Dendreon Corp, the maker of the world’s first cancer vaccine, filed for bankruptcy protection this Monday.
The Chapter 11 bankruptcy has been filed as Dendreon faces an outstanding $620 million in convertible debt that is due in 2016. The Seattle-based company listed over $664 million in total debts and $364.6 million in assets.
The arrangement requires a recapitalization of Dendreon, or a sale of the company and all its assets, according to a statement released today. The company also indicated it had agreed on financial restructuring terms with several bond holders.
Provenge was approved in 2010 as the first immunotherapy and was intended to treat patients with advanced-stage prostate cancer. Drug sales never met its expectations as Provenge is difficult to administer and cost $93,000.
The treatment requires a patient’s extraction of white blood cells to be mixed with vaccine components. The combination is then provided as an infusion.
The high cost of manufacturing Provenge specifically hurt Dendreon and allowed several competitors to surpass the company.
Dendreon reported only $283.7 million in revenue in 2013, significantly smaller than 2012’s $325.3 million.
"The business is fundamentally unprofitable so, without a change to efficiencies in the manufacturing process, it's really difficult to see them coming back as a standalone company," according to Wedbush Securities analyst David Nierengarten.
Dendreon dispensed several staff and cost-cutting actions over the past years after the company realized revenue growth would take much longer than expected.
By summer 2014, it was clear that cost cutting alone would not make Dendreon "independently viable with its existing capital structure," according to general counsel Robert Crotty.
Shares of Dendreon plummeted Monday, dropping 70 cents to 24 cents in one afternoon of trading. The stock posted below $1 earlier this quarter, as compared to $2.99 at the close of 2013.
Dendreon said it plans to resume operations during the restructuring and will continue to provide Provenge to patients.