Dendreon Corporation (NASDAQ:DNDN) has fallen from grace since its Provenge prostate-cancer treatment received Food and Drug Administration approval three years ago. Investors had banked on the drug becoming a hot seller, but the anticipated ramp-up in revenue hasn’t materialized nearly as quickly as shareholders had hoped. Let’s take an early look at what’s been happening with Dendreon Corporation (NASDAQ:DNDN) over the past quarter and what we’re likely to see in its quarterly report.
Stats on Dendreon
| Analyst EPS Estimate | ($0.48) |
| Year-Ago EPS | ($0.70) |
| Revenue Estimate | $80.15 million |
| Change From Year-Ago Revenue | (2.3%) |
| Earnings Beats in Past 4 Quarters | 1 |
Source: Yahoo! Finance.
Can Dendreon cure what ails it this quarter?
Analysts have only gotten more pessimistic about Dendreon Corporation (NASDAQ:DNDN) and its earnings in recent months. They’ve added a nickel per share to their loss estimates for the first quarter and widened their loss figures for the full 2013 and 2014 years as well. The stock has fallen more than 20% since the end of January, adding to poor performance from 2011 and 2012.
The primary culprit for Dendreon Corporation (NASDAQ:DNDN) over the past several years has been the high price tag for Provenge. With the financial risk that comes from taking on the $93,000 treatment without absolute guarantees of insurance reimbursement, patients and medical professionals have shied away from the treatment.
But looming larger is the specter of increased competition in prostate cancer. Late last month, Medivation Inc (NASDAQ:MDVN) got a favorable opinion from an advisory panel for the European Medicine Agency for its Xtandi treatment, which will expand the drug’s reach beyond the U.S., where the FDA approved Xtandi last August. Moreover, Johnson & Johnson (NYSE:JNJ)‘s Zytiga saw sales grow 72% in the company’s first-quarter report, with even faster growth internationally. Essentially, what the success of Dendreon Corporation (NASDAQ:DNDN)’s rivals shows is that the company is running out of time to carve out its niche in the industry.
Dendreon did manage to get one potential problem behind it, settling a securities class action lawsuit for $40 million. With 95% of that coming from insurance carriers, Dendreon Corporation (NASDAQ:DNDN) won’t suffer a major cash hit, which is an important victory given the company’s persistent losses and consequent drain on cash.
In Dendreon Corporation (NASDAQ:DNDN)’s quarterly report, watch for news on where Provenge stands in the company’s attempt to get EU approval for the drug. If Europe comes on board, then it might finally provide the sales boost that investors have waited years to see.
The article Will Dendreon Ever Make Money? originally appeared on Fool.com and is written by Dan Caplinger.
Fool contributor Dan Caplinger has no position in any stocks mentioned. You can follow him on Twitter @DanCaplinger. The Motley Fool recommends Johnson & Johnson (NYSE:JNJ). The Motley Fool owns shares of Dendreon and Johnson & Johnson (NYSE:JNJ).
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