Dendreon files for Chap 11

Sales never approached anything near initial expectations (about $285M vs $4B). Why did sales never materialize?

Some quick research:

Dendreon Corporation filed for Chapter 11 bankruptcy protection Monday after coming to terms with senior lenders on a restructuring that could mean a reorganization or a sale of its cancer drug operation.
In a news release, the Seattle company said the bankruptcy filing will allow continued delivery of its Provenge prostate cancer treatment. In a filing with the U.S. Bankruptcy Court in Wilmington, Del., Dendreon general counsel Robert Crotty said the company raised money based on expectations the drug would bring in billions in revenue, but found the drug was slower to catch on than expected.
Holders of 84% of a $620 million issue of convertible senior notes have signed a restructuring support agreement that calls for their debt to be converted to equity in a reorganized company. The support agreement is the result of talks with, among others, Deerfield Management Company, L.P., the largest holder of the debt issue, court papers say.
While it pursues a Chapter 11 turnaround, Dendreon will launch a court-supervised sale process, looking for a buyer that will continue producing the drug. Potential bidders will have to provide value of at least $275 million, Dendreon said. Companies in bankruptcy often file with a reorganization strategy in mind, but test the market by putting their assets up for auction. Court papers say efforts to sell Dendreon privately near the end of 2013 produced no bidders.
Dendreon filed for protection with $100 million in cash or cash equivalents, and won't need bankruptcy financing, according to the release.
As of the period ending Sept. 30, 2014, Dendreon had $340 million in assets and $660.7 million in liabilities on a book value basis. When hopes for Provenge were running high, Dendreon had 1,500 employees. Cost-containment efforts have reduced the workforce to 698 people, court papers say.
When Provenge won approval from the Food and Drug Administration in 2010, it was touted as ushering in a new era of treatments to marshal the immune system against cancer. But it never really gained traction in the market.
Its $93,000 price for a treatment that improved median survival by just over four months was one reason. Management missteps in understanding the market, including the fact that doctors had to pay for the complex treatment up front amid initial uncertainty over insurance reimbursement was another.
Then came competition. Johnson & Johnson's Zytiga was approved for advanced prostate cancer in 2011 followed by Xtandi from Medivation Inc. of San Francisco and Astellas Pharma Inc. of Japan.
Both were pills that were easy to prescribe, required no upfront investment for doctors and were backed by clinical trial data doctors were more comfortable with. In the face of these rivals, Provenge's market share w
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Mel

Jim:

Never thought YOU would be involved (LOL!).

From other reading, I predict some other company will take over and continue providing Provenge. Maybe the price will go down?

Mel

This treatment must be administered locally through your local oncologist. He/she fronts the cost for the Provenge, as well as the office costs for infusion and blood draw plus other infusion center costs. The Provenge cost of nearly 100,000$ is just one part of the total expense. Even if approved by patient insurance there can be months before reimbursement and onc practice administrators reported to their doc-owners that there was a significant cost to carry these expenses for months, and in a few cases never be re-imbursed when there was some misunderstanding or misrepresentation. When you add that to the limited patient response common to this treatment it was a hard sell to docs and to patients.

Yes, that is sales for a year at $93K per patient. That's 3,065 and a half patients.

But why did this treatment never got off the ground?