The desperate Dendreon ( DNDN) debacle just descended into despondency with the abrupt departure of Chairman and CEO John Johnson, citing "personal reasons."
Dendreon, financially troubled seller of the Provenge prostate cancer vaccine, must repay $28 million in debt by June 15. With $170 million in the bank at the end of the first quarter, Dendreon can make the debt payment, but the company has no means to pay the $560 million in debt due in 2016. Investors have been waiting for months to hear from Dendreon about plans to deal with the strangling debt. Instead, Johnson resigns. A bad omen.
To make grave matters even worse, Dendreon's board elected lead independent director Doug Watson to be the company's next chairman. Activist healthcare investor Brad Loncar has called Watson the worst director in the country. Watson and the rest of the Dendreon board are looking for a new CEO.
Johnson became Dendreon's CEO in February 2012 promising to turn around the struggling cancer vaccine maker but Provenge sales never accelerated and the company was quickly paralyzed by the crushing debt.
Dendreon shares closed Monday at $2.15 ahead of the Johnson announcement.