My wealth is all at your command
If you will move your icy hand
Dendreon heard the plea and they made a deal with death. But death is a son of a bitch. Now Dendreon is not going to be the next billion dollar biotech in the Northwest. The projection of $350 to $400 million in earnings for 2011 was a little off. It now looks like the number will be below $200 million.
What the leaders didn't count on was a lack of interest in what they were offering. Dendreon diagnosed their situation and found that the problem is primarily happening with small community-based physicians. As leaders of the biggest Cargo Cult in the Northwest, they had only been associating with "top academic centers that have been familiar with the product for years in clinical trials." They are having a hard time getting the dumb hick doctors on board. David Miller, an analyst with Biotech Stock Research in Seattle said, “Docs are not prescribing Provenge until they are certain they are going to be reimbursed.”
One reader of Xconomy had a slightly different version of the predicament Dendreon is in:
As an oncology practice administrator other than the high cost another issue is the data itself- patients may be hesitant to use a drug with 4 month survival when there are other options available. And if medicare remibursement decreases to ASP + 4 next year, these very expensive drugs could be difficult to justify administering in the community setting
Mitch Gold, the CEO of Dendreon said that the company needs to educate physicians about how the reimbursement process has been streamlined. The education in this case goes in the opposite direction. The market has educated Mitch Gold and the investors.
In their arrogance, they forgot that the patient has a say in their health care. It's not just a paycheck for Dendreon, it's an end of life decision with options.
For the investors, the education came from the earnings call this week. For Mitch Gold and the insiders of Dendreon, the education took place on a daily basis. They just didn'tshare it with the investors. Someone asked the question back in March, "Why is Mitch selling his shares?" We have an answer.
When a company is dying, you don't pump more money into saving it. Clearly, the insiders at Dendreon knew they were in trouble.