Dendreon Corporation (NASDAQ:DNDN) Announces Major Restructuring Plan
Seattle, Washington based biotechnology company engaged in enhancing cancer treatment options, Dendreon Corporation (NASDAQ:DNDN) yesterday reported its 3Q13 results for the quarter ended September 30, 2013. The company reported net product revenue of $68 million for 3Q13 as compared to $77.9 million for 3Q12, presenting 12.8% year over year decline. The net loss narrowed significantly to $67.2 million ($0.44 per share) for 3Q13 as compared to $154.9 million ($1.04 per share) for 3Q12. The company reported cash, cash equivalents and short- and long term investments at $233.3 million at the end of 3Q13 as compared to $429.8 million at the end of FY12.
The CEO Speak
The President and Chief Executive Officer of Dendreon Corporation (NASDAQ:DNDN), John H. Johnson said, “We have seen a strengthening of our business during the past two months. Should these enrollments convert to infusions at our historical rate, we expect that this will bring benefit to both the fourth quarter of this year and the first quarter of next year.”
The Restructuring Plan
The CEO also talked about restructuring plan and some additional cost reductions measures to accelerate Dendreon Corporation (NASDAQ:DNDN) to profitability. As a part of its restructuring plan the company will cut jobs to operate with 820 employees compared to 2,000 employees at its peak. The company plans to cut about 150 jobs. The plan would help the company remove $125 million in cash operating expenses. These reductions would come from all expense categories with cost of goods sold expenses to reduce by $30 million.
Dendreon Corporation (NASDAQ:DNDN) expects to realize the benefits of this implementation by 1Q14.
What Hurt the 3Q13 Earnings?
Despite receiving marketing authorization in the European Union for its lead drug PROVENGE, Dendreon Corporation (NASDAQ:DNDN) reported the sales decline attributed to increased competition as well as sales force vacancies. Moreover the high cost and easy to use rival drugs like Zytiga from Johnson & Johnson (NYSE:JNJ) and Xtandi from Medivation Inc. (NASDAQ:MDVN) also hurt the sales of Provenge.