Dendreon said Thursday it has completed a deal to sell shares and warrants to an institutional investor for $47 million. The unnamed investor agreed...
Dendreon said Thursday it has completed a deal to sell shares and warrants to an institutional investor for $47 million.
The unnamed investor agreed to pay $5.92 for 8 million shares of Dendreon stock, a 17 percent premium over Wednesday’s closing price. Dendreon shares climbed 20 cents, or 3.9 percent, to close at $5.28 Thursday.
The unidentified investor also bought warrants to purchase up to 8 million of Dendreon’s shares at $20 per share. The warrants will be exercisable after Oct. 8.
Interim results for the company’s late-stage clinical trial on prostate-cancer drug Provenge, which could lead to the therapy’s approval by the U.S. Food and Drug Administration, are due in the second half of the year.
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The company had previously said it had enough cash in hand to sail through the interim results.
“I’m a little surprised,” said McAdams Wright Ragen analyst Paul Latta. “It’s always better to be prepared at some level, but the trade-off there is dilution,” he said.
The move will dilute existing shareholders’ stake by about 10 percent, he added.
On the other hand, the company may be taking preventive measures for what could be a rocky stock market if predictions of a recession come true. Raising money in such an environment could be difficult. At the end of last year the company had some $76 million in cash and cash equivalents.
“Having cash on hand is a good thing,” Latta said.
Net proceeds from the new financing, approximately $46 million, will bankroll the commercial launch of Provenge and fund the company’s research.
Ángel González: 206-515-5644 or firstname.lastname@example.org