Dendreon Raising Money

Dendreon Corporation (DNDN - Analyst Report) announced recently that it will sell 15 million shares of common stock in a public offering underwritten by JP Morgan Securities, a division of JP Morgan Chase & Co (JPM - Analyst Report) and Deutsche Bank (DB - Snapshot Report). The underwriters will have a 30-day option to by up to a further 2.25 million shares of common stock to cover any over-allotments. The offering has not yet been priced by the company. 

The company intends to use the net proceeds 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) is expected to decide on whether to approve the drug by May 1, 2010. If approved, Provenge would be the first product in the new therapeutic class known as active cellular immunotherapies. In development studies, Provenge boosted survival rates in men with advanced prostate cancer beyond any currently available treatments. 

Unlike traditional vaccines that prevent diseases, Provenge treats 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 globally as per data from the American Cancer Society. We believe that approval of Provenge is critical for the financial performance of the company because the product has blockbuster potential and its successful commercialization could drive a company of Dendreon’s size to strong profitability.

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