Dendreon (Nasdaq: DNDN) got its first chance to court urologists this weekend at the American Urological Association meeting since its long-awaited prostate cancer therapy, Provenge, was approved. The company combined the safety data from four clinical trials to help bolster its case for using Provenge over the alternative treatment, Taxotere from sanofi-aventis (NYSE: SNY).
Unfortunately, it's all for naught -- at least for the immediate future. As much as doctors would like to prescribe Provenge for their patients, manufacturing limitations will keep demand outpacing supply for awhile.
I don't know of any other drug with blockbuster potential that has such manufacturing issues. Sales of some of Genzyme's (Nasdaq: GENZ) drugs have been supply-constrained while it dealt with a contamination issue, but the company will eventually be able to catch up and build an inventory of its drugs. That will never happen for Provenge.
You see, unlike traditional drugs such as Pfizer's (NYSE: PFE) Lipitor, or Plavix from Sanofi and Bristol-Myers Squibb (NYSE: BMY) -- the No. 1- and No. 2-selling drugs in the world -- Provenge can't be stored. There was no way for Dendreon to stock up ahead of Provenge's approval, because it's specifically made for each patient using the patient's own immune cells.
In fact, manufacturing will be fairly limited for the next year or so. For now, the company only has one manufacturing plant, which can only handle about 2,000 patients in the coming year as it works at 25% capacity. Dendreon is building out capacity at that plant and constructing two more, but the additional sites won't be approved by the FDA until the middle of next year.
Until then, presentations at medical meetings won't have much, if any, effect on sales for Provenge. Disrupting the status quo will take time; at least Dendreon can save money on promotional swag in the meantime.
