Dendreon Warns Shareholders Of Likely Wipeout

Dendreon Corporation DNDN warned Monday that shareholders could be out of luck.

The Seattle-based maker of Provenge, once hailed as a potential blockbuster drug for prostate cancer, filed for Chapter 11 bankruptcy Monday, sending its shares down more than 80 percent to $0.18.

Bankruptcy proceedings are likely to result in cancellation of Dendreon shares, the company said in its Form 10-Q, also filed Monday.

Dendreon said it asked the bankruptcy court to limit trading of Dendreon stock during the proceedings, and said trading is "highly speculative."

The company posted a quarterly loss of $22.1 million, or $0.14 per share, on revenue of $73.1 million.

Dendreon had $340.2 million in assets and $660.7 million in liabilities as of September 30.

About $620 million in notes will be swapped for equity and Dendreon will put itself up for sale at a minimum price of $275 million. If offers are inadequate the company will attempt to recapitalize as a stand-alone company.

The company launched its Provenge drug in May 2010 and currently has about 990 customer accounts. But the product got sunk by its high cost and the subsequent launch of competing drugs.

Deerfield Capital Management, a life sciences investment fund, reportedly holds about 36 percent of Denreon's debt.