Dendreon Corp., maker of the prostate-cancer drug Provenge, sold its royalty interest in Merck & Co.’s new hepatitis C drug for $125 million, strengthening its cash holdings.
Dendreon expects to close the deal by the end of the month to sell its interest in Victrelis to CPPIB Credit Investments Inc., the Seattle-based biotechnology company said today in a statement. Dendreon had $560 million in capital at the end of the third quarter, Chief Executive Officer Mitchell Gold said today in a presentation.
“It’s a good move by them,” said David Nierengarten, an analyst with Wedbush Securities Inc. in a telephone interview. “It extends the cash runway that they have to achieve profitability before the equity markets need to be tapped.”
The company is expected to report an adjusted loss of $423.4 million in 2011, according to the average estimate of 17 analysts surveyed by Bloomberg.
Dendreon declined 1.6 percent to $8.66 at 1:59 p.m. New York time. The shares have declined 75 percent this year before today.
Victrelis was approved in May as the first hepatitis C treatment in a decade cleared for U.S. sale and generated $31 million in the third quarter, Whitehouse Station, New Jersey-based Merck reported Oct. 28. The drug competes with Vertex Pharmaceuticals Inc.’s Incivek, approved in May after Victrelis.