Dendreon Corporation (DNDN) announced recently that it has priced its common stock at $24.75 per share in its public offering to sell 15 million shares of common stock. The offer is underwritten by JP Morgan Securities, a division of JP Morgan Chase & Co (JPM) along with Deutsche Bank (DB). The underwriters will have a 30-day option to purchase up to a further 2.25 million shares of common stock to cover any over-allotments. The offer, which is expected to realize a net amount of approximately $356 million which can extend to $409.5 million in the event of the underwriters exercising the over-allotment option fully, is expected to close on Dec 15, 2009.
The company intends to use the proceeds from the offer to accelerate the construction of new facilities in Atlanta, Georgia and Orange County, California and build-out of the remaining capacity at its facility in Morris Plains, New Jersey.
Furthermore, the money raised from the offering will be utilized to fund investment in information technology infrastructure and product support systems coupled with the hiring of manufacturing, sales and marketing and other related personnel in preparation for marketing Provenge, a therapeutic vaccine for the treatment of prostate cancer in men.
The U.S. Food and Drug Administration (FDA) has assigned a Prescription Drug User Fee Act (PDUFA) date of May 1, 2010, to the company’s amended biologics license application (BLA) for Provenge.
Provenge would be the first product to be launched in a new therapeutic class known as active cellular immunotherapies on approval. The candidate boosted survival rates in men with advanced prostate cancer beyond any currently available treatments in clinical trials.
Unlike traditional vaccines that prevent diseases, Provenge acts by stimulating the body’s own immune system to attack cancer cells. Dendreon plans to market Provenge in the U.S. on its own and is seeking partners for ex-U.S territories.
Prostate cancer is the most common non-skin cancer in the United States and the third most common cancer worldwide as per data from the American Cancer Society. We believe that approval of Provenge is critical for the financial performance of Dendreon since the product has blockbuster potential and its successful commercialization could drive the company to strong profitability.
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