Dendreon Shares Plunge on Concern Debt Won’t Be Repaid

Dendreon Corp. (DNDN), the maker of prostate-cancer drug Provenge, plunged after the company said it’s considering steps that may leave the shares worthless.

There is a “significant risk” that Dendreon will not be able to refinance or repay bondholders that own $620 million in convertible notes due in January 2016, according to a filing from the Seattle-based company. It’s weighing alternatives that would leave stockholders with “little or no financial ownership,” the company said in the statement.

Dendreon shares slid 72 cents, or 34 percent, to $1.40 as of 4 p.m. in New York, the biggest percentage-point drop since 2011. The stock, which reached $55.43 in 2010, has seen most of its value disappear amid slowing sales of Provenge, the first approved therapy that trains the body’s immune system to attack cancer cells as if they were a virus.

“It could wipe out the common shareholder,” Y Katherine Xu, a New York-based analyst at William Blair & Co., said in a phone interview. “You look at the prospects of sales to eventually repay the debt somehow, but right now, they don’t have confidence in Provenge, and this becomes a huge issue.”

A voicemail and e-mail to Dendreon’s media relations department were not immediately returned.

Provenge involves extracting white blood cells from a patient, mixing them with vaccine components and delivering the combination as an infusion. It competes with the oral drugs Xtandi, for which Astellas and Medivation Inc. split profits, and Johnson & Johnson’s Zytiga.

Dendreon reported a net loss of $51.7 million for the first half of this year, citing expenses for research, clinical trials and manufacturing, according to the filing dated yesterday. That compares with a $140.8 million loss in the same time last year.

The company’s debt is convertible to shares at $51.24, making it unlikely that bondholders will exercise that right, Dendreon said in the filing. The notes dropped 4.3 percent to 64 cents on the dollar.

To contact the reporter on this story: Oliver Renick in New York at orenick2@bloomberg.net

To contact the editors responsible for this story: Lynn Thomasson at lthomasson@bloomberg.net Chris Nagi

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