UPDATED: Novartis buys Dendreon New Jersey plant
Dendreon ($DNDN), still trying to claw its way back to financial security, has found a buyer for its Provenge manufacturing plant in New Jersey. Novartis ($NVS) has bought the facility for $43 million and taken on 100 of its employees.
"We are also pleased that approximately 100 of the existing employees at the facility will have the opportunity to retain their jobs and work for Novartis," Dendreon CEO John H. Johnson said today in a statement.
Christine Mikail, Dendreon's executive vice president of corporate development, said in a telephone interview that the 173,000-square-foot plant in Morris Plains, NJ, was an asset the company wanted to "monetize, so we tried to find a buyer for that facility that could fit in the same bailiwick and Novartis seemed to fit the bill. This is not only good value for Dendreon shareholders, but it is great to get 100 people jobs." Mikail said about 300 people had worked at the facility, so 1 in 3 were getting an offer.
Mikail said she could not speak for Novartis but did point to its recently announced venture with the University of Pennsylvania. The Swiss company said it would invest $20 million into efforts by researchers there to develop bioengineered immune system attacks on cancer.
In an emailed statement, Novartis said it "planned to support both clinical and commercial production of potential new products/personalized cell therapies, such as CTL019, that emerge from the Novartis-Penn collaboration. CTL019 is Novartis first, novel investigational CAR therapy, and is currently being studied by Penn in a pilot clinical trial."
Dendreon has been reeling from its underperforming prostate cancer drug Provenge. The Seattle-based company said in July it was slashing 600 jobs and would close the New Jersey plant as part of a restructuring plan to save $150 million over 12 months. It said it could ramp up production at plants in Seal Beach, CA, and Union City, GA, and in so doing reduce its cost of goods from the current 77% to less than 50%. Johnson said at the time that manufacturing improvements would allow it to double production at those two plants without sacrificing quality.
The company projected 2011 sales of Provenge to hit $350 million to $400 million, but they reached only $280 million, leading to the former CEO's exit and an emergency plan to downsize to a sustainable level. Dendreon is also putting four more of the 8 floors at its Seattle headquarters up for lease, The Seattle Times reports. Earlier, it had put one floor up for lease.
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