Valeant reaches Tentative Deal to Buy Provenge from Dendreon
On Thursday, Quebec-based Valeant Pharmaceuticals International Inc. announced that it has entered into a stalking-horse agreement with Dendreon Corp. to buy its prostate- cancer drug Provenge and other assets for $296 million in cash.
As per the tentative deal, Valeant is the preferred bidder. If the company's bid does not win the auction then it would receive breakup fee and reimbursed expenses. Valeant also said that a bankruptcy court would be required to approve Valeant's stalking-horse bid and the sale.
In last November, Dendreon filed for Chapter 11 bankruptcy protection. The deal would be a major one for Valeant, as it failed to acquire Botox maker Allergan Inc., which was bought by Actavis PLC for $66 billion in November.
After losing the takeover, Valeant made it clear that it would focus on the expansion of its own business. But then it seems that Dendreon appeared to be quite an interesting deal for Valeant. On the other hand, Dendreon filed for bankruptcy after it was unable to have expected profits from Provenge, which costs $93,000 for a course of treatment.
The drug is effective, as it improved median survival for prostate-cancer patients by more than four months. In 2014, Provenge had around $300 million in terms of revenue. The drug acquire would make Valeant to focus more on cancer-drugs section.
"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", affirmed Valeant Chief Executive Michael Pearson.
Prostate cancer treatment is a competitive market these days, as a number of companies are battling to be in the leading positions, like Johnson & Johnson and Medivation Inc have joined hands with Astellas Pharma Inc.
Competition would become tougher as Johnson & Johnson's another prostate cancer drug is in development.
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