Dendreon's Quarterly Report Shows Assets & Updates (DNDN)

August 10, 2009 · Filed Under Cardiac, dendreon 

Dendreon Corp. (NASDAQ: DNDN) has made its quarterly SEC filing with its earnings results.  We are not interested in revenues as they are too small to count.  But we wanted to review its full assets, its cash burn, and its updates which have been talked about and have been tossed around in many local media reports over the recent weeks and months.  We have included these broken down and taken data out of its SEC filing.

Assets are as follows: Cash and cash equivalents $ 266.122 million; Short-term investments $21.334 million; Restricted cash $4.882 million; Prepaid antigen costs $18.975 million.  The company also noted that prepaid expenses and other current assets $2.692 million.  Total current assets were listed as $314.005 million.

Dendreon’s total current liabilities were listed as $130.179 million and the company did still have $52.535 million convertible notes listed as liabilities as of June 30. Those notes are what is remaining from the $85.3 million issued in June and July of 2007.

As of June 30, 2009, there was $19.0 million of capitalized costs associated with the purchase of the antigen used in the manufacture of Provenge, which antigen Diosynth RTP, Inc. is obligated to manufacture and delivery is expected to begin in 2010.  It later noted that in may 2009, it placed an order for $39.5 million with Diosynth, amended under a December 22, 2005 agreement, which covers the commercial production of the antigen used in connection with Provenge.  Dendreon’s remaining obligation to pay Diosynth as of June 30, 2009 is $20.5 million upon the delivery of antigen.

Operating expenses were $13.321 million for R&D, $7.608 million for general & administrative, and total operating expenses were $20.929 million.

There are also many more items in the notes…

If you must know the per share items, this is a net loss after items of $126.7 million (after warrant liability).  That is not just from operations and it does include many ongoing or new items.  That comes to a loss of $1.20 EPS and revenues were listed as $25,000.00.

The company has entered Phase II and Phase III building contracts for its New Jersey facility that has guaranteed maximum price for the completion of all work under the Construction Agreement of $50.5 million.  Later on, the company did confirm that as of July 31, 2009, Dendreon entered into a lease with Majestic Realty Co. for a building to be constructed in Atlanta, Georgia, consisting of approximately 160,000 rentable square feet as a manufacturing facility following construction and build-out. The aggregate rent payable for the building shell under the initial lease term is $6.7 million.

Effective as of August 7, 2009, Dendreon entered into a lease for existing building space totaling approximately 184,000 rentable square feet in Orange County, California for eventual use by us as a manufacturing facility following build-out. The initial lease term is for ten and a half years, with two renewal terms of five years each. The lease includes a one-time purchase option exercisable during the first three years of the lease term and the aggregate rent payable under the initial lease term for the existing warehouse property is $13.6 million.

During July 2009, Dendreon engaged LifeTek Solutions, Inc., to provide consulting design and commissioning services for the build out of the Atlanta, Georgia, and Orange County, California facilities, as well as Phase II and Phase III of the New Jersey Facility, for a maximum total cost of $5.9 million.

The filing shows that the company maintains that PROVENGE is ‘approvable,’ although that was not the language used.  He is a quote: “Final results from the IMPACT study showed that Provenge extended median survival by 4.1 months compared to placebo (25.8 months versus 21.7 months), and Provenge improved 3-year survival by 38% compared to placebo (31.7% versus 23.0%). The IMPACT study achieved a p-value of 0.032, exceeding the pre-specified level of statistical significance defined by the study’s design (p-value less than 0.043), and Provenge reduced the risk of death by 22.5% compared to placebo (HR=0.775). In light of the IMPACT study results, we intend to amend our BLA with the FDA and proceed to seek U.S. licensure for Provenge.”

Another note was as follows: “In a meeting with the FDA on May 29, 2007, we received confirmation that the FDA will accept a positive final analysis of survival from our Phase 3 D9902B IMPACT (IMmunotherapy for Prostate AdenoCarcinoma Treatment) study to support licensure of Provenge.”

Other potential product candidates under development and updates are as follows:

  • Neuvengetm, its investigational active cellular immunotherapy for the treatment of patients with breast, ovarian and other solid tumors expressing HER2/ neu;
  • It is developing an orally-available small molecule targeting TRP-M8 that could be applicable to multiple types of cancer as well as benign prostatic hyperplasia;
  • In December 2008 it filed an IND application to investigate this small molecule in advanced cancer patients, which was cleared by the FDA in January 2009.
  • In April 2009, the first patient enrolled in the Phase 1 clinical trial for patients with advanced cancer.

There are well over 50 pages all said and done here, so if you want to review the full SEC document it is here.

JON C. OGG
AUGUST 10, 2009

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