Valeant Pharmaceuticals will buy bankrupt cancer vaccine maker Dendreon Corp after no additional qualified bids came forward on Tuesday. The company will pay $400 million in cash for Seattle-based Dendreon and will acquire its Provenge cancer treatment and other assets. The deal is expected to close by the end of the month and court approval will be sought for the sale on Feb 20.
Valeant jumpstarted the bidding process by setting a minimum bid. Other parties that were interested were to submit qualified bids by Tuesday, according to the rules approved by the United States Bankruptcy Court in Wilmington, Delaware. Valeant’s initial bid was $296 million in January, and it was subsequently raised. A joint competing bid was submitted by US Worldmeds of Matthews, Kentucky, with Deerfield Management, a New York investment firm with a focus on healthcare, and it is also a major Dendreon creditor. The rival bid, however, did not meet Valeant’s raised bid.
Dendreon has been up for sale before it filed for banktruptcy in November, and 40 parties signed non-disclosure agreements to go through its books. Deerfield Management is Dendreon’s largest lender. It holds 36 percent of the $620 million in notes.
Dendreon has a cancer immunotherapy treatment for advanced prostate cancer, called Provenge. Its sales projections have been widely over optimistic and that company had to file for bankruptcy. The Provenge treatment requires extracting cells from a patient, shipping them to a processing center, genetically engineering them and shipping them back to be re infused into the patient. While Dendreon made the logistics work numerous other snags ensued.
The company faced marketing struggles, reimbursement questions, a high $93,0000 price tag, which prevented the treatment from doing well. The treatment also faced competition from rival prostate cancer treatments like abiraterone (Zytiga) and enzalutamide (Xtandi), which grabbed market share. Provenge generated $300 million in sales in 2014. Abiraterone, by comparison, generated $1.07 billion in sales in the first half of 2014 alone.
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