Commenting on his company's second-quarter financial results in an investor call, Dendreon Corp. CEO John Johnson said, "I'm not satisfied with the commercial performance of Provenge and believe that more men with advanced prostate cancer should be benefiting from the product."

The company reported net product revenue for the quarter of $80 million compared to the consensus estimate of $85.78 million. The Seattle-based company said in order to improve and accelerate future growth, it was implementing a strategic restructuring plan, which included cutting 600 staff positions.

It was clear that the reported financial results and corporate plans did not sit well with investors. Dendreon's shares (NASDAQ:DNDN) dropped 23 percent Tuesday, or $1.42, to close at $4.76.

As a result of the announced restructuring, the company said it expects to reduce costs by approximately $150 million annually. It will close its Morris Plains, N.J. manufacturing facility, restructure administrative functions and strengthen its commercial function, a process that will take about a year to fully implement, the company estimated. By then executives said they believe the firm will be in a position to be cash flow-positive when net product revenue reaches about $100 million in a quarter.

This is the second time in less than a year that Dendreon has been forced to restructure. In September 2011, it eliminated about one-quarter of its work force, or roughly 500 employees. (See BioWorld Today, Sept. 12, 2011.)

Dendreon expects to reduce its cost of goods sold to less than 50 percent of net product revenue following the closure of the New Jersey facility, down from 77 percent for the quarter ended June 30.

As a result of the decision to close the New Jersey facility, the company expects to record an initial restructuring charge of approximately $4 million related to severance and other related termination benefits.

However, in a research note to clients, analyst Lee Kalowski, of Credit Suisse said that "you can't cut your way to prosperity." While the cost-cutting program is both necessary and reassuring, it has to be viewed as "secondary to growing revenues."

Going forward, the manufacturing of Provenge (sipuleucel-T) will be handled in the company's existing manufacturing facilities located in Union City, Ga., and Seal Beach, Calif., which the company said collectively have the ability to manufacture about $1 billion of product.

In the near term, "we remain focused on leveraging restructuring, and I believe we are headed in the right direction," Johnson noted.

Net loss in the second quarter was $96.1 million, or 65 cents per share, vs. consensus of $86.2 million, and 60 cents per share, respectively, compared to a net loss of $116 million, or 79 cents per share, for the same period in 2011. The current period included about $5.2 million in cash and noncash severance expenses. Excluding those expenses, the company had a net loss of $90.9 million, or 61 cents per share. The company also withdrew its prior projection of modest quarter-over-quarter sales growth in 2012.

Dendreon said the lower sales in the quarter were due in part on the exodus of their sales force that caused 18 percent to 20 percent of the previously penetrated territories to no longer have sales coverage in the month of June.

Joe DePinto, executive vice president of global commercial operations, however, said the company continues to steadily grow its customer base across all practices, neurology, oncology and academic. In the second quarter, the firm added 115 new accounts, up from 84 new infusing accounts last quarter, for a total of 687 accounts since launch of Provenge. The sales team also added 151 new infusing sites that are aligned to the parent account, resulting in 874 infusing sites since launch.

At the end of the second quarter, Dendreon had approximately $509.7 million in cash, compared to $617.7 million as of Dec. 31, 2011. The cash will be sufficient to take the company through 2014, according to analyst Jonathan Aschoff, of Brean Murray, Carret & Co.

In other earnings news:

• Acorda Therapeutics Inc., of Ardsley, N.Y., reported second-quarter revenues of $75.7 million, with net revenues from multiple sclerosis drug Ampyra (dalfampridine) extended-release tablets reaching $66.3 million, compared to $51.8 million for the same quarter in 2011. The company reiterated its Ampyra guidance of $255 million to $275 million for 2012. GAAP net income totaled $4.5 million, or 11 cents per share, 1 cent below consensus estimates. As of June 30, Acorda had $303 million in cash, equivalents and short-term and long-term investments. Shares of Acorda (NASDAQ:ACOR) closed at $24.07 Tuesday, down 67 cents.

• Auxilium Pharmaceuticals Inc., of Malvern, Pa., posted net revenues of $78.2 million for the second quarter, compared to $65.9 million in revenues from the second quarter of 2011. Sales of hypogonadism drug Testim (testosterone gel) increased by 26 percent to $63.8 million, while revenues of Dupuytren's contracture product Xiaflex (collagenase clostridium histolyticum) jumped by 21 percent to $14.4 million. Net income totaled $7.7 million, or 16 cents per share, beating consensus estimates of a net loss of 6 cents per share. As of June 30, the company had about $181.3 million on its balance sheet. Shares of Auxilium (NASDAQ:AUXL) gained $1.17 Tuesday to close at $26.94.

• Vertex Pharmaceuticals Inc., of Cambridge, Mass., reported revenues of $418.3 million for the second quarter, including net product revenues of $327.7 million from sales of hepatitis C virus protease inhibitor Incivek (telaprevir) and $45.5 million from cystic fibrosis drug Kalydeco (ivacaftor). Royalty revenues related to the sale of Incivo in Europe by partner Johnson & Johnson, of New Brunswick, N.J., were about $28 million. Non-GAAP net income totaled about $100 million, or 46 cents per share, missing analyst estimates of 56 cents per share. Vertex had about $1.2 billion in cash as of June 30. Shares of the company (NASDAQ:VRTX) fell $1.45 Tuesday to close at $48.51.