Dendreon (NASDAQ:DNDN) released its quarterly results and gave guidance for the rest of the year after market-close yesterday. With unprofitable biotech companies like this one, there's rarely much interest in the earnings release, except for the quarterly cash-burn numbers. On that front, Dendreon used $28 million in the last three months, and it's expecting to burn through $100 million for the year -- leaving the company with something around $70 million left on the balance sheet.
So what is exciting? Dendreon has stated that it will file a Biologics License Application (BLA) with the FDA for its lead drug, Provenge, later this year.
Provenge, designed to treat the approximately 30,000 men in the U.S. with late-stage prostate cancer, has the potential to become the first cancer vaccine to get approval from the FDA. Two phase 3 trials have shown that 33% of patients taking it were alive after 36 months, while only 15% of placebo patients were alive by that point. The trial results look even better after comparing the mild side effects of Provenge to the current standard of care, Taxotere, which has all the horrendous side effects of most current cancer treatments.
With these type of trial results, Provenge could become a front-line treatment for late-stage prostate cancer. An expected course of treatment of Provenge will most likely cost more than $20,000, so it's easy to see how Provenge could eventually become a blockbuster drug worldwide.
Unfortunately, the small number of patients in the trials has raised statistical questions about Provenge, but Dendreon claims to be "confident" about its forthcoming BLA filing after consulting with former FDA statisticians about the proposed drug.
Although it can be easy to get excited about the potential here, it's important to keep in mind that the FDA can be a difficult place to get a new drug approved. Recent negative FDA decisions on drugs from companies like Rule Breaker pick Encysive Pharmaceuticals (NASDAQ:ENCY), Discovery Labs (NASDAQ:DSCO), and Elan (NYSE:ELN) have cut these companies' market caps in half (or more) overnight.
Dendreon does have a backup plan: another phase 3 trial with Provenge, which is currently enrolling 500 patients. Unfortunately, these results won't be available until 2008 at the earliest, which would mean significant diluting financings for Dendreon shareholders.
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Fool contributor Brian Lawler does own shares of Dendreon and is currently getting over a bad case of poison oak after hiking in the Smoky Mountains. Feel free to send him condolences at [email protected] .
