Five years ago, the Business Journal wondered whether a “biotech beachhead” was going to take root in Orange County, an area long known for its domination by the medical device industry.
One of the bigger players in that movement was Seattle-based Dendreon Corp., which opened a manufacturing plant in Seal Beach four years ago with big expectations for its Provenge drug, once hailed as a potential blockbuster treatment for prostate cancer.
Dendreon was a shining star in the firmament, but that’s no longer the case.
The company filed for Chapter 11 bankruptcy reorganization two weeks ago. It said it had $340.2 million in assets and $660.7 million in liabilities as of Sept. 30.
Dendreon opened its Provenge plant after signing a 10 ½-year lease valued at $13.6 million and putting nearly $65 million worth of capital improvements into the building. Provenge is a personalized drug treatment made with a patient’s own white blood cells.
The Seal Beach plant Dendreon used was sold in May to Rexford Industrial Realty Inc., a Los Angeles-based industrial property investor, for $21.1 million. The property, at 1700 Saturn Way, was sold for about $123 per square foot by a unit of JPMorgan Chase & Co., according to property records.
Dendreon had an option to purchase the building in the first three years of its lease but never did so.
The biotech company once ranked as the third largest OC drugmaker and had about 250 workers. It has scaled back its operations here and at other manufacturing plants through a series of layoffs over the past six months.
Dendreon said in January that it would lay off nearly 60 people in Seal Beach.
The company touched on manufacturing in a Securities and Exchange Commission filing:
“Manufacturing Provenge is very complex and time-sensitive. With fewer manufacturing facilities, it may be difficult for us to meet the commercial demand for [the drug], especially in certain parts of the country.”
Company officials said in earlier interviews that they wanted to be in California for several reasons, including easy airport access, “first-rate academic institutions, and a rich talent pool with experience in the healthcare industry.”
Dendreon fell on hard times shortly after it opened its plant and launched Provenge. It had challenges with gaining reimbursement for Provenge, which cost $93,000 a treatment, and it was also affected by the subsequent launch of competing drugs.
Company shares plummeted 67% in mid-2011 after Dendreon officials acknowledged acceptance and use of Provenge would likely come more gradually than first believed.
The company said in its SEC filing that about $620 million in notes would be swapped for equity and that Dendreon was putting itself up for sale at a minimum price of $275 million.
It also warned in its filing that the bankruptcy proceedings were likely to result in cancellation of its shares. The biotech said in the filing that it asked the bankruptcy court to limit trading of Dendreon stock during the proceedings and noted that trading was “highly speculative.”
Shares are down more than 95% since the beginning of the year, with a recent market value of $24 million.
MemorialCare Taps CBRE
Fountain Valley-based MemorialCare Health System said this month that it selected New York-based CBRE Group Inc. to provide its real estate services.
CBRE’s healthcare group will provide strategic real estate planning, property management, transaction management, lease administration and real estate accounting for MemorialCare’s 85-property portfolio, CBRE said in a news release.
“We are confident our work with MemorialCare will provide an excellent environment for MemorialCare’s medical staff to deliver the highest standard of patient care,” said Jim Hayden, CBRE Healthcare’s executive managing director.
Orange Coast Memorial Medical Center in Fountain Valley and Saddleback Memorial Medical Center, with campuses in Laguna Hills and San Clemente, are part of the MemorialCare operation, which also includes three hospitals in Long Beach, medical groups, Seaside Health Plan and numerous outpatient health centers, imaging centers and surgery centers throughout OC and Los Angeles counties.
Bits & Pieces
UC Irvine Health received a quality achievement award for stroke care from the American Heart Association and the American Stroke Association. The designation means that it’s achieved the associations’ goal of “delivering prompt, accurate stroke treatment that saves lives and reduces the likelihood of recurrence.” … Garden Grove Hospital and Medical Center and Huntington Beach Hospital earned “top performer on key quality measures” recognition from the Joint Commission. The Washington-based nonprofit organization accredits hospitals and other health groups. The Prime Healthcare-owned facilities are two of 1,224 hospitals in the U.S. to receive the distinction.
