Dendreon to cut more jobs as cancer vaccine sales drop again

Reuters

Nov 12 (Reuters) - Biotechnology company Dendreon Corp said it would reduce annual costs by $125 million andcut about 150 jobs in a new round of restructuring, as itstruggles to boost sales of its flagship cancer vaccine.

The company is watched closely due to the immense potentialof cancer vaccines, but sales of Provenge have never reallytaken off because of limited manufacturing capacity anduncertainty over reimbursements.

Dendreon's net product revenue, reflecting Provenge sales,fell 13 percent to $68 million in the third quarter ended Sept.30.

"It appears clearly that competition continues to affect thesales of Provenge ..." Wedbush Securities Inc analyst DavidNierengarten said.

The current restructuring is not radical enough to addressconcerns about weak sales, he said, adding that the currentrestructuring effort is just "too little and too late."

High cost and the emergence of easier-to-use rival drugssuch as Medivation Inc's Xtandi and Johnson & Johnson's Zytiga have hurt sales of Provenge.

Dendreon had cut 600 jobs and closed its New Jerseymanufacturing facility in a restructuring in July last year tosave about $150 million annually.

The company, in its post-earnings conference call onTuesday, refused to say whether it would shut more plants.

The benefits of the latest restructuring, which would lowerexpenses by 20 percent, were expected from the first quarter of2014, the drugmaker said.

Dendreon said it would have about 820 employees at the endof the restructuring, down from more than 2,000 at its peak.

The company will record a restructuring charge of about $7.5million in the current quarter and the first quarter of 2014.

Dendreon's net loss narrowed to $67.2 million, or 44 centsper share, in the third quarter from $154.9 million, or $1.04per share, a year earlier.

Analysts on average had expected a loss of 42 cents pershare on revenue of $76.3 million, according to Thomson ReutersI/B/E/S.

Dendreon shares rose 3 percent to $2.58 on Tuesday on theNasdaq.

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