Ever since Dendreon's lackluster Provenge launch, the Washington-based biotech's failures have cast a pall over the troubled cancer vaccine field. And the company's bankruptcy won't help with that.
A couple of years ago, Dendreon sold off a manufacturing plant to Novartis for $40 million-plus to raise some quick cash. Now, someone can pick up its two remaining manufacturing facilities, a logistics center and headquarters in Seattle and its one-time promising drug, Provenge, for as little as $275 million.
The SEC is investigating whether officials at the Center for Medicare and Medicaid Services tipped off a policy research group about the agency's review of Dendreon's cancer vaccine, Provenge, The Wall Street Journal reports.
Shareholders knew Dendreon had debt problems. What they did not know until Monday was that the cancer vaccine maker is considering moves that could leave them empty-handed.
When Dendreon was trying to bring its cancer vaccine Provenge to market, many doubted whether it could overcome the associated manufacturing and logistical hurdles. Ultimately Dendreon did better than some expected, but not as well as it hoped. And the same problems that made the cost of producing and shipping Provenge a burden for Dendreon still hang over the sector.
Things haven't been pretty for Dendreon since its highly anticipated cancer vaccine Provenge stumbled out of the gate. Now that disappointing sales, increased competition and cost-control struggles have taken their toll, the Seattle-based company is up against a mountain of debt. But CEO John Johnson won't be around to help right the company's course.
While Dendreon fell well short of serving as a good example of how cancer vaccine businesses can succeed on the public markets, it did at least provide a horrible warning of what can go wrong. Argos Therapeutics is undeterred though and has revived its IPO plans.
For any company entering the immunotherapy field, manufacturing and logistics are huge challenges. At newly formed Juno Therapeutics, they have a plan to overcome these obstacles--find a CEO who has done it before and back him with $120 million.
In the latest round of layoffs, Dendron plans to save $125 million in operating expenses by cutting its headcount by 15%. Around 150 full-time employees are set to lose their jobs over the next nine months as Dendreon cuts its R&D and marketing budgets in a bid to achieve profitability.
Dendreon is again turning to manufacturing, along with slashing more jobs, in its effort to claw its way to profitability. The drugmaker sold a plant last year to save money and raise some cash but will now invest in manufacturing in hopes that production improvements will reduce operation costs.