Dendreon Shares Plunge on Concern Debt Won’t Be Repaid

Dendreon Corp., 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.

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