Dendreon Corporation (NASDAQ:DNDN) has secured a committed equity financing facility under which it may sell up to $130 million of its registered common stock to Azimuth Opportunity, Ltd. over an 18-month period.
Dendreon is not obligated to utilize any of the $130 million facility and remains free to enter into and consummate other equity and debt financing transactions. Dendreon will determine, at its sole discretion, the timing, dollar amount and floor price per share of each draw under this facility, subject to certain conditions. The number and price of shares sold in each draw are determined by a contractual formula, whereby Dendreon will issue shares to Azimuth when and if Dendreon elects to use the facility at a small discount to the volume weighted average price of Dendreon’s common stock over a preceding period of trading days.
This is a good news situation for the company, IF it determines it wants to bolster its cash. Sure, it’s dilutive. But with PROVENGE on hold and the FDA being more unpredictable than a two-card draw game, they bought themselves much more cash if they want. Some may try to say that they see the company showing a position of need, but this also gives the company even more long term cash to keep up its fight. Dendreon’s options haven’t shown any major indications of late, although the bias has still leaned to call option buying and higher open interest compared to put options.
Jon C. Ogg
October 12, 2007
Jon Ogg can be reached at firstname.lastname@example.org; he produces the Special Situation Investing Newsletter and he does not own securities in the companies he covers.