Biotech Dendreon files for Chapter 11 to restructure massive debts
Dendreon said late Sunday it has filed for bankruptcy protection as part of a plan to restructure $620 million in debt, a move likely to effectively wipe out the value of its common stock.
By Seattle Times business staff
Dendreon said it has filed for bankruptcy protection as part of a plan to restructure $620 million in debt, a move likely to effectively wipe out the value of its common stock.
The biotechnology company, once Seattle’s largest, filed a voluntary Chapter 11 bankruptcy petition Monday in Delaware.
Dendreon, which pioneered a therapy for treating prostate cancer with boosted cells from a patients own immune system, said the plan should allow continued operations and the ongoing commercial availability of its Provenge treatment.
The company said noteholders representing about 84 percent of the debt have agreed to let it pursue a stand-alone recapitalization or a sale of the company or its assets in Chapter 11.
A transaction that would leave common stockholders with little value for their shares has been expected since August, when the company acknowledged for the first time the significant risk that it could not pay the debt.
The convertible debt notes were issued when Dendreon’s stock traded at more than $50 a share; last week the stock was below $1, meaning there was no chance the noteholders would want to turn their debt into equity at the originally specified price.
”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 Dendreon president and CEO Thomas Amick. “We are pleased to have the support of a substantial majority of our Senior Noteholders through this restructuring and sale process. We thank our employees for their continued hard work and dedication and for their commitment to help deliver Provenge to patients who are in need of immunotherapy.”
The company said it has about $100 million in cash and investments to support operations through the bankruptcy process, so it does not expect to raise any additional money until the restructuring is worked out.
Dendreon was Seattle’s biggest independent biotechnology company a few years ago, with hundreds of employees in a downtown headquarters and hundreds more at three cell-processing centers around the country.
But sales of Provenge, though they rose quickly, never reached the heights projected by company executives because rival treatments also arrived on the market.