Dendreon said Thursday it would lay off 500 workers in an effort to cut costs and offset losses due to slow early adoption of Provenge, its prostrate cancer drug.

The Seattle biotech company was flying high in 2010: it tripled its staff to more than 1,500 and gobbled up extra real estate in both Seattle's Russeel Investment Center in downtown and additional R&D space from Zymogenetics in South Lake Union

Now Dendreon said it must restructure the company -- at a cost of $21 million -- to save an estimated $120 million annually and allow the company to achieve a "cash flow break even position."

Sales of Provenge -- the company's sole drug -- have been slower than expected, which Dendreon attributes to its high price tag.

Though the drug increases the median survival time for patients by four months, the treatment totals $93,000 and concerns about cost and reimbursement have prevented some physicians from recommending it, reports Bloomberg.

Dendreon saw $22 million in August revenues and said it expects to see modest quarter-over-quarter growth as it works to "educate physicians on the improved remibursement paradigm" under a new plan from the Centers for Medicaid and Medicare Services.

The company also announced the departure of former CEO Hans Bishop. It appears that Dendreon's new CEO, Mitchell Gold, took up the reins early this year.

The company has $600 million in cash and investments on hand and expects to see $400 million in revenue this year.

"We believe that the improved reimbursement landscape and our comprehensive plan to educate physicians, coupled with the meaningful clinical benefit that Provenge provides to patients, creates a strong market opportunity," said Gold in a press release. "While the last month has been difficult for our employees, these cost reductions are necessary to ensure the long-term growth of our company, and I am grateful to our dedicated and passionate employees who are the driving force behind Dendreon."