Dendreon Announces Second Quarter 2012 Results

To fulfill a post marketing requirement and as a part of the company's ongoing commitment to patients, Dendreon will conduct a registry of approximately 1500 patients to further evaluate a small potential safety signal of cerebrovascular events. In four randomized clinical trials of PROVENGE in prostate cancer patients, cerebrovascular events were observed in 3.5% of patients in the PROVENGE group compared with 2.6% of patients in the control group.

For more information on PROVENGE, please see the full prescribing information at http://www.provenge.com or call 1-877-336-3736.

About Dendreon

Dendreon Corporation is a biotechnology company whose mission is to target cancer and transform lives through the discovery, development, commercialization and manufacturing of novel therapeutics. The Company applies its expertise in antigen identification, engineering and cell processing to produce active cellular immunotherapy (ACI) product candidates designed to stimulate an immune response in a variety of tumor types. Dendreon’s first product, PROVENGE® (sipuleucel-T), was approved by the U.S. Food and Drug Administration (FDA) in April 2010. Dendreon is exploring the application of additional ACI product candidates and small molecules for the potential treatment of a variety of cancers. The Company is headquartered in Seattle, Washington, and is traded on the NASDAQ Global Market under the symbol DNDN. For more information about the Company and its programs, visit http://www.dendreon.com/.

Statements in this press release that are not strictly historical in nature constitute “forward-looking statements.” Such statements include, but are not limited to, statements regarding the expected benefits of the restructuring, the timing and elements of the restructuring, the timing and form of related charges, the expected annual operating expense reduction, and Dendreon’s ability to achieve improved performance as a result of the restructuring, developments affecting Dendreon's business and prospects and potential revenue and earnings from product sales, and progress generally on commercialization efforts for PROVENGE. Such forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause Dendreon’s actual results to be materially different from historical results or from any results expressed or implied by such forward-looking statements. These factors include, but are not limited to, our inability to achieve and sustain commercial success for PROVENGE; the identification of efficacy, safety or other issues with PROVENGE; a slower than anticipated adoption by treating physicians of PROVENGE for the treatment of patients with advanced prostate cancer due to competing therapies, perceived difficulties in the treatment process, delays in obtaining reimbursement or for other reasons; any promotional limitations imposed by the FDA on our ability to commercialize and market PROVENGE; unexpected difficulties and costs associated with the rapid expansion of our operations to support the commercial launch of PROVENGE; and other factors discussed in the “Risk Factors” section of Dendreon’s Annual Report on Form 10-K for the year ended December 31, 2011. All forward-looking statements are qualified in their entirety by this cautionary statement. Dendreon is providing this information as of the date of this release and does not undertake any obligation to update any forward-looking statements contained in this release as a result of new information, future events or otherwise.

DENDREON CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)
	Three Months EndedJune 30,								Six Months EndedJune 30,
	2012				2011				2012				2011
	(unaudited)								(unaudited)
Product revenue, net	$	79,964			$	48,139			$	161,936			$	75,140
Royalty and other revenue		28				20				130				41
Total revenue		79,992				48,159				162,066				75,181
Operating expenses:
Cost of product revenue		61,731				28,754				121,772				47,092
Research and development		19,697				18,565				37,040				36,174
Selling, general and administrative		80,219				105,071				175,534				200,360
Restructuring		1,099				—				975				—
Total operating expenses		162,746				152,390				335,321				283,626
Loss from operations		(82,754	)			(104,231	)			(173,255	)			(208,445	)
Interest income		375				393				758				793
Interest expense		(13,768	)			(12,121	)			(27,580	)			(21,114	)
Other income (expense)		10				(26	)			26				(26	)
Net loss	$	(96,137	)		$	(115,985	)		$	(200,051	)		$	(228,792	)
Basic and diluted net loss per share	$	(0.65	)		$	(0.79	)		$	(1.35	)		$	(1.57	)
Shares used in computation of basic and diluted net loss per share		148,161				145,928				147,880				145,712
	June 30,				December 31,
	2012				2011
Balance Sheet Data:
Cash and cash equivalents	$	247,493			$	427,100
Short-term investments		184,743				111,525
Long-term investments		77,479				79,071
Trade accounts receivable		35,343				35,541
Prepaid antigen costs		1,534				7,490
Inventory		71,558				69,502
Total assets		875,747				1,001,491
Convertible senior notes due 2016		520,335				508,418
Convertible senior subordinated notes due 2014		27,685				27,685
Total stockholders' equity		202,409				352,637

DENDREON CORPORATION
RECONCILIATION OF GAAP TO NON-GAAP NET LOSS
(in thousands, except per share amounts)
	Three Months EndedJune 30,								Six Months EndedJune 30,
	2012				2011				2012				2011
	(unaudited)								(unaudited)
GAAP net loss	$	(96,137	)		$	(115,985	)		$	(200,051	)		$	(228,792	)
Non-GAAP adjustments:
Depreciation and amortization expense		10,790				8,644				21,654				15,955
Imputed interest related to the convertiblesenior notes due 2016		6,019				5,551				11,917				9,851
Restructuring		1,099				—				975				—
Management severance and othertermination benefits:
Severance expense		1,792				—				6,965				—
Non-cash stock-based compensation expense		3,434				—				15,112				—
Other stock-based compensation expense		12,793				16,754				32,268				31,430
Non-GAAP net loss	$	(60,210	)		$	(85,036	)		$	(111,160	)		$	(171,556	)
Non-GAAP net loss per share- basic and diluted	$	(0.41	)		$	(0.58	)		$	(0.75	)		$	(1.18	)
Shares used in computation of basic and diluted net loss per share		148,161				145,928				147,880				145,712

The above table provides certain non-GAAP financial measures that include adjustments to GAAP figures. Dendreon believes that these non-GAAP financial measures, when considered together with the GAAP figures, can enhance an overall understanding of Dendreon's financial performance and its prospects for the future. The non-GAAP financial measures are included with the intent of providing investors with a more complete understanding of operational results and trends. We believe excluding these items provides important insight into our operational results, important for a company at our stage in development. In addition, these non-GAAP financial measures are among the indicators Dendreon management uses for planning and forecasting purposes and measuring the Company's performance. These non-GAAP financial measures are not intended to be considered in isolation or as a substitute for GAAP figures.

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