By Brady Huggett

Dendreon Corp. registered with the SEC for a proposed public offering of 2.5 million shares of common stock, which would raise $53.8 million based on Wednesday's opening price. It also entered a collaboration with the R.W. Johnson Pharmaceutical Research Institute to develop immunotherapies.

"We are looking to provide ourselves with flexibility," said Martin Simonetti, chief financial officer of Dendreon, discussing the public offering. "Both strategic and development flexibility."

The offering is led by Prudential Vector Healthcare Group, and co-managed by SG Cowen Securities Corp., of New York, and Pacific Growth Equities Inc., of San Francisco.

Simonetti said Dendreon had about $55 million in cash and cash equivalents on hand and roughly 21.7 million shares of stock outstanding before the financing. Its stock (NASDAQ:DNDN) fell $3.50, or 16 percent, Wednesday to close at $18.

Dendreon raised $45 million through its initial public offering in June, after intending to raise $100 million at the time of its filing. (See BioWorld Today, March 9, 2000; and June 19, 2000.)

The company is spending about $1.5 million per month, Simonetti said, and he doesn't believe that figure should rise above $2 million. Based on those numbers, the money raised should last Dendreon at least two years.

Dendreon, of Seattle, focuses on the development of novel therapeutic vaccines for the treatment of cancer using antigen discovery, antigen engineering and dendritic cell technologies. It has a prostate cancer vaccine, Provenge (formerly called APC8015), in Phase III trials and a therapeutic vaccine for B-cell malignancies, Mylovenge, in Phase II trials. (See BioWorld Today, Jan. 27, 2000.)

Dendreon obtains dendritic cells from patients by removing white blood cells through leukapheresis, then separates them from other white cells using its cell separation device. The dendritic cells are then co-cultured with a antigen delivery cassette to form a vaccine with the appropriate antigens attached to the dendritic cells. The process takes less than three days from blood collection to vaccine administration.

The collaboration with R.W. Johnson, a Johnson & Johnson company, allows the companies to use each other's products and technologies to develop immunotherapies, including dendritic-based vaccine therapy for the treatment of a variety of cancers, including breast, ovarian and colorectal. R.W. Johnson will provide financial support for research and development activities carried out by Dendreon.

Dendreon's product APC8024, aimed at breast, ovarian and colorectal cancers, is scheduled to enter Phase I clinical trials later this year. R.W. Johnson will fund those trials, said David Urdal, chief scientific officer of Dendreon.

"R.W. will take 8024 through Phase I, but during that time the deal will be evaluated as to how this relationship can be extended," Urdal said. "We won't be negotiating with other companies on 8024. There is a chance that, if the product gets through to the commercialization stage, R.W. would handle that aspect, but right now that isn't in the deal."

No rights change hands in the collaboration, Urdal said.

"Dendreon has found R.W. to be very much interested in our approach to treating cancer," Urdal said. "We are pleased at their validation of our approach."

With the financial support from R.W. Johnson, Dendreon will use the money raised through the public offering to branch out, Simonetti said.

"The plan is to allow Dendreon to be more flexible in its approach to its strategy," Simonetti said. "We want to explore our opportunities in Europe, for clinical development and also to fuel our pipeline."