Immunotherapy Biotech Company Dendreon Files for BankruptcyBy
Dendreon Corporation, a Seattle, Washington-based biopharmaceutical company focused on developing personalized immunotherapies, has filed for bankruptcy and announced a financial restructuring. The company and its subsidiaries filed voluntary petitions under Chapter 11 of the Bankruptcy Code in the US. Bankruptcy Court for the District of Delaware.
Dendreon is focused on antigen identification, engineering, and cell processing to produce active cellular immunotherapy (ACI) product candidates designed to stimulate an immune response in a variety of tumor types. Dendreon’s first product, Provenge (sipuleucel-T), was approved by the US Food and Drug Administration (FDA) in April 2010. Dendreon is exploring the application of additional ACI product candidates and small molecules for the potential treatment of a variety of cancers.
With regard to its financial restructuring, the company reached agreements on the terms of a financial restructuring with certain holders of the company’s 2.875% convertible senior notes due 2016, which represent approximately 84% of the $620 million aggregate principal amount of the 2016 notes. Under the terms of the agreements, the financial restructuring may take the form of a stand-alone recapitalization or a sale of the company or its assets. The transactions under the agreements will enable continued delivery of Provenge without disruption or impact to access for providers and patients, said the company.
“Whether the restructuring takes the form of a stand-alone recapitalization or a sale of the company or its assets, we are confident that this process will allow Provenge to remain commercially available to the patients and providers who have come to rely on this revolutionary personalized cancer immunotherapy,” said W. Thomas Amick, president and chief executive officer of Dendreon, in a company statement.
Under the terms of the restructuring support agreements, the senior noteholders will support a plan of reorganization to convert all 2016 notes to common equity of the reorganized Dendreon. The agreements further provide that Dendreon conduct a court-supervised sale process, pursuant to Section 363 of the Bankruptcy Code or through a plan of reorganization, for all or substantially all of its assets to a party that would continue producing and providing Provenge. Qualified bids under the terms of the proposed bidding procedures will have to meet certain criteria and provide value of not less than $275 million. If more than one qualified bid is received, an auction will be held to determine the successful bidder with the highest or otherwise best bid, following which the company will seek to consummate that transaction. If no qualified bids are received, Dendreon will proceed to confirmation of the stand-alone plan.
Dendreon said it has significant liquidity to support all of its operations during the restructuring process, with approximately $100 million of cash, cash equivalents, and investments on hand as of November 7, 2014, and does not anticipate the need to raise any incremental financing in connection with the restructuring process. During the restructuring process, the company will continue to operate in the ordinary course, including continuing to service distributors and wholesalers to ensure timely fulfillment of orders and shipments and to meet other obligations to physicians and patients who depend on Provenge. In addition, Dendreon has requested court approval of the proposed bidding procedures and a series of customary motions allowing it to honor employee obligations, including wages, salaries and health benefits without interruption, as well as to continue customer programs and patient-assistance programs.
In December 2012, Dendreon sold its immunotherapy manufacturing facility based in Morris Plains, New Jersey, to Novartis for $43 million in cash. The 173,000-square foot facility produced the company’s Provenge. Earlier in 2012, the company had announced its intention to wind down production at the facility in conjunction with a strategic restructuring plan.