Dendreon Corporation Heads for Bankruptcy Auction Without $275 Million Minimum Bidder

Published: Jan 02, 2015

Dendreon Corporation Heads for Bankruptcy Auction Without $275 Million Minimum Bidder
December 31, 2014
By Mark Terry, Breaking News Staff

Seattle-based Dendreon , which filed Chapter 11 bankruptcy in November, announced Tuesday that it will be auctioning off its assets in February 2015.

The company filed with the U.S. Securities and Exchange Commission, indicating it would sell without a “stalking-horse bidder.” A stalking-horse bid is when an interested buyer is chosen by the selling company to make the first bid in order to avoid low bids on its assets, setting the minimum threshold for auction.

Dendreon filed Chapter 11 on Nov. 10, indicating that the restructuring could be a standalone recapitalization or a company or company asset sale. In August the company had announced there was significant risk it would not be able to pay off its $620 million debt.

“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 Dendreon President and CEO W. Thomas Amick in a statement. “We are pleased to have the support of a substantial majority of our senior noteholders through this restructuring and sale process.”

In 2010 the U.S. Food and Drug Administration approved Provenge, a prostate cancer treatment. Provenge was revolutionary, taking the patient’s own immune cells and reprogramming them to attack the patient’s advanced prostate cancer. In trials, patients showed significant improvement, reducing the risk of death by 22.5 percent, and with more men in the Provenge group alive at three years than men not treated with Provenge.

Unfortunately, the individualized treatment was expensive and time-consuming. Dendreon’s plans for processing centers around the country were very expensive and were not met with the necessary commercial response.

The company used several hundred million dollars it had borrowed using convertible securities when its stock was trading at more than $50 per share. When it filed for bankruptcy, the shares were trading below $1.

The minimum price set for the stalking-horse bid was expected to be $275 million. The auction is scheduled for Feb. 3, 2015 at 10 a.m. Eastern time at the offices of New York law firm Skadden Arps Slate Meagher & Flom.

In the most recent filing, Dendreon said, “The debtors have had active participation in the competitive process by a number of bidders and look forward to holding an auction in connection with a sale transaction.”

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