Dendreon Corporation (NASDAQ:DNDN) announced on Monday, November 10th that it was filing for Chapter 11 bankruptcy protection following an agreement with senior lenders on a restructuring that could mean a reorganization or a sale of its prostate cancer drug. Although perhaps not the end of the firm’s groundbreaking immunotherapy treatment for prostate cancer, it is likely the end for long-suffering Dendreon common stock holders who saw the value of their holdings cut by 75% on the news of the bankruptcy filing.
Bankruptcy will permit continued delivery of its Provenge prostate cancer treatment
In its statement released on Monday, the Seattle-based firm said the bankruptcy filing means it will be able to continue delivery of its innovative Provenge prostate cancer treatment. In the bankruptcy filing, Dendreon general counsel Robert Crotty noted the company had raised money based on expectations the drug would bring in billions in revenue, but found that Provenge (which is very expensive and only extends mean survival time by a few months) was slower to catch on than expected.
Details on Dendreon bankruptcy filing
As a part of the deal, the owners of 84% of a $620 million issue of convertible senior notes have signed onto a restructuring support agreement that will convert their debt to equity in a reorganized company. The support agreement comes following extensive negotiations with Deerfield Management Company, L.P., the largest holder of the debt issue, and others, according to court filings.
Dendreon Corporation (NASDAQ:DNDN) will launch a court-supervised sale process while pursuing bankruptcy, looking for a buyer to continue producing their prostate immunotherapy. The agreement specifies that potential bidders will have to provide value of at least $275 million. Court filings also noted efforts to sell Dendreon in late 2013 produced no bidders.
Of note, the biotechnology firm filed for bankruptcy protection with $100 million in cash or cash equivalents, and will not require bankruptcy financing.