Dendreon (DNDN) fell 7% this afternoon after Jefferies analyst Biren Amin initiated coverage of the stock with an Underperform rating, saying the company faces “epic headwinds.”
Dendreon makes Provenge, a prostate cancer treatment, but is facing competition from Johnson & Johnson’s (JNJ) drug Zytiga, as well as drug candidate MDV 3100 made by Medivation and Astellas Pharma. Against those two drugs, “we believe Provenge is likely to be diminished to a distant third,” Amin wrote.
The drug’s price may also inhibit it, Amin argued.
“Our analysis and survey results suggest Provenge’s high price (to a larger degree) and reimbursement challenges (to a smaller degree) will likely continue impeding adoption. With $93K per patient payable over a few months representing a high cost density for the prescribing physician, Provenge use is associated with significant cash outflow, and is potentially negative for smaller community practices with more vulnerable balance sheets caring for the majority of Provenge-eligible patients.”
Dendreon makes Provenge, a prostate cancer treatment, but is facing competition from Johnson & Johnson’s (JNJ) drug Zytiga, as well as drug candidate MDV 3100 made by Medivation and Astellas Pharma. Against those two drugs, “we believe Provenge is likely to be diminished to a distant third,” Amin wrote.
The drug’s price may also inhibit it, Amin argued.
“Our analysis and survey results suggest Provenge’s high price (to a larger degree) and reimbursement challenges (to a smaller degree) will likely continue impeding adoption. With $93K per patient payable over a few months representing a high cost density for the prescribing physician, Provenge use is associated with significant cash outflow, and is potentially negative for smaller community practices with more vulnerable balance sheets caring for the majority of Provenge-eligible patients.”