Dendreon: Government Vaccine Review Brightens Outlook

| About: Dendreon Corporation (DNDN)

By Michael Fitzhugh

A new government-funded analysis of Dendreon’s (NASDAQ:DNDN) prostate cancer vaccine, Provenge, found moderate support for its clinical effectiveness. The finding boosted investor confidence and Dendreon’s share price as those bullish on the vaccine’s prospects took the report as a sign that the Centers for Medicare and Medicaid Services is likely to reimburse patients using the pricey vaccine.

Government reimbursement would have a substantial impact on sales for Dendreon, since the company has set a high price on the therapy—$93,000 per patient—that most Medicare and Medicaid beneficiaries are unlikely to pay out-of-pocket.

Reviewers found that “the strength of the body of evidence for improved outcomes was graded as moderate.” There was insufficient evidence to evaluate the outcomes for cases in which the vaccine is used to treat diseases other than prostate cancer, say the reviewers. They also noted that future clinical trials of Provenge should be robustly designed for a survival end point and to better “understand the existence of and nature” of interactions between Provenge and subsequent treatments.

The draft assessment was prepared by the Blue Cross and Blue Shield Association Technology Evaluation Center Evidence-based Practice Center under contract with the Agency for Healthcare Research and Quality.

Provenge, known generically as Sipuleucel-T, was approved in April 2010. It is designed to stimulate the body’s system to fight prostate cancer. A pivotal study of the vaccine showed that it extended men’s survival by 4.1 months compared to a placebo in men with prostate cancer that had spread but not responded to hormone therapy.

Prostate cancer is the third most common cause of death from cancer in men and is the most common cause of death from cancer in men over age 75, according to the United States National Library of Medicine.

In preparation for expanded sales of Provenge, Dendreon says it has requested permission to expand the manufacturing capacity at the Morris Plains, New Jersey facility where it makes the vaccine. The company expects a decision regarding the November request within four months.