WASHINGTON (AP) -- Shares of biotech developer Dendreon Corp. rose Friday after health insurer Aetna said it would expand coverage of Provenge, the company's pricey prostate cancer drug.
THE SPARK: Aetna, the nation's third-largest health insurer, posted a memo Friday saying it considers Provenge "medically necessary" for men with late-stage prostate cancer that has not responded to other therapies. Patients must have cancer that has not reached the liver and a life expectancy greater than six months, the insurer said. Previously Aetna only covered the drug for patients meeting narrower criteria.
"Dendreon sees this as a positive policy update for patients with advanced prostate cancer who may be eligible for Provenge and reflects Dendreon's continued efforts to ensure eligible patients have access," the company said in a statement.
THE BIG PICTURE: When Provenge was approved in 2010, analysts thought sales would rise to $1 billion per year. But sales have been disappointing, in part because of the single-dose drug's $93,000 price tag and concerns that it does not extend patient's lives by a great deal. In studies, patients who were treated with Provenge lived about four months longer on average than those who didn't receive the drug.
Dendreon has no other drugs on the market.
SHARE ACTION: Shares of Seattle-based Dendreon rose 18 cents, or 3.9 percent, to end Friday's session at $4.81. The stock has changed hands between $4.17 and $17.04 in the past 52 weeks, and is down nearly 37 percent since the start of the year.