SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): October 11, 2007
DENDREON CORPORATION
(Exact name of registrant as specified in its charter)
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| Delaware | | 000-30681 | | 22-3203193 |
(State or other jurisdiction of
incorporation) | | (Commission File Number) | | (I.R.S. Employer Identification
Number) |
3005 First Avenue
Seattle, Washington
98121
(Address of principal executive offices) (zip code)
(206) 256-4545
(Registrant’s telephone number, including area code)
None
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
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| o | | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
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| o | | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
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| o | | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
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| o | | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
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Item 1.01 Entry into a Material Definitive Agreement
On October 11, 2007, Dendreon Corporation (the “Company” or “Dendreon”) entered into an equity line of credit arrangement with Azimuth Opportunity Ltd. (“Azimuth”). A copy of the press release issued by Dendreon on October 12, 2007 concerning the transaction is filed herewith as Exhibit 99.1 and is incorporated herein by reference. The Company entered into a Common Stock Purchase Agreement with Azimuth (the “Purchase Agreement”), which provides that, upon the terms and subject to the conditions set forth therein, Azimuth is committed to purchase up to $130,000,000 of Dendreon common stock, or the number of shares which is one share less than twenty percent (20%) of the issued and outstanding shares of Dendreon common stock as of October 11, 2007, over the approximately 18-month term of the Purchase Agreement. From time to time ending on April 11, 2009, and at the Company’s sole discretion, Dendreon may present Azimuth with draw down notices to purchase Dendreon common stock over 10 consecutive trading days or such other period mutually agreed upon by the Company and Azimuth. Each draw down is subject to limitations based on the price of Dendreon common stock and a limit of 2.5% of Dendreon’s market capitalization at the time of such draw down, provided, however, Azimuth will not be required to purchase more than $55,000,000 of Dendreon common stock in any single draw down excluding shares under any call option, which is described below. The Company is able to present Azimuth with up to 24 draw down notices during the term of the Purchase Agreement, with a minimum of five trading days required between each draw down period. Only one draw down is allowed in each draw down pricing period, unless otherwise mutually agreed upon by the Company and Azimuth.
Once presented with a draw down notice, Azimuth is required to purchase a pro-rata portion of the shares allocated to each trading day during the trading period on which the daily volume weighted average price for Company common stock exceeds a threshold price for such draw down determined by the Company. The payment for, against simultaneous delivery of, shares in respect of each draw down notice shall be settled on the second trading day following the last trading day of each draw down period, or on such earlier date as the Company and Azimuth may mutually agree. The per share purchase price for these shares equals the daily volume weighted average price of Dendreon common stock on each date during the draw down period on which shares are purchased, less a discount ranging from 3% to 5% based on the Company’s market capitalization. If the daily volume weighted average price of Dendreon common stock falls below the threshold price on any trading day during a draw down period, the Purchase Agreement provides that Azimuth will not be required to purchase the pro-rata portion of shares of common stock allocated to that day. However, at its election, Azimuth could buy the pro-rata portion of shares allocated to that day at the threshold price less the discount described above.
The Purchase Agreement also provides that from time to time and at the Company’s sole discretion the Company may grant Azimuth the right to exercise one or more call options to purchase additional shares of Dendreon common stock during each draw down pricing period for the amount of shares based upon the maximum call option dollar amount and the call option threshold price specified by the Company. Upon Azimuth’s exercise of the call option, the Company would sell to Azimuth the shares of Dendreon common stock subject to the call option at a price equal to the greater of the daily volume weighted average price of Company common stock on the day Azimuth notifies the Company of its election to exercise its call option or the threshold price for the call option determined by the Company, less a discount ranging from 3% to 5% based on the Company’s market capitalization.
In addition to the Company’s issuance of shares of common stock to Azimuth pursuant to the Purchase Agreement, the Company’s Registration Statement on Form S-3 (File No. 333-141388) (the “Registration Statement”) also covers the sale of those shares from time to time by Azimuth to the public. Azimuth is an “underwriter” within the meaning of Section 2(a)(11) of the Securities Act of 1933, as amended (the “Securities Act”).
Azimuth has informed the Company that it will use an unaffiliated broker-dealer (who will receive customary brokerage commissions) to effectuate all sales, if any, of common stock that it may purchase from the Company pursuant to the Purchase Agreement.
Azimuth has agreed that during the term of and for a period of ninety (90) days after the termination of the Purchase Agreement, neither Azimuth nor any of its affiliates will, directly or indirectly, sell, or enter into a short position with respect to any of the Company’s securities except the shares that it owns or has the right to purchase pursuant to the provisions of a draw down notice.
Upon each sale of Dendreon common stock to Azimuth under the Purchase Agreement, the Company has also agreed to pay Reedland Capital Partners, an Institutional Division of Financial West Group, member NASD/SIPC, a placement fee equal to 1.0% of the aggregate dollar amount of common stock purchased by Azimuth.
The Company has agreed to indemnify and hold harmless each of Azimuth and Reedland Capital Partners against certain liabilities in connection with the sale and placement of the Company’s common stock under the Purchase Agreement.
The foregoing descriptions are qualified in their entirety by reference to the Purchase Agreement, a copy of which is attached hereto as Exhibit 10.1 and incorporated by reference herein.
Item 9.01 Financial Statements and Exhibits
(d) Exhibits
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| Exhibit No. | | Description |
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| 10.1 | | Common Stock Purchase Agreement, dated as of October 11, 2007, by and between Dendreon Corporation and Azimuth Opportunity Ltd. |
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| 99.1 | | Press Release of Dendreon Corporation, dated October 12, 2007. |
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