The Committee for Medicinal Products for Human Use (CHMP) of the European Medicines Agency (EMA) recently provided a positive opinion on Dendreon Corporation’s marketing authorization application for Provenge.
Dendreon is looking to get Provenge 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 those patients. Previously, Dendreon also received a positive opinion from the EMA’s Committee for Advanced Therapy (CAT) for its marketing application for Provenge.
We note that the CAT evaluates the quality, safety and effectiveness of advanced-therapy medicinal products. Furthermore, the committee is also responsible for following scientific developments in the relevant area.
A final decision from the EU regulatory authorities on the approval of Provenge is expected by the end of this year. We note that though the European Commission is not bound to follow the CHMP’s decision, it generally does so.
Provenge, Dendreon’s sole marketed product, is already approved in the US for treating advanced prostate cancer since May 2010.
We remind investors that the drug performed disappointingly in the first quarter of 2013 with sales declining roughly 17.6% year over year to $67.6 million. The sharp decline in Provenge sales was primarily due to the entry of Johnson & Johnson’s (JNJ - Free Report) Zytiga in the prostate cancer market in Dec 2012.
Management, however, stated in its first quarter 2013 conference call that Provenge sales will rebound in the coming quarters. The company expects its second quarter Provenge sales in the mid-$70 million range. The company also believes that 2013 Provenge sales are expected to surpass the 2012 sales figure of $325 million.
We are encouraged with the positive CHMP opinion on Provenge’s regulatory approval in the EU. However, we remain concerned about Dendreon’s high dependence on Provenge for long-term growth.
Dendreon, a biotechnology company, presently carries a Zacks Rank #3 (Hold). Meanwhile, other biotech companies such as WuXi PharmaTech Inc. and Elan Corporation currently look better positioned. Both WuXi Pharma and Elan carry a Zacks Rank #2 (Buy).