Makers of the drug Provenge file for Chapter 11 bankruptcy

Although business owners may have great ideas, their desired outcomes do not always come to fruition. Dendreon Corporation, the creator of Provenge, the first immunotherapy drug for people suffering from prostate cancer, has filed for Chapter 11 bankruptcy. This filing comes after the company downsized in 2012 and 2013 by reducing its Seattle and New Jersey workforce to nearly half its size after selling off a New Jersey plant.

Provenge was not as successful as was projected by analysts, who thought the treatment would generate $4.3 billion in sales by 2020. That figure has now drastically dropped to only $378 million. Two of the issues with the drug that affected profitability were that it was costly and difficult to administer.

According to Dendreon's bankruptcy petition, the company has $364 million in assets and $100 million in cash, but $664 million in debt. Shares of the company's stock peaked in 2010 at $55.43, but after an announcement was made that the company could not refinance, the shares lost over 99 percent of their value. Majority shareholders agreed to going through the restructuring process after an unsuccessful attempt in 2013 to find a prospective buyer. The company will be auctioned under court supervision and, if the auction is successful, the money will be given to noteholders. If there are no buyers, the noteholders will take control of the company.

Companies in New Jersey who are in a difficult financial position may be able to find relief by filing for Chapter 11 bankruptcy. During the process. a company can work to discover ways to operate more efficiently, while eliminating unnecessary expenses. By filing, the company may be able to put itself into a better financial position, allowing for a successful future either in its own right or as part of a larger company.

Source: sfgate.com, "Dendreon files for bankruptcy", Phil Serafino and Steven Church, Nov. 11, 2014

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