Dendreon Corporation (NASDAQ: DNDN) is indicated higher this morning on news that came out last night. The company announced support for broad availability for on-label use of Provenge for asymptomatic or minimally symptomatic metastatic castrate resistant prostate cancer. The FDA also this week approved Dendreon’s Los Angeles immunotherapy manufacturing facility with 36 workstations. The big win is Medicare coverage.
Dendreon reported that the Centers for Medicare and Medicaid Services issued a final coverage decision for PROVENGE that will require Medicare contractors to cover the use of PROVENGE for treatment of asymptomatic or minimally symptomatic metastatic castrate resistant prostate cancer. The coverage decision will standardize coverage processes across the country for all Medicare patients in need of the drug.
The move provides local Medicare Administrative Contractors the specific criteria, which is said to be “consistent with the label,” on how PROVENGE should be covered. PROVENGE was also issued a product specific Q-code effective July 1, 2011.
Dendreon will also support programs to provide comprehensive assistance for eligible patients seeking access to treatment with PROVENGE. This will include grants to independent foundations and establishment of a patient assistance program for uninsured patients.
PROVENGE was approved by the FDA in April 2010, but what had been under attack was the $93.000 price tag for the treatment. Many felt that was too high. We do not have a formal “sale price” per treatment yet under Medicare coverage that will be paid to Dendreon but this is being treated as a win for PROVENGE and a win for Dendreon.
Dendreon shares closed at $39.44 on Thursday and the 52-week trading range is $25.78 to $43.96. Volume is thin so far with more than two hours until the market opens but shares are indicated up around $41.00 in pre-market trading.
In early May came a report that Dendreon was given an “Underperform” rating by Credit Suisse; late in May came a “Buy” rating from ISI Group. Goldman Sachs also initiated coverage with a “Buy” rating in early June.
JON C. OGG
Dendreon Corporation (NASDAQ: DNDN) is seeing a surge this morning after its PROVENGE for prostate cancer received a positive vote from a Medicare coverage advisory panel late on Wednesday. This had been a key hurdle, although the price has always been the issue even if the ‘efficacy’ issue was brought up.
The news suggests that Medicare will pay more than $90,000 per patient for the treatment, and it is no secret that prostate cancer usually hits those who are already under Medicare.
This is one more step rather than an ultimate and final conclusion. This does seem to be an added win, as you would notice in teh share rally this morning.
We are expecting a final ruling from Medicare late in the first quarter of 2011. We also expect that coverage will be granted in at least a “most of the way” form, although the delays have been so steady here that we are not hanging our hat on any final-final decision date.
Provenge was finally approved for late-stage prostate cancer earlier in 2010. The company’s production guidance has been a drag on the company and it has more capacity via more manufacturing space being constructed that will be available late next year.
Dendreon shares are trading higher at the open this morning. What else would you expect? Shares are at $39.00 for an 8.7% gain right after the open.