Dive Brief:
- A bankruptcy court judge just cleared Valeant's deal for the now-defunct Dendreon last week. But Valeant is already publicizing new phase II data for the prostate cancer vaccine Provenge, which was developed by Dendreon.
- In preliminary phase II results, researchers were able to show that immune response from Provenge continues for two years after treatment ends in men being treated for prostate cancer.
- Valeant is paying $495 million for Dendreon ($95 million more than its original deal) and will have the rights to both Provenge and a new Dendreon asset called D-3263.
Dive Insight:
Although the data showing efficacy and benefit for patients is important, Valeant CEO Michael Pearson is also interested in the economics of the acquisition.
The UK's National Institute of Care and Excellence (NICE) has already rejected Valeant's pricing for Provenge. But Pearson plans to use cost-cutting measures to improve Provenge's margins—while continuing to generate more data on the drug.
For instance, Pearson is planning to save money on manufacturing that could come out to $130 million in savings. "We believe that we have the ability to raise the gross margins of this business to more than 65% by the end of 2015 and to reach 80% gross margins in the longer term," said Pearson in a statement.