Dendreon Corp., the maker of the yet-to-be approved prostate cancer drug Provenge (sipuleucel-T), said it has entered into an equity financing commitment that will allow the biotech to sell up to $130 million of its common stock to Azimuth Opportunity Ltd. over 18 months.

Under the agreement, Dendreon is not obligated to use any of the $130 million facility and may enter into other equity and debt financing transactions.

Greg Schiffman, chief financial officer for Dendreon, said the facility is a "purely flexible device" for the firm and there is no commitment by the company to draw on the line at this time. Therefore, he told BioWorld Today, Dendreon currently has "no specific intended use" of any funds raised by the issuance of shares under the agreement.

The terms of the agreement allow the Seattle-based biotech to determine the timing, dollar amount and floor price per share of each draw, subject to certain conditions.

The number and price of shares sold in each draw are determined by a contractual formula, Dendreon said, whereby the firm will issue shares to Azimuth when and if the biotech elects to use the facility at a small discount to the volume weighted average price of the company's common stock over a preceding period of trading days.

The agreement also calls for Dendreon to pay a placement fee to Mill Valley, Calif.-based Reedland Capital Partners equal to 1 percent of the aggregate dollar amount of common stock purchased by Azimuth at the time of any draw under the facility.