Dendreon's loss balloons with warrant costs

Dendreon, which is developing the prostate cancer drug Provenge, reported a much wider second-quarter loss today after setting aside more money to cover warrants to buy its shares.

After booking a loss of $105.8 million to cover the value of warrants, Dendreon reported a loss of $126.7 million, or $1.20 a share, for the quarter. That compares with $16.5 million, or 18 cents a share, a year ago. Excluding one-time items, the company lost 20 cents per share in the latest period.

Revenue dipped to $25,000 from $26,000.

According to Thomson Reuters, analysts expected a smaller loss of 17 cents per share and $80,000 in revenue.

In April 2008, Dendreon raised money by selling 8 million shares of stock and warrants to buy 8 million more shares. The warrants can be exercised any time before April 8, 2015. During the second quarter of 2009, Dendreon's stock surged to $25 from $4.20, and the company had to set aside funds to reflect the greater value of the warrants.

Dendreon shares rose because the company reported positive results from a late-stage study of Provenge. On April 29, the company said Provenge extended the survival of patients with advanced prostate cancer by about a month more than the chemotherapy drug Taxotere, which is currently the only approved treatment for the disease.

The company hopes to get Food and Drug Administration approval for Provenge and launch the drug next year.

Dendreon also said today that it will build a 160,000 square-foot facility in Union City, Ga., to manufacture the drug. A ribbon-cutting is scheduled for Sept. 30. If Provenge is approved by the FDA, Dendreon said it will launch the drug from a facility in Morris Plains, N.J., and use planned facilities in Union City and Seal Beach, Calif., to increase its capacity.