Dendreon to cut 150 jobs after sales of Provenge fail to meet estimates
Dendreon plans to cut 150 jobs, or about 15 percent of its workforce, to trim operating expenses after sales of its prostate-cancer drug Provenge missed analysts’ estimates.
The Seattle company said it will notify employees about the latest job cuts this week and said it will have 820 employees after the cuts are made.
Dendreon will take a $7.5 million charge related to severance this quarter and next, the company said Tuesday in a regulatory filing. The reductions will help save about $125 million in operating expenses, with cost of goods sold being reduced by about $30 million.
The drugmaker is cutting costs as sales of Provenge, approved in 2010, fail to meet expectations. The drug, Dendreon’s only marketed product, generated third-quarter revenue of $68 million, the company reported Tuesday. That missed the $75 million average estimate of analysts and was a 13 percent decline from a year earlier. Dendreon said in early August that the medicine’s revenue wouldn’t increase this year as forecast.
“This marks the third consecutive top-line miss for the company in 2013, so we think few investors were expecting much of a turnaround story at this point,” Chris Raymond, an analyst with Robert W. Baird, wrote in a research note. “While the workforce reduction was probably well anticipated, savings from past restructuring efforts took longer to realize than anticipated.”
Dendreon on Tuesday posted a loss of $67.2 million, or 44 cents a share, for the three months ended Sept. 30. In the 2012 third quarter, it lost $154.9 million, or $1.04 per share, due mainly to costs related to earlier job cuts and a restructuring.
FactSet says analysts expected a loss for the latest quarter of 41 cents a share.
Dendreon said in July 2012 that it would cut more than 600 jobs, close a manufacturing plant and reduce costs by $150 million as it sought to reach profitability.
In October, Bloomberg News reported Dendreon was working with JPMorgan Chase & Co. to find a buyer. The company declined to comment at the time.
Dendreon noted Tuesday that more patients signed up for treatment in October than in any other month in 2013.
The company’s stock rose 8 cents, or 3.2 percent, to $2.58 Tuesday. The shares have fallen 51 percent this year.