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What: Shares of oncology-focused biotech company Dendreon (NAS: DNDN) vaulted higher by as much as 32% after reporting third-quarter earnings results.
So what: For the quarter, Dendreon noted a 27% increase in sales of its late-stage prostate cancer treatment, Provenge, to $77.9 million. Dendreon also announced that revenue from community oncologists is leveling off, which is good news. In spite of large one-time costs associated with its restructuring that resulted in a wider loss than expected, it did reduce expenses by 20% and expects to save $150 million annually once its job cuts and restructuring is complete.
Now what: Instead of running out of the gate, Provenge continues to limp. The biggest obstacle remains the treatment's hefty $93,000 price tag, as well as its numerous competitors, including Johnson & Johnson's (NYS: JNJ) Zytiga and Sanofi's (NYS: SNY) Jevtana (which are both approved in Europe too), as well as the newly FDA-approved Xtandi from Medivation (NAS: MDVN) . In order for Dendreon to head higher, it's going to need to gain European approval for Provenge and it'll need more favorable actions from insurers like Aetna (NYS: AET) , which expanded its coverage of Provenge last month. The road is tough, but I feel Dendreon will eventually be successful.
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The article Why Dendreon Shares Soared originally appeared on Fool.com.Fool contributor Sean Williams has no material interest in any companies mentioned in this article. You can follow him on CAPS under the screen name TMFUltraLong, track every pick he makes under the screen name TrackUltraLong, and check him out on Twitter, where he goes by the handle @TMFUltraLong. The Motley Fool owns shares of Dendreon and Johnson & Johnson. Motley Fool newsletter services have recommended buying shares of, and buying calls on, Johnson & Johnson. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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