Dendreon Corp. (NASDAQ: DNDN) has turned into one of those unsettling biotech stories: It went from great promise, to high hopes, to a reality check, and now to an incredibly uncertain future. Dendreon hit a 52-week and multi-year low on Tuesday. The reason the stock is hitting multi-year lows is of the largest concern.

Analysts and investors have grown more and more concerned that Dendreon was not going to meet its coming debt obligations. It would be one thing if the capital markets were open to Dendreon, but the markets are just not likely to offer Dendreon anywhere close to the capital it needs.

An SEC filing shows just how bad things are. Sure, it has capital to operate for now through the next 12 months. But it does not have enough for a principal repayment.

Here is the takeaway — what you need to know about Dendreon. This is another roundabout warning that Dendreon could file for bankruptcy protection. Under that potential scenario, the holders of the common stock will almost certainly be wiped out entirely (see below).

Dendreon’s filing said,

As previously disclosed, our 2.875% Convertible Senior Notes due 2016 (the “2016 Notes”), in an aggregate principal amount of $620 million, mature on January 15, 2016. Our stock price is well below the $51.24 effective conversion price for the 2016 Notes, making it unlikely that the holders of the 2016 Notes will exercise their conversion right. As a result, we assume that, absent the execution of a transaction of the type described below, we will be required under the terms of the 2016 Notes to repay the full $620 million principal amount at maturity. Based on our currently anticipated operating results, however, and even assuming the realization of future expense reductions that we plan to make and product revenues that we forecast, there is a significant risk that, while we believe we have sufficient cash to meet our ordinary course obligations for at least the next twelve months, we will not be able to repay or refinance the 2016 Notes. Accordingly, we are currently considering alternatives to the repayment of the 2016 Notes in cash, including alternatives that could result in leaving our current stockholders with little or no financial ownership of Dendreon. Our Board of Directors will consider any strategic alternatives that might be presented by third parties, though there can be no guarantee that any such alternative will provide value for the Company’s stockholders.

Again, this is the company’s admission of a potential reorganization under bankruptcy protection. There is just no other way to interpret the wording.

Dendreon shares were down 36% at $1.36 on more than 14 million shares right at the noon-hour on Tuesday. The 52-week range is $1.33 to $3.52, and it no longer matters that Dendreon was once a multi-billion company by market capitalization.

The only good news here is that Dendreon shares have not hit their all-time low yet. The bad news — shares have to fall only another 9 cents or so to hit that all-time low from July of 2002.

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