order.
Call me skeptical.
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