The biotechnology firm, Dendreon Corporation, is a company which is developing the prostate cancer drug Provenge. On Friday, November 20, the U.S. Food and Drug Administration (FDA) accepted its application to market the vaccine to treat men with advanced prostrate cancer. If the FDA approves it, the drug would be the first in a new class of treatments, which uses live human cells to activate a patient’s own immune system.
- Unfortunately, as the Seattle Times article indicates, financing of this new venture has been troublesome at times. What is the mechanism of the stock warrant that the article talks about as a way in which the company raised money to continue its work in April 2008?
- Why did the warrants result in a second-quarter loss in 2009?
- What journal entry would Dendreon Corporation make to initially record the stock warrants in April 2008?
- Associated Press. “Dendreon’s Loss Balloons with Warrant Costs,” The Seattle Times (Retrievable online at http://seattletimes.nwsource.com/html/businesstechnology/2009634919_webdendreon10.html)
- Clarke, T. “UPDATE 1-FDA says Dendreon’s Drug Application is Complete,” Reuters Biotechnology News (Retrievable online at http://www.reuters.com/article/rbssBiotechnology/idUSN2054038420091120)