The prostate cancer drug developer Dendreon (DNDN) is seeking Chapter 11 bankruptcy protection and has reached a financial restructuring agreement with investors holding more than $520 million in debt.
The Seattle company listed more than $664 million in total debts and $364.6 million in assets in a U.S. Bankruptcy Court filing on Monday. Its largest creditor is Bank of New York Mellon, which holds $620 million in notes.
Dendreon Corp. makes the prostate cancer treatment Provenge. It said Monday that its reorganization allows for the continued delivery of the drug to doctors and patients. The drugmaker also said it has enough cash to support all operations during its restructuring.
The company will attempt to sell itself to a buyer that would continue to produce Provenge, or, if it receives no qualifying bids, continue as a stand-alone company.
Dendreon warned shareholders in August about its debt load and said then that it that it was considering alternatives that could wipe out their ownership. The company said then that there was a "significant risk" that it would not be able to repay or refinance $620 million in notes due in 2016.
The company said Monday that its reorganization plan involves converting all 2016 notes into equity of the reorganized company.
Dendreon launched Provenge, its first commercial product approved by the Food and Drug Administration, in 2010. The drug trains a patient's immune system to fight cancer. 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.
The drugmaker changed leadership last summer when it named former Discovery Labs leader W. Thomas Amick 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, which is based in Seattle, shed most of their value Monday before markets opened, sinking 59 cents to 35 cents. The stock had slipped below $1 earlier this fall and has tumbled most of this year after closing 2013 at $2.99.