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The European Commission (EC) has recently granted marketing authorization for Dendreon Corporation’s (DNDN - Analyst Report) Provenge. The drug is approved in the EU for the treatment of asymptomatic or minimally symptomatic metastatic (non-visceral) castrate resistant prostate cancer in adults. Chemotherapy is not yet clinically indicated for these patients.

The EU approval of Provenge does not come as a surprise as, in Jun 2013, the Committee for Medicinal Products for Human Use of the European Medicines Agency (EMA) provided a positive opinion on the approval of the drug. Dendreon also received a favorable opinion from the EMA’s Committee for Advanced Therapy (CAT) on its marketing application for Provenge.

Provenge’s approval in the EU was based on positive results from the phase III IMPACT (n=737) study in patients suffering from prostate cancer. Results from the study revealed an improvement in overall survival in patients treated with Provenge compared to those in the placebo arm.

Provenge, Dendreon’s sole marketed product, has been approved in the U.S. for treating advanced prostate cancer since May 2010. We remind investors that the drug performed disappointingly in the second quarter of 2013 with sales declining 8.4% to $73.3 million. The sharp decline in Provenge sales was primarily due to the entry of Johnson & Johnson’s (JNJ - Analyst Report) Zytiga in the prostate cancer market in Dec 2012.
 
Meanwhile, management stated in its second quarter 2013 conference call that Provenge sales will not be able to beat the 2012 sales figure of $325.3 million. Though encouraged by the EU approval, we remain concerned about the decreasing trend of Provenge sales. We are also concerned about Dendreon’s high dependence on Provenge for growth.

Dendreon carries a Zacks Rank #3 (Hold). Meanwhile companies such as Actelion Ltd. (ALIOF) and Biogen Idec Inc. (BIIB - Analyst Report) look better positioned with a Zacks Rank #1 (Strong Buy).

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