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Valeant Offers $296 Million for Dendreon’s Prostate Cancer Drug Provenge

February 5, 2015

Canadian drugmaker Valeant Pharmaceuticals has agreed to pay $296 million to acquire cash-strapped Dendreon’s prostate-cancer drug Provenge and other assets.

Under the deal, Valeant will serve as a so-called “stalking horse” bidder, meaning that the company could receive a break-up fee and reimbursement for expenses if it doesn’t prevail at a Feb. 12 auction of Dendreon’s assets. The Seattle-based company declared bankruptcy in November.

The deal gives Valeant a much-desired entry into the oncology market, Chairman and CEO J. Michael Pearson said.

Dendreon said it is confident the court-supervised sale will allow patients to continue to receive Provenge without disruption.

Provenge was approved by the FDA in April 2010 and had revenues of roughly $300 million in 2014. Dendreon’s gross margins are currently at 50 percent, says Evercore ISI senior analyst Umer Raffat, and the company has barely launched in Europe. Provenge was approved by the European Medicines Agency in 2013.

Last month, UK’s health cost watchdog said Provenge has not shown enough benefit over less expensive drugs to justify national reimbursement. — Jonathon Shacat