Dendreon Corp fka DNDNQ

[98040]

Apr 13, 2015 13:54:00 (ET)


By Joseph Checkler

Drug maker Dendreon Corp. (DNDNQ) is offering details of how it will distribute to creditors the money from its sale to Valeant Pharmaceuticals International Inc. (VRX, VRX.T).

In a Friday Filing with U.S. Bankruptcy Court in Wilmington, Del., Dendreon said the holders of its key unsecured notes will get between 72 cents and 75 cents on the dollar, thanks to the $495 million sale to Valeant.

Those creditors, the largest group owed money in Dendreon's bankruptcy case, would have gotten much less earlier in the case, but the Valeant offer kept getting higher. At one point, Valeant was only going to buy Dendreon's flagship prostate cancer drug, Provenge, but eventually it bought all the company's assets.

The Friday filing was an updated version of Dendreon's so-called disclosure statement, a plain-language version of a company's restructuring plan on which creditors must vote. A prior version of the document hadn't placed a printed figure on how much the creditors would get. Other unsecured creditors will also get between 72 cents and 75 cents on the dollar.

Originally, Valeant offered $296 million for Dendreon assets, including Provenge. That offer was increased to $400 million when Valeant was approved to serve as the stalking horse, or lead bidder, at a bankruptcy auction that was ultimately canceled when no rival bidders emerged to challenge Valeant. It eventually went up to $495 million.

The deal is Valeant's first big move since its failed hostile takeover of Botox maker Allergan Inc. (AGN). Actavis PLC ended up buying Allergan in November for $66 billion. After losing out on Allergan, Valeant indicated it would focus on expanding its own business. But Dendreon became too tempting a target.

Once a darling of hedge funds betting both on and against Provenge's prospects, Dendreon's market capitalization once topped $7.5 billion after Food & Drug Administration approval of the drug.

But at an average of $93,000 for a course of treatment that improved median survival by just over four months, Provenge wasn't adopted readily by doctors. The company's stock started to plummet in August 2011 after it offered lower revenue guidance, prompting an investor lawsuit, which was eventually settled, and a stock freefall.

That led to a Chapter 11 filing, in November 2014.

Provenge had about $300 million in 2014 revenue. Valeant hired Dendreon's employees and agreed to take over the supply contracts for the acquired business, a component of the purchase that stabilizes Dendreon's operations.

(Dow Jones Daily Bankruptcy Review covers news about distressed companies and those under bankruptcy protection. Go to http://dbr.dowjones.com)

Write to Joseph Checkler at [e-mail]


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April 13, 2015 13:54 ET (17:54 GMT)