Dendreon Shares Sink After Company Warns of Debt Woes
Dendreon Corp. shares tumbled Tuesday morning, a day after the drug developer warned shareholders that it has debt worries, and it is considering alternatives that could wipe out their ownership.
The maker of the prostate cancer treatment Provenge said Monday in a Securities and Exchange Commission filing that there is a "significant risk" it will not be able to repay or refinance $620 million in notes due in 2016. The company said it is considering alternatives to repaying the notes in cash, including options that could leave stockholders with little or no ownership in Dendreon.
Dendreon also said in the same quarterly filing that it lost $15.3 million, or 10 cents per share, on $82.2 million in Provenge sales during the quarter that ended June 30.
Dendreon launched Provenge, which trains a patient's immune system to fight cancer, in 2010, and analysts initially expected sales to reach into the billions of dollars. However, the drug's performance has been hurt in part by its cost, limited benefit and reimbursement rates.
Provenge was the Seattle company's first commercial product approved by the Food and Drug Administration.
Dendreon recently changed leadership. Last month, the drug developer named former Discovery Labs leader W. Thomas Amick as president and chief executive officer. The company had said in June that former CEO John H. Johnson planned to resign for personal reasons.
Shares of Dendreon sank 33 percent, or 70 cents, to $1.42 in morning trading Tuesday, while broader trading indexes dropped slightly. The stock had already shed 29 percent of its value so far this year, as of Monday's market close.