Canada-based Valeant Pharmaceuticals International has signed a stalking horse agreement to acquire certain assets of US-based Dendreon for $296m in cash.

Since November 2014, Dendreon has been a debtor pursuant to Chapter 11 of the US Bankruptcy Code.

Valeant noted that the asset purchase agreement constitutes a stalking horse bid in a sale process being conducted under Section 363 of the US Bankruptcy Code.

Valeant Pharmaceuticals International chairman and CEO Michael Pearson said: "We believe that oncology has similar characteristics to our current therapeutic portfolios, such as strong growth, high-durability, strong patient and physician loyalty, and a terrific reimbursement regime.

"We have not previously found an economic way to enter this market, but with the unique dynamics of this situation, we believe that this transaction will create significant shareholder value."

"With the unique dynamics of this situation, we believe that this transaction will create significant shareholder value."

Under the agreement, Valeant will acquire the worldwide rights to Dendreon’s Provenge (sipuleucel-T) product and certain other assets.

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Provenge is an immunotherapy treatment, which is developed to treat men with advanced prostate cancer by taking the body’s own immune cells and reprogramming them to attack advanced prostate cancer.

The product received US Food and Drug Administration (FDA) approval in April 2010, and generated revenues of around $300m in 2014.

Provenge obtained approval from the European Medicines Agency (EMA) in 2013.

Weil, Gotshal & Manges is acting as legal advisor to Valeant, while Skadden, Arps, Slate, Meagher & Flom is serving as legal advisor to Dendreon.

Image: Micrograph of prostatic adenocarcinoma, conventional (acinar) type, the most common form of prostate cancer. Photo: courtesy of Nephron.