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A Few Reasons Why Investors Should Consider Dendreon for Their Portfolio

August 15, 2014 | About:



Biotechnology organization Dendreon (DNDN) is not healthy in 2014. The organization has lost considerable value year-to-date and its first-quarter results didn't inspire any trust either, despite the fact that they were marginally better as compared to last year. Dendreon's tumor drug, Provenge, turned in feeble sales. As a result, despite cutting its losses from the year-back period, Dendreon shares declined.

On a year-over-year basis, the company observed an increase in its revenue without precedent for the quarter. Moreover, Dendreon says that sales of Provenge have stabilized despite confronting stiff competition from rivals. As a result, the organization expects that the drug's performance should enhance in the second quarter.

Better times ahead

Dendreon has stretched out beyond it given the solid development expected in the business sector for prostate growth drugs. As per Decision Resources, this business sector is relied upon to develop at a robust CAGR of 10% till 2022.

Dendreon has plans to make Provenge financially accessible in Europe, which will boost its growth. Anyhow before the marketing of any medication, safety is one of the paramount factors that influence drug acceptability. Dendreon had a successful meeting with the European Association of Urology, garnering a positive response from key sentiment leaders to incorporate Provenge in the new EAU prostate tumor guidelines.

Indeed, consensus findings suggest that European physicians are enthusiastic about Provenge.

The company has chalked out a two-step process for Provenge's European attempt. The first step includes making the medication accessible to physicians and patients through centers of brilliance. This would be attained using the organization's agreement fabricating association, Pharmacell, starting with Germany and the United Kingdom. Dendreon has plans to treat its first business understanding by the final quarter this year.

The next step includes further expansion of Provenge in Europe. The organization is in negotiations with European administrative authorities in regards to mechanization. As indicated by break CFO Gregory Cox, "We anticipate that computerization will not just assume a key part in our capability to extend in Europe yet to also be an essential strategic driver to help us bring down our cost of goods sold in the United States."

Cost cutting moves

Dendreon is also targeting restructuring its expenses. It has formally executed the cost-restructuring process, which will empower it to turn into a leaner biotechnology organization going ahead. The company has officially started to understand the positives of its restructuring process, and the results were apparent in the first quarter.

Development despite stiff rivalry

As Dendreon is making progress with Provenge, so are its competitors. Dendreon has to face intense rivalry from peers such as Johnson & Johnson's (JNJ) Zytiga and Medivation's (MDVN) Xtandi. Both these drugs have increased their focused share in the post chemo coliseum. Indeed in pre-chemo and oncology, Xtandi is putting forth an extreme battle to Dendreon. On the other hand, Dendreon administration is taking various initiatives to hold its piece of the overall industry.

For instance, Dendreon finished the first quarter with 93 enormous accounts, significantly up from just 54 in the year-back quarter. The organization defines a substantial record as having a yearly run rate of more than $1 million in sales. Amid the first quarter, focus on accounts represented around 80% of Dendreon's business. The organization has received a record base model to drive profundity and entrance in its vast accounts. This can help the organization enhance its top line through incremental development.


Dendreon has made considerable moves to lower its expenses. At the same time, the organization is making strategic investments in key initiatives, such as Provenge sales in Europe that will eventually drive top and bottom line growth. This blend looks empowering, and analysts are of the assessment that Dendreon's bottom line will develop at a CAGR of 85% for the following five years. Considering the moves that the organization is making, it may bode well for purchasing Dendreon on the pullback.

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