Shares of Dendreon Corp. (DNDN) fell as much as 24% in after hours Wednesday after the Centers for Medicare & Medicaid Services, which oversees the Medicare program for the elderly and disabled, announced that it is evaluating nationwide coverage policy for the company's prostate cancer vaccine Provenge.
Provenge is the first autologous cellular immunotherapy treatment of prostate cancer and it was approved by the FDA in April of this year after being rejected three years ago. Provenge costs $93,000 for the three required doses.
The Centers for Medicare & Medicaid Services, or CMS, in a statement said that it has received informal inquiries for a national coverage determination for Provenge and that it is opening the national coverage analysis to determine whether or not the autologous cellular immunotherapy is reasonable and necessary.
In a pivotal phase III study dubbed IMPACT, which evaluated men with advanced prostate cancer, Provenge extended median survival beyond two-years, demonstrating a median improvement of 4.1 months compared to the control group. Overall, Provenge reduced the risk of death by 22.5% compared to the control group.
The CMS is requesting public comments on the effects of Provenge on health outcomes in patients with prostate cancer. The one month public comment period closes on July 30, 2010. The proposed decision date is March 30, 2011, and the completion date for the national coverage analysis is June 30, 2011.
Commenting on the CMS national coverage analysis, Dendreon said it is not a change in Medicare coverage policy and does not impact existing coverage decisions or restrict local Medicare contractors from covering Provenge. Therefore, Medicare beneficiaries will be still able to access Provenge and private payers can also still cover the prostate cancer vaccine, Dendreon clarified.
The company noted that it welcomed the opportunity to continue its discussions with CMS about how Provenge will be provided to Medicare beneficiaries, particularly given the survival benefit and safety profile of the vaccine. Dendreon said it will continue to work closely with CMS to ensure patients with advanced prostate cancer have broad access to Provenge.
DNDN closed Wednesday's trade at $32.33, down 3.75%, on a volume of 10.8 million shares. In after-hours trading, the stock fell as low as $24.51 and it last traded at $26.69.
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