Dendreon Heads Across the Pond

Dendreon (Nasdaq: DNDN  ) is headed overseas.

The good news is that the company won't have to run additional clinical trials to get its prostate cancer drug, Provenge, approved in Europe. The bad news is that it's going to be a long boat ride.

The biggest obstacle for gaining EU approval? Provenge is an individualized treatment that requires shipping the patient's cells back and forth between the doctor's office and the manufacturing plant, where the cells are programmed to stimulate the immune system to attack the prostate cancer. The U.S. manufacturing plants are too far away from Europe, so Dendreon needs a European manufacturing facility.

Dendreon plans to build one on its own, but to get the ball rolling, the company is hiring a contract manufacturer to produce Provenge. Once the facility is set up, Dendreon can apply to the European Medicines Agency late this year or early next year, which would put an approval in the EU sometime in the first half of 2013.

And then, of course, there's the question of whether anyone will buy it. Provenge is a costly medicine -- $93,000 for the three-course treatment -- and European countries haven't been all that open to paying the high costs we see in the U.S. Pfizer (NYSE: PFE  ) , for instance, had trouble getting its oncology drug Sutent past the U.K.'s National Institute for Health and Clinical Excellence (NICE). The company eventually had to agree to pay for the first round of treatment in order to get the drug approved for reimbursement.

On the conference call, Dendreon seemed upbeat, pointing out that the low side effects of Provenge help justify the high costs. The reimbursement agencies will look at total cost of the drug plus the cost to treat any side effects in deciding whether to cover the drug. Management compared Provenge to drugs such as Roche's Avastin, GlaxoSmithKline's (NYSE: GSK  ) Tykerb, and Novartis' (NYSE: NVS  ) Afinitor, which have European prices that are similar to the price they fetch in the U.S.

Now that the EU strategy is set -- and years away from generating revenue -- investors can get back to obsessing over U.S. sales.

Interested in keeping track of Dendreon as it launches in Europe and ramps up stateside? Click here to add it to My Watchlist, which will help you keep track of all our Foolish analysis on Dendreon.

Pfizer is a Motley Fool Inside Value recommendation. GlaxoSmithKline and Novartis are Motley Fool Global Gains picks. The Fool owns shares of and has written covered calls on GlaxoSmithKline. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.

Fool contributor Brian Orelli, Ph.D., doesn't own shares of any company mentioned in this article. The Fool has a disclosure policy.


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  • Report this Comment On January 07, 2011, at 9:49 PM, thecannula wrote:

    The Safety data was also very important today- Provenge is well tolerated without a significant increase in adverse events.

    Also, the fact that Dendreon estimates all 3 US plants will be up and running by year end is key.

    Finally, the IND for NEUVENGE for bladder cancer, a condition that is highly sensitive to immune modulation, was announced- it was filed in December- The randomized Phase 2 study will evaluate the safety and efficacy of DN24-02 in patients with HER2+ invasive transitional cell carcinoma (TCC) of the bladder following cystectomy."

    All in all a REALLY good day for Dendreon!

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