Slow Provenge growth prompts Dendreon staff cull

After months of building manufacturing capacity, US biotech Dendreon has decided to slash a quarter of its workforce - with production staff bearing the brunt of the cutbacks.

The reason for the restructuring is slower-than-expected sales of its only commercial product, the advanced prostate cancer treatment Provenge (sipuleucel-T). Dendreon had previously predicted sales of $300-400 million for the immunotherapeutic in 2011, but managed just $75 million in the first six months of the year.

A total of 500 workers will be let go in order to "align with the shift in the launch trajectory and meet the company's manufacturing requirements", said Dendreon.

The company's chief operating officer Hans Bishop will also depart the company as a consequence of the restructuring, which will cost around $21 million but should achieve savings of around $120 million a year.

The FDA approved a manufacturing facility in Atlanta for Provenge last month - the third in the company's network after sites in New Jersey and Los Angeles - and Dendreon now has much more capacity than it needs.

The company says the main obstacle to Provenge sales growth has been a steeper-than -expected learning curve among physicians in the use of the therapy, which involves taking immune cells from patients, exposing them to a prostate cancer antigen in a Dendreon production facility and re-injecting them into the patient.

There has also been a lack of clarity in the reimbursement situation for Provenge, with doctors reluctant to prescribe the treatment for fear of being left out of pocket, according to Dendreon.

In June, the Centers for Medicare and Medicaid Services (CMS) issued a billing Q-code for the product which should improve confidence for prescribers, although the company said it may take some time for the impact of this to be felt.

There are early signs growth may be improving, however, with $22 million in sales booked for the month of August.

"We believe that the improved reimbursement landscape and our comprehensive plan to educate physicians, coupled with the meaningful clinical benefit that Provenge provides to patients, creates a strong market opportunity", said Mitchell Gold, Dendreon's chief executive.

Last week, Dendreon terminated a manufacturing and supply deal with GlaxoSmithKline, which had been contracted to produce and supply the antigen used in Provenge.

Phil Taylor