LAVAL, Quebec , Jan. 29, 2015 /CNW/ -- Valeant Pharmaceuticals International, Inc. (VRX) (VRX.TO) today announced that it has entered into a "stalking horse" asset purchase agreement to acquire certain assets of Dendreon Corporation ("Dendreon") for $296 million in cash. Pursuant to the terms of the agreement, Valeant will acquire the world-wide rights to Dendreon's PROVENGE® (sipuleucel-T) product and certain other Dendreon assets. PROVENGE® (sipuleucel-T) is an immunotherapy treatment designed to treat men with advanced prostate cancer by taking the body's own immune cells and reprograming them to attack advanced prostate cancer. The product was approved by the U.S. Food and Drug Administration (FDA) in April 2010 and realized revenues of approximately $300 million in 2014. PROVENGE® was approved by the European Medicines Agency in 2013.
Hopefully this deal goes through and shuts up the delusional pumpers for good. Funny reading about bids in the billions and billions by 40+ companies who want this company so bad.
Not likely. This unacceptably low offer for a company every pumper know deep in their heart is clearly is worth AT LEAST $50 billion will only cause them to whine about the intricate conspiracy involving Valeant, John Johnson, Mitch Gold, the corrupt judge, J&J, Medivation, the US Federal Reserve, the SEC, FDA, George Soros, the Trilateral Commission, Al Qaida, and the aliens that landed in Area 51 to steal their shares.
Valeant, an aggregate of mediocre companies, marketing barely average products in Neuro & Derm to the public. Their sole growth model is through M&A/L&A, where they acquire and streamline operations within their other similar product lines, not by increasing sales. That being said, operationally streamlining a logistically and financially sensitive product like PROVENGE, in an oncology setting within which they have zero experience and zero product lines, will be a tall order, virtually insurmountable. From the standpoint of their purchase of another failing business with an average product, however, Dendreon fits right in. Problem is, with no symmetry between therapeutic areas, Dendreon will be an anchor on the bottom line. The CEO just put another nail in his coffin after the failed Allergan acquisition.
No firm with any common sense wants this company. Pharma companies at the bottom of the food chain, like Valeant, are vultures that prey on the dead, hoping to get what little meat they can off the bones to make them profitable. Problem is, Dendreon was already picked alive through prior streamlining, there is very little meat to pick. This vulture will end up choking on the bones, right next to its kill.
Valeant will get rid of most people. With no oncology experience they will raise price because they think people will pay anything for life saving drugs. No understanding of oncology reimbursement. Will fire most of team if not all and milk asset for next 1-2 years. By then they will have 5 more companies they will milk. Product and conpany dead, gone and forgotten. Get out now.
Hit the nail on the head. They are a fish out of water on this one. Don't think that they will fire ALL the reps though. Just quite a few. I know that sounds like an idiotic statement, but without a similar business line, they don't have the expertise to sell this drug in this arena.
Many of those involved in the actual production of the product are hard to replace on short notice although in the long-term, nobody is guaranteed a job. Reps are a harder call, especially if they don't understand the oncology space. The comments over at the Valeant board do not inspire confidence.
They're all pill pushers over there, and their ENTIRE business is set up that way. Valeant's going to have to ramp up a whole separate division to accommodate a Dendreon, it's THAT different of a sale. That doesn't leave room for operational streamlining to get into the black. That means more RED. It's THIS reason that they've been so reluctant to invade the oncology space. It's like GM trying to build jets. Yeah, they're metal and they move people, but the similarities end there. Two totally different businesses.
Give this person a drink. He/she hit it right. Thank you for the candid and spot on observation. F Mike Pearson.
Valeant always takes price first day they own something. This will be no different. They don't understand the ramifications on us when they take the price. They're used to dealing with minimally reimbursed, consumer like products. Even their presentations during the allergan ordeal said their assets are like consumer products. This will be ugly.
Assuming this bid goes thru, can anyone (without being a jerk) tell us what, if anything, the dndn shares would be worth? Thanks
Dendreon shares will be worth zero. This bid, plus the remaining cash, comes to something close to $400 million. The company owes $620 million on the bonds (plus interest since the last coupon date), and there are already more than $100 million in other creditor claims unrelated to the bonds. Costs of the bankruptcy also have to be paid which includes a pile of legal fees, investment banking fees, and other court costs. Lets just call it $750 million in total, although that still might be a bit light. All those claims must be paid in full before shareholders get anything, so if this bid goes through the shareholders will get nothing and the creditors will get about 50% of what they are owed. The only parties that will be paid in full are those with priority claims (these are specifically defined by law) such as the lawyers, investment bankers, and bankruptcy court fees. Those priority costs come first, then the creditors, and then shareholders. Unless the sale proceeds plus remaining cash exceed $750 million, shareholders will lose it all.
SHHHHHHHHHHHHHHHHHHHHHHH! You will be fueling the pumpers' flames. They will leave the Yazoo board and come here to seek more attention. A few more days and it will be over. These silly pumpers are actually more optimistic about DNDN after the bankruptcy than during the "quiet period" when they thought DNDN was going to be bought out. They are claiming to buy even more shares as well. Throwing more money into a bad investment gone from bad to worse. Will they learn from this? Nope, you can't fix stupid.
the chance of the bid going to $700+ million is about zero. Only 1 bid even after they extended the deadline once. If there was strong interest, in sufficient magnitude to assume a good likihood of a much higher bid price, there would have been multiple bids. 2/3rds of the companies approached didn't even bother to do due diligence.
There isn't a snowball's chance in hell that a bidding war will break out and send the winning bid price into the $700+ million range. Valeant is a bottom feeder and anybody who competes with them will also be a bottom feeder. Truly strategic investors with a strong franchise in oncology could have scooped up the company by now, but have elected to take a pass. That tells you all you need to know about the long-term viability of this technology.
