February 11, 2015 / 4:08 PM / 3 years ago

REFILE-UPDATE 2-Valeant to buy bankrupt vaccine maker Dendreon

(Refiles to correct paragraph eight to show location of US WorldMeds headquarters is Louisville and to capitalize the “m” in WorldMeds)

By Tom Hals

Feb 10 (Reuters) - Valeant Pharmaceuticals International Inc will scoop up bankrupt cancer vaccine maker Dendreon Corp, after no additional qualified bids came forward by Tuesday’s deadline, Valeant said.

A potential buyer dropped from the bidding process, three sources close to the sale told Reuters earlier.

Valeant, of Laval, Quebec, will get Seattle-based Dendreon’s Provenge cancer treatment and other assets for $400 million in cash.

Dendreon and Valeant will seek court approval of the sale on Feb. 20, Valeant said. It expects to close the deal by the end of this month.

Valeant was what is known as a stalking horse bidder, who jump-starts an auction by setting a minimum bid. Other interested parties had to submit qualified bids by 4 p.m. EST (2100 GMT) on Tuesday, according to rules approved by the U.S. Bankruptcy Court in Wilmington, Delaware.

Valeant already raised its stalking horse bid from the $296 million that it originally agreed to pay in January.

A competing joint bid had been submitted by US WorldMeds of Louisville, Kentucky, with Deerfield Management, a New York investment firm with a focus on healthcare that is also a major Dendreon creditor. The pair did not meet Valeant’s higher bid, however.

A source told Reuters there has already been essentially two auctions: an initial one in January to pick a stalking horse, then one with several rounds last week that resulted in Valeant raising its bid.

“The surprising thing was Valeant made a blind offer,” said the source, referring to brief due diligence done by Valeant.

Dendreon had been up for sale long before it filed for bankruptcy in November, and 40 parties signed non-disclosure agreements to comb through its books. Valeant was a late-comer to that process, according to two sources close to the process. (Reporting by Tom Hals in Wilmington, Delaware; Additional reporting by Rod Nickel in Winnipeg; Editing by Lisa Shumaker)

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