Dendreon to restructure after drop in cancer drug sales

Reuters

Nov 12 (Reuters) - Biotechnology company Dendreon Corp said it would restructure to cut costs after reportinganother quarter of weak sales of its prostate cancer vaccine,Provenge.

Net product revenue, reflecting Provenge sales, fell 13percent to $68 million in the third quarter, short of analysts'average estimate of $76.3 million, according to Thomson ReutersI/B/E/S.

Dendreon is watched closely due to the immense potential ofcancer vaccines, but Provenge sales have never really taken offdue to limited manufacturing capacity and uncertainty overreimbursements.

The high cost of the vaccine, which is tailor-made for eachpatient, and the emergence of newer drugs have also been adeterrent.

The drugmaker said on Tuesday it will begin a restructuringprogram to save more than $125 million, representing a 20percent cut in costs, and expects the benefits to kick in in thefirst quarter.

"...we are restructuring the company and implementingadditional cost reductions to enable Dendreon to succeed as aleaner, more nimble biotechnology company focused inimmuno-oncology," Chief Executive John Johnson said.

Dendreon said it will have about 820 employees at the end ofthe 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 yearearlier.

Analysts were expecting a loss of 42 cents per share.

Shares of the company were up about 2.5 percent at $2.56 inpre-market trade. They closed at $2.50 on Monday on the Nasdaq.

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