Dendreon Corp, maker of Provenge, is cutting 150 jobs, having posted disappointing sales of the prostate cancer immunotherapy.
The announcement came as the company noted that third-quarter revenues fell 12.8% to $68 million. The problem is that Provenge (sipuleucel-T), which is extremely expensive, has been up against more conventional but highly effective treatments that were later entrants to the prostate cancer market, ie Johnson & Johnson’s Zytiga (abiraterone) and Medivation and Astellas’ Xtandi (enzalutamide).
Dendreon has therefore decided to implement another restructuring and cost reduction plan which should generate more than $125 million in annual savings. With the latest round of job cuts (600 went last year), the company says it will have about 820 staff, "down from more than 2,000 employees at its peak." In July last year, Dendreon said it was cutting more than 600 jobs in a bid to reduce costs by $150 million.
The company will take a $7.5 million charge related to the cuts in the fourth quarter and first quarter of 2014. It added that the move will reduce the cost of goods sold by $30 million.
Tough times but chief executive John Johnson was upbeat, saying that "in October, we saw more patient enrollments than any other month this year". He claimed that the restructuring will help Dendreon "succeed as a leaner, more nimble biotechnology company".
Mr Johnson added that the plan "enables us to slow our cash burn and be better positioned to achieve profitability while continuing to make strategic investments in manufacturing automation [and] select European initiatives". Provenge was approved on this side of the Atlantic in September and the firm is in discussions with potential partners .
Dendreon is also running trials looking at the immunotherapy in combination or sequenced with Xtandi and Zytiga.