Dendreon Hangs Hopes on Provenge Launch

(Updated with Tuesday stock movement.)

SEATTLE (TheStreet) -- The surging value of its stock in the wake of successful trials of its cancer treatment led Dendreon(DNDN Quote) to a big second-quarter loss as it prepares to bring that hotly anticipated drug to market next year.

The developer of a treatment for late-stage prostate cancer, Dendreon said it lost $126.7 million, or $1.20 a share in the quarter, most of which came from a nearly $106 million charge to revalue warrants. A year ago, Dendreon lost $16.5 million, or 18 cents a share.

The warrants were part of an $8 million equity fundraising in 2008. After investors bid the company's shares higher by a factor of more than five early this year in anticipation of the eventual commercialization of the cancer drug Provenge, Dendreon had to set aside cash to reflect the more-valuable warrants.

Stripping out the items, Dendreon lost 20 cents a share in its second quarter, wider than the 17-cent loss analysts were expecting.

The company, which posted second-quarter revenue of $25,000 compared with $26,000 a year ago, is in the midst of preparing for the launch next year of Provenge, a so-called cancer vaccine that still awaits FDA approval. Dendreon is proceeding as if that were a fait accompli.

On Monday, the company said it's building a 160,000-square foot plant in Union City, Ga., outside Atlanta, to manufacture the drug. It's developing two other plants as well: one in Seal Beach, Calif., near Los Angeles, and the other in Morris Plains, N.J., its "lead facility," where it plans to begin initial production of Provenge should it obtain FDA approval.

Shares in the company were changing hands at $23.37 in morning trading, a drop of more than 2.5%.

-- Written by Scott Eden in New York