The deal between Dendreon
The deal isn't a licensing deal for ex-U.S. sales of Dendreon's new prostate cancer treatment, Provenge, nor does it give us new insight into how Dendreon plans to handle sales outside the borders should it get an approval in Europe or elsewhere.
Instead the Dendreon-Glaxo deal revolves around the manufacturing of Provenge in the U.S., but it doesn't look like it'll alleviate any of the supply constraints currently on the drug.
Provenge is produced by taking the patients' immune cells and exposing them to an antigen that trains the cells to attack prostate cancer. The immune cells are then put back into the patient where they do their job. Glaxo is supplying the antigen part of the system.
As Dendreon ramps up its production and opens more plants, it'll obviously need larger quantities of antigen to produce Provenge. Not having to worry about where it'll get that supply (and not having to run a separate production line to make it) is a net positive. But construction of the infrastructure and the production lines is the limiting factor in taking Provenge from around $30 million per quarter in sales to production of $250 million or more per quarter.
For your average drug -- think recent approvals of Novartis'
For Dendreon, it's the exact opposite; Provenge will sell itself, but only if the company has the capacity to produce the treatment. The challenges are far from insurmountable, but until Dendreon is no longer supply constrained, investors are right to be worried about the ramp-up.
The Glaxo deal will help -- but only a little.
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