Dendreon to restructure after drop in cancer drug sales
Nov 12 (Reuters) - Biotechnology company Dendreon Corp said it would restructure to cut costs after reporting another quarter of weak sales of its prostate cancer vaccine, Provenge.
Net product revenue, reflecting Provenge sales, fell 13 percent to $68 million in the third quarter, short of analysts' average estimate of $76.3 million, according to Thomson Reuters I/B/E/S.
Dendreon is watched closely due to the immense potential of cancer vaccines, but Provenge sales have never really taken off due to limited manufacturing capacity and uncertainty over reimbursements.
The high cost of the vaccine, which is tailor-made for each patient, and the emergence of newer drugs have also been a deterrent.
The drugmaker said on Tuesday it will begin a restructuring program to save more than $125 million, representing a 20 percent cut in costs, and expects the benefits to kick in in the first quarter.
"...we are restructuring the company and implementing additional cost reductions to enable Dendreon to succeed as a leaner, more nimble biotechnology company focused in immuno-oncology," Chief Executive John Johnson said.
Dendreon said it will have about 820 employees at the end of the plan, down from more than 2,000 at its peak.
Net loss narrowed to $67.2 million, or 44 cents per share, in the quarter from $154.9 million, or $1.04 per share, a year earlier.
Analysts were expecting a loss of 42 cents per share.
Shares of the company were up about 2.5 percent at $2.56 in pre-market trade. They closed at $2.50 on Monday on the Nasdaq.