Dendreon misses Street, restructures

Dendreon Corp. (NASDAQ:DNDN) reported 2Q12 financial results below Street estimates late Monday and announced a restructuring that will include more than 600 employee cuts. Dendreon will close its Morris Plains, N.J., manufacturing facility, which is one of three facilities producing prostate cancer drug Provenge sipuleucel-T, the company's only drug on the market. Dendreon said the closure will reduce the cost of goods sold to less than 50% of net product revenue, down from 77% in 2Q12. Dendreon expects the moves to save about $150 million annually. As of Feb. 23, Dendreon had about 1,475 employees. This is the second restructuring for the biotech since pulling its 2011 revenue guidance of $350-$400 million last August as a result of lower-than-expected uptake of Provenge (see BioCentury Aug. 8, 2011).

Second quarter net product sales fell 2% to $80 million compared to the first quarter and missed the Street's estimate of $85.8 million. Dendreon was expecting low single-digit sequential growth in 2Q12. On a conference call Monday, the company declined to give guidance for the rest of the year, citing recent organizational changes in its sales force and an unusually high rate of vacancies in sales positions in May and June. Previously, Dendreon forecasted modest quarter-over-quarter growth. ...