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Dendreon Shares Surge on Provenge Cancer Vaccine Sales


A number of questions remain about the prostate cancer treatment and potential for future growth. The beaten-up biotech will disclose more details by late February or early March.

Dendreon's (DNDN) disappointing sales of its Provenge cancer vaccine tainted investors' views of biotech stocks last year. The stock itself is so beaten up that it's understandable that any bit of good news is going to stir some excitement.

The shares are trading up almost 41% Thursday to $10.68 on news that the fourth quarter sales of the Provenge prostate cancer treatment appear to have exceeded Wall Street's expectations. The stock is still down almost 75% in the past six months.

Note that the company is reporting "gross product revenue" of $82 million (not a final sales number). For the full year, that revenue number was $228 million, the company says. In August, Dendreon withdrew its sales forecast of as much as $400 million in estimated 2011 revenue. (See Dendreon's Stock Plunges on Low Provenge Sales)

For the fourth quarter, analysts predicted revised Provenge sales estimates of about $72 million.

So let's keep this in mind: The stock is up today on a possible beat of reduced expectations. And Dendreon is (wisely) damping anticipation for future growth this year.

"We had a strong fourth quarter that exceeded our expectations," CEO Mitchell Gold says in a statement. "As we look to 2012, we expect modest quarter-over-quarter growth while we focus on bringing additional clinics on board and converting them into steady prescribers."

Gold also says: "Given our results for the past two quarters, physician and patient interest in Provenge clearly continues to grow. We believe that the improved reimbursement landscape, along with our improved sales execution and physician education initiatives, are contributing to the increased use of Provenge in the community urology and oncology settings."

We won't know for at least several weeks what the final fourth-quarter numbers show. The company hasn't disclosed an earning announcement date yet but says results usually aren't released until late February or early March.

Dendreon will be presenting at the mega-biotech conference sponsored by J.P. Morgan in San Francisco Monday afternoon. Investors will want to tune in to listen for more clues. How much did Dendreon have to spend in the fourth quarter? Were there any one-time events that contributed to the sales spike? What are the net numbers? What's the real demand and reimbursement outlook?

The company previously blamed some of its lagging sales on physician fears over government and private insurance reimbursement. Dendreon stressed today that docs are getting paid. It says physicians are getting reimbursed on average less than 30 days from the time they submit claims. Expect the company to continue to hammer that point.

Dendreon execs also noted that they're continuing to keep an eye on expenses and said cash on hand is sufficient to operate this year. It had cash of $373.7 million as of September 30. (Cash plus short- and long-term investments was $568 million, the company said.)

Stay tuned.

Twitter: @brettchase

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