Posted 11/10/2014 1:37 PM (GMT 0)
The filing is new news today. Provenge will continue to be available for the time being.
Dendreon Corporation filed for Chapter 11 bankruptcy protection Monday after coming to terms with senior lenders on a restructuring that could mean a reorganization or a sale of its cancer drug operation.
In a news release, the Seattle company said the bankruptcy filing will allow continued delivery of its Provenge prostate cancer treatment. In a filing with the U.S. Bankruptcy Court in Wilmington, Del., Dendreon general counsel Robert Crotty said the company raised money based on expectations the drug would bring in billions in revenue, but found the drug was slower to catch on than expected.
Holders of 84% of a $620 million issue of convertible senior notes have signed a restructuring support agreement that calls for their debt to be converted to equity in a reorganized company. The support agreement is the result of talks with, among others, Deerfield Management Company, L.P., the largest holder of the debt issue, court papers say.
While it pursues a Chapter 11 turnaround, Dendreon will launch a court-supervised sale process, looking for a buyer that will continue producing the drug. Potential bidders will have to provide value of at least $275 million, Dendreon said. Companies in bankruptcy often file with a reorganization strategy in mind, but test the market by putting their assets up for auction. Court papers say efforts to sell Dendreon privately near the end of 2013 produced no bidders.
Dendreon filed for protection with $100 million in cash or cash equivalents, and won’t need bankruptcy financing, according to the release.
As of the period ending Sept. 30, 2014, Dendreon had $340 million in assets and $660.7 million in liabilities on a book value basis. When hopes for Provenge were running high, Dendreon had 1,500 employees. Cost-containment efforts have reduced the workforce to 698 people, court papers say.