Dendreon Takes Huge Hit, Stock Tanks 60% on Sales Shortfall
Xconomy, Luke Timmerman, August 3rd, 2011- Dendreon failed to live up to expectations for its new prostate cancer drug, and now it is facing some brutal consequences. The Seattle-based biotech company (NASDAQ: DNDN) saw its stock plummet about 60 percent in after-hours trading today after it issued a surprisingly bad second-quarter financial report.
The loss, if it holds up in tomorrow’s trading, would erase more than $2.5 billion of the company’s market valuation.
All that turmoil roiled the market after Dendreon said it has to withdraw its forecast of $350 million to $400 million in full-year sales for sipuleucel-T (Provenge), and that it was unable to offer any revised projection in its place. The company generated $49.6 million in sales in the quarter ended June 30, plus another $19 million in the month of July, which was “substantially” lower than its internal forecasts, CEO Mitch Gold told investors on a conference call. As for guidance, the company only said it expects “modest quarter-over-quarter” growth. The shortfall means that Dendreon is now planning to cut costs, including make some staff layoffs, which will come during this quarter.
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