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Dendreon Corporation (DNDN) Earnings: An Early Look

But Dendreon isn’t giving up. It’s trying to bolster sales by promoting Provenge as a complementary therapy to competing drugs Xtandi from Medivation, Inc. (NASDAQ:MDVN) and Johnson & Johnson (NYSE:JNJ)‘s Zytiga. Yet with Provenge’s high cost, Fool health-care analyst David Williamson believes that Provenge will have to demonstrate a huge survival benefit to justify the expense in combination with the price of Zytiga and Xtandi.

Moreover, the company is trying to restructure itself to earn some breathing room as it faces a substantial negative cash-burn rate. By selling off a New Jersey manufacturing plant to Novartis AG (ADR) (NYSE:NVS) for $43 million and implementing layoffs, the company will cut $100 million off its break-even point, taking some of the pressure off Provenge to produce big sales gains. Nevertheless, analyst firm Maxim Group downgraded the stock on expectations that competition will prove the finishing blow to Dendreon.

In Dendreon’s report, Provenge sales figures will again take center stage, but also watch for strategic comments on how the company plans to deal with rising competition in the cancer space. Without strong action from management, Dendreon may never fully recover from its woes.

The article Dendreon Earnings: An Early Look originally appeared on and is written by Dan Caplinger.

Fool contributor Dan Caplinger has no position in any stocks mentioned. You can follow him on Twitter @DanCaplinger. The Motley Fool recommends Johnson & Johnson. The Motley Fool owns shares of Dendreon and Johnson & Johnson.

Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

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