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What: Shares of Dendreon (NASDAQ: DNDN) -- developer of the Food and Drug Administration-approved immunotherapy treatment Provenge to treat castration-resistant prostate cancer -- sank like a stone, losing as much as 17% after reporting disappointing first-quarter results.

So what: For the quarter, revenue for Provenge actually fell 18% year-over-year to $67.6 million despite the company's aggressive advertising campaign, missing the Street's estimates of $80 million in sales. Net loss clocked in at $0.48 per share, which was right in line with estimates. Dendreon's CEO, John Johnson, blamed the revenue shortfall on his company's difficulty in gaining insurance approval for the pricey treatment, and increased competition, which included Medivation's Xtandi getting a recommendation for approval to treat advanced prostate cancer from the Committee for Medicinal Products for Human Use in Europe last month. Dendreon's remaining cash balance fell to $337.3 million.

Now what: Dendreon really needs to attack this from two fronts at once. Without question, if Dendreon has any hope of righting this ship, it'll need to get Provenge approved in Europe. Approval there would likely double sales within the first two years. Second, it needs to slow the bleeding in the U.S. The company's restructuring should demonstrate noticeable expense savings in the second half of this year, but it's going to need to work with insurers to comfort physicians who are afraid of not being reimbursed after prescribing Provenge. It was an ugly quarter indeed, but I haven't given up on Dendreon just yet.

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