Bloodied But Unbowed on the Personalized Medicine Battlefront

Pharmaceutical CommercePharmaceutical Commerce - September/October 2011

Do Dendreon’s troubles with over-optimistic sales forecasts put a cap on the promise of personalized medicine?

Years ago, when the term “personalized medicine” starting being bandied about, I had a conversation with a experienced pharmaceutical researcher who pointed out that the economics of personalized medicine were all wrong for the biopharma industry. Manufacturers want to be able to crank out large volumes of the same product—that’s where economies of scale come in, and that’s what the industry has traditionally performed well. I figured, the ingenuity of pharma developers would address this, and the fantastic potential of personalized medicine would become real.

The biotech company Dendreon has been a textbook case of this, until very recently. After an arduous R&D program, the company worked out a way to obtain T cells from prostate cancer patients, manipulate the surface of those cells to attack cancer cells, and then re-infuse them into the patient. Provenge (sipuleucel-T) was approved in 2010, and the company looked to garner sales of $350-400 million this year, ramping up production facilities in multiple locations to treat thousands of patients.

Last month, however, the company announced revenue results that would project out to barely half of what it had been predicting. Wall Street reacted with a fury, dropping the company’s stock by two-thirds, evaporating some $3 billion in market value. More recently, the company announced a 25% reduction in its workforce and management reshuffling, and would to begin preparing for the stockholder lawsuits that seem to be forming up. (GSK, supplier of the one of the antigen “ingredients” of Provenge, will also suffer a sales hit.)

The proximate cause of the slow sales, according to Dendreon, is the difficulty oncologists have had with reimbursement for the expensive drug; the unfamiliarity of urologists (who also treat prostate cancer patients) with infused drugs, and the associated problems that nearly any new drug-delivery system (into the patient) would have at launch. Significantly, nearly all these reservations have to do with marketing and commercial operations, and not with the medical benefit that some patients, some of the time, are receiving from the drug. (A cancer therapy that works equally well for most patients is practically non-existent.) Dendreon did adequately well on the drug development. It appears that its commercial operations plan fell far short.

There are other biotech companies working on many variations of personalized medicine (and there are other prostate cancer treatments in the works); all this is not being written to denigrate Dendreon specifically, but to point to the integral value of marketing and commercial operations functions in introducing new therapies—especially ones that have a high price, as many new biotech drugs do. Personalized medicine still has tremendous potential—there were newspaper reports of exciting new gene therapies for cancer circulating just as the Dendreon story was unfolding. But the science is one thing, and the business management is another. Drug developers need to be more attentive to how the healthcare system will accept personalized medicine.

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