By Jonathan D. Rockoff
Valeant Pharmaceuticals International Inc. said late Thursday it
has reached a tentative deal to buy the prostate-cancer drug
Provenge and other assets from Dendreon Corp. for $296 million in
cash.
Quebec-based Valeant said it has entered into a so-called
stalking-horse agreement, which means it is the preferred bidder
and the company would receive an unspecified breakup fee and
reimbursed expenses if its bid doesn't win the auction for
Dendreon's assets. A bankruptcy court also must approve Valeant's
stalking-horse bid and the sale, Valeant said.
Dendreon filed for Chapter 11 bankruptcy protection in
November.
The deal would be Valeant's first big move since its failed
hostile takeover of Botox maker Allergan Inc. Actavis PLC ended up
buying Allergan in November for $66 billion. After losing out on
Allergan, Valeant indicated it would focus on expanding its own
business. But Dendreon appears to have been too tempting a
target.
Dendreon filed for bankruptcy after failing to fulfill its hopes
of reaping big profits from the pricey Provenge. Doctors didn't
flock to Provenge, which cost $93,000 for a course of treatment but
improved median survival for prostate-cancer patients by just over
four months.
Provenge had about $300 million in 2014 revenue, Valeant
said.
In acquiring the drug, Valeant would be making the cancer-drugs
arena more of a focus. "We believe that oncology has similar
characteristics to our current therapeutic portfolios, such as
strong growth, high durability, strong patient and physician
loyalty, and a terrific reimbursement regime," Valeant Chief
Executive Michael Pearson said in a statement.
Prostate-cancer treatment is especially competitive, with
Johnson & Johnson and Medivation Inc. in partnership with
Astellas Pharma Inc. battling. The competition could intensify
further, as J&J has high hopes for another prostate-cancer drug
in development.
Write to Jonathan D. Rockoff at jonathan.rockoff@wsj.com
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