Form 10-K

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Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes þ No ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes þ No ¨

Indicate by a check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. þ

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨ No þ

The aggregate market value of the common stock held by non-affiliates of the registrant based on the closing sale price of the registrant’s common stock on June 30, 2012, as reported by the NASDAQ Stock Market, was $1,120,026,053.

As of February 20, 2013, the registrant had outstanding 156,136,189 shares of common stock.

Sections of the registrant’s definitive Proxy Statement, which will be filed on or before April 30, 2013 with the Securities and Exchange Commission in connection with the registrant’s 2013 annual meeting of stockholders, are incorporated by reference into Part III of this Report, as noted therein.

Dendreon Corporation (referred to as “Dendreon,” “the Company,” “we,” “us,” or “our”), a Delaware corporation, is a biotechnology company focused on the discovery, development and commercialization of novel therapeutics that may significantly improve cancer treatment options for patients. Our product portfolio includes active cellular immunotherapies and a small molecule product candidate that could be applicable to treating multiple types of cancers.

PROVENGE^® (sipuleucel-T), is our first commercialized product approved by the United States Food and Drug Administration (“FDA”), and is a first in class autologous cellular immunotherapy for the treatment of asymptomatic or minimally symptomatic, metastatic, castrate-resistant (hormone-refractory) prostate cancer. Prostate cancer is the most common non-skin cancer among men in the United States, with over one million men currently diagnosed with the disease, and the second leading cause of cancer deaths in men in the United States. We currently own worldwide rights for PROVENGE.

Other potential product candidates we have under development include our investigational active cellular immunotherapy, DN24-02, which may be used to treat solid tumors expressing HER2/neu such as bladder, breast and ovarian. Active cellular immunotherapies directed at carbonic anhydrase 9 (“CA-9”), an antigen highly expressed in renal cell carcinoma, and carcinoembryonic antigen (“CEA”), an antigen expressed in colorectal and other cancers, are in preclinical development. We are also investigating further development of an orally-available small molecule targeting TRPM8 that could be applicable in treating multiple types of cancer. We completed our Phase 1 clinical trial in April 2012 to evaluate TRPM8.

Cancer is characterized by abnormal cells that grow and proliferate, forming masses called tumors. Under the right circumstances, these proliferating cells can metastasize, or spread, throughout the body and produce deposits of tumor cells called metastases. As the tumors grow, they may cause tissue and organ failure and, ultimately, death. Therapies such as surgery, radiation, hormone treatments and chemotherapy may not have the desired therapeutic effect and can result in significant detrimental side effects. Active cellular immunotherapies are designed to stimulate the immune system, the body’s natural mechanism for fighting disease, to mount a specific response to tumor cells; this approach may overcome some of the limitations of current standard-of-care cancer therapies.

The immune system is composed of a variety of specialized cells. These cells recognize specific chemical structures called antigens. Foreign antigens trigger an immune response that typically results in resistance to disease-causing agents from the body. The immune system recognizes and generates a strong response to hundreds of thousands of different foreign antigens. Tumors, however, originate from the body’s own cells and largely display antigens that are also found on normal cells. The immune system may not be able to distinguish between tumors and normal cells and, thus, may be unable to mount a strong anti-cancer response. Moreover, tumors often acquire adaptations by which they suppress effective immune activation. We believe one key to directing the immune system to fight cancers is to modify, or engineer, tumor antigens so that they can be recognized by the immune system and to engineer a context in which these antigens can trigger a response.

An immune response is triggered by a specialized class of immune system cells called antigen-presenting cells. Antigen-presenting cells take up antigen from their surroundings and process the antigen into fragments that are then displayed on the surface of the antigen-presenting cell. Once displayed, these antigens can be recognized by classes of immune cells called lymphocytes. One category of lymphocytes, cytotoxic T lymphocytes (“T cells”), combats disease by killing antigen-bearing cells directly; another class of T lymphocytes, helper T cells, coordinates the activities of cells that directly target diseased tissue. Through this process, T cells may eliminate cancers and virally infected tissue. T cell immunity is also known as cell-mediated immunity and

is commonly thought to be a key defense against tumors and cells chronically infected by viruses. A second category of lymphocytes, B lymphocytes (“B cells”), produce specific antibodies when activated. Each antibody binds to and attacks one particular type of antigen expressed on a cell.

We combine our expertise in identifying and engineering antigens and processing antigen-presenting cells to produce active and autologous cellular immunotherapy products, which are designed to stimulate a tumor-directed immune response. We believe that our proprietary technology is applicable to many antigens of interest and, therefore, may be developed to target a variety of solid tumor and blood-borne malignancies.

Antigen Identification. Our internal antigen discovery programs begin by identifying novel antigens expressed in specific tissues or in malignant cells. We consider the antigens whose expression is largely confined to a specific tissue or diseased tissue as candidates for antigen engineering. PROVENGE is designed to target the prostate cancer antigen prostatic acid phosphatase (“PAP”), an antigen that is expressed in more than 90% of all prostate cancers. The antigen target for DN24-02, our active cellular immunotherapy candidate currently in development for the treatment of bladder cancer, is HER2/neu. We have also acquired the opportunity to work with the tumor antigens designated CEA and CA-9, through licenses, and discovered the tumor antigen TRPM8 as a target that may be utilized in small molecule drug development.

Antigen Engineering. We engineer antigens to use as key agents for the production of proprietary active cellular immunotherapies. We design these agents to trigger and maximize cell-mediated immunity by augmenting the uptake and processing of the target antigen by antigen-presenting cells, and by activating these cells to deliver a costimulatory signal to other components of the immune system. This is achieved in part by fusing the antigen to the immune-stimulatory cytokine GM-CSF in our proprietary Antigen Delivery Cassette^TM.

Our Antigen Delivery Cassette technology enhances antigen-presenting cell activation and uptake of antigen. The antigen-presenting cells process antigen along pathways that stimulate cell-mediated immunity. We believe this process results in a tumor-directed immune response. Our Antigen Delivery Cassette technology also provides us with a versatile foundation on which to build new proprietary antigens.

Active Cellular Immunotherapy Production and Delivery. Our manufacturing process involves two key elements: the antigen in the Antigen Delivery Cassette technology and antigen-presenting cells. To obtain antigen-presenting cells, we acquire white blood cells removed from a patient via a standard blood collection process called leukapheresis. We transport the cells to one of our manufacturing facilities via professional courier service. The cells are further processed using our proprietary cell separation technology. The resulting antigen-presenting cells are then incubated with the required concentration of the antigen under controlled conditions. We subject each dose to quality control testing, including identity, purity, potency, sterility and other safety testing. The final product is transported back to the physician site, where the cells are re-infused into the patient. Our process requires less than three days from cell collection to the administration of the active immunotherapy product candidate.

The American Cancer Society estimates that in 2013 approximately 238,590 new cases of prostate cancer will be diagnosed in the United States, and approximately 29,720 men will die of prostate cancer in the United States. Approximately 1 in 6 men will be diagnosed with prostate cancer during his lifetime, and prostate

cancer is the second leading cause of cancer death in American men, behind only lung cancer. Castrate-resistant prostate cancer is an advanced stage of prostate cancer in which the tumor growth is no longer controlled by castration therapy; it is also referred to as androgen-independent prostate cancer or hormone-refractory prostate cancer.

Early-stage, localized prostate cancer may be cured with surgery or radiation therapy. The disease will recur in approximately 20% to 30% of men, at which point hormone ablation therapy is the most commonly used treatment approach. While most prostate cancer initially responds to hormone ablation therapy, the majority of these patients will experience disease progression after 18 to 24 months, as the cancer becomes refractory to hormone treatment, or castrate-resistant. Prior to the approval of PROVENGE, a chemotherapeutic was the only FDA-approved drug that had been proven to prolong survival in men with metastatic, castrate-resistant (hormone-refractory) prostate cancer. On April 29, 2010, the FDA approved PROVENGE for the treatment of asymptomatic or minimally symptomatic, metastatic, castrate-resistant (hormone-refractory) prostate cancer. We believe that PROVENGE addresses a significant unmet medical need for patients within its labeled indication by prolonging survival with the most common side effects being mild to moderate and typically of short duration. In 2012, Zytiga^® (abiraterone acetate), an inhibitor of androgen biosynthesis, was approved, in combination with prednisone, to treat men with metastatic castrate-resistant prostate cancer prior to receiving chemotherapy and Xtandi^® (Enzalutamide), an androgen receptor inhibitor, was approved to treat men with metastatic castrate-resistant prostate cancer who previously received docetaxel chemotherapy.

In 2012, we achieved net revenue from the sale of PROVENGE of $325.3 million, compared to $213.5 million in 2011. Approximately 802 parent accounts, some of which have multiple sites, had infused the product as of the end of 2012. For the majority of 2012, commercial sale of PROVENGE was supported by our manufacturing facilities in Morris Plains, New Jersey (the “New Jersey Facility”), Orange County, California (the “Orange County Facility”), and Atlanta, Georgia (the “Atlanta Facility”). On July 30 2012, we announced a strategic restructuring plan that included re-configuring our manufacturing model with the closure of our New Jersey Facility. We subsequently sold the New Jersey Facility to Novartis Pharmaceuticals Corporation (“Novartis”) for $43.0 million in December 2012. We believe that with the sale of our New Jersey Facility, the capacity at our Atlanta and Orange County facilities will be sufficient to handle the manufacturing of PROVENGE in the volumes that we anticipate.

On June 30, 2011, the Centers for Medicare and Medicaid Services (the “CMS”) issued a final National Coverage Determination (“NCD”) for PROVENGE, completing the analysis commenced one year prior and requiring Medicare contractors to cover the use of PROVENGE for on-label use. The NCD standardized coverage processes across the country for all Medicare patients with asymptomatic or minimally symptomatic metastatic castrate-resistant (hormone-refractory) prostate cancer and provides the local Medicare Administrative Contractors (“MACs”) specific criteria, consistent with the label, on how PROVENGE should be covered. PROVENGE was issued a product specific Q-code effective July 1, 2011, which allows for electronic submission of claims. During November 2011, CMS also updated their coverage policy for PROVENGE to cover the infusion costs associated with the administration of PROVENGE, making coverage for PROVENGE consistent with all other infused biologics.

In January 2011, we announced plans to seek marketing authorization for the sale of PROVENGE in Europe. Following a number of pre-submission meetings with European Union (“E.U.”) National Agencies, we expect that data from our Phase 3 D9902B IMPACT (IMmunotherapy for Prostate AdenoCarcinoma Treatment) study, supported by data from our D9901 and D9902A studies, will be sufficient to seek regulatory approval for PROVENGE in the E.U. Using clinical data contained in our United States Biologics License Application, we filed our marketing authorization application (“MAA”) with the European Medicines Agency (“EMA”), which was validated on January 25, 2012. We plan to manufacture product through a contract manufacturing organization. We anticipate a regulatory decision from the E.U. in mid-2013.

PROVENGE received FDA approval for use in men with asymptomatic or minimally symptomatic metastatic castrate-resistant (hormone-refractory) prostate cancer in April 2010. The pivotal clinical trial supporting FDA approval was D9902B (IMPACT), which was a multicenter, randomized, double-blind, controlled study of 512 men with asymptomatic or minimally symptomatic, metastatic, castrate-resistant prostate cancer. The IMPACT study met its primary endpoint of overall survival, achieving a p-value of 0.032, exceeding the pre-specified level of statistical significance defined by the study’s design (p-value less than 0.043). PROVENGE reduced the risk of death by 22.5% compared to control (hazard ratio=0.775), and extended median survival by 4.1 months compared to control (25.8 months versus 21.7 months).

The IMPACT results were supported by the results of the D9901 trial, a multicenter, randomized double-blind controlled study in 127 men with asymptomatic, metastatic castrate-resistant prostate cancer. The trial did not meet its primary endpoint of time to disease progression (p-value of 0.052), but a planned analysis of overall survival after three years of follow-up demonstrated a 41% reduction in the risk of death (HR=0.586, p=0.01). Median survival was extended by 4.1 months.

A third randomized study, D9902A, was identical in original design to D9901. Enrollment in D9902A was stopped in 2002 after 98 of 120 patients were enrolled. The trial demonstrated a trend towards improved overall survival, which did not achieve statistical significance (hazard ratio 0.786, p=0.331).

In the controlled clinical trials described above, the most common adverse events (incidence 15%) reported in the PROVENGE group were chills, fatigue, fever, back pain, nausea, joint ache, and headache. The majority of adverse events were mild or moderate in severity (Grade 1 or 2). In general, they occurred within 1 day of infusion and were short in duration (resolved in <2 days). Serious adverse events reported in the PROVENGE group included acute infusion reactions (occurring within 1 day of infusion) and cerebrovascular events. Severe (Grade 3) acute infusion reactions were reported in 3.5% of patients in the PROVENGE group. Reactions included chills, fever, fatigue, asthenia, dyspnea, hypoxia, bronchospasm, dizziness, headache, hypertension, muscle ache, nausea, and vomiting. No Grade 4 or 5 acute infusion reactions were reported in patients in the PROVENGE group. In Study D9902B, the percentage of patients who discontinued treatment with PROVENGE due to an adverse reaction was 1.5%. To fulfill a post-marketing requirement, we are conducting a registry of approximately 1,500 patients (P10-3, described further below) to further evaluate a small potential safety signal of cerebrovascular events observed in the Phase 3 clinical trials included in the safety data for the PROVENGE label. In the four randomized clinical trials of PROVENGE in prostate cancer patients included in the safety data, cerebrovascular events were observed in 3.5% of patients in the PROVENGE group compared with 2.6% of patients in the control group.

Clinical Trial— P09-1. In 2009, we initiated a Phase 2 open-label study of sipuleucel-T. The trial allowed us to provide sipuleucel-T to men with metastatic castrate-resistant prostate cancer while marketing approval for PROVENGE was being pursued, obtain safety data, evaluate the magnitude of immune responses to treatment with sipuleucel-T, and to further characterize the cellular components of sipuleucel-T. This trial was closed to new enrollment following FDA approval of PROVENGE. Overall survival data will also be collected.

Clinical Trial — P07-2. In August 2008, we initiated a Phase 2 trial of PROVENGE called ProACT (PROstate Active Cellular Therapy), or P07-2. The multicenter trial has been closed to new enrollment after enrolling approximately 120 patients with metastatic, castrate-resistant (hormone-refractory) prostate cancer. All patients received active treatment but were randomized into one of three cohorts to receive sipuleucel-T manufactured with different concentrations of the prostate antigen component. Patients received three infusions of sipuleucel-T, each approximately two weeks apart. We are conducting the trial to explore the effect of antigen concentration on antigen-presenting cell activation, as measured by CD54 upregulation, a measure of product potency, as well as on immune response. Overall survival data will also be collected.

Clinical Trial — P10-2. In August 2011, we initiated a Phase 2 trial to examine the sequencing of PROVENGE and androgen deprivation therapy (“ADT”) in men with non-metastatic prostate cancer and a rising

serum prostate specific antigen (PSA) after primary therapy. This multicenter trial has completed enrollment. All subjects receive active treatment, but are randomized into one of two arms. Patients in Arm 1 receive PROVENGE and two weeks later begin one year of ADT. In Arm 2, patients receive twelve weeks of ADT before beginning PROVENGE and continue ADT for a total of one year. In both arms, three infusions of PROVENGE are given, each approximately two weeks apart. The trial is intended to evaluate whether ADT started before or after PROVENGE leads to superior augmentation of immune response to PROVENGE and will also evaluate safety, immune responses over time, PROVENGE product parameters and changes in PSA.

Clinical Trial — P10-3. In January 2011, we initiated an observational registry called PROCEED (PROVENGE Registry for Observation, Collection, Evaluation of Experience Data), or P10-3. This multicenter United States registry is targeting enrollment of at least 1,500 men being treated with PROVENGE to further evaluate and quantify the risk of cerebrovascular events following treatment with PROVENGE and will also follow all subjects for survival.

Clinical Trial — P11-1. In July 2012, we initiated a Phase 2 trial of sipuleucel-T in Europe, which is intended to demonstrate that product manufacturing and logistics can be conducted successfully in Europe. Additional safety data in men with metastatic castrate-resistant prostate cancer will also be gathered as part of the trial. Four clinical trial sites have been identified, one each in Austria, France, The Netherlands, and United Kingdom. The first subject initiated treatment on September 28, 2012. The study is anticipated to enroll between 10 and 45 subjects.

Clinical Trial — P11-3. In December 2011, we initiated a Phase 2 trial in the United States to examine PROVENGE with concurrent versus sequential administration of abiraterone acetate plus prednisone in men with metastatic castrate-resistant prostate cancer. This multicenter trial has completed enrollment. Subjects randomized to this trial receive 3 infusions of PROVENGE and 26 weeks of abiraterone acetate plus prednisone treatment. Subjects are randomized to one of two treatment arms; Arm 1 patients receive PROVENGE and abiraterone acetate plus prednisone at the same time and Arm 2 patients receive PROVENGE first, then abiraterone acetate plus prednisone approximately 10 weeks later. We are conducting this trial to explore the effect of the sequencing of these two treatments on antigen-presenting cell activation, as measured by cumulative CD54 upregulation. We will also be evaluating sipuleucel-T product parameters, peripheral immune response, safety, changes in serum PSA and overall survival.

Clinical Trial — P-11. In November 2006, we disclosed preliminary results from our ongoing PROTECT (PROVENGE Treatment and Early Cancer Treatment) or P-11, Phase 3 clinical trial in patients with androgen-dependent (hormone sensitive) prostate cancer. The study was designed to explore the biologic activity of sipuleucel-T in patients with recurrent prostate cancer prior to the development of metastatic disease. Among the preliminary findings, the study showed a median time to biochemical failure (“BF”) of 18.0 months for subjects in the sipuleucel-T group compared to 15.4 months for subjects in the control group (HR=0.936; p=0.737). When the analysis was restricted to patients with confirmed BF, the HR for BF was 0.797 in favor of sipuleucel-T (p=0.278). In addition, the study showed a 35% increase in PSA Doubling Time (“PSADT”) for patients randomized to sipuleucel-T compared to control (125 vs. 93 days; p=0.046, F-test) based on an analysis of PSADT calculated from 90 days following randomization to BF or the initiation of systemic therapy. PSADT calculated after testosterone recovery to baseline levels demonstrated a 48% increase in PSADT for the sipuleucel-T arm (155 vs. 105 days; p=0.038). PSADT is currently considered to be one of the best predictors of clinical outcome in patients with PSA recurrence following primary therapy. This study is closed to enrollment; however, patients continue to be followed for the clinical secondary endpoints of distant failure and overall survival.

Clinical Trial — P07-1. In August 2008, we initiated a Phase 2 trial of sipuleucel-T in men with localized prostate cancer who were scheduled to undergo a radical prostatectomy. The trial, called NeoACT (NEOadjuvant Active Cellular immunoTherapy) or P07-1, has been fully enrolled. The study will assess the safety of and immune response induced by sipuleucel-T in men with localized prostate cancer.

Clinical Trial — P10-1. In October 2011, we initiated a follow-on clinical trial to P-11. This trial will evaluate the immune response elicited from a second sipuleucel-T regimen following disease progression in P-11

subjects previously treated with sipuleucel-T. The safety of administering a second sipuleucel-T regimen will also be evaluated as well as any correlation between a sipuleucel-T immune response and overall survival. Enrollment of up to 90 former P-11 subjects is possible at 10 sites in the United States.

DN24-02. DN24-02 is our investigational active immunotherapy which potentially may be used for the treatment of patients with bladder, breast, ovarian and other solid tumors expressing HER2/neu. Results from an earlier Phase 1 study targeting the HER2/neu antigen showed that treatment stimulated significant immune responses in patients with advanced, metastatic HER2/neu positive breast cancer, which were shown to be enhanced following booster infusions. Twenty-two percent of patients had evidence of anti-cancer activity. This included one patient who experienced a partial response lasting approximately 6 months and three patients who had stable disease for over a year (74.9-94.0 weeks) without the addition of any other cancer therapy other than the continuation of bisphosphonates. Two additional patients had stable disease for up to 20 weeks. These results were published in the August 20, 2007 issue of the Journal of Clinical Oncology. In June 2011, we initiated a Phase 2 trial of DN24-02 called NeuACT (NEU Active Cellular immunoTherapy), or N10-1. This open-label trial will evaluate DN24-02 as adjuvant investigational treatment versus standard of care in subjects with high risk HER2+ urothelial carcinoma following surgical resection. We are conducting the trial to evaluate overall survival, disease-free survival, the safety of DN24-02, CD54 upregulation in the product, and immune response following administration of DN24-02. Up to 180 subjects will be enrolled in the United States.

CA-9 Antigen. We have access to the CA-9 antigen through an in-license. Over 75% of primary and metastatic renal cell carcinomas highly express the transmembrane protein CA-9, whereas expression of CA-9 in normal kidneys is low or undetectable. CA-9 is also expressed in other cancers such as non-small cell lung and breast tumors, but not in the corresponding normal tissue. As such, we believe that CA-9 represents an attractive antigen target for study as a potential immunotherapy target. In May 2006, preclinical data were presented at the American Association of Immunology Conference demonstrating that an active immunotherapy product made using CA-9 antigen expressed using our Antigen Delivery Cassette significantly prolonged survival in animal tumor models. We are investigating the use of active cellular immunotherapy product candidates targeted at CA-9.

CEA. We have access to CEA through an in-license. CEA was found to be present on 70% of lung cancers, virtually all cases of colon cancers and approximately 65% of breast cancers. We are investigating the use of active cellular immunotherapy product candidates targeted at CEA in breast, lung and colon cancer.

TRPM8. The protein encoded by the gene first designated trp-p8 is an ion channel. It was identified through our internal antigen discovery program. As progress has been made in the discovery of other ion channel members of the trp (Transient Receptor Potential) family, trp-p8 (sub-family M) has come to be more commonly referred to as TRPM8. A patent on the gene encoding this ion channel was issued to us in 2001. In normal human tissues, it is expressed predominantly in the prostate and is over-expressed in hyperplastic prostates. A study found it to be present in 100% of prostate cancers, approximately 71% of breast cancers, 93% of colon cancers and 80% of lung cancers. Ion channels such as TRPM8 may be attractive targets for manipulation by small molecule drug therapy. Small molecule agonists have been synthesized that activate the TRPM8 ion channel and induce cell death (apoptosis). Some of these small molecule agonists are orally bioavailable and in December 2008 we filed an Investigational New Drug application with the FDA for clinical evaluation of the product candidate D3263 HCl in subjects with advanced cancer. We completed our Phase 1 clinical trial in April 2012. All subjects experienced cold sensation or dysthesia, consistent with on-target activation of the cold menthol receptor. Elevations in troponin-T were observed without evidence of cardiac toxicity. The maximum target dose was determined to be 100 mg/day.

To support our commercialization efforts, we have developed manufacturing facilities and related operations that we believe are sufficient to handle the manufacturing of PROVENGE in the volumes that we antici-

pate. At the time of commercial launch of PROVENGE, manufacturing was conducted in our New Jersey Facility. Since the commercial manufacture of PROVENGE began in May 2010, we expanded the capacity at our New Jersey Facility and built our Atlanta Facility and our Orange County Facility. On July 30 2012, we announced a strategic restructuring plan that included re-configuring our manufacturing model with the closure of our New Jersey Facility. We subsequently sold the New Jersey Facility to Novartis for $43.0 million in December 2012.

In February 2011, we entered into a technology transfer and manufacturing agreement with a third-party manufacturer for the manufacture of PROVENGE for clinical trials and prospective commercial sale in Europe following EMA marketing approval.

As of December 31, 2012, our manufacturing operations consisted of approximately 500 employees, a decrease from 865 employees as of December 31, 2011 due to the 2012 restructuring and workforce reduction, including the closure of the New Jersey Facility. Our commercial team included approximately 180 employees in sales, marketing, and market access support as of December 31, 2012, an increase from 150 employees as of December 31, 2011, due in part to the realignment of employees from other departments.

The manufacture of our active cellular immunotherapy candidates, such as PROVENGE, begins with a standard cell collection process called leukapheresis. The resulting cells are then transported to one of our two remaining manufacturing facilities to undergo the process to manufacture PROVENGE. The final product is returned to the healthcare provider for infusion into the patient. Our most significant provider for leukapheresis procedures for the manufacture of PROVENGE is the American Red Cross. We also have agreements with, among others, Puget Sound Blood Center, New York Blood Center, Blood Group of America, and Hemacare as providers of commercial leukapheresis services. We continue to pursue commercial arrangements with other vendors in order to have a network of commercial leukapheresis suppliers to meet the geographical and volume requirements for PROVENGE.

We utilize two commercial couriers for transport of the leukapheresis material and final product. We oversee transportation of the leukapheresis material and the final product through our proprietary integrated information technology tracking system.

We currently depend on specialized vendor relationships that are not readily replaceable for some of the components for our active immunotherapy candidates. One of these components is the antigen used in the manufacture of PROVENGE, which is supplied to us under a supply agreement with Fujifilm Diosynth Biotechnologies (“Fujifilm”), formerly Diosynth RTP, Inc. The second amendment to the supply agreement with Fujifilm extended the term of the agreement through December 31, 2018. Unless terminated, the agreement will renew automatically thereafter for additional 5-year terms. The agreement may be terminated upon written notice by us or Fujifilm at least 24 months before the end of a renewal term or by either party in the event of an uncured material breach or default by the other party. We have remaining commitments with Fujifilm to purchase antigen of up to $72.1 million. We expect payments on these commitments to extend into 2014.

The cell separation devices and related media that isolate the cells for our active immunotherapy product candidates from a patient’s blood and other bodily fluids are manufactured by third-party contractors in compliance with current Good Manufacturing Practices (“cGMP”). We use third-party contractors to produce commercial quantities of these devices for PROVENGE.

As a matter of regular course, we have obtained, and intend to actively seek to obtain, when appropriate, protection for our current and prospective products and proprietary technology by means of United States and foreign patents, trademarks, and applications for each of the foregoing. In addition, we rely upon trade secrets and contractual agreements to protect certain of our proprietary technology and products. PROVENGE is a novel biologic, and it is difficult to predict how competition could develop and accordingly which aspects of our related intellectual property may prove the most significant in the future. We have three issued United States patents

with claims relating to immunostimulatory compositions, including PROVENGE, and to methods of treating specific diseases, including prostate cancer, using the immunostimulatory compositions. We also have four issued United States patents with claims relating to the cell separation devices and related media and certain aspects of the manufacturing process used to produce PROVENGE. The scheduled expiration dates of our United States patents related to PROVENGE are in 2014 through 2018. Outside the United States, we have, in certain territories, corresponding issued patents related to PROVENGE that are scheduled to expire in 2015 through 2019. Patent expiration dates may be subject to patent term extension depending on certain factors. In addition, following expiration of a basic product patent or loss of patent protection resulting from a legal challenge, it may be possible to continue to obtain the commercial benefits of market exclusivity from other characteristics such as clinical trial data, product manufacturing trade secrets, uses for products, and special formulations of the product or delivery mechanisms.

We protect our technology through United States patent filings, trademarks and trade secrets that we own or license. We own or license issued patents or patent applications that are directed to the media and devices by which cells can be isolated and manipulated, our Antigen Delivery Cassette^TM technology, our antigen-presenting cell processing technology, immunostimulatory compositions, methods of making the immunostimulatory compositions, methods for treating specific diseases using the immunostimulatory compositions, our small molecule pharmaceutical compound product candidates that are modulators of ion channel and protease activity, methods of making the product candidates, and methods for treating certain diseases using the product candidates. We have filed foreign counterparts to these issued patents and patent applications in a number of countries.

We intend to continue using our scientific experience to pursue and patent new developments to enhance our position in the cancer field. Patents, if issued, may be challenged, invalidated, declared unenforceable, circumvented or may not cover all applications we desire. Thus, any patent that we own or license from third parties may not provide adequate protection against competitors. Our pending patent applications, those we may file in the future, or those we may license from third parties may not result in issued patents. Also, patents may not provide us with adequate proprietary protection or advantages against competitors with, or who could develop, similar or competing technologies, or who could design around our patents. In addition, future legislation may impact our competitive position in the event brand-name and follow-on biologics do not receive adequate patent protection. From time to time, we have received invitations to license third-party patents.

We also rely on trade secrets and know-how that we seek to protect, in part, by using confidentiality agreements. Our policy is to require our officers, employees, consultants, contractors, manufacturers, outside scientific collaborators and sponsored researchers and other advisors to execute confidentiality agreements. These agreements provide that all confidential information developed or made known to the individual during the course of the individual’s relationship with us be kept confidential and not disclosed to third parties except in specific limited circumstances. We also require signed confidentiality agreements from companies that receive our confidential data. For employees, consultants and contractors, we require agreements providing that all inventions conceived while rendering services to us shall be assigned to us as our exclusive property.

The biotechnology and biopharmaceutical industries are characterized by rapidly advancing technologies, intense competition and a strong emphasis on proprietary products. Pharmaceutical and biotechnology companies, academic institutions and other research organizations are actively engaged in the discovery, research and development of products designed to address prostate cancer and other indications. There are products currently under development by other companies and organizations that could compete with PROVENGE or other products that we are developing. Products such as chemotherapeutics, androgen metabolism or androgen receptor antagonists, endothelin A receptor antagonists, antisense compounds, angiogenesis inhibitors and gene therapies for cancer are also under development by a number of companies and could potentially compete with PROVENGE and our other product candidates. In addition, many universities and private and public research institutes may in the future become active in cancer research, which may be in direct competition with us. Docetaxel (also referred to by its brand name Taxotere) was approved by the FDA for the therapeutic treatment of metastatic, androgen-independent prostate cancer in 2004 and JEVTANA^® (cabazitaxel) was approved in 2010 for use in men as a second line therapy following progression after initial treatment with docetaxel.

In 2011, ZYTIGA^® (abiraterone acetate) was approved for use in men with prostate cancer with progression following treatment with a chemotherapeutic regime. In 2012, ZYTIGA was approved, in combination with prednisone, to treat men with metastatic castrate-resistant prostate cancer prior to receiving chemotherapy, and Xtandi (Enzalutamide), an androgen receptor inhibitor, was approved to treat men with metastatic castrate-resistant prostate cancer who previously received docetaxel chemotherapy. Other therapies such as Bavarian Nordic’s PROSTVAC^® are the subject of ongoing clinical trials in men with metastatic castrate-resistant prostate cancer. PROSTVAC^®, currently in Phase 3 clinical development, is a therapeutic cancer vaccine being studied in men with metastatic castrate-resistant prostate cancer.

Our competitors include major pharmaceutical companies. These companies may have significantly greater financial resources and expertise in research and development, manufacturing, preclinical testing, conducting clinical trials, obtaining regulatory approvals and marketing. In addition, smaller competitors may collaborate with these large established companies to obtain access to their resources.

Our ability to successfully commercialize PROVENGE and our other potential products, and compete effectively with third parties will depend, in large part, on:

Competition among approved marketed products will be based upon, among other things, efficacy, reliability, product safety, price-value analysis, and patent position. Our competitiveness will also depend on our ability to advance our product candidates, license additional technology, maintain a proprietary position in our technologies and products, obtain required government and other approvals on a timely basis, attract and retain key personnel and enter into corporate relationships that enable us and our collaborators to develop effective products that can be manufactured cost-effectively and marketed successfully.

Government authorities in the United States and other countries extensively regulate, among other things, the preclinical and clinical testing, manufacturing, labeling, storage, record-keeping, advertising, promotion, export, marketing and distribution of biologic products. In the United States, the FDA subjects pharmaceutical and biologic products to rigorous review under the Federal Food, Drug, and Cosmetic Act, the Public Health Service Act and other federal statutes and regulations.

To obtain approval of our product candidates from the FDA, we must, among other requirements, submit data supporting safety and efficacy as well as detailed information on the manufacture and composition of the

product candidate. In most cases, this entails extensive laboratory tests and preclinical and clinical trials. The collection of these data, as well as the preparation of applications for review by the FDA, are costly in time and effort, and may require significant capital investment. We may encounter significant difficulties or costs in our efforts to obtain FDA approvals that could delay or preclude us from marketing any products we may develop.

A company typically conducts human clinical trials in three sequential phases, but the phases may overlap. Phase 1 trials consist of testing of the product in a small number of patients or healthy volunteers, primarily for safety at one or more doses. Phase 1 trials in cancer are often conducted with patients who are not healthy and who have end-stage or metastatic cancer. Phase 2 trials, in addition to safety, evaluate the efficacy of the product in a patient population somewhat larger than Phase 1 trials. Phase 3 trials typically involve additional testing for safety and clinical efficacy in an expanded population at geographically dispersed test sites. Prior to commencement of each clinical trial, a company must submit to the FDA a clinical plan, or “protocol,” which must also be approved by the Institutional Review Boards at the institutions participating in the trials. The trials must be conducted in accordance with the FDA’s good clinical practices. The FDA may order the temporary or permanent discontinuation of a clinical trial at any time.

To obtain marketing authorization, a company must submit to the FDA the results of the preclinical and clinical testing, together with, and among other things, detailed information on the manufacture and composition of the product, in the form of a new drug application or, in the case of a biologic such as PROVENGE, a biologics license application.

We are also subject to a variety of regulations governing clinical trials and sales of our products outside the United States. Whether or not FDA approval has been obtained, approval of conduct of a clinical trial or authorization of a product by the comparable regulatory authorities of foreign countries and regions must be obtained prior to the commencement of marketing the product in those countries. The approval process varies from one regulatory authority to another and the time may be longer or shorter than that required for FDA approval based on local regulations. In the E.U., Canada and Australia, regulatory requirements and approval processes are similar, in principle, requiring a rigorous assessment of the data to ensure a product has satisfactorily demonstrated an acceptable benefit/risk profile prior to regulatory approval for marketing.

Congress enacted the Food and Drug Administration Modernization Act of 1997 (the “Modernization Act”) in part to ensure the availability of safe and effective drugs, biologics and medical devices by expediting the development and review for certain new products. The Modernization Act establishes a statutory program for the review of Fast Track products, including biologics. A Fast Track product is defined as a new drug or biologic intended for the treatment of a serious or life-threatening condition that demonstrates the potential to address unmet medical needs for this condition. Under the Fast Track program, the sponsor of a new drug or biologic may request that the FDA designate the drug or biologic as a Fast Track product at any time during the development of the product, prior to a new drug application submission.

The Food and Drug Administration Amendments Act of 2007 expanded FDA authority over drug products after approval. All approved drug products are subject to continuing regulation by the FDA, including record-keeping requirements, reporting of adverse experiences with the product, sampling and distribution requirements, notifying the FDA and gaining its approval of certain manufacturing or labeling changes, complying with certain electronic records and signature requirements, submitting periodic reports to the FDA, maintaining and providing updated safety and efficacy information to the FDA, and complying with FDA promotion and advertising requirements. Failure to comply with the statutory and regulatory requirements can subject a manufacturer to possible legal or regulatory action, such as warning letters, suspension of manufacturing, seizure of product, injunctive action, criminal prosecution, or civil penalties.

The FDA may require post-marketing studies or clinical trials to develop additional information regarding the safety of a product. These studies or trials may involve continued testing of a product and development of

data, including clinical data, about the product’s effects in various populations and any side effects associated with long-term use. The FDA may require post-marketing studies or trials to investigate known serious risks or signals of serious risks or identify unexpected serious risks and may require periodic status reports if new safety information develops. Failure to conduct these studies in a timely manner may result in substantial civil fines.

Drug and biologics manufacturers and their subcontractors are required to register their establishments with the FDA and certain state agencies, and to list their products with the FDA. The FDA periodically inspects manufacturing facilities in the United States and abroad in order to assure compliance with the applicable cGMP regulations and other requirements. Facilities also are subject to inspections by other federal, foreign, state or local agencies. In complying with the cGMP regulations, manufacturers must continue to assure that the product meets applicable specifications, regulations and other post-marketing requirements. We must ensure that third-party manufacturers continue to ensure full compliance with all applicable regulations and requirements. Failure to comply with these requirements subjects the manufacturer to possible legal or regulatory action, such as suspension of manufacturing or recall or seizure of product.

Also, newly discovered or developed safety or efficacy data may require changes to a product’s approved labeling, including the addition of new warnings and contraindications, additional preclinical or clinical studies, or even in some instances, revocation or withdrawal of the approval. Violations of regulatory requirements at any stage, including after approval, may result in various adverse consequences, including the FDA’s withdrawal of an approved product from the market, other voluntary or FDA-initiated action that could delay or restrict further marketing, and the imposition of civil fines and criminal penalties against the manufacturer and Biologics License Applications (“BLA”) holder. In addition, discovery of previously unknown problems may result in restrictions on the product, manufacturer or BLA holder, including withdrawal of the product from the market. Furthermore, new government requirements may be established that could delay or prevent regulatory approval of our products under development, or affect the conditions under which approved products are marketed.

The Biologics Price Competition and Innovation Act (“BPCIA”) was passed on March 23, 2010 as Title VII to the Patient Protection and Affordable Care Act. The law provides for an abbreviated approval pathway for biological products that demonstrate biosimilarity to a previously-approved biological product. The BPCIA provides 12 years of exclusivity for innovator biological products. The BPCIA may be applied to our product in the future and could be applied to allow approval of biosimilars to our products.

Federal Anti-Kickback, False Claims Laws & The Federal Physician Payment Sunshine Act

In addition to FDA restrictions on marketing of pharmaceutical products, several other types of state and federal laws are relevant to certain marketing practices in the pharmaceutical industry. These laws include anti-kickback statutes, false claims statutes, and the federal Physician Payment Sunshine Act. The federal healthcare program anti-kickback statute prohibits, among other things, persons from knowingly and willfully soliciting, receiving, offering or paying remuneration, directly or indirectly, in exchange for or to induce either the referral of an individual for, or the purchase, lease, order or recommendation of, any good or service for which payment may be made under federal health care programs such as the Medicare and Medicaid programs. For example, this statute has been interpreted to apply to arrangements between pharmaceutical manufacturers on the one hand and prescribers, purchasers and formulary managers on the other. Violations of the federal anti-kickback statute are punishable by imprisonment, criminal fines, civil monetary penalties and exclusion from participation in federal healthcare programs. The federal Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act of 2010 and subsequent legislation (collectively, “PPACA”), among other things, amends the intent requirement of the federal anti-kickback statute. A person or entity no longer needs to have actual knowledge of this statute or specific intent to violate it. In addition, PPACA provides that the government may assert that a claim including items or services resulting from a violation of the federal anti-kickback statute constitutes a false or fraudulent claim for purposes of the false claims statutes. There are a number of statutory exceptions and regulatory safe harbors protecting certain common activities from prosecution or other regulatory sanctions; however, the exceptions and safe harbors are drawn narrowly, and practices that do not fit squarely within an exception or safe harbor may be subject to scrutiny.

Federal false claims laws prohibit, among other things, any person from knowingly presenting, or causing to be presented, a false or fraudulent claim for payment, or knowingly making, or causing to be made, a false record or statement material to a false or fraudulent claim. For example, several pharmaceutical and other healthcare companies have faced enforcement actions under these laws for allegedly inflating drug prices they report to pricing services, which in turn were used by the government to set Medicare and Medicaid reimbursement rates, and for allegedly providing free product to customers with the expectation that the customers would bill federal programs for the product. In addition, anti-kickback statute violations and certain marketing practices, including off-label promotion, may also implicate false claims laws. Federal false claims laws violations may result in imprisonment, criminal fines, civil monetary damages and penalties and exclusion from participation in federal healthcare programs. The majority of states also have statutes or regulations similar to the federal anti-kickback law and false claims laws, which apply to items and services reimbursed under Medicaid and other state programs. A number of states have anti-kickback laws that apply regardless of the payer.

In addition, the federal Physician Payment Sunshine Act will require extensive tracking of physician and teaching hospital payments, maintenance of a payments database, and public reporting of the payment data. CMS recently issued a final rule implementing the Physician Payment Sunshine Act provisions and clarified the scope of the reporting obligations, requiring manufacturers to begin tracking on August 1, 2013 and reporting payment data to CMS by March 31, 2014. Failure to comply with the reporting obligations may result in civil monetary penalties.

Marketing Restrictions and Disclosure Requirements. A number of states, such as Minnesota, Massachusetts and Vermont, have requirements that restrict pharmaceutical marketing activities. These state requirements limit the types of interactions we may have with healthcare providers licensed in these jurisdictions. In addition, a number of states have laws that require pharmaceutical companies to track and report payments, gifts and other benefits provided to physicians and other health care professionals and entities. Still other state laws mandate implementation of specific compliance policies to regulate interactions with health care professionals.

State Fraud and Abuse Laws. Several states have enacted state law equivalents of federal laws, such as anti-kickback and false claims laws. These state laws may apply to items or services reimbursed under Medicaid and other state programs or, in several states, apply regardless of the payer.

State Price Reporting Requirements. Some states, including Texas, New Mexico and Vermont, have enacted state price disclosure requirements that may apply to any drug sold in the state, subject to specific state requirements.

Healthcare Reform. Certain states, such as Massachusetts, are pursuing their own programs for health reform. These programs may include cost containment measures that could affect state healthcare benefits, particularly for higher priced drugs. Under PPACA, states will have authority to define packages of “essential health benefits” that health plans in the individual and small group markets must offer beginning in 2014. The definition of these packages could affect coverage of our products by those plans.

Sale of Pharmaceutical Products. Many states have enacted their own laws and statutes applicable to the sale of pharmaceutical products within the state, with which we must comply. We are also subject to certain state privacy and data protection laws and regulations.

In the United States, the Medicare program is administered by CMS. Coverage and reimbursement for products and services under Medicare are determined in accordance with the Social Security Act and pursuant to regulations promulgated by CMS, as well as the agency’s subregulatory coverage and reimbursement determinations. Medicare Part B provides limited coverage of outpatient drugs and biologicals that are furnished “incident to” a physician’s services. Generally, “incident to” drugs and biologicals are covered only if they satisfy certain criteria, including that they are of the type that is not usually self-administered by the patient and they are reasonable and necessary for a medically accepted diagnosis or treatment.

On June 30, 2011, the CMS issued a final NCD for PROVENGE, completing the analysis commenced one year prior and requiring Medicare contractors to cover the use of PROVENGE for on-label use. The NCD standardized coverage across the country for all Medicare patients with asymptomatic or minimally symptomatic metastatic castrate-resistant (hormone-refractory) prostate cancer and provides the local MACs specific criteria, consistent with the label, on how PROVENGE should be covered. PROVENGE was issued a product specific Q-code effective July 1, 2011, which allows for electronic submission of claims.

Medicare Part B pays providers that administer PROVENGE under a payment methodology using average sales price (“ASP”) information. Manufacturers, including us, are required to provide ASP information to CMS on a quarterly basis. If a manufacturer is found to have made a misrepresentation in the reporting of ASP, the statute provides for civil monetary penalties of up to $10,000 for each misrepresentation for each day in which the misrepresentation was applied. This information is used to compute Medicare payment rates, updated quarterly based on this ASP information. The Medicare Part B payment methodology for physicians is ASP plus six percent and can change only through legislation. There is a mechanism for comparison of ASP for a product to the widely available market price and the Medicaid Average Manufacturer Price for the product, which could cause further decreases in Medicare payment rates, although this mechanism has yet to be utilized. The statute establishes the payment rate for new drugs and biologicals administered in hospital outpatient departments that are granted “pass-through status” at the rate applicable in physicians’ offices (i.e., ASP plus six percent) for two to three years after FDA approval. PROVENGE was granted pass-through status effective October 1, 2010, allowing reimbursement in hospital outpatient departments at ASP plus six percent, and this status expired on December 31, 2012. CMS establishes the payment rates for drugs and biologicals that do not have pass-through status by regulation. For 2013, these drugs, including PROVENGE, are reimbursed at ASP plus six percent if they have an average cost per day exceeding $80; drugs with an average cost per day of less than $80 are not separately reimbursed.

The methodology under which CMS establishes reimbursement rates is subject to change, particularly because of budgetary pressures facing the Medicare program and the federal government. Beginning April 1, 2013, Medicare payments for all items and services, including drugs and biologicals, will be reduced by up to 2% under the sequestration required by the Budget Control Act of 2011, Pub. L. No. 112-25 (“BCA”), as amended by the American Taxpayer Relief Act of 2012, Pub. L. 112-240 (“ATRA”), unless Congress acts to prevent the cuts. The Medicare Modernization Act of 2003 made changes in reimbursement methodology that reduced the Medicare reimbursement rates for many drugs, including oncology therapeutics. In the past year, Congress has considered additional reductions in Medicare reimbursement for drugs as part of legislation to reduce the budget deficit. Similar legislation could be enacted in the future. The Medicare regulations and interpretive determinations that determine how drugs and services are covered and reimbursed also are subject to change.

Pharmaceutical Pricing and Reimbursement Under Medicaid and Other Programs

In many of the markets in which we may do business in the future, the prices of pharmaceutical products are subject to direct price controls (by law) and to drug reimbursement programs with varying price control mechanisms.

PROVENGE is made available to patients that are eligible for Medicaid benefits. A condition of federal funds being made available to cover our products under Medicaid and Medicare Part B is Dendreon’s participation in the Medicaid drug rebate program, established by the Omnibus Budget Reconciliation Act of 1990, Pub. L. 101-508, and as amended by subsequent legislation, including PPACA. Under the Medicaid drug rebate

program, Dendreon pays a rebate to each state Medicaid program for each unit of PROVENGE paid for by those programs. The rebate amount varies by quarter, and is based on pricing data reported by us on a monthly and quarterly basis to CMS. These data include the monthly and quarterly average manufacturer price, or AMP, for our drugs, and in the case of innovator products like PROVENGE, the quarterly best price, or BP, which is our lowest price in a quarter to any commercial or non-governmental customer. If we become aware that our reported prices for prior quarters are incorrect or should be changed to reflect late-arriving pricing data, we are obligated to submit the corrected data for a period not to exceed 12 quarters from the quarter in which the data originally were due. Any corrections to our pricing data could result in an overage or underage in our rebate liability for past quarters, depending on the nature of the correction.

The availability of federal funds under Medicaid and Medicare Part B to pay for PROVENGE and any other products that are approved for marketing also is conditioned on our participation in the Public Health Service 340B drug pricing program. The 340B drug pricing program requires participating manufacturers to agree to charge statutorily-defined covered entities no more than the 340B “ceiling price” for the manufacturer’s covered outpatient drugs. These covered entities include hospitals that serve a disproportionate share of low-income patients, as well as a variety of community health clinics and other recipients of health services grant funding. PPACA expanded the 340B program to include certain free standing cancer hospitals, critical access hospitals, rural referral centers and sole community hospitals, each as defined by the Act. The 340B ceiling price for a drug is calculated using a statutory formula that is based on the AMP and Medicaid rebate amount for the drug. Any revisions to previously reported Medicaid pricing data also may require revisions to the 340B ceiling prices that were based on those data and could require the issuance of refunds.

We also make PROVENGE available for purchase by authorized users of the Federal Supply Schedule (“FSS”), of the General Services Administration pursuant to an FSS contract with the Department of Veterans Affairs (“VA”), which we were awarded in September 2012. Under the Veterans Health Care Act of 1992 (“VHCA”), we are required to offer deeply discounted FSS contract pricing to four federal agencies commonly referred to as the “Big Four” — the Department of Veterans Affairs, the Department of Defense (“DoD”), the Coast Guard and the Public Health Service (including the Indian Health Service) — for federal funding to be made available for reimbursement of any of our products under the Medicaid program, Medicaid Part B and for our products to be eligible to be purchased by those four federal agencies and certain federal grantees. FSS pricing to those four federal agencies must be equal to or less than the federal ceiling price (“FCP”). The FCP is based on a weighted average wholesaler price known as the non-federal average manufacturer price (“Non-FAMP”). We are required to report Non-FAMP to the VA on a quarterly and annual basis. If we misstate Non-FAMP or FCP, we must restate these figures. In addition, if we are found to have knowingly submitted false information to the government, the VHCA provides for civil monetary penalties of $100,000 per item of false information in addition to other penalties the government may impose.

The FSS contract is a federal procurement contract that includes standard government terms and conditions and extensive disclosure and certification requirements. All items on FSS contracts are subject to a standard FSS contract clause that requires FSS contract price reductions under certain circumstances where pricing is reduced to an agreed “tracking customer.” Further, in addition to the “Big Four” agencies, all other federal agencies and some non-federal entities are authorized to access FSS contracts. If we overcharge the government in connection with our FSS contract, whether due to a misstated FCP or otherwise, we are required to refund the difference to the government.

Numerous federal and state laws, including state security breach notification laws, state health information privacy laws and federal and state consumer protection laws, govern the collection, use and disclosure of personal information. Other countries also have, or are developing, laws governing the collection, use and transmission of personal information. In addition, most healthcare providers who prescribe our product and from whom we obtain patient health information are subject to privacy and security requirements under the Health Insurance Portability and Accountability Act of 1996 (“HIPAA”). We are not a HIPAA covered entity, and we do not operate as a business associate to any covered entities. Therefore, these privacy and security requirements do not apply to us. However, we could be subject to criminal penalties if we knowingly obtain individually

identifiable health information from a covered entity in a manner that is not authorized or permitted by HIPAA or for aiding and abetting the violation of HIPAA. We are unable to predict whether our actions could be subject to prosecution in the event of an impermissible disclosure of health information to us. The legislative and regulatory landscape for privacy and data protection continues to evolve, and there has been an increasing amount of focus on privacy and data protection issues with the potential to affect our business, including recently enacted laws in a majority of states requiring security breach notification. These laws could create liability for us or increase our cost of doing business.

In the European Union, governments influence the price of pharmaceutical products through their pricing and reimbursement rules and control of national healthcare systems that fund a large part of the cost of such products to consumers. The approach taken varies from member state to member state. Some jurisdictions operate positive and/or negative list systems under which products may be marketed only once a reimbursement price has been agreed. Other member states allow companies to fix their own prices for medicines, but monitor and control company profits. The downward pressure on healthcare costs in general, particularly prescription drugs, has become very intense. As a result, increasingly high barriers are being erected to the entry of new products, as exemplified by the role of the National Institute for Health and Clinical Excellence in the United Kingdom, which evaluates the data supporting new medicines and passes reimbursement recommendations to the government. In addition, in some countries cross-border imports from low-priced markets (parallel imports) exert commercial pressure on pricing within a country.

We are subject to a variety of federal, state and local regulations relating to the use, handling, storage and disposal of hazardous materials, including chemicals and radioactive and biological materials. Our operations produce such hazardous waste products. Although we believe that our safety procedures for handling and disposing of these materials comply with the standards prescribed by federal, state and local regulations, the risk of accidental contamination or injury from these materials cannot be eliminated. We generally contract with third parties for the disposal of such substances, and store our low level radioactive waste at our facilities until the materials are no longer considered radioactive. We are also subject to various laws and regulations governing laboratory practices and the experimental use of animals.

We are also subject to regulation by the Occupational Safety and Health Administration (“OSHA”), and the Environmental Protection Agency (the “EPA”), and to regulation under the Toxic Substances Control Act, the Resource Conservation and Recovery Act and other regulatory statutes, and may in the future be subject to other federal, state or local regulations. OSHA and/or the EPA may promulgate regulations that may affect our research and development programs.

As of February 20, 2013, we had approximately 1,050 employees. None of our employees are subject to a collective bargaining agreement or represented by a labor or trade union, and we believe that our relations with our employees are good.

Dendreon^®, the Dendreon logo, Dendreon Targeting Cancer, Transforming Lives^®, PROVENGE^®, NEUVENGE^TM, INTELLIVENGE^TM, Powered by Intellivenge^TM and Antigen Delivery Cassette™ are our trademarks. All other trademarks that may appear or be incorporated by reference into this annual report are the property of their respective owners.

We make available, free of charge, through our investor relations website, our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to those reports as soon as

reasonably practicable after they are filed with, or furnished to, the Securities and Exchange Commission (the “SEC”). You may also read and copy any materials we file with the SEC at the SEC’s Public Reference Room located at 100 F Street NE, Washington DC 20549. Information on the operation of the Public Reference Room may be obtained by calling the SEC at 1-800-SEC-0330. The address for our website is http://www.dendreon.com and the address for the investor relations page of our website is http://investor.dendreon.com. The information contained on our website is not a part of this report.

The risks described below may not be the only ones relating to our company. Additional risks that we currently believe are immaterial may also impair our business operations. Our business, financial condition, future prospects and the trading price of our common stock could be harmed as a result of any of these risks. These risks and uncertainties may be interrelated or co-related, and as a result, the occurrence of one risk might directly affect other risks described below, make them more likely to occur or magnify their impact. Investors should also refer to the other information contained or incorporated by reference in this Annual Report on Form 10-K for the year ended December 31, 2012, including our consolidated financial statements and related notes, and our other filings from time to time with the Securities and Exchange Commission (“SEC”).

If we fail to achieve and sustain commercial success for PROVENGE, our business will suffer, our future prospects may be harmed and our stock price would likely decline.

Prior to the launch of PROVENGE in May 2010, we had never sold or marketed a pharmaceutical product. Unless we can successfully commercialize another product candidate or acquire the right to market other approved products, we will continue to rely on PROVENGE to generate substantially all of our revenue and fund our operations from product sales. Our ability to maintain or increase our revenues for PROVENGE will depend on, and may be limited by, a number of factors, including the following:

If for any reason we become unable to continue selling or manufacturing PROVENGE, our business would be seriously harmed and could fail.

If PROVENGE were to become the subject of problems related to its efficacy, safety, or otherwise, our revenues from PROVENGE could decrease.

PROVENGE, in addition to any other of our drug candidates that may be approved by the FDA, will be subject to continual review by the FDA, and we cannot assure you that newly discovered safety issues will not arise. With the use of any newly marketed drug by a wider patient population, serious adverse events may occur

from time to time that initially do not appear to relate to the drug itself. Any safety issues could cause us to suspend or cease marketing of our approved products, cause us to modify how we market our approved products, subject us to substantial liabilities, and adversely affect our revenues and financial condition. In the event of a withdrawal of PROVENGE from the market, our revenues would decline significantly and our business would be seriously harmed and could fail.

Adoption of PROVENGE for the treatment of patients with advanced prostate cancer may be slow or limited for a variety of reasons including competing therapies and perceived difficulties in the treatment process or delays in obtaining reimbursement. If PROVENGE is not successful in achieving broad acceptance as a treatment option for advanced prostate cancer, our business would be harmed.

The continued rate of adoption of PROVENGE for advanced prostate cancer and the ultimate market size will be dependent on several factors, including the education of treating physicians on the patient treatment process with PROVENGE and immunotherapies generally. As a first in class therapy, PROVENGE utilizes a unique treatment approach, which can have associated challenges in practice for treating physicians. A significant portion of the prospective patient base for treatment with PROVENGE may be under the care of urologists who may be less experienced with infusion treatments than oncologists. Acceptance by urologists of PROVENGE as a treatment option may be measurably slower than adoption by oncologists of PROVENGE as a therapy and may require more educational effort by us. In addition, the tight manufacturing and infusion timelines required for treatment with PROVENGE require educating physicians to adjust practice mechanics, which may result in delay in market adoption of PROVENGE as a preferred therapy.

We may not be able to successfully achieve the full global market potential of PROVENGE.

PROVENGE is presently approved for the treatment of metastatic asymptomatic or minimally symptomatic castrate-resistant prostate cancer in the United States. Earlier diagnosis of metastatic prostate cancer will be increasingly important, and screening, diagnostic and treatment practices can vary significantly by geographic region. To achieve global success for PROVENGE as a treatment, we will need to obtain approvals by foreign regulatory authorities. Data from our completed clinical trials of PROVENGE may not be sufficient to support approval for commercialization by regulatory agencies governing the sale of drugs outside the United States. This could require us to spend substantial sums to develop sufficient clinical data for licensure by foreign authorities. Submissions for approval by foreign regulatory authorities may not result in marketing approval by these authorities for the requested indication. In addition, certain countries require pricing to be established before reimbursement for the specific indication may be obtained. We may not receive or maintain marketing approvals at favorable pricing or reimbursement levels or at all, which could harm our ability to market PROVENGE globally. Prostate cancer is common in many regions where the healthcare support systems are limited and reimbursement for PROVENGE may be limited or unavailable, which will likely limit or slow adoption in these regions. If we are unable to successfully achieve the full global market potential of PROVENGE due to diagnosis practices or regulatory hurdles, our future prospects would be harmed and our stock price could decline.

Products we may potentially commercialize and market may be subject to promotional limitations.

The FDA has the authority to impose significant restrictions on an approved product through the product label and allowed advertising, promotional and distribution activities. The FDA also may require us to undertake post-marketing clinical trials. If the results of such post-marketing studies are not satisfactory, the FDA may withdraw marketing authorization or may condition continued marketing on commitments from us that may be expensive and/or time consuming to fulfill. Even if we receive FDA and other regulatory approvals, if we or others identify adverse side effects after any of our products are on the market, or if manufacturing problems occur, regulatory approval may be suspended or withdrawn and reformulation of our products, additional clinical trials, changes in labeling of our products and additional marketing applications may be required, any of which could harm our business and cause our stock price to decline.

We announced the closure of one of our manufacturing facilities and we may close more of our manufacturing facilities, which could limit our ability to supply the market and may limit our product sales.

On July 30, 2012, we announced the closure of our Morris Plains, New Jersey manufacturing facility in connection with our strategic restructuring plan. We may decide to close more of our manufacturing facilities in the future. Manufacturing PROVENGE is very complex and time-sensitive. With fewer manufacturing facilities, it may be difficult for us to meet the commercial demand for PROVENGE, especially in certain parts of the country. In addition, having fewer manufacturing facilities exposes us to greater risk that problems with any individual facility, or regional issues such as natural disasters or terrorist attacks, could have a greater effect on our overall ability to supply the market. If we cannot meet demand, we could lose product sales and our revenue and reputation with physicians would suffer. In addition, our business could be materially harmed and our results of operations would be adversely impacted.

We and our contract manufacturers are subject to significant regulation with respect to manufacturing of our products.

All of those involved in the preparation of a therapeutic drug for clinical trials or commercial sale, including our existing (and any future) supply contract manufacturers and clinical trial investigators, are subject to extensive regulation. Components of a finished therapeutic product approved for commercial sale or used in late-stage clinical trials must be manufactured in accordance with the FDA’s current Good Manufacturing Practices, or equivalent cGMP regulations developed by authorities in other countries. These regulations govern manufacturing processes and procedures and the implementation and operation of quality systems to control and assure the quality of investigational products and products approved for sale. Our facilities and quality systems and the facilities and quality systems of some or all of our third-party contractors must be inspected and audited routinely for compliance with applicable United States and other country regulations. If any such inspection or audit identifies a failure to comply with applicable regulations or if a violation of our product specifications or applicable regulation occurs independent of such an inspection or audit, we, the FDA, or governmental authorities in other countries may require remedial measures that may be costly and/or time consuming for us or a third-party to implement and that may include the temporary or permanent suspension or change of a clinical trial or commercial sales, recalls, market withdrawals, seizures or the temporary or permanent closure of a facility. Any such remedial measures imposed upon us or third parties with whom we contract could materially harm our business.

Manufacturing difficulties, disruptions or delays could limit supply of our products and limit our product sales.

Manufacturing biologic human therapeutic products is difficult, complex and highly regulated. We currently manufacture PROVENGE in the United States and plan to manufacture any other product candidates ourselves. We have contracted with a third-party manufacturer in order to commence clinical trials in the European Union, and we are presently reliant on the ability of the third-party to adequately support our initial clinical trials in the E.U. Our ability to adequately and in a timely manner manufacture and supply our products is dependent on the uninterrupted and efficient operation of our facilities and those of our third-party contract manufacturers, which may be impacted by:

If the efficient manufacture and supply of our products is interrupted, we may experience delayed shipments or supply constraints. If we are at any time unable to provide an uninterrupted supply of our products to patients, we may have to notify the FDA, we may lose patients, and physicians may elect to prescribe competing therapeutics, all of which could materially and adversely affect our product sales and results of operations.

Our manufacturing processes and those of our third-party contract manufacturers must undergo a potentially lengthy FDA or other country regulatory approval process and are subject to continued review by the FDA and other country regulatory authorities.

If regulatory authorities determine that we or our third-party contract manufacturers or certain of our third-party service providers have violated regulations or if they restrict, suspend or revoke our prior approvals, they could prohibit us from manufacturing our products or conducting clinical trials or selling our marketed products until we or the affected third-party contract manufacturers or third-party service providers comply, or indefinitely. Because our third-party contract manufacturers and certain of our third-party service providers are subject to FDA and foreign regulatory authorities, alternative qualified third-party contract manufacturers and third-party service providers may not be available on a timely basis or at all. If we or our third-party contract manufacturers or third-party service providers cease or interrupt production or if our third-party contract manufacturers and third-party service providers fail to supply materials, products or services to us, we may experience delayed shipments, and supply constraints for our products.

We rely on complex IT systems for various critical purposes, including timely delivery of product and maintaining patient confidentiality.

We have developed a comprehensive, integrated IT system for the intake of physician orders for PROVENGE, to track product delivery, and to store patient-related data we obtain for purposes of manufacturing PROVENGE. We rely on this system to maintain the chain of identity for each patient-specific dose of PROVENGE, and to ensure timely delivery of product prior to expiration. PROVENGE has a limited usable life of approximately 18 hours from the completion of the manufacturing process to patient infusion and accordingly maintaining accurate scheduling logistics is critical. In addition, this IT system stores and protects the privacy of the required patient information for the manufacture of PROVENGE. If our systems were to fail or be disrupted for an extended period of time we could lose product sales and our revenue and reputation would suffer. In the event our systems were to be breached by an unauthorized third-party, they could potentially access confidential patient information we obtain in manufacturing PROVENGE, which could cause us to suffer reputational damage and loss of customer confidence. Any one of these events could cause our business to be materially harmed and our results of operations would be adversely impacted.

We have rapidly expanded our operations to support commercial launch of PROVENGE, and we may encounter unexpected costs or difficulties.

Since 2010, we have increased investment in commercial infrastructure. We will need to effectively manage our expanded operations and facilities to successfully grow sales of PROVENGE and pursue development of our other product candidates. We must effectively manage our supply chain, third-party vendors and distribution network, all of which requires strict planning to meet production timelines for PROVENGE. If we fail to manage the growth in our systems and personnel appropriately and successfully to achieve our commercialization plans for PROVENGE our revenues could suffer and our business could be harmed.

Our operating results may be harmed if our 2012 restructuring plan does not achieve the anticipated results or causes undesirable consequences.

On July 30, 2012, we announced a restructuring plan which will result in a reduction in headcount of approximately 600 full-time and contractor positions, and the closing of our Morris Plains, New Jersey facility. Restructuring plans may yield unintended consequences, such as attrition beyond our intended reduction in workforce and reduced employee morale, which may cause our employees who were not affected by the reduction in workforce to seek alternate employment. Additional attrition could impede our ability to meet our operational goals, which could have a material adverse effect on our financial performance. In addition, as a result of the reductions in our workforce, we may face an increased risk of employment litigation. Furthermore, employees whose positions will be eliminated in connection with these restructuring plans may seek future employment with our competitors. Although all our employees are required to sign a confidentiality agreement with us at the time of hire, we cannot assure you that the confidential nature of our proprietary information will be maintained in the course of such future employment. We cannot assure you that we will not undertake additional restructuring activities, that any of our restructuring efforts will be successful, or that we will be able to realize the cost savings and other anticipated benefits from our previous or any future restructuring plans. In addition, if we continue to reduce our workforce, it may adversely impact our ability to respond rapidly to any new growth or revenue opportunities.

Because of reductions in our workforce related to our prior restructuring activities, we have reallocated certain employment responsibilities and have increased our dependence on third parties to perform certain corporate functions.

We restructured our operations in 2011 and 2012, which included reductions in our workforce. The reductions resulted in the loss of numerous long-term employees, the loss of institutional knowledge and expertise and the reallocation of certain employment responsibilities, all of which could adversely affect operational efficiencies, employee performance and retention. In addition, because of these reductions, we are outsourcing certain corporate functions, which make us more dependent on third parties for the performance of these functions in connection with our business and product candidates. To the extent that we are unable to effectively reallocate employee responsibilities, retain key employees, establish and maintain agreements with competent third-party contractors on terms that are acceptable to us, or effectively manage the work performed by any retained third-party contractors, our ability to advance our business or product candidates may be significantly impaired and our stock price may be adversely affected.

We have a history of operating losses. We expect to continue to incur losses for the foreseeable future, and we may never become profitable.

As of December 31, 2012, our accumulated deficit was $1.95 billion and our net loss for the year ended December 31, 2012 was $393.6 million. We have incurred net losses as a result of research and development expenses, clinical trial expenses, contract manufacturing and facility expenses, costs associated with our commercial efforts on behalf of PROVENGE and general and administrative expenses in support of our operations and research efforts. There can be no assurance that available cash and cash generated through current operations will be sufficient to continue to conduct our operations and expand according to our business plans. The majority of our resources continue to be used in support of the commercialization of PROVENGE, including outside the United States. Even if we are able to successfully realize our commercialization goals for PROVENGE, because of the numerous risks and uncertainties associated with commercialization of a biologic, we may still require additional funding. And in any event, we are unable to predict when we will break-even on our U.S. operations or become profitable, if at all. Even if we do produce revenues and achieve profitability, we may not be able to maintain or increase profitability.

Forecasting sales of PROVENGE may continue to be difficult. If our revenue projections are inaccurate and our business forecasting and planning decisions are not reflected in our actual results, our business may be harmed and our stock price may be adversely affected.

Our forecasting model for PROVENGE revenue may be inaccurate because of any number of factors. These factors may include slower than anticipated physician adoption of PROVENGE because of cautionary prescribing behavior due to lack of reimbursement history for the product, difficulty in identifying appropriate patients for treatment with PROVENGE, the cost of the product, which is purchased by the physician on a buy and bill basis, and incurred over a short time period, and other aspects of physician education due to the novelty of the treatment process. The extent to which any of these or other factors individually or in the aggregate may impact future sales of PROVENGE is uncertain and difficult to predict. Our management must make forecasting decisions regarding future revenue in the course of business planning despite this uncertainty, and actual results of operations may deviate materially from projected results. This may lead to inefficiencies and increased difficulties in operational planning. Our general and administrative expenses are relatively fixed in the short term. If our revenues from PROVENGE sales are lower than we anticipate, we will incur costs in the short term that will result in losses that are unavoidable. A shortfall in our revenue has a direct impact on our cash flow and on our business generally. In addition, as reflected in our recent stock price, fluctuations in our quarterly results can adversely and significantly affect the market price of our common stock.

We may require additional funding, and our future access to capital is uncertain.

It is expensive to develop and commercialize cancer immunotherapy and small molecule product candidates. We plan to continue to simultaneously conduct clinical trials and preclinical research for a number of product candidates while pursuing commercial acceptance and our marketing goals for PROVENGE. Our product development efforts may not lead to commercial products, either because our product candidates fail to be found safe or effective in clinical trials or because we lack the necessary financial or other resources or relationships to pursue our programs through commercialization. Even if commercialized, a product may not achieve revenues that exceed the costs of producing and selling it. Our capital and future cash flow may not be sufficient to support the expenses of our operations and we may need to raise additional capital depending on a number of factors, including but not limited to the following:

We may not be able to obtain additional financing if and when needed. If we are unable to raise additional funds on terms we find acceptable, we may have to delay, reduce or eliminate some of our clinical trials and our development programs. If we raise additional funds by issuing equity or equity-linked securities, further dilution to our existing stockholders will result. In addition, the possibility of future dilution as a result of our offering of securities convertible into equity securities may cause our stock price to decline.

Our existing indebtedness includes an aggregate of $27.7 million in outstanding Convertible Senior Subordinated Notes due 2014 (the “2014 Notes”) which bear interest at 4.75%, and an aggregate of $620 million in outstanding Convertible Senior Notes due 2016 (the “2016 Notes”) which bear interest at 2.875%. Our indebtedness and annual debt service requirements may adversely impact our business, operations and financial condition in the future. For example, it could:

The accounting method for convertible debt securities that may be settled in cash, such as the 2016 Notes, could have a material effect on our net loss, net working capital or other financial results.

Under the Financial Accounting Standards Board (the “FASB”) Accounting Standards Codification Section 470-20, Debt with Conversion and other Options (“ASC 470-20”), an entity must separately account for the liability and equity components of the convertible debt instruments (such as the 2016 Notes) that may be settled entirely or partially in cash upon conversion in a manner that reflects the issuer’s economic interest cost. The effect of ASC 470-20 on the accounting for our 2016 Notes is that the equity component is required to be included in the additional paid-in capital section of stockholders’ equity on the consolidated balance sheets and the value of the equity component is treated as original issue discount for purposes of accounting for the debt component of the notes. As a result, we are required to record non-cash interest expense as a result of the amortization of the discounted carrying value of the 2016 Notes to their face amount over the term of the 2016 Notes. We report higher interest expense in our financial results because ASC 470-20 requires interest to include both the current period’s amortization of the debt discount and the instrument’s coupon interest, which could adversely affect our reported or future financial results, the trading price of our common stock and the trading price of the 2016 Notes.

Our stockholders may be diluted by the conversion of our outstanding convertible notes.

The holders of the 2014 Notes may choose at any time to convert their notes into common stock prior to maturity in June 2014. The holders of the 2016 Notes may choose at any time to convert their notes prior to maturing in January 2016, and upon conversion we may issue cash, stock, or a combination thereof at our option. Should a holder of the 2016 Notes exercise their conversion option during the next twelve month period, it is our intention to satisfy the conversion with shares of our common stock.

The 2014 Notes are convertible into our common stock, initially at the conversion rate of approximately 97.2644 shares per $1,000 principal amount, or approximately $10.28 per share. The 2016 Notes are convertible into our common stock initially at the conversion rate of 19.5160 shares per $1,000 principal amount, or approximately $51.24 per share, subject to adjustment. The number of shares of common stock issuable upon conversion of the 2014 Notes and 2016 Notes, and therefore the dilution of existing common stockholders, could increase under certain circumstances described in the indentures under which the 2014 Notes and 2016 Notes were issued. The conversion of the 2014 Notes and potentially the 2016 Notes will result in the issuance of additional shares of common stock, diluting existing common stockholders.

We may elect to issue additional shares of our common stock or other securities that may be convertible into our common stock, which could result in further dilution to our existing stockholders.

Future sales of our common stock will depend primarily on the market price of our common stock, the terms we may receive upon the sale of debt or convertible securities, the interest in our company by institutional investors and our cash needs. In addition, we may register additional equity, debt or other convertible securities with the SEC for sale in the future. Each of our issuances of common stock or securities convertible into common stock to investors under a registration statement or otherwise will proportionately decrease our existing stockholders’ percentage ownership of our total outstanding equity interests and may reduce our stock price.

Our business, financial condition and future prospects could suffer as a result of carrying out strategic alternatives in the future.

We may decide it is in our best interests to engage in a strategic transaction that could dilute our existing stockholders or cause us to incur contingent liabilities, commitments, or significant expense. In the course of

pursuing strategic alternatives, we may evaluate potential acquisitions or investments in related businesses, products or technologies. Future acquisitions or investments could subject us to a number of risks, including, but not limited to:

In connection with an acquisition, we must estimate the value of the transaction by making certain assumptions that may prove to be incorrect, which could cause us to fail to realize the anticipated benefits of a transaction. We may incur as part of a transaction substantial charges for closure costs associated with the elimination of duplicate operations and facilities and acquired in-process research and development charges. In either case, the incurrence of these charges could adversely affect our results of operations for particular quarterly or annual periods. Any strategic transaction we may pursue may not result in the benefits we initially anticipate, and/or result in costs that end up outweighing the benefits, and may adversely impact our financial condition and business prospects.

Our ability to realize potential value from our net operating loss carryforwards is highly speculative and subject to numerous material uncertainties.

Our net operating loss carryforwards permit us to offset net operating losses from prior years to taxable income in future years in order to reduce our tax liability. As we have incurred losses since our inception and do not currently expect to turn a profit in the near future, we are currently unable to realize value from our net operating loss carryforwards unless we generate future taxable income, either through the acquisition of a profitable company or otherwise. There can be no assurance that we will have sufficient taxable income, if any, in future years to use the net operating loss carryforwards before they expire. The Internal Revenue Service could challenge the amount of our net operating loss carryforwards.

In order to preserve our net operating loss carryforwards, we must ensure that there has not been a “change of control” of our company. A “change in control” includes a more than 50 percentage point increase in the ownership of our company by certain equity holders who are defined in Section 382 of the Internal Revenue Code as “5 percent shareholders”. Calculating whether an ownership change has occurred is subject to uncertainty, both because of the complexity of Section 382 of the Code and because of limitations on a publicly-traded company’s knowledge as to the ownership of, and transactions in, its securities. Therefore, the calculation of the amount of our net operating loss carryforwards may be changed as a result of a challenge by a governmental authority or our learning of new information about the ownership of, and transactions in, our securities. Our ability to fully utilize our net operating losses could be limited if there have been past ownership changes or if there are future ownership changes resulting in a change of control for Section 382. Additionally, future changes in tax legislation could negatively affect our ability to use the tax benefits associated with our net operating losses.

Delays to our expansion outside the United States may result in increased competitive challenges.

In September 2011, we announced that, in conjunction with a company restructuring to reduce operating costs in the near term due to a lack of forecasted sales growth in line with our original projections, we were revising our commercialization strategy for PROVENGE outside the United States. The announced changes included seeking a longer-term contract manufacturing partnership for production of PROVENGE in Europe, rather than building our own immunotherapy manufacturing facility, as well as revisiting our European clinical trial plan. Although we believe the revisions to our commercialization strategy outside the United States will have long-term benefits for the Company from our near-term cash conservation and extended business planning strategy for the EU, delays to the commercialization of PROVENGE in the European Union and throughout the rest of the world could result in increased competitive challenges in the future if competing products and therapies gain market acceptance in the interim. These competitive challenges could impede adoption of PROVENGE as a preferred therapy, which could adversely affect our future product sales and results of operations.

Our competitors may develop and market products that are less expensive, more effective, safer or reach the market sooner, which may diminish or eliminate the commercial success of any products we may commercialize.

Competition in the cancer therapeutics field is intense and is accentuated by the rapid pace of advancements in product development. In addition, we compete with other clinical-stage companies and institutions for clinical trial participants, which could reduce our ability to recruit participants for our clinical trials. Delay in recruiting clinical trial participants could adversely affect our ability to bring a product to market prior to our competitors. Further, research and discoveries by others may result in breakthroughs that render PROVENGE or our other product candidates obsolete.

Products such as chemotherapeutics, androgen metabolism or androgen receptor antagonists, endothelin A receptor antagonists, antisense compounds, angiogenesis inhibitors and gene therapies for cancer are also under development by a number of companies and could potentially compete with PROVENGE and our other product candidates. In addition, many universities and private and public research institutes have become active in cancer research, which may be in direct competition with us.

Furthermore, in 2011, ZYTIGA^® (abiraterone acetate) was approved for use in men with prostate cancer with progression following treatment with a chemotherapeutic regime. In 2012, ZYTIGA was approved, in combination with prednisone, to treat men with metastatic castrate-resistant prostate cancer prior to receiving chemotherapy, and Xtandi (Enzalutamide), an androgen receptor inhibitor, was approved to treat men with metastatic castrate-resistant prostate cancer who previously received docetaxel chemotherapy. Other therapies such as Bavarian Nordic’s PROSTVAC^® are the subject of ongoing clinical trials in men with metastatic castrate-resistant prostate cancer. PROSTVAC^®, currently in Phase 3 clinical development, is a therapeutic cancer vaccine being studied in men with metastatic castrate-resistant prostate cancer.

Some of our competitors in the cancer therapeutics field have substantially greater research and development capabilities and manufacturing, marketing, financial and managerial resources than we do. Acquisitions of competing companies by large pharmaceutical and biotechnology companies could enhance our competitors’ resources. In addition, our competitors may obtain patent protection or FDA approval and commercialize products more rapidly than we do, which may impact future sales of our products. We expect that competition among products approved for sale will be based, among other things, on product efficacy, price, safety, reliability, availability, patent protection, and sales, marketing and distribution capabilities. Our profitability and financial position will suffer if our products receive regulatory approval, but cannot compete effectively in the marketplace.

We could face competition for PROVENGE or other approved products from biosimilar products that could impact our profitability.

We may face competition in Europe from biosimilar products, and we expect we may face competition from biosimilars in the future in the United States as well. To the extent that governments adopt more permissive approval frameworks and competitors are able to obtain broader marketing approval for biosimilars, our products

will become subject to increased competition. Expiration or successful challenge of applicable patent rights could trigger such competition, and we could face more litigation regarding the validity and/or scope of our patents. We cannot predict to what extent the entry of biosimilar products or other competing products could impact our future potential sale of PROVENGE in the E.U., where biosimilars to other innovator biological products are already available. Our inability to compete effectively in foreign territories would reduce global sales potential, which could have a material adverse effect on our results of operations.

On March 23, 2010, PPACA became law and authorized FDA approval of biosimilar products. PPACA established a period of 12 years of data exclusivity for reference products and outlined statutory criteria for science-based biosimilar approval standards. Under this framework, data exclusivity protects the data in the innovator’s regulatory application by prohibiting, for a period of 12 years, others from gaining FDA approval based in part on reliance or reference to the innovator’s data. FDA has not yet announced implementation of the biosimilars regulatory approval pathway; however, PPACA does not require the agency to do so before it may approve biosimilars. The new law does not change the duration of patents granted on biologic products. Because of this pathway for the approval of biosimilars in the U. S., we may in the future face greater competition from biosimilar products and downward pressure on our product prices, sales and revenues, subject to our ability to enforce our patents.

Failure to retain key personnel could impede our ability to develop our products and to obtain new collaborations or other sources of funding.

We depend, to a significant extent, on the efforts of our key employees, including senior management and senior scientific, clinical, regulatory, operational and other personnel. The development of new therapeutic products requires expertise from a number of different disciplines, some of which are not widely available.

We depend upon our scientific staff to discover new product candidates and to develop and conduct preclinical studies of those new potential products. Our clinical and regulatory staff is responsible for the design and execution of clinical trials in accordance with FDA requirements and for the advancement of our product candidates toward FDA approval and submission of data supporting approval. The quality and reputation of our scientific, clinical and regulatory staff, especially the senior staff, and their success in performing their responsibilities, may directly influence the success of our product development programs. As we continue to pursue successful commercialization of PROVENGE, our sales and marketing, and operations executive management staff takes on increasing significance and influence upon our organizational success. In addition, our executive officers are involved in a broad range of critical activities, including providing strategic and operational guidance. The loss of these individuals, or our inability to retain or recruit other key management and scientific, clinical, regulatory, medical, operational and other personnel, may delay or prevent us from achieving our business objectives. We face intense competition for personnel from other companies, universities, public and private research institutions, government entities and other organizations.

We must rely at present on relationships with third-party suppliers to supply necessary components used in our products, and such relationships are not easy to replace.

We rely upon contract manufacturers for components used in the manufacture and distribution of PROVENGE. Problems with any of our or our suppliers’ facilities or processes could result in failure to produce or a delay in production of adequate supplies of the antigen or other components we use in the manufacture of PROVENGE. This could delay or reduce commercial sales and materially harm our business. Any prolonged interruption in the operations of our suppliers’ facilities could result in cancellation of orders, loss of components in the process of being manufactured or a shortfall in availability of a necessary component. A number of factors could cause interruptions, including the inability of a supplier to provide raw materials, equipment malfunctions or failures, damage to a facility due to natural disasters, changes in FDA or equivalent other country authorities’ regulatory requirements or standards that require modifications to manufacturing processes, or action by us to implement process changes or other similar factors. Because manufacturing processes are complex and are subject to a lengthy FDA or equivalent non-United States regulatory approval process, alternative qualified supply may not be available on a timely basis or at all. Difficulties or delays in our suppliers’ manufacturing and supply

of components could delay our clinical trials, increase our costs, damage our reputation and, for PROVENGE, cause us to lose revenue or market share if we are unable to timely meet market demands.

We are dependent on our leukapheresis network for raw materials required for the manufacture of PROVENGE.

The manufacture of each patient-specific dose of PROVENGE first requires that we obtain immune cells from the relevant patient, which is done through a leukapheresis process at a cell collection center with which we have contracted. We have entered into agreements with third-party cell collection and blood centers, including the American Red Cross, to perform this process for us. However there are a finite number of centers with the requisite skill, training, staffing and equipment to perform the leukapheresis procedure for PROVENGE patients and we cannot be certain that as our manufacturing capacity expands the leukapheresis network presently available to us will be sufficient to service demand at full capacity. We anticipate that we will need to expand the leukapheresis network available to us prospectively through additional partnerships or other endeavors. There can be no assurance that we will be able to secure sufficient appropriate leukapheresis capacity to manufacture PROVENGE when and as desired. If we are unable to expand our access to these services as necessary, our revenues will suffer and our business would be harmed.

We rely on single source vendors for some key components for PROVENGE and our active immunotherapy product candidates, which could impair our ability to manufacture and supply our products.

We currently depend on single source vendors for components used in PROVENGE and other active immunotherapy candidates. For example, we have a long-term contract with Fujifilm Diosynth Biotechnologies (“Fujifilm”), formerly Diosynth RTP, Inc., for the production of the antigen used in the manufacturing of PROVENGE. Any production shortfall on the part of Fujifilm that impairs the supply of the antigen to us could have a material adverse effect on our business, financial condition and results of operations. If we are unable to obtain a sufficient quantity of antigen, there could be a substantial delay in successfully developing a second source supplier. In addition, we rely on single-source unaffiliated third-party suppliers for certain other raw materials, medical devices and components necessary for the formulation, fill and finish of our products. Certain of these raw materials, medical devices and components are the proprietary products of these unaffiliated third-party suppliers and are specifically cited in the drug application with regulatory agencies so that they must be obtained from that specific sole source and could not be obtained from another supplier unless and until the regulatory agency approved such supplier. An inability to continue to source product from any of these suppliers, which could be due to regulatory actions or requirements affecting the supplier, adverse financial or other strategic developments experienced by a supplier, labor disputes or shortages, unexpected demands or quality issues, could adversely affect our ability to satisfy demand for PROVENGE or other products, which could adversely affect our product sales and operating results materially or our ability to conduct clinical trials, either of which could significantly harm our business.

If we fail to enter into any needed collaboration agreements for our product candidates, we may be unable to commercialize them effectively or at all.

Product collaborations are complex and any potential discussions may not result in a definitive agreement for many reasons. For example, whether we reach a definitive agreement for a collaboration would depend, among other things, upon our assessment of the collaborator’s resources and expertise, the terms and conditions of the proposed collaboration, and the proposed collaborator’s evaluation of a number of factors. Those factors may include the design or results of clinical trials, the potential market for the product candidate, the costs and complexities of manufacturing and delivering the product candidate to patients, the potential of competing products or other products approved in our indication, the existence of uncertainty with respect to our ownership of technology, which can exist if there is a challenge to such ownership without regard to the merits of the challenge, and industry and market conditions generally. If we were to determine that a collaboration for a particular product is necessary to commercialize it and we were unable to enter into such a collaboration on acceptable terms, we might elect to delay or scale back the commercialization of a product in order to preserve our financial resources or to allow us adequate time to develop the required physical resources and systems and expertise ourselves.

If we enter into a collaboration agreement we consider acceptable, the collaboration may not proceed as quickly, smoothly or successfully as we plan. The risks in a collaboration agreement generally include:

With respect to a collaboration for any of our products or product candidates, we are dependent on the success of our collaborators in performing their respective responsibilities and the continued cooperation of our collaborators. Our collaborators may not cooperate with us to perform their obligations under our agreements with them. We cannot control the amount and timing of our collaborators’ resources that will be devoted to activities related to our collaboration agreements with them. Our collaborators may choose to pursue existing or alternative technologies in preference to those being developed in collaboration with us. A collaborator may have the right to terminate the collaboration at its discretion. Any termination may require us to seek a new collaborator, which we may not be able to do on a timely basis, if at all, or require us to delay or scale back the commercialization efforts. The occurrence of any of these events could adversely affect the commercialization of product candidates we may commercialize and materially harm our business and stock price by slowing the pace of growth of such sales, by reducing the profitability of the product or by adversely affecting the reputation of the product in the market.

Our clinical and preclinical candidates in the pipeline for other potential cancer immunotherapies and small molecule products may never reach the commercial market for a number of reasons.

To sustain our business, we focus substantial resources on the search for new pharmaceutical products. These activities include engaging in discovery research and product development, conducting preclinical and clinical studies, and seeking regulatory approval in the United States for product candidates and in other countries for PROVENGE and other products we may market in the future. Our long-term success depends on the discovery and development of new drugs that we can commercialize. Our cancer immunotherapy and small molecule program pipeline candidates are still at a relatively early stage in the development process. There can be no assurance that these product candidates or any other potential therapies we may pursue will become a marketed drug. In addition, we may find that certain products cannot be manufactured on a commercial scale and, therefore, they may not be economical to produce, or may be precluded from commercialization by proprietary rights of third parties.

A significant portion of the research that we are conducting involves new and unproven technologies. Research programs to identify disease targets and product candidates require substantial technical, financial and human resources, whether or not we ultimately identify any candidates. Our research programs may initially show promise in identifying potential product candidates, yet fail to yield candidates for clinical development for a number of reasons, including difficulties in formulation which cannot be overcome, timing and competitive concerns.

An Investigative New Drug (“IND”) application must become effective before human clinical trials may commence. The IND application is automatically effective 30 days after receipt by the FDA unless before that time, the FDA raises concerns or questions about the product’s safety profile or the design of the trials as described in the application. In the latter case, any outstanding concerns must be resolved with the FDA before clinical trials can proceed. Thus, the submission of an IND may not result in FDA authorization to commence clinical trials in any given case. After authorization is received, the FDA retains the authority to place the IND, and clinical trials under that IND, on clinical hold. If we are unable to commence clinical trials or clinical trials

are delayed indefinitely, we would be unable to develop additional product candidates and our business could be materially harmed. Clinical trials, both in the United States and in other countries, can be delayed for a variety of reasons, including:

The nature and efforts required to complete a prospective research and development project are typically indeterminable at very early stages when research is primarily conceptual and may have multiple applications. Once a focus towards developing a specific product candidate has been developed, we obtain more visibility into the efforts that may be required to reach conclusion of the development phase. However, there are inherent risks and uncertainties in developing novel biologics in a rapidly changing industry environment. To obtain approval of a product candidate from the FDA or other country regulatory authorities, we must, among other requirements, submit data supporting safety and efficacy as well as detailed information on the manufacture and composition of the product candidate. In most cases, this entails extensive laboratory tests and preclinical and clinical trials. The collection of this data, as well as the preparation of applications for review by the FDA and other regulatory agencies outside the United States are costly in time and effort, and may require significant capital investment.

We may encounter significant difficulties or costs in our efforts to obtain FDA approvals or approvals to market products in foreign markets. For example, the FDA or the equivalent in jurisdictions outside the United States may determine that our data is not sufficiently compelling to warrant marketing approval, or may require we engage in additional clinical trials or provide further analysis which may be costly and time consuming. Regardless of the nature of our efforts to complete development of our products and receive marketing approval, we may encounter delays that render our product candidates uncompetitive or otherwise preclude us from marketing products.

We may be required to obtain additional funding to complete development of product candidates or in order to commercialize approved products. However such funding may not be available to us on terms we deem acceptable or at all. Our ability to access additional capital is dependent on the success of our business and the perception by the market of our future business prospects. In the event we were unable to obtain necessary funding, we might halt or temporarily delay ongoing development projects.

Preclinical testing and clinical trials for product candidates must satisfy stringent regulatory requirements or we may be unable to utilize the results.

The preclinical testing and clinical trials of any product candidates that we develop must comply with regulations by numerous federal, state and local government authorities in the United States, principally the FDA, and by similar governmental authorities in other countries. Clinical trials are subject to continuing oversight by governmental regulatory authorities and institutional review boards and must meet the requirements of these authorities in the United States and other countries, including those for informed consent and good clinical practices. We may not be able to comply with these requirements, which could disqualify completed or ongoing clinical trials. We may experience numerous unforeseen events during, or as a result of, the testing process that could delay or prevent commercialization of our product candidates, including the following:

Each phase of clinical testing is highly regulated, and during each phase there is risk that we will encounter serious obstacles or will not achieve our goals, and accordingly we may abandon a product in which we have invested substantial amounts of time and money. In addition, we must provide the FDA and foreign regulatory authorities with preclinical and clinical data that demonstrate that our product candidates are safe and effective for each target indication before they can be approved for commercial distribution. We cannot state with certainty when or whether any of our products now under development will be approved or launched; or whether any products, once approved and launched, will be commercially successful.

The FDA, other non-United States regulatory authorities, or an Advisory Committee may determine our clinical trials data regarding safety or efficacy are insufficient for regulatory approval.

Although we obtain guidance from regulatory authorities on certain aspects of our clinical development activities, these discussions are not binding obligations on regulatory authorities. Regulatory authorities may revise or retract previous guidance or may disqualify a clinical trial in whole or in part from consideration in support of approval of a potential product for commercial sale or otherwise deny approval of that product. Even if we obtain successful clinical safety and efficacy data, we may be required to conduct additional, expensive trials to obtain regulatory approval. FDA, or equivalent other country authorities, may elect to obtain advice from outside experts regarding scientific issues and/or marketing applications under FDA or other country authority review through the FDA’s Advisory Committee process or other country procedures. Views of the Advisory Committee or other experts may differ from those of the FDA, or equivalent other country authority, and may impact our ability to commercialize a product candidate.

If we encounter difficulties enrolling patients in our clinical trials, our trials could be delayed or otherwise adversely affected.

Clinical trials for our product candidates may require that we identify and enroll a large number of patients with the disease under investigation. We may not be able to enroll a sufficient number of patients, or those with required or desired characteristics to achieve diversity in a study, to complete our clinical trials in a timely manner.

Additionally, even if we are able to identify an appropriate patient population for a clinical trial, there can be no assurance that the patients will continue in the clinical trial through completion.

If we have difficulty enrolling or maintaining a sufficient number of patients with sufficient diversity to conduct our clinical trials as planned, we may need to delay or terminate ongoing or planned clinical trials, either of which would have a negative effect on our business.

PROVENGE and our other products in development cannot be sold if we do not maintain or gain required regulatory approvals.

Our business is subject to extensive regulation by numerous state and federal governmental authorities in the United States, including the FDA, and potentially by foreign regulatory authorities, with regulations differing from country to country. In the United States, the FDA regulates, among other things, the preclinical testing, clinical trials, manufacturing, safety, efficacy, potency, labeling, storage, record keeping, quality systems, advertising, promotion, sale and distribution of therapeutic products. Other applicable non-United States regulatory authorities have equivalent powers. Failure to comply with applicable requirements could result in, among other things, one or more of the following actions: withdrawal of product approval, notices of violation, untitled letters, warning letters, fines and other monetary penalties, unanticipated expenditures, delays in approval or refusal to approve a product candidate; product recall or seizure; interruption of manufacturing or clinical trials; operating restrictions; injunctions; and criminal prosecution. We are required in the United States and in foreign countries to obtain approval from regulatory authorities before we can manufacture, market and sell our products.

Obtaining regulatory approval for marketing of a product candidate in one country does not assure we will be able to obtain regulatory approval in other countries. However, a failure or delay in obtaining regulatory approval in one country may have a negative effect on the regulatory process in other countries. Once approved, the FDA and other United States and non-United States regulatory authorities have substantial authority to limit the uses or indications for which a product may be marketed, restrict distribution of the product, require additional testing, change product labeling or mandate withdrawal of our products. The marketing of our approved products will be subject to extensive regulatory requirements administered by the FDA and other regulatory bodies, including: the manufacturing, testing, distribution, labeling, packaging, storage, reporting and record-keeping related to the product, advertising, promotion, and adverse event reporting requirements. In addition, incidents of adverse drug reactions, unintended side effects or misuse relating to our products could result in required post-marketing studies, additional regulatory controls or restrictions, or even lead to withdrawal of a product from the market.

In general, the FDA and equivalent other country authorities require labeling, advertising and promotional materials to be truthful and not misleading, and marketed only for the approved indications and in accordance with the provisions of the approved label. If the FDA or other regulatory authorities were to challenge our promotional materials or activities, they may bring enforcement action.

Our failure to obtain approval, significant delays in the approval process, or our failure to maintain approval in any jurisdiction will prevent us from selling a product in that jurisdiction. Any product and its manufacturer will continue to be subject to strict regulations after approval, including but not limited to, manufacturing, quality control, labeling, packaging, adverse event reporting, advertising, promotion and record-keeping requirements. Any problems with an approved product, including the later exhibition of adverse effects or any violation of regulations could result in restrictions on the product, including its withdrawal from the market, which could materially harm our business. The process of obtaining approvals in foreign countries is subject to delay and failure for many of the same reasons.

Regulatory authorities could also add new regulations or change existing regulations at any time, which could affect our ability to obtain or maintain approval of our products. PROVENGE and our investigational cellular immunotherapies are novel. As a result, regulatory agencies lack experience with them, which may lengthen the regulatory review process, increase our development costs and delay or prevent commercialization of PROVENGE outside the United States and with respect to our active immunotherapy products under development. We are unable to predict when and whether any changes to regulatory policy affecting our business could occur, and such changes could have a material adverse impact on our business. If regulatory authorities determine that we have not complied with regulations in the research and development of a product candidate, a new indication for an existing product or information to support a current indication, they may not approve the product candidate or new indication or maintain approval of the current indication in its current form or at all, and we would not be able to market and sell it. If we were unable to market and sell our products or product candidates, our business and results of operations would be materially and adversely affected.

Failure to comply with foreign regulatory requirements governing human clinical trials and failure to obtain marketing approval for product candidates could prevent us from selling our products in foreign markets, which may adversely affect our operating results and financial condition.

The requirements governing the conduct of clinical trials, manufacturing, testing, product approvals, pricing and reimbursement outside the United States vary greatly from country to country. In addition, the time required to obtain approvals outside the United States may differ significantly from that required to obtain FDA approval. We may not obtain foreign regulatory approvals on the timeframe we may desire, if at all. Approval by the FDA does not assure approval by regulatory authorities in other countries, and foreign regulatory authorities could require additional testing. Failure to comply with these regulatory requirements or obtain required approvals could impair our ability to develop foreign markets for our products and may have a material adverse effect on our business and future prospects.

Our product sales depend on adequate coverage and reimbursement from third-party payers.

Our sale of PROVENGE is dependent on the availability and extent of coverage and reimbursement from third-party payers, including government healthcare programs and private insurance plans. We rely in large part on the reimbursement coverage by federal and state sponsored government programs such as Medicare and Medicaid in the United States and equivalent programs in other countries. In the event we seek approvals to market PROVENGE in foreign territories, we will need to work with the government-sponsored healthcare systems in Europe and other foreign countries that are the primary payers of healthcare costs in those regions. Governments and private payers may regulate prices, reimbursement levels and/or access to PROVENGE and any other products we may market to control costs or to affect levels of use of our products. We cannot predict the availability or level of coverage and reimbursement for PROVENGE or our product candidates. A reduction in coverage and/or reimbursement for our products could have a material adverse effect on our product sales and results of operations.

The availability and amount of reimbursement for PROVENGE and our product candidates and the manner in which government and private payers may reimburse for our potential products is uncertain.

In many of the markets where we may do business in the future, the prices of pharmaceutical products are subject to direct price controls pursuant to applicable law or regulation and to drug reimbursement programs with varying price control mechanisms. Many of the patients in the United States who seek treatment with PROVENGE or any other of our products that are approved for marketing will be eligible for Medicare benefits.

Other patients may be covered by private health plans. The Medicare program is administered by the Centers for Medicare & Medicaid Services (“CMS”), and coverage and reimbursement for products and services under Medicare are determined pursuant to statute, regulations promulgated by CMS, and CMS’s subregulatory coverage and reimbursement determinations. CMS’s regulations and interpretive determinations are subject to change, as are the procedures and criteria by which CMS makes coverage and reimbursement determinations and the reimbursement amounts established by statute, particularly because of budgetary pressures facing the Medicare program. For example, Medicare reimbursement for drugs and biologicals administered in physician offices, including PROVENGE, is set at average sales price (“ASP”) plus six percent by statute. ASP is a price calculated by the manufacturer and reported to CMS on a quarterly basis. In addition, the statute establishes the payment rate for new drugs and biologicals administered in hospital outpatient departments that are granted “pass-through status” at the rate applicable in physicians’ offices (i.e., ASP plus six percent) for two to three years after FDA approval. PROVENGE was granted pass-through status effective October 1, 2010, allowing reimbursement in hospital outpatient departments at ASP plus six percent, and this status expired on December 31, 2012. CMS establishes the payment rates for drugs and biologicals that do not have pass-through status by regulation. For 2013, these drugs, including PROVENGE, are reimbursed at ASP plus six percent if they have an average cost per day exceeding $80; drugs with an average cost per day of less than $80 are not separately reimbursed. In future years, CMS could change both the payment rate and the average cost threshold, and these changes could adversely affect payment for PROVENGE. In addition, Congress has considered amending the statute to reduce Medicare’s payment rates for drugs and biologicals, and if such legislation is enacted, it could adversely affect payment for PROVENGE.

Beginning April 1, 2013, Medicare payments for all items and services, including drugs and biologicals, will be reduced by up to 2% under the sequestration (i.e., automatic spending reductions) required by the Budget Control Act of 2011, Pub. L. No. 112-25 (“BCA”), as amended by the American Taxpayer Relief Act of 2012, Pub. L. 112-240 (“ATRA”). The BCA requires sequestration for most federal programs, excluding Medicaid, Social Security, and certain other programs, because Congress failed to enact legislation by January 15, 2012, to reduce federal deficits by $1.2 trillion over ten years. The BCA caps the cuts to Medicare payments or items and services at 2%, and requires the cuts to be implemented on the first day of the first month following the issuance of a sequestration order. The ATRA delayed implementation of sequestration from January 2, 2013, to March 1, 2013, and as a result, the Medicare cuts will take effect April 1, 2013, unless Congress enacts legislation to cancel or delay the cuts. If implemented, these cuts would adversely impact payment for PROVENGE and related procedures.

PROVENGE also is made available to patients that are eligible for Medicaid benefits. A condition of federal funds being made available to cover our products under Medicaid and Medicare Part B is our participation in the Medicaid drug rebate program, established by the Omnibus Budget Reconciliation Act of 1990, Pub. L. 101-508, and as amended by subsequent legislation, including the Patient Protection and Affordable Care Act and the Health Care and Education Affordability Reconciliation Act, as amended by the Health Care and Education Affordability Reconciliation Act of 2010 (collectively “PPACA”). Under the Medicaid rebate program, we pay a rebate to each state Medicaid program for each unit of our drug paid for by those programs. The rebate amount for a drug varies by quarter, and is based on pricing data reported by us on a monthly and quarterly basis to CMS. These data include the monthly and quarterly average manufacturer price (“AMP”) for the drug, and in the case of innovator products such as PROVENGE, the quarterly best price (“BP”), which is our lowest price in a quarter to any commercial or non-governmental customer. The formula for determining the rebate amount, using those data, is set by law, and for innovator products like PROVENGE is the greater of 23.1% of AMP or the difference between AMP and BP. The rebate amount for innovator products also must be adjusted upward for price increases that outpace inflation.

We cannot predict the availability or level of coverage and the amount of reimbursement for PROVENGE or our product candidates, or the manner in which government and private payers may reimburse for our potential products. A reduction in coverage and/or reimbursement for our products could have a material adverse effect on our product sales and results of operations.

Healthcare law and policy changes, including those based on recently enacted legislation, may impact our business in ways that we cannot currently predict and these changes could have a material adverse effect on our business and financial condition.

In March 2010, the President signed PPACA. This law substantially changes the way healthcare is financed by both governmental and private insurers in the U.S., and significantly impacts the pharmaceutical industry. The PPACA contains a number of provisions that are expected to impact our business and operations, in some cases in ways we cannot currently predict. Changes that may affect our business include those governing enrollment in federal healthcare programs, reimbursement changes, rules regarding prescription drug benefits under the health insurance exchanges, and fraud and abuse and enforcement. These changes will impact existing government healthcare programs and will result in the development of new programs.

PPACA significantly changed the Medicaid rebate program. Rebates previously were due only on utilization under Medicaid fee-for-service plans, but PPACA expanded our rebate liability to include the utilization of Medicaid managed care organizations, effective upon enactment, March 23, 2010. PPACA also increased the minimum rebate due for innovator drugs such as PROVENGE, from 15.1% of AMP to 23.1% of AMP, effective the first quarter of 2010, and capped the total rebate amount for innovator drugs at 100% of AMP. PPACA and subsequent legislation also changed the definition of AMP, effective the fourth quarter of 2010. CMS has issued a proposed rule to implement PPACA’s changes to the Medicaid rebate program, but does not anticipate finalizing this rule until later in 2013. This rule may have the effect of increasing our rebates or other costs and charges associated with participating in the Medicaid rebate program.

PPACA is expected to impact the United States pharmaceutical industry substantially, including with regard to how health care is financed by both governmental and private insurers. Some of the other key PPACA provisions include:

Although the constitutionality of key provisions of the PPACA was recently upheld by the Supreme Court, legislative changes to the PPACA remain possible. The issuance of additional regulations and the passage of additional or amended legislation may increase our costs and the complexity of compliance. Moreover, a number of state and federal legislative and regulatory proposals aimed at reforming the healthcare system in the United States continue to be proposed, the effect of which, if enacted, could adversely impact our product sales and results of operations.

If we fail to comply with our obligation to accurately track and report ASP, AMP and BP data to the relevant state and federal authorities, we may face fines or penalties and could be subject to additional reimbursement requirements, which could have a material adverse effect on our business, financial condition, results of operations and growth prospects.

As a result of our participation in the Medicaid and Medicare programs, we are required to report ASP, AMP and BP data to state and federal authorities. The calculations for our reported pricing data, including AMP, BP, as well as ASP, are complex and the governing legal requirements may be subject to interpretation by us, governmental or regulatory agencies, and the courts. If we become aware that our reported AMP and best price figures for prior quarters are incorrect or should be changed to reflect late-arriving pricing data, we are obligated to submit the corrected data for a period not to exceed 12 quarters from the quarter in which the data originally were due. Such restatements and recalculations serve to increase our costs for complying with the laws and regulations governing the Medicaid rebate program. Any corrections to our pricing data could result in an overage or underage in our rebate liability for past quarters, depending on the nature of the correction.

Our failure to submit AMP, BP, ASP, and other required data on a timely basis could result in a civil monetary penalty of $10,000 per day for each day the submission is late beyond the due date. In addition, if we are found to have knowingly submitted false information to the government, we could be liable for civil monetary penalties not to exceed $100,000 per item of false information, in addition to other penalties the government may impose. As to ASP specifically, if a manufacturer is found to have made a misrepresentation in the reporting of ASP, the statute provides for civil monetary penalties of up to $10,000 for each misrepresentation for each day in which the misrepresentation was applied. In all cases, this conduct also could result in the termination of our Medicaid rebate agreement. In the event that CMS terminates our rebate agreement, no federal payments would be available under Medicaid or Medicare Part B for PROVENGE or any other of our products that are approved for marketing.

The availability of federal funds under Medicaid and Medicare Part B to pay for PROVENGE and any other products that are approved for marketing also is conditioned on our participation in the Public Health Service 340B drug pricing program. The 340B drug pricing program requires participating manufacturers to agree to charge statutorily-defined covered entities no more than the 340B “ceiling price” for the manufacturer’s covered outpatient drugs. These covered entities include hospitals that serve a disproportionate share of poor Medicare beneficiaries, as well as a variety of community health clinics and other recipients of health services grant funding. PPACA expanded the 340B program to include additional entity types: certain free standing cancer hospitals, critical access hospitals, rural referral centers and sole community hospitals, each as defined by the Act. The 340B ceiling price for a drug is calculated using a statutory formula that is based on the AMP and Medicaid rebate amount for the drug. To the extent PPACA, as discussed above, changes the statutory and regulatory definitions of AMP and the Medicaid rebate amount, these changes will also affect our 340B ceiling price for PROVENGE or any other of our products that are approved for marketing. Any revisions to previously reported Medicaid pricing data also may require revisions to the 340B ceiling prices that were based on those data and could require the issuance of refunds.

We also make PROVENGE available for purchase by authorized users of the Federal Supply Schedule (“FSS”), of the General Services Administration pursuant to an FSS contract with the Department of Veterans Affairs (“VA”) that was awarded to Dendreon in mid-2012. Under the Veterans Health Care Act of 1992 (“VHCA”), we are required to offer deeply discounted FSS contract pricing to four federal agencies commonly referred to as the “Big Four” — the Department of Veterans Affairs, the Department of Defense (“DoD”), the Coast Guard and the Public Health Service (including the Indian Health Service) — for federal funding to be made available for reimbursement of any of our products under the Medicaid program, Medicaid Part B and for our products to be eligible to be purchased by those four federal agencies and certain federal grantees. FSS pricing to those four federal agencies must be equal to or less than the federal ceiling price (“FCP”). The FCP is based on a weighted average wholesaler price known as the non-federal average manufacturer price (“Non-FAMP”). We are required to report Non-FAMP to the VA on a quarterly and annual basis. If we misstate Non-FAMP or FCP, we must restate these figures. In addition, if we are found to have knowingly submitted false information to the government, the VHCA provides for civil monetary penalties of $100,000 per item of false information in addition to other penalties the government may impose.

The FSS contract is a federal procurement contract that includes standard government terms and conditions and extensive disclosure and certification requirements. The FSS contract has a five-year base term and five (5) one-year option periods. All items on FSS contracts are subject to a standard FSS contract clause that requires FSS contract price reductions under certain circumstances where pricing is reduced to an agreed “tracking customer.” Further, in addition to the “Big Four” agencies, all other federal agencies and some non-federal entities are authorized to access FSS contracts. If we overcharge the government in connection with our FSS contract, whether due to a misstated FCP or otherwise, we are required to refund the difference to the government. Failure to make necessary disclosures and/or to identify contract overcharges can result in allegations against us under the Federal False Claims Act and other laws and regulations. Unanticipated refunds to the government, and responding to a government investigation or enforcement action, would be expensive and time-consuming, and could have a material adverse effect on our business, financial condition, results of operations and growth prospects.

Pricing and rebate calculations vary among products, and programs and are complex. Governmental agencies may also make changes in program interpretations, requirements or conditions of participation, some of which may have implications for amounts previously estimated or paid. We cannot assure you that our submissions will not be found by CMS or VA to be incomplete or incorrect.

The pharmaceutical industry is subject to significant regulation and oversight to prevent an inappropriate inducement and health care fraud pursuant to anti-kickback laws, false claims statutes, and anti-corruption laws, which may result in significant additional expense and limit our ability to commercialize our products. In addition, any failure to comply with these regulations could result in substantial fines or penalties.

In the United States, we are also subject to health care fraud and abuse regulation and enforcement by both the federal government and the states in which we conduct our business. The laws that may affect our ability to operate include:

The risk of our being found in violation of these laws is increased by the fact that many of them have not been fully interpreted by the regulatory authorities or the courts, and their provisions are open to a variety of interpretations. Moreover, recent health care reform legislation has strengthened many of these laws. For example, PPACA, among other things, amends the intent requirement of the federal anti-kickback and criminal health care fraud statutes to clarify that a person or entity does not need to have actual knowledge of this statute or specific intent to violate it. In addition, PPACA provides that a claim including items or services resulting from a violation of the federal anti-kickback statute constitutes a false or fraudulent claim for purposes of the false claims statutes.

Dendreon’s products are subject to rigorous regulation by the U.S. Food and Drug Administration (“FDA”). These requirements include, among other things, regulations regarding manufacturing practices, quality control,

product labeling, packaging, safety surveillance, adverse event reporting, storage, and advertising and post-marketing reporting. Dendreon’s facilities and procedures are subject to ongoing regulation, including periodic inspection by the FDA and other regulatory authorities. Dendreon must spend time and effort to ensure compliance with these complex regulations. Possible regulatory actions could include warning letters, fines, damages, injunctions, civil penalties, recalls, seizures of Dendreon’s products, and criminal prosecution. These actions could result in substantial modifications to Dendreon’s business practices and operations that could disrupt Dendreon’s business.

In addition, a number of states have laws that require pharmaceutical companies to track and report payments, gifts and other benefits provided to physicians and other health care professionals and entities. Similarly, the federal Physician Payments Sunshine Act within PPACA will require pharmaceutical companies to report to the federal government certain payments to physicians and teaching hospitals. The Physician Payments Sunshine Act provisions were recently implemented in final regulation that requires manufacturers that participate in federal health care programs to begin collecting such information on August 1, 2013. Manufacturers are required to report such data to CMS by March 13, 2014. Other state laws require pharmaceutical companies to adopt and or disclose specific compliance policies to regulate the company’s interactions with healthcare professionals. Moreover, some states, such as Minnesota and Vermont, also impose an outright ban on certain gifts to physicians.

Violations of some of these laws may result in substantial fines. These laws affect our promotional activities by limiting the kinds of interactions we may have with hospitals, physicians or other potential purchasers or users of our products. Both the disclosure laws and gift bans impose additional administrative and compliance burdens on us. In addition to the federal and state disclosure and gift ban laws, certain countries outside of the United States have similarly enacted disclosure laws for which the company in its activities may be subjected to from time to time. Although we seek to structure our interactions in compliance with all applicable requirements, these laws are broadly written, and it is often difficult to determine precisely how a law will be applied in specific circumstances. If an employee were to offer an inappropriate gift to a customer, we could be subject to a claim under an applicable state law. Similarly if we fail to comply with a reporting requirement, we could be subject to penalties under applicable federal or state laws.

The United States and other countries have adopted anti-corruption laws such as the U.S. Foreign Corrupt Practices Act (FCPA) and the U.K. Bribery Act, which generally prohibit directly or indirectly giving, offering or promising inducements to public officials to elicit an improper commercial advantage. Under the FCPA, this prohibition has been interpreted to apply to doctors and other medical professionals who work in state-run hospitals and state-run healthcare systems outside the United States. Some of these laws, including the U.K. Bribery Act, also prohibit directly or indirectly giving, offering or promising (and, in some cases, accepting or soliciting) inducements to (or from) private parties to elicit (or grant) an improper commercial advantage.

As we begin to commercialize our products outside the United States, there is an increased risk that we (or others acting on our behalf) will engage in transactions or activities that could be deemed to violate applicable anti-corruption laws. Although we believe that we have appropriate compliance policies and procedures in place to mitigate such risk, our personnel and others acting on our behalf could nevertheless engage in conduct that violates such laws, for which we could be held responsible. Under such circumstances, we could be subject to civil and/or criminal penalties, and the resulting negative publicity could adversely affect our brand, our reputation, and our sales activities.

We expect there will continue to be U.S. and non-U.S. national and, in some cases, regional and local laws and/or regulations, proposed and implemented, that could impact our operations and business. The extent to which future legislation or regulations, if any, relating to health care fraud abuse laws and/or enforcement, may be enacted or what effect such legislation or regulation would have on our business remains uncertain. Because of the breadth of these laws and, in some cases, the lack of extensive legal guidance in the form of regulations or court decisions, it is possible that some of our business activities could be subject to challenge under one or more of these laws. If our operations are found to be in violation of any of the laws described above or any other governmental regulations that apply to us, we may be subject to penalties, including civil and criminal penalties, damages, fines, exclusion of a company’s products from reimbursement under governmental health care programs, and the curtailment or restructuring of our operations, any of which could adversely affect our ability to

operate our business and our financial results. Any challenge that we or our business partners have failed to comply with applicable laws and regulations could have a material adverse effect on our business, financial condition, results of operations and growth prospects. If we or the other parties with whom we work fail to comply with applicable regulatory requirements, we or they could be subject to a range of regulatory actions that could affect our ability to commercialize our products and could harm or prevent sales of the affected products, or could substantially increase the costs and expenses of commercializing and marketing our products. Any threatened or actual government enforcement action could also generate adverse publicity and require that we devote substantial resources that could otherwise be used in other aspects of our business.

We may be subject to or otherwise affected by laws relating to privacy and security of personal information, including personal health information and our failure to comply could result in fines and penalties and significant reputational damage.

There are numerous United States federal and state laws governing the privacy and security of personal health information that we obtain, maintain or have access to in connection with manufacture of our product. Some of the laws that may apply include state security breach notification laws, state health information privacy laws and federal and state consumer protections laws which impose requirements for the collection, use, disclosure and transmission of personal information. Numerous other countries have, or are developing, laws governing the collection, use and transmission of personal information as well. Each of these laws may be subject to varying interpretations by courts and government agencies, creating complex compliance issues for us. If we fail to comply with applicable laws and regulations we could be subject to penalties or sanctions.

Although we are not a covered entity subject to HIPAA, most healthcare providers who prescribe our product and from whom we obtain personal health information are subject to HIPAA. Accordingly, we could be subject to criminal penalties if we knowingly obtain individually identifiable health information from a covered entity in a manner that is not authorized or permitted by HIPAA or for aiding and abetting the violation of HIPAA. We are unable to predict whether our actions could be subject to prosecution in the event of an impermissible disclosure of health information to us.

The receipt of personal health information in connection with our clinical trial initiatives is subject to state and federal human subject protection laws. These laws could create liability for us if one of our research collaborators were to use or disclose research subject information without consent and in violation of applicable laws.

If we do not ensure the effectiveness of our information security controls over patient personal information, cyber-attacks against our computing infrastructure may result in that information being accessed by unauthorized external individuals, which could result in substantial reputational damage, increase company costs, and may subject the company to financial penalties.

We receive personal information from our patients and our business partners in connection with business operations and the product manufacturing process. We have implemented information security measures to protect patients’ personal information against the risk of inappropriate and unauthorized external use and disclosure. However, despite these measures, and due to the ever changing information cyber-threat landscape, we may be subject to data breaches through cyber-attacks perpetrated by individuals that attempt to compromise our security controls.

An attack that results in a breach of patient information may compromise our patient’s trust, resulting in devastating reputational damage, which could have major operational and financial impact on our business. Moreover, because we depend on information systems for our manufacturing process, a successful cyber-attack could limit the availability of our computing infrastructure thereby causing a disruption in our operations and negatively affecting our financial condition. Any such cyber-breach may subject the company to state and federal penalties. Finally, an information breach through cyber-attacks could require that we engage additional resources, thereby increasing our costs.

We use hazardous materials in our business and must comply with environmental laws and regulations, which can be expensive.

Our operations produce hazardous waste products, including chemicals and radioactive and biological materials. We are subject to a variety of federal, state and local laws and regulations relating to the use, handling, storage and disposal of these materials. Although we believe that our safety procedures for handling and disposing of these materials complies with the standards prescribed by state and federal laws and regulations, the risk of accidental contamination or injury from these materials cannot be eliminated. We generally contract with third parties for the disposal of such hazardous waste products and store our low level radioactive waste at our facilities in compliance with applicable environmental laws until the materials are no longer considered radioactive. We are also subject to regulation by the Occupational Safety and Health Administration (“OSHA”), and the Environmental Protection Agency (the “EPA”), and to regulation under the Toxic Substances Control Act, the Resource Conservation and Recovery Act and other regulatory statutes, and may in the future be subject to other federal, state or local regulations. OSHA and/or the EPA may promulgate regulations that may affect our research and development programs. We may be required to incur further costs to comply with current or future environmental and safety laws and regulations. In addition, in the event of accidental contamination or injury from these materials, we could be held liable for any damages that result, including remediation, and any such liability could exceed our resources.

If we are unable to protect our proprietary rights or to defend against infringement claims, we may not be able to compete effectively or operate profitably.

We invent and develop technologies that are the basis for or incorporated in our potential products. We protect our technology through United States and foreign patent filings, copyrights, trademarks and trade secrets. We have issued patents, and applications for United States and foreign patents in various stages of prosecution. We expect that we will continue to file and prosecute patent applications and that our success depends in part on our ability to establish and defend our proprietary rights in the technologies that are the subject of issued patents and patent applications.

The fact that we have filed a patent application or that a patent has issued, however, does not ensure that we will have meaningful protection from competition with regard to the underlying technology or product. Patents, if issued, may be challenged, invalidated, declared unenforceable or circumvented or may not cover all applications we may desire. Our pending patent applications as well as those we may file in the future may not result in issued patents. Patents may not provide us with adequate proprietary protection or advantages against competitors with, or who could develop, similar or competing technologies or who could design around our patents. Patent law relating to the scope of claims in the pharmaceutical field in which we operate is continually evolving and can be the subject of some uncertainty. The laws providing patent protection may change in a way that would limit protection.

We also rely on trade secrets and know-how that we seek to protect, in part, through confidentiality agreements. Our policy is to require our officers, employees, consultants, contractors, manufacturers, outside scientific collaborators and sponsored researchers and other advisors to execute confidentiality agreements. These agreements provide that all confidential information developed or made known to the individual during the course of the individual’s relationship with us be kept confidential and not disclosed to third parties except in specific limited circumstances. We also require signed confidentiality agreements from companies that receive our confidential data. For employees, consultants and contractors, we require confidentiality agreements providing that all inventions conceived while rendering services to us shall be assigned to us as our exclusive property. It is possible, however, that these parties may breach those agreements, and we may not have adequate remedies for any breach. It is also possible that our trade secrets or know-how will otherwise become known to or be independently developed by competitors.

We are also subject to the risk of claims, whether meritorious or not, that our products or product candidates infringe or misappropriate third-party intellectual property rights. Defending against such claims can be quite expensive even if the claims lack merit. If we are found to have infringed or misappropriated a third-party’s

intellectual property, we could be required to seek a license or discontinue our products or cease using certain technologies or delay commercialization of the affected products or product candidates, and we could be required to pay substantial damages, which could materially harm our business.

We may be subject to litigation with respect to the ownership and use of intellectual property that will be costly to defend or pursue and uncertain in its outcome.

Our business may bring us into conflict with our licensees, licensors or others with whom we have contractual or other business relationships, or with our competitors or others whose interests differ from ours. If we are unable to resolve those conflicts on terms that are satisfactory to all parties, we may become involved in litigation brought by or against us. That litigation is likely to be expensive and may require a significant amount of management’s time and attention, at the expense of other aspects of our business.

Litigation relating to the ownership and use of intellectual property is expensive, and our position as a relatively small company in an industry dominated by very large companies may cause us to be at a disadvantage in defending our intellectual property rights and in defending against claims that our product or product candidates infringe or misappropriate third-party intellectual property rights. Even if we are able to defend our position, the cost of doing so may adversely affect our profitability. We may in the future be subject to patent litigation and may not be able to protect our intellectual property at a reasonable cost if such litigation is initiated. The outcome of litigation is always uncertain, and in some cases could include judgments against us that require us to pay damages, enjoin us from certain activities or otherwise affect our legal or contractual rights, which could have a significant adverse effect on our business.

We are exposed to potential product liability claims, and insurance against these claims may not be adequate and may not be available to us at a reasonable rate in the future.

Our business exposes us to potential liability risks inherent in the research, development, manufacturing and marketing of pharmaceutical products and product candidates. If any of our product candidates in clinical trials or our marketed products harm people or allegedly harm people, we may be subject to costly and damaging product liability claims. Most, if not all, of the patients who participate in our clinical trials are already seriously ill when they enter a trial. We have clinical trial insurance coverage, and commercial product liability insurance coverage. However, this insurance coverage may not be adequate to cover all claims against us. There is also a risk that adequate insurance coverage will not be available in the future on commercially reasonable terms, if at all. The successful assertion of an uninsured product liability or other claim against us could cause us to incur significant expenses to pay such a claim, could adversely affect our product development or product sales and could cause a decline in our product revenues. Even a successfully defended product liability claim could cause us to incur significant expenses to defend such a claim, could adversely affect our product development and could cause a decline in our product revenues. In addition, product liability claims could result in an FDA or equivalent non-United States regulatory authority investigation of the safety or efficacy of our products, our manufacturing processes and facilities, or our marketing programs. An FDA or equivalent non-United States regulatory authority investigation could also potentially lead to a recall of our products or more serious enforcement actions, limitations on the indications for which they may be used, or suspension or withdrawal of approval.

We are currently subject to certain pending litigation and may be subject to similar claims in the future.

PROVENGE as reflected in the Company’s August 3, 2011 release of its financial results for the quarter ended June 30, 2011. The Company and other defendants filed a motion to dismiss the consolidated amended complaint on April 27, 2012, and that motion is fully briefed. The Court has indicated that it wishes to hear argument on the motion, but no hearing has yet been scheduled. We cannot predict the outcome of that motion or of these lawsuits; however, the Company believes the claims lack merit and intends to defend the claims vigorously.

Related to the securities lawsuits, the Company also is the subject of stockholder derivative complaints first filed in August 2011 generally arising out of the facts and circumstances that are alleged to underlie the securities action. Derivative suits filed in the District Court were consolidated in December 2011 into a proceeding captioned In re Dendreon Corp. Derivative Litigation, Master Docket No. C 11-1345 JLR; others were filed in the Superior Court of Washington for King County and were consolidated by order dated November 9, 2011 into a proceeding captioned In re Dendreon Corporation Shareholder Derivative Litigation, Lead Case No. 11-2-29626-1 SEA. On June 22, 2012, another derivative action was filed in the Court of Chancery of the State of Delaware, captioned Herbert Silverberg, derivatively on behalf of Dendreon Corporation v. Mitchell H. Gold, et al., Case No. 7646-VCP. The complaints filed in Washington all name as defendants the three individuals who are defendants in the securities action together with the other members of the Company’s Board of Directors. While the complaints filed in Washington assert various legal theories of liability, the lawsuits generally allege that the defendants breached fiduciary duties owed to the Company in connection with the launch of PROVENGE and by purportedly subjecting the Company to potential liability for securities fraud. The complaints also include claims against certain of defendants for supposed misappropriation of Company information and insider trading; the Silverberg complaint, which names one additional former officer of the Company as a defendant, asserts only this claim. The derivative actions pending in Washington are all the subject of stipulated orders staying proceedings until the District Court rules on the motion to dismiss the consolidated amended complaint in the securities action. The parties in the Delaware action agreed to extend the deadline for a response to the Silverberg complaint to February 22, 2013. Shortly before that deadline, the Company filed a motion to stay the litigation consistent with the stay in place in the Washington cases, and it expects to press motions to dismiss on various grounds if the stay motion be denied. While the Company has certain indemnification obligations, including obligations to advance legal expense to the named defendants for defense of these lawsuits, the purported derivative lawsuits do not seek relief against the Company. Additionally, the SEC is conducting a formal investigation, which the Company believes relates to some of the same issues raised in the securities and derivative actions. The Company is cooperating fully with the SEC investigation. The ultimate financial impact of these various proceedings if any is not yet determinable and therefore, no provision for loss, if any, has been recorded in the financial statements. The Company has insurance that it believes affords coverage for much of the anticipated costs of these proceedings, subject to the policies’ terms and conditions.

The Company is not a defendant in the stockholder derivative actions as the defendants are the members of the Company’s board of directors and certain executive officers. Nevertheless, the Company is at risk of incurring significant costs in connection with these derivative actions, including for example costs associated with discovery and defense of the individual defendants. We cannot predict the outcome of any of these suits or proceedings. Monitoring and defending against legal actions, whether or not meritorious, and considering stockholder demands is time-consuming for our management and detracts from our ability to fully focus our internal resources on our business activities and we cannot predict how long it may take to resolve these matters. In addition, legal fees and costs incurred in connection with such activities can be significant. We cannot predict the outcome of the matters or the associated costs to us, nor the amounts that the Company may need to pay to settle them or satisfy an adverse judgment. The Company maintains directors’ and officers’ liability insurance that it believes is applicable to these various lawsuits; however, this insurance coverage may not be adequate to cover all claims against us. We have not established any reserves for any potential liability relating to the suits or other claims related to the same matters. It is possible that we could, in the future, be subject to judgments or enter into settlements of claims for monetary damages. A decision adverse to our interests on these actions or resulting from these matters could result in the payment of substantial damages and could have a material adverse effect on our cash flow, results of operations and financial position.

We have been in the past, and may become in the future, involved in legal proceedings in addition to those described above. You should carefully review and consider the various disclosures we make in our reports filed with the SEC regarding legal matters that may affect our business. Civil and criminal litigation is inherently unpredictable and outcomes can result in excessive verdicts, fines, penalties and/or injunctive relief that affect how we operate our business. Monitoring and defending against legal actions, whether or not meritorious, and considering stockholder demands, is time-consuming for our management and detracts from our ability to fully focus our internal resources on our business activities. In addition, legal fees and costs incurred in connection with such activities may be significant. We cannot predict with certainty the outcome of any legal proceedings in which we become involved and it is difficult to estimate the possible costs to us stemming from these matters. Settlements and decisions adverse to our interests in legal actions could result in the payment of substantial amounts and could have a material adverse effect on our cash flow, results of operations and financial position. Refer to Item 3 for further discussion of our legal proceedings.

Market volatility may affect our stock price, and the value of an investment in our common stock may be subject to sudden decreases.

The trading price for our common stock has been, and we expect it to continue to be, volatile. The price at which our common stock trades depends on a number of factors, including the following, many of which are beyond our control:

During periods of extreme stock market price volatility, share prices of many biotechnology companies have often fluctuated in a manner not necessarily related to their individual operating performance. Furthermore, historically our common stock has experienced greater price volatility than the stock market as a whole.

Anti-takeover provisions in our charter documents and under Delaware law and our stockholders’ rights plan could make an acquisition of us, which may be beneficial to our stockholders, more difficult.

Provisions of our amended and restated certificate of incorporation, as amended (“certification of incorporation”) and amended and restated bylaws (“bylaws”) will make it more difficult for a third-party to acquire us on terms not approved by our board of directors and may have the effect of deterring hostile takeover attempts. Our certificate of incorporation, as amended, authorizes our board of directors to issue up to 10,000,000 shares of preferred stock, of which 2,500,000 shares have been designated as “Series A Junior Participating Preferred Stock,” and to fix the price, rights, preferences, privileges and restrictions, including voting

rights, of those shares without any further vote or action by the stockholders. The rights of the holders of our common stock will be subject to, and may be junior to the rights of the holders of any preferred stock that may be issued in the future. The issuance of preferred stock could reduce the voting power of the holders of our common stock and the likelihood that common stockholders will receive payments upon liquidation.

In addition, our certificate of incorporation divides our board of directors into three classes having staggered terms. This may delay any attempt to replace our board of directors. We have also implemented a stockholders’ rights plan, also called a poison pill, which would substantially reduce or eliminate the expected economic benefit to an acquirer from acquiring us in a manner or on terms not approved by our board of directors. These and other impediments to a third-party acquisition or change of control could limit the price investors are willing to pay in the future for shares of our common stock. Our executive officers have employment agreements that include change of control provisions providing severance benefits in the event that their employment terminates involuntarily without cause or for good reason within twelve months after a change of control of us. These agreements could affect the consummation of and the terms of a third-party acquisition.

We are also subject to provisions of Delaware law that could have the effect of delaying, deferring or preventing a change in control of our company. One of these provisions prevents us from engaging in a business combination with any interested stockholder for a period of three years from the date the person becomes an interested stockholder, unless specified conditions are satisfied.

We do not intend to pay cash dividends on our common stock in the foreseeable future.

We have never declared or paid cash dividends on our capital stock. We are not currently profitable. To the extent we become profitable, we intend to retain any future earnings to fund the development and growth of our business and do not currently anticipate paying any cash dividends in the foreseeable future. Accordingly, our stockholders will not realize a return on their investment unless and until they sell shares after the trading price of our shares appreciates from the price at which the shareholder purchased.

The fundamental change repurchase feature of our convertible notes may delay or prevent a takeover attempt of our company that would otherwise be beneficial to investors.

The indenture governing each of our 2014 Notes and 2016 Notes will require us to repurchase the notes for cash upon the occurrence of a fundamental change and, in certain circumstances, to increase the conversion rate for a holder that converts its notes in connection with a fundamental change. A takeover of our company may be a fundamental change that would trigger the requirement that we repurchase the notes and increase the conversion rate, which could make it more costly for a potential acquirer to engage in a combinatory transaction with us. Such additional costs may have the effect of delaying or preventing a takeover of our company that would otherwise be beneficial to investors.

Changes in interest rates can affect the fair value of our investment portfolio and the debt we have issued and its interest earnings.

Our interest rate risk exposure results from our investment portfolio and our non-recourse notes. Our primary objectives in managing our investment portfolio are to preserve principal, maintain proper liquidity to meet operating needs and maximize yields. The securities we hold in our investment portfolio are subject to interest rate risk. At any time, sharp changes in interest rates can affect the fair value of the investment portfolio and its interest earnings. Currently, we do not hedge these interest rate exposures. We have established policies and procedures to manage exposure to fluctuations in interest rates. We place our investments with high quality issuers, limit the amount of credit exposure to any one issuer, and do not use derivative financial instruments in our investment portfolio.

The fair value of the 2014 Notes and 2016 Notes is affected by changes in the interest rates and by changes in the price of our common stock.

If securities or industry analysts publish research or reports or publish unfavorable research about our business, the price of our common stock and trading volume could decline.

The trading market for our common stock will depend in part on the research and reports that securities or industry analysts publish about us or our business. If one or more of the analysts who covers us downgrades our common stock, the price of our common stock would likely decline. If one or more of these analysts ceases to cover us or fails to publish regular reports on us, interest in the purchase of our common stock could decrease, which could cause the price of our common stock or trading volume to decline.

Our principal research, development and administrative facilities are located in Seattle, Washington and Bridgewater, New Jersey. In February 2011, we entered into a lease for office space of 179,656 square feet in Seattle, Washington. In July 2012, we amended the lease to reduce the premises to 158,081 square feet. The initial lease term is for five and a half years, with one renewal term of two and a half years. Also in February 2011, we entered into a sublease for laboratory and office space of 97,365 square feet in Seattle, Washington. The lease term is for eight years. In July 2012, we entered into a lease for office space of 39,937 square feet in Bridgewater, New Jersey. We currently anticipate taking occupancy in mid-2013. The initial lease term is for ten years, with one renewal term of five years. Additionally, we lease approximately 2,400 square feet of office space in Morrisville, North Carolina under a lease expiring in October 2014.

In July 2009, we entered into a lease in Atlanta, Georgia consisting of approximately 156,000 square feet, for use as a manufacturing facility following construction and build-out, which was completed in 2010. The initial lease term is for ten and a half years expiring in August 2020, with five renewal terms of five years each. In August 2009, we entered into a lease for approximately 184,000 square feet in Orange County, California for use as a manufacturing facility following build-out, which was completed in 2010. The initial lease term is for ten and a half years expiring in December 2019, with five renewal terms of five years each. We also leased approximately 158,000 square feet of manufacturing space in Morris Plains, New Jersey under an amended lease expiring in November 2022; in December 2012, we assigned this lease to Novartis as part of the sale of the New Jersey Facility and were released from future obligations under this lease.

We believe that our existing properties are in good condition and suitable for the conduct of our business.

To support our commercialization efforts, we have made significant investments in manufacturing facilities and related operations. In February 2007, we started to manufacture PROVENGE for clinical use in the New Jersey Facility. Commercial manufacture of PROVENGE began in May 2010 at our New Jersey Facility. Our manufacturing capabilities significantly increased during 2011 with the approval by the FDA of additional capacity at the New Jersey Facility in March 2011, and approval of the Orange County Facility in June 2011 and the Atlanta Facility in August 2011. On July 30, 2012, we announced a strategic restructuring plan that included re-configuring our manufacturing model with the closure of our New Jersey Facility. We subsequently sold the New Jersey Facility to Novartis in December 2012. We believe that with the sale of our New Jersey Facility, the capacity at our Atlanta and Orange County facilities will be sufficient to handle the manufacturing of PROVENGE in the volumes that we anticipate.

filed on February 24, 2012. In general, the complaints allege that the defendants issued materially false or misleading statements concerning the Company, its finances, business operations and prospects with a focus on the market launch of PROVENGE and related forecasts concerning physician adoption, and revenue from sales of PROVENGE as reflected in the Company’s August 3, 2011 release of its financial results for the quarter ended June 30, 2011. The Company and other defendants filed a motion to dismiss the consolidated amended complaint on April 27, 2012, and that motion is fully briefed. The Court has indicated that it wishes to hear argument on the motion, but no hearing has yet been scheduled. We cannot predict the outcome of that motion or of these lawsuits; however, the Company believes the claims lack merit and intends to defend the claims vigorously.

Related to the securities lawsuits, the Company also is the subject of stockholder derivative complaints first filed in August 2011 generally arising out of the facts and circumstances that are alleged to underlie the securities action. Derivative suits filed in the District Court were consolidated in December 2011 into a proceeding captioned In re Dendreon Corp. Derivative Litigation, Master Docket No. C 11-1345 JLR; others were filed in the Superior Court of Washington for King County and were consolidated by order dated November 9, 2011 into a proceeding captioned In re Dendreon Corporation Shareholder Derivative Litigation, Lead Case No. 11-2-29626-1 SEA. On June 22, 2012, another derivative action was filed in the Court of Chancery of the State of Delaware, captioned Herbert Silverberg, derivatively on behalf of Dendreon Corporation v. Mitchell H. Gold, et al., Case No. 7646-VCP. The complaints filed in Washington all name as defendants the three individuals who are defendants in the securities action together with the other members of the Company’s Board of Directors. While the complaints filed in Washington assert various legal theories of liability, the lawsuits generally allege that the defendants breached fiduciary duties owed to the Company in connection with the launch of PROVENGE and by purportedly subjecting the Company to potential liability for securities fraud. The complaints also include claims against certain of defendants for supposed misappropriation of Company information and insider trading; the Silverberg complaint, which names one additional former officer of the Company as a defendant, asserts only this claim. The derivative actions pending in Washington are all the subject of stipulated orders staying proceedings until the District Court rules on the motion to dismiss the consolidated amended complaint in the securities action. The parties in the Delaware action agreed to extend the deadline for a response to the Silverberg complaint to February 22, 2013. Shortly before that deadline, the Company filed a motion to stay the litigation consistent with the stay in place in the Washington cases, and it expects to press motions to dismiss on various grounds should the stay motion be denied. While the Company has certain indemnification obligations, including obligations to advance legal expense to the named defendants for defense of these lawsuits, the purported derivative lawsuits do not seek relief against the Company. Additionally, the Securities and Exchange Commission (“SEC”) is conducting a formal investigation, which the Company believes relates to some of the same issues raised in the securities and derivative actions. The Company is cooperating fully with the SEC investigation. The ultimate financial impact of these various proceedings if any is not yet determinable and therefore, no provision for loss, if any, has been recorded in the financial statements. The Company has insurance that it believes affords coverage for much of the anticipated costs of these proceedings, subject to the policies’ terms and conditions.

The Company received notice in November 2011 of a lawsuit filed in the Durham County Superior Court of North Carolina against the Company by GlaxoSmithKline LLC (“GSK”). The lawsuit purports claims for monies due and owing and breach of the Company’s obligations under the Development and Supply Agreement terminated as of October 31, 2011. On January 25, 2013, GSK filed a motion to amend its complaint to add a claim for breach of North Carolina’s unfair and deceptive trade practices act. The Company does not believe the lawsuit has merit, filed a Counterclaim and Answer on January 6, 2012, will oppose GSK’s motion to amend its complaint, and intends to defend its position vigorously. The Company expects to pay approximately $4.0 million in fees in connection with the termination of the Development and Supply Agreement. The ultimate financial impact of the lawsuit is not yet determinable. Therefore, no additional provision for loss, has been recorded in the financial statements.

ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

Our common stock trades on the NASDAQ Global Market under the symbol “DNDN.” The following table sets forth, for the periods indicated, the high and low reported intraday sale prices of our common stock as reported on the NASDAQ Global Market:

On February 20, 2013, the last reported sale price of our common stock on the NASDAQ Global Market was $5.93 per share. See Item 12, “Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters” for a description of our equity compensation plans.

Recordholders. As of February 20, 2013, there were 277 holders of record of our common stock.

Dividends. We have never declared or paid cash dividends on our capital stock. We currently intend to retain any future earnings to fund the development and growth of our business and do not currently anticipate paying cash dividends in the foreseeable future. Future dividends, if any, will be determined by our board of directors and will depend upon our financial condition, results of operations, capital requirements and other factors.

Share Repurchases. The following table sets forth information with respect to purchases of shares of common stock made during the three months ended December 31, 2012 by or on behalf of the Company or any “affiliated purchaser,” as defined by Rule 10b-18 of the Securities Exchange Act of 1934:

The following graph shows the total stockholder return of an investment of $100 on December 31, 2007 in cash in our common stock and in each of the following indices: (i) the NASDAQ Composite Index and (ii) the NASDAQ Biotechnology Index. All values assume reinvestment of the full amount of all dividends, for which none have been declared or paid, and are calculated as of December 31, 2012.

You should read the selected financial data set forth below in conjunction with the information in Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and our audited financial statements and the related notes thereto appearing elsewhere in this Annual Report on Form 10-K.

ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

We are a biotechnology company focused on the discovery, development and commercialization of novel therapeutics that may significantly improve cancer treatment options for patients. Our product portfolio includes active cellular immunotherapies and a small molecule product candidate that could be applicable to treating multiple types of cancers.

PROVENGE^® (sipuleucel-T) is our only commercialized product approved by the United States Food and Drug Administration (“FDA”), and is a first in class autologous cellular immunotherapy for the treatment of asymptomatic or minimally symptomatic, metastatic, castrate-resistant (hormone-refractory) prostate cancer. Commercial sale of PROVENGE began in May 2010. Prostate cancer is the most common non-skin cancer among men in the United States, with over one million men currently diagnosed with the disease, and the second leading cause of cancer deaths in men in the United States. We currently own worldwide rights for PROVENGE.

We generated net revenue from sales of PROVENGE of $325.3 million in 2012, compared to $213.5 million during 2011. Approximately 802 parent accounts, some of which have multiple sites, had infused the product as of the end of 2012. Commercial sale of PROVENGE is currently supported by our Orange County Facility and our Atlanta Facility. We also manufactured PROVENGE at the New Jersey Facility into December 2012, at which time we sold the New Jersey Facility to Novartis for $43.0 million. We believe that with the sale of the New Jersey Facility, the capacity at our Atlanta and Orange County facilities will be sufficient to handle the manufacturing of PROVENGE in the volumes that we anticipate.

Prior to the sale of the New Jersey Facility, as announced on July 30 2012, we initiated a strategic restructuring plan that included re-configuring our manufacturing model with the closure of the New Jersey Facility, restructuring administrative functions and strengthening our commercial functions, which we anticipate will lower our overall cost structure. As a result of the restructuring, we expect to reduce costs by approximately $150 million annually, including a reduction in headcount of approximately 600 full-time and contractor positions. We expect the implementation of the restructuring initiatives will be substantially completed by June 2013. Certain projects are subject to a variety of labor and employment laws, rules, and regulations which could result in a delay in implementing these projects.

We are currently seeking marketing authorization for the sale of PROVENGE in Europe. Following a number of pre-submission meetings with European Union National Agencies, we expect that data from our Phase 3 D9902B IMPACT (IMmunotherapy for Prostate AdenoCarcinoma Treatment) study, supported by data from our D9901 and D9902A studies, will be sufficient to seek regulatory approval for PROVENGE in the E.U. Using clinical data described in our United States Biologics License Application, we filed our marketing authorization application (“MAA”) with the European Medicines Agency (“EMA”), which was validated on January 25, 2012. We plan to manufacture product through a contract manufacturing organization. We anticipate a regulatory decision from the E.U. in mid-2013.

We make judgmental decisions and estimates with underlying assumptions when applying accounting principles to prepare our consolidated financial statements. Certain critical accounting policies requiring significant judgments, estimates, and assumptions are detailed below. We consider an accounting estimate to be critical if (1) it requires assumptions to be made that are uncertain at the time the estimate is made and (2) changes to the estimate or different estimates that could have reasonably been used would have materially changed our consolidated financial statements. The development and selection of these critical accounting policies have been reviewed with the Audit Committee of our Board of Directors.

We believe the current assumptions and other considerations used to estimate amounts reflected in our consolidated financial statements are appropriate. However, should our actual experience differ from these assumptions and other considerations used in estimating these amounts, the impact of these differences could have a material impact on our consolidated financial statements.

We recognize revenue primarily from the sale of PROVENGE. Revenue from the sale of PROVENGE is recorded net of product returns and estimated price discounts, including rebates and chargebacks offered pursuant to mandatory federal and state government programs and to members of Group Purchasing Organizations (“GPOs”) with which we have contracts. Revenue from sales of PROVENGE is recognized upon confirmed product delivery to and issuance of a product release form to the physician. Product returns are limited to those instances in which the physician receives the product but does not infuse the product prior to expiry, either due to timing or the failure of the product to meet specifications and pass site inspection. Due to the limited usable life of PROVENGE of approximately 18 hours from the completion of the manufacturing process to patient infusion, actual return information is known and credited against sales in the month incurred.

PROVENGE sales are direct to the physician; however, we have entered into distribution agreements with several credit-worthy third-party wholesalers (the “Wholesalers”) whereby we manufacture and ship the product direct to the physician and transfer the sale of PROVENGE to the Wholesalers. Under the distribution agreements, the Wholesalers assume all bad debt risk from the physician or institution, therefore no allowance for bad debt is recorded. In addition, under the terms of the distribution agreements, our return policy allows for the return of product that has expired or has a defect prior to delivery, product that is damaged during delivery and product that cannot be infused because it does not otherwise meet specified requirements.

Our product is subject to certain required pricing discounts via rebates and/or chargebacks pursuant to mandatory federal and state government programs and, accordingly, revenue recognition requires estimates of rebates and chargebacks. We have agreements with CMS providing for a rebate on sales to eligible Medicaid patients. For sales of our product to eligible Medicaid patients, the physician purchases our product at full price, and then receives reimbursement from the applicable state. The state, in turn, invoices us for the amount of the Medicaid rebate. Estimated rebates payable under Medicaid are recognized in the same period that the related revenue is recognized, resulting in a reduction in gross product revenue, and are classified as other accrued liabilities until paid. Our estimate of rebates payable is based on information we gather related to the physician site as well as health insurance information related to the patient being treated. Since there is often a delay between product sale and the processing and payment of the Medicaid rebates, we evaluate our estimates regularly, and adjust our estimates as necessary.

We also have agreements with the Public Health Service (“PHS”), providing for a chargeback on sales to PHS-eligible providers, and Federal Supply Schedule (“FSS”) customers, including the Department of Veteran Affairs and the Department of Defense, providing for a chargeback on sales to eligible patients. Chargebacks occur when a contracted physician purchases our product at fixed contract prices that are lower than the price we charge the Wholesalers. Each Wholesaler, in turn, charges us back for the difference between the price initially paid by the Wholesaler and the contract price paid to the Wholesaler by the physician. These chargebacks are estimated and recorded in the period that the related revenue is recognized, resulting in a reduction in gross product revenue and trade accounts receivable. Our estimate of chargebacks is based on information we gather related to the physician site.

In the fourth quarter of 2011, we entered into agreements with certain GPOs that contract for the purchase of PROVENGE on behalf of their members and provide contract administration services. Beginning in July of 2012, eligible members of the GPOs purchase PROVENGE at contracted prices through a chargeback, and may be entitled to receive a rebate on eligible purchases at the end of each quarter. Estimated rebates and administrative fees payable to GPOs are recognized in the same period that the related revenue is recognized, resulting in a reduction in gross product revenue, and are classified as other accrued liabilities until paid. Our estimate of rebates payable is based on information we gather related to sales of our product to eligible GPO members.

In the third quarter of 2011, we began receiving royalties on Merck’s sales of VICTRELIS^TM (boceprevir), for the treatment of chronic hepatitis C, which was approved in May 2011. We received royalties on worldwide

net sales of boceprevir pursuant to the terms of a license and collaboration agreement. Royalty revenue and royalty receivables were recorded in the period earned, in advance of collection. In the fourth quarter of 2011, we sold this royalty to an unrelated third-party for $125.0 million and recognized the full amount as revenue. No revenue will be recorded related to this royalty in future periods.

Inventories are determined at the lower of cost or market value with cost determined under the specific identification method. We began capitalizing raw material inventory in mid-April 2009, in anticipation of the potential approval for marketing of PROVENGE in the first half of 2010. At this time, our expectation of future benefits became sufficiently high to justify capitalization of these costs, as regulatory approval was considered probable and the related costs were expected to be recoverable through the commercialization of the product. Costs incurred prior to mid-April 2009 were recorded as research and development expense in our statements of operations. As of April 2009, we had approximately $26.4 million in zero-cost inventory which was previously expensed and could be used for the commercial and clinical manufacture of PROVENGE, training or additional research and development efforts.

As of December 31, 2011 and 2010, approximately $4.7 million and $23.1 million, respectively, of zero-cost inventory remained on hand. No zero-cost inventory remained on hand as of December 31, 2012. Cost of product revenue includes antigen expense of approximately $20.8 million during the year ended 2012. Cost of product revenue for the years ended 2011 and 2010 did not include antigen expense as we used zero-cost inventory during these periods. As a result, cost of product revenue reflects a lower average per unit cost of antigen prior to 2012.

We record a liability for costs associated with an exit or disposal activity at fair value in the period in which the liability is incurred. Employee termination benefits are accrued when the obligation is probable and estimable. Employee termination benefits are expensed at the date the employee is notified. If the employee must provide future service in excess of 60 days, such benefits are expensed ratably over the future service period. For contract termination costs, we record a liability upon the later of the contract termination date or the date we cease using the rights conveyed by the contract. We have made estimates regarding the amount and timing of our restructuring expense and liability, including current and future period employee termination benefits.

Losses from impairment of long-lived assets used in operations are recognized when indicators of impairment are present and the undiscounted cash flows estimated to be generated by those assets are less than the assets’ carrying amount. We periodically evaluate the carrying value of long-lived assets to be held and used when events and circumstances indicate that the carrying amount of an asset may not be recovered. Refer to Note 7 – Property and Equipment and Note 13 – Restructuring, Contract Termination and Asset Impairment to our consolidated financial statements for details of losses from impairment of long-lived assets recorded in 2012, including impairment of the New Jersey Facility. The calculation of estimated fair value of the New Jersey Facility assets required judgment in the assumptions used in the probability-weighted estimated future cash flows related to the highest and best use of the assets, including salvage values.

The Company’s 2.875% Convertible Senior Notes due 2016 (the “2016 Notes”), issued in the first quarter of 2011, are convertible at the option of the holder, and we may choose to satisfy conversions, if any, in cash, shares of our common stock, or a combination of cash and shares of our common stock, based on a conversion rate initially equal to 19.5160 shares of common stock per $1,000 principal amount of the 2016 Notes, which is equivalent to an initial conversion price of approximately $51.24 per share. Should a holder of the 2016 Notes exercise their conversion option during the next twelve month period, it is our intention to satisfy the conversion with shares of common stock.

The 2016 Notes are accounted for in accordance with Accounting Standards Codification (“ASC”) 470-20, Debt with Conversion and Other Options, under which issuers of certain convertible debt instruments that may be settled in part in cash upon conversion, are required to separately account for the liability (debt) and equity (conversion option) components of the instrument. The liability component of the 2016 Notes, as of the issuance date, was calculated by estimating the fair value of a similar liability issued at an 8.1% effective interest rate, which was determined by considering the rate of return investors would require in the Company’s debt structure. The amount of the equity component was calculated by deducting the fair value of the liability component from the principal amount of the 2016 Notes and resulted in a corresponding increase to debt discount. The debt discount is being amortized as interest expense through the earlier of the maturity date of the 2016 Notes or the date of conversions, if any.

We measure and report at fair value our cash equivalents and investment securities. We also measured and reported at fair value our warrant liability, prior to exercise of the warrants in the second quarter of 2010. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability, an exit price, in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value maximize the use of observable inputs and minimize the use of unobservable inputs.

Market values were determined for each individual security in the investment portfolio. We utilize third-party pricing services for all security valuations. We review the pricing methodology, including the collection of market information, used by the third-party pricing services. On a periodic basis, we also review and validate the pricing information received from the third-party providers.

Assets and liabilities typically recorded at fair value on a non-recurring basis include long-lived assets measured at fair value due to an impairment assessment under ASC 360-10, Property, Plant and Equipment, and asset retirement obligations initially measured under ASC 410-20, Asset Retirement and Environmental Obligations.

Stock-based compensation cost is estimated at the grant date based on the award’s fair value and is recognized on the accelerated method as expense over the requisite service period. The fair value of our stock options is calculated using the Black-Scholes-Merton (“BSM”) option pricing model. The BSM model requires judgmental assumptions including volatility, forfeiture rates and expected option life. If any of the assumptions used in the BSM model change significantly, stock-based compensation expense for new awards may differ materially from that recorded for existing awards.

Restricted stock awards generally vest and are expensed over two- to four-year periods. We have granted restricted stock awards and options with certain performance conditions to certain executive officers and key employees. At each reporting date, we evaluate whether achievement of the performance conditions is probable. Compensation expense is recorded over the appropriate service period based upon our assessment of accomplishing each performance provision or the occurrence of other events which may have caused the awards or options to accelerate and vest.

We determine the fair value of awards under our Employee Stock Purchase Plan using the BSM model.

A loss contingency is recorded if it is probable that an asset has been impaired or a liability has been incurred and the amount of the loss can be reasonably estimated. We evaluate, among other factors, the probability of an unfavorable outcome and our ability to make a reasonable estimate of the amount of the ultimate loss. Loss contingencies that we determine to be reasonably possible, but not probable, are disclosed but not recorded. Changes in these estimates could materially affect our financial position and results of operations.

In 2011, the Financial Accounting Standards Board issued two Accounting Standard Updates (“ASUs”) which amended guidance for the presentation of comprehensive income. The amended guidance requires an entity to present components of net income and other comprehensive income in one continuous statement, referred to as the statement of comprehensive income, or in two separate, but consecutive statements. The previous option to report other comprehensive income and its components in the statement of stockholders’ equity was eliminated. Although the new guidance changed the presentation of comprehensive income, no changes were made to the components that are recognized in net income or other comprehensive income under existing guidance. These ASUs were effective for us in the first quarter of 2012 and retrospective application was required. Accordingly, we changed our financial statement presentation of comprehensive income in our 2012 Quarterly Reports on Form 10-Q and in this 2012 Annual Report on Form 10-K, which had no impact on our results of operations, cash flows or financial position.

The increase in product revenue in 2012 and 2011 is due to our commercialization efforts following the approval of PROVENGE for commercial sale on April 29, 2010. Approximately 802 parent accounts, some of which have multiple sites, had infused the product as of the end of 2012. Product revenue for 2010 reflects approximately eight months of sales activity. We expect product revenue to increase in future periods as we expand commercialization and as market acceptance of PROVENGE grows.

Revenue from the sale of PROVENGE is recorded net of product returns and estimated pricing discounts via rebates and/or chargebacks offered pursuant to mandatory federal and state government programs and to members of GPOs. Revenue recognition requires estimates of rebates and chargebacks each period. We recorded estimated rebates, chargebacks and GPO administrative fees of $21.6 million and $14.4 million for the years ended December 31, 2012 and 2011, respectively. No such amounts were recorded for the year ended December 31, 2010.

During the fourth quarter of 2012, we revised our estimate of outstanding chargebacks related to PHS-eligible providers, resulting in a reduction in the chargebacks reserve and an increase in net product revenue of $3.8 million. The following is a roll forward of our chargebacks reserve:

The following table is a roll forward of our accrued GPO rebates and GPO administrative fees balance:

In the third quarter of 2011, we began receiving royalties on Merck’s sales of VICTRELIS^TM (boceprevir) for the treatment of chronic hepatitis C, which was approved in May 2011. We received royalties on worldwide net sales of boceprevir pursuant to the terms of a license and collaboration agreement. We recorded royalty revenue of $3.0 million during the year ended December 31, 2011, related to royalties received on sales of this product. In the fourth quarter of 2011, we sold this royalty for $125.0 million to an unrelated third-party and recognized the full amount as revenue, as we have no further obligations under the agreement. No revenue will be recorded related to this royalty in future periods. Royalty revenue also resulted from the recognition of royalties pursuant to another license agreement in each of the years presented.

Collaborative revenue resulted from the recognition of deferred revenue related to a license agreement.

The increase in cost of product revenue in 2012 and 2011 was due to increased sales of PROVENGE and additional FDA approved manufacturing capacity. Cost of product revenue includes the costs of manufacturing and distributing PROVENGE. Prior to FDA approval of these facilities, these costs were classified as selling, general and administrative expense. Upon FDA approval of the remaining capacity of the New Jersey Facility in March 2011, the Orange County Facility in June 2011 and the Atlanta Facility in August 2011, all commercial manufacturing costs at these facilities are included in cost of product revenue. Costs related to the manufacture of PROVENGE for clinical patients are classified as research and development expense.

We began capitalizing raw material inventory in mid-April 2009, in anticipation of the potential approval for marketing of PROVENGE in the first half of 2010. At this time, our expectation of future benefits became sufficiently high to justify capitalization of these costs, as regulatory approval was considered probable and the related costs were expected to be recoverable through the commercialization of the product. Costs incurred prior to mid-April 2009 were recorded as research and development expense in our statements of operations. As of April 2009, we had approximately $26.4 million in zero-cost inventory, which had been previously expensed and could be used for the commercial and clinical manufacture of PROVENGE, training or additional research and development efforts.

Offsetting the increase in cost of product revenue in 2012 was a decrease in cost of product revenue in the second half of 2012 due to certain adjustments recorded as a result of the strategic restructuring plan announced on July 30, 2012. These adjustments include the reversal of accrued bonus for terminated employees and the reversal of stock-based compensation expense related to unvested awards of terminated employees. In addition, cost of product revenue in the second half of 2012 includes reduced depreciation expense related to the New Jersey Facility due to the impairment of property and equipment at this facility in the third quarter of 2012 as a result of its planned closure in the fourth quarter. Due to the closure and subsequent sale of the New Jersey Facility to Novartis in December 2012, no expenses related to the New Jersey Facility will be included in cost of product revenue in future periods.

Gross margins on new product introductions generally increase over the life of the product as utilization of capacity increases and manufacturing efforts on product cost reduction are successful. As product sales increase, we anticipate that cost of product revenue as a percentage of product revenue will decline. We also anticipate cost of product revenue as a percentage of revenue will decrease in future periods as a result of the strategic restructuring plan announced on July 30, 2012, as further discussed in the Overview section.

Research and development expenses were $74.6 million in 2012, $74.3 million in 2011 and $75.9 million in 2010. Expenses related to our research and development activities are categorized as costs associated with clinical programs, research and supplier development expenses. Our research and development expenses were as follows:

Direct research and development costs associated with our clinical programs include clinical trial site costs, clinical manufacturing costs, costs incurred for consultants and other outside services, such as data management and statistical analysis support, materials and supplies used in support of the clinical programs and employee-related expenses of departments directly supporting clinical programs. Indirect costs of our clinical programs include employee-related expenses and other expenses incurred by departments indirectly supporting clinical programs. Costs attributable to supplier development expenses include technology transfer and process development costs related to developing second source suppliers. Costs attributable to research programs represent efforts to develop and expand our product pipeline and other research efforts. The costs in each category may change in the future and new categories may be added.

Current product candidates and potential targets for the focus of new product candidates in research and development include:

For the years ended December 31, 2012, 2011 and 2010, research and development costs incurred related to these product candidates and potential targets were as follows:

Research and development costs associated with CEA for each period presented were not material.

The significant majority of our historical research and development expense has been in connection with PROVENGE in the United States. In 2011 we commenced work in connection with our intention to seek approval of PROVENGE for marketing in the European Union. Research and development costs associated with PROVENGE in the United States and in the European Union for each period presented were as follows:

The nature and efforts required to complete a prospective research and development project are typically indeterminable at very early stages when research is primarily conceptual and may have multiple applications. Once a focus towards developing a specific product candidate has been developed, we obtain more visibility into the efforts that may be required to reach conclusion of the development phase. However, there are inherent risks and uncertainties in developing novel biologics in a rapidly-changing industry environment. To obtain approval of a product candidate from the FDA, we must, among other requirements, submit data supporting safety and efficacy as well as detailed information on the manufacture and composition of the product candidate. In most cases, this entails extensive laboratory tests and preclinical and clinical trials. The collection of this data, as well as the preparation of applications for review by the FDA and other regulatory agencies outside the United States, is costly in time and effort, and may require significant capital investment.

We may encounter significant difficulties or costs in our efforts to obtain FDA approvals or approvals to market products in foreign markets. For example, the FDA or the equivalent in jurisdictions outside the United States may determine our data is not sufficiently compelling to warrant marketing approval and may require that we engage in additional clinical trials or provide further analysis which may be costly and time-consuming. Regardless of the nature of our efforts to complete development of our products and receive marketing approval, we may encounter delays that render our product candidates uncompetitive or otherwise preclude us from marketing products.

We may be required to obtain additional funding to complete development of product candidates or in order to commercialize approved products. However, such funding may not be available to us on terms we deem

acceptable or at all. Our ability to access additional capital is dependent on the success of our business and the perception by the market of our future business prospects. In the event we were unable to obtain necessary funding, we might halt or temporarily delay ongoing development projects.

We anticipate our research and development expenses in 2013 will remain consistent with 2012.

Selling, general and administrative expenses were $317.1 million in 2012, $361.3 million in 2011 and $235.8 million in 2010. Selling, general and administrative expenses primarily consisted of salaries and wages, stock-based compensation, consulting fees, sales and marketing fees and administrative costs to support our operations. In addition, selling, general and administrative expenses in 2011 and 2010 included the expenses associated with the portion of the New Jersey Facility which was not commercially operational during the first quarter of 2011, the Orange County Facility for the first half of 2011 and the Atlanta Facility into the third quarter of 2011, including related costs of personnel in training.

Selling, general and administrative expenses for 2012 decreased as compared to 2011 primarily due to manufacturing facility-related costs. These costs were included in selling, general and administrative expenses prior to FDA approval of the facilities for commercial manufacture in 2011, and are included in cost of product revenue upon FDA approval. Pre-operational costs incurred at the facilities and for start-up activities were approximately $87.0 million and $105.0 million for the years ended December 31, 2011 and 2010, respectively.

In addition, selling, general and administrative expenses decreased in 2012 due to certain adjustments recorded as a result of the strategic restructuring plan announced on July 30, 2012. These adjustments include the reversal of accrued bonuses for terminated employees and the reversal of stock-based compensation expense related to unvested awards of terminated employees. Offsetting these decreases in selling, general and administrative expenses were increased payroll and non-cash stock-based compensation costs due to certain executive separations in 2012, and increased sales and marketing costs for PROVENGE.

The significant increase in selling, general and administrative expenses in 2011 as compared to 2010, was primarily attributable to higher payroll costs from increased headcount and commercial product launch activities, as well as increased manufacturing facility-related costs related to start-up activities prior to FDA approval of the facilities.

We anticipate our selling, general and administrative expenses will decrease in future periods, which will all be realized in general and administrative functions, as a result of the strategic restructuring plan announced on July 30, 2012, as further discussed in the Overview section.

On July 30, 2012, we announced that our Board of Directors approved a strategic restructuring plan that includes re-configuring our manufacturing model with the closure of the New Jersey Facility, restructuring administrative functions and strengthening our commercial functions, which we anticipate will lower our overall cost structure. The restructuring initiatives include a reduction in workforce of approximately 600 full-time and contractor positions. The employees affected by the workforce reduction were notified the week of September 17, 2012.

On December 20, 2012, we announced the sale of our New Jersey Facility to Novartis for $43.0 million. As part of the agreement with Novartis, approximately 100 employees at the facility that were previously included in the workforce reduction were offered jobs with Novartis.

offers with Novartis. We expect to incur and record an additional $1.3 million in restructuring charges related to employee severance benefits through the second quarter of 2013, as employees who were notified the week of September 17, 2012 continue to transition out of the Company. We expect the implementation of the restructuring initiatives will be substantially completed by June 2013.

In addition, we recorded restructuring charges of $7.8 million for the year ended December 31, 2012, related to fees associated with planning and developing the restructuring plan, relocation benefits offered to employees, expenses associated with the closure of the New Jersey Facility and other related expenses.

As a result of our decision to close the New Jersey Facility, we recorded an impairment charge of approximately $60.0 million during the third quarter of 2012 to reduce the net book value of the property and equipment at the New Jersey facility to estimated fair value. The calculation of estimated fair value of the New Jersey Facility assets required judgment in the assumptions used in the probability-weighted estimated future cash flows related to the highest and best use of the assets, including salvage values.

Upon sale of the New Jersey Facility to Novartis in December 2012, we recorded a recovery of approximately $47.4 million. The recovery was calculated as the proceeds from the sale of the facility of $43.0 million, plus the release of the facility-specific lease and asset retirement obligations, less the remaining net book value of the New Jersey Facility.

Also as a result of the strategic restructuring plan, we discontinued development of a non-essential computer software project and recorded an impairment charge of $5.3 million in the third quarter of 2012.

The total non-cash impairment charge of $17.9 million and total restructuring expenses of $27.9 million are included in “Restructuring, contract termination and asset impairment” on our consolidated statement of operations for the year ended December 31, 2012.

On August 3, 2011, as a result of a decrease in anticipated revenue growth in 2011, we announced plans to reduce expenses, including workforce-related expenses, to align with our near-term manufacturing requirements. On September 2, 2011, our Board of Directors approved a reduction in force of approximately 25% of our total workforce, or approximately 500 employees. The employees affected by the reduction in force were notified the week of September 6, 2011.

As a result of this workforce reduction, we recorded a charge of $19.4 million related to severance, other termination benefits, outplacement services and non-cash stock-based compensation due to the accelerated vesting of options and restricted stock awards of certain employees with employment agreements. The amount is included in “Restructuring, contract termination and asset impairment” on our consolidated statement of operations for the year ended December 31, 2011.

On September 1, 2011 we provided written notice to GSK of termination of the GSK Agreement effective on October 31, 2011. We entered into the GSK Agreement for the commercial production and supply of the antigen used in the manufacture of PROVENGE. We exercised our right to terminate the GSK Agreement when, after unforeseen delays, GSK failed to complete the process implementation phase on or before September 1, 2011 pursuant to the terms of the GSK Agreement. Assets included in our prepaid expense and other current assets balance related to the GSK Agreement were deemed unusable and, as such, we incurred an expense of $19.2 million, included in “Restructuring, contract termination and asset impairment” in our consolidated statement of operations for the year ended December 31, 2011.

Refer to Item 3 – Legal Proceedings included in this Annual Report on Form 10-K for disclosure of a lawsuit filed against the Company by GSK in November 2011, purporting claims for monies due and owing and breach of the Company’s obligations under the GSK Agreement. On January 25, 2013, GSK filed a motion to amend its complaint to add a claim for breach of North Carolina’s unfair and deceptive trade practices act, which

Dendreon will oppose. Although the ultimate financial impact of the lawsuit is not yet determinable, the Company expects to pay approximately $4.0 million in fees in connection with the termination of the GSK Agreement, which is included in the “Restructuring and contract termination liabilities” on our consolidated balance sheets at December 31, 2012 and 2011.

Interest income was $1.3 million in 2012, $1.4 million in 2011 and $1.1 million in 2010. We receive interest income primarily from holdings of cash and investments. The increase in interest income in 2011 and 2012 was primarily due to increased holdings of cash and investments as a result of the net proceeds of $607.1 million realized from the offering of the 2016 Notes in January and February 2011.

Interest expense was $55.3 million in 2012, $47.7 million in 2011 and $1.6 million in 2010. The increase in interest expense in 2012 and 2011 as compared to 2010 was due to the issuance of our 2016 Notes in the first quarter of 2011, which resulted in non-cash interest expense related to amortization of the debt discount and debt issuance costs of $26.2 million and $23.0 million for the years ended December 31, 2012 and 2011, respectively. In addition, interest expense recognized on the 2.875% stated coupon rate of the 2016 Notes was $17.8 million and $16.8 million for the years ended December 31, 2012 and 2011, respectively. Refer to Liquidity and Capital Resources: Financings from the Sale of Securities and Issuance of Convertible Notes for further discussion of the accounting for the 2016 Notes.

We also recorded interest expense, including the amortization of debt issuance costs, related to the 4.75% Convertible Senior Subordinated Notes due 2014 (the “2014 Notes”) of $1.5 million in both 2012 and 2011 and $3.9 million in 2010.

In addition, interest expense increased in 2012 as compared to 2011 due to increased financing fees paid to the Wholesalers as a result of increased sales of PROVENGE. We capitalized interest expense of $0.3 million, $1.2 million and $3.5 million for the years ended December 31, 2012, 2011 and 2010, respectively.

Non-operating loss associated with the increase in our warrant liability for the year ended December 31, 2010 was $142.6 million. The fair value was calculated using the BSM model and was revalued at each reporting period and at the date of exercise in May 2010.

We recognized no income tax expense or benefit in 2012 or 2011, and $0.4 million in income tax benefit in 2010 relating to refundable credits.

As of December 31, 2012, we had federal and state net operating loss carryforwards (“NOLs”) of approximately $1.55 billion and $456.3 million, respectively, including $131.1 million of NOLs related to excess tax benefits associated with stock option exercises which are recorded directly to stockholder’s equity only when realized. We also had federal and state research and development credit carryforwards (“R&D credits”) of approximately $24.6 million and $2.6 million, respectively. The NOLs and R&D credits expire at various dates, beginning in 2013 through 2032, if not utilized. Utilization of the NOLs and R&D credits may be subject to annual limitations due to the ownership change limitations provided by the Internal Revenue Code of 1986. The annual limitations may result in the expiration of NOLs and R&D credits before utilization.

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of our deferred tax assets include NOLs, R&D credits and stock-based compensation.

allowance relates primarily to net deferred tax assets from operating losses. Our net deferred tax assets offset by a valuation allowance were $562.7 million and $419.6 million at December 31, 2012 and 2011, respectively.

Excess tax benefits associated with stock option exercises are recorded directly to stockholders’ equity only when realized. As a result, the excess tax benefits included in net operating loss carryforwards, but not reflected in deferred tax assets, for fiscal years 2012 and 2011 were $131.1 million and $156.1 million, respectively.

Deferred tax assets do not include R&D credits generated for the fiscal year 2012. The American Taxpayer Relief Act of 2012 was signed into law on January 3, 2013, which retroactively extended the R&D credit back to January 1, 2012. ASC 740 requires that the effect of tax legislation is taken into account in the interim period in which the law was enacted. Therefore, the 2012 R&D credits are not contained in the deferred tax assets but will be included in 2013. Fiscal year 2012 R&D credits were approximately $1.4 million.

We recorded stock-based compensation expense in the consolidated statements of operations for 2012, 2011 and 2010 as follows:

Total stock-based compensation expense recognized in the consolidated statement of operations for 2012, 2011 and 2010 increased our net loss per share by $0.48, $0.41 and $0.29, respectively. The increase in stock-based compensation expense in 2012 was primarily due to certain executive separations in 2012 and the hiring of new executives and shorter vesting schedules for certain awards. The increase in stock-based compensation expense in 2011 was primarily related to increased headcount and the increased valuation of stock options and restricted stock awards granted in 2010 and in the first half of 2011 as a result of our increased stock price.

As of December 31, 2012, we had approximately $429.8 million in cash, cash equivalents, and short-term and long-term investments. To date, we have financed our operations primarily through proceeds from the sale of equity and convertible debt securities, commercial sale of PROVENGE, sale of the boceprevir royalty for $125.0 million in the fourth quarter of 2011, cash receipts from collaborative agreements and interest income.

Net cash used in operating activities for the years ended December 31, 2012, 2011 and 2010 was $208.7 million, $242.3 million and $267.5 million, respectively. Expenditures related to operating activities in these periods were a result of costs associated with the commercial launch of PROVENGE, research and development expenses, including clinical trial costs, research costs and supplier development costs, and selling, general and administrative expenses in support of our operations. The decrease in net cash used in operating activities in 2012 primarily resulted from decreased operating expenditures associated with pre-FDA approval activities. In addition, the number of personnel decreased from 1,495 as of December 31, 2011 to 1,108 as of December 31, 2012 as a result of the strategic restructuring plan announced on July 30, 2012.

Net cash used in operating activities decreased in 2011, as compared to 2010, due to cash received from the commercial sale of PROVENGE and the sale of the boceprevir royalty in the fourth quarter of 2011, offset by increased expenses associated with the commercial launch of PROVENGE.

Net cash used in investing activities for the years ended December 31, 2012, 2011 and 2010 was $31.0 million, $71.8 million and $90.0 million, respectively. Since our inception, investing activities, other than purchases and maturities of short-term and long-term investments, have consisted primarily of purchases of property and equipment. Purchases of property and equipment of $140.6 million in 2010 were substantially higher than $18.8 million in 2012 and $25.4 million in 2011, due to expenditures for the three manufacturing facility build-outs. Purchases of property and equipment in 2012 and 2011 were primarily related to software and facilities-related expenditures. In addition, cash proceeds from the sale of the New Jersey Facility to Novartis received in December 2012 of $43.0 million are included in investing activities for 2012.

Net cash used in financing activities for the year ended December 31, 2012 was $1.1 million, compared with net cash provided by financing activities for the years ended December 31, 2011 and 2010 of $608.2 million and $80.7 million, respectively. Cash provided by financing activities in 2011 was due to the offering of the 2016 Notes, from which we realized net proceeds of approximately $607.1 million. Cash provided by financing activities in 2010 was due to the exercise of a warrant in exchange for 8.0 million shares of common stock, resulting in aggregate cash proceeds of $71.4 million.

We have incurred significant losses since our inception. As of December 31, 2012, our accumulated deficit was $1.95 billion. We have incurred net losses as a result of research and development expenses, clinical trial expenses, contract manufacturing and facility expenses, costs associated with the commercial launch of PROVENGE and general and administrative expenses in support of our operations and research efforts.

We believe that our cash, cash equivalents, and short-term and long-term investments as of December 31, 2012, together with revenue generated from commercial sales of PROVENGE and giving effect to the reduced levels of spending following the restructurings in 2011 and 2012, will be sufficient to meet our anticipated expenditures for at least the next 12 months as we continue to invest in commercial operations, continue our clinical trials, apply for regulatory approvals, potentially invest in commercial infrastructure outside the United States and invest in research and product development. The majority of our resources continue to be used in support of the commercialization of PROVENGE in the United States. Even if we are able to successfully realize our commercialization goals for PROVENGE, because of the numerous risks and uncertainties associated with commercialization of a biologic, we are unable to predict when we will become profitable, if at all. Even if we achieve profitability, we may not be able to maintain or increase profitability. We expect that continued revenue from PROVENGE product sales will be a significant source of cash. However, we may need to raise additional funds to meet potential long-term liquidity needs including:

In February 2011, we entered into a lease for office space of 179,656 square feet in Seattle, Washington. In July 2012, we amended the lease to reduce the premises to 158,081 square feet. The initial lease term is for five and a half years, with one renewal term of two and a half years. The remaining rent payable for the amended lease agreement under the initial lease term was approximately $14.6 million as of December 31, 2012. The lease required us to provide the landlord with a letter of credit as a security deposit. We provided the bank that issued the letter of credit on our behalf with an initial security deposit of $2.2 million to guarantee the letter of credit. The lessor reduced the security deposit during the year ended December 31, 2012, resulting in a decrease in the deposit securing the letter of credit to $1.1 million. The deposit is recorded as a long-term investment on the consolidated balance sheets as of December 31, 2012 and 2011.

Also in February 2011, we entered into a sublease for laboratory and office space of 97,365 square feet in Seattle, Washington. The lease term is for eight years. The remaining rent payable under the lease term was approximately $21.9 million as of December 31, 2012. The lease required us to provide the landlord with a letter of credit which we have secured with a $1.1 million security deposit. The security deposit is recorded as a long-term investment on the consolidated balance sheets as of December 31, 2012 and 2011.

Prior to moving to these two facilities, we had leased space at three locations in Seattle, Washington, all of which leases expired in 2011.

In July 2012, we entered into a lease for office space of 39,937 square feet in Bridgewater, New Jersey. We currently anticipate taking occupancy in mid-2013. The initial lease term is for ten years, with one renewal term of five years. The aggregate rent payable under the initial lease term is approximately $12.5 million. The lease required us to provide the landlord with a letter of credit which we have secured with a $1.6 million security deposit. The security deposit is recorded as a long-term investment as of December 31, 2012 on the consolidated balance sheet.

In August 2009, we entered into an agreement to lease the Orange County Facility, consisting of approximately 184,000 square feet, for use as a manufacturing facility following build-out. The initial lease term is ten and a half years, expiring in December 2019, with five renewal terms of five years each. The remaining rent payable under the initial lease term was $9.8 million as of December 31, 2012.

The Orange County Facility lease required us to provide the landlord with a letter of credit of $2.1 million as a security deposit. We provided the bank that issued the letter of credit on our behalf an initial security deposit of $2.2 million to secure the letter of credit. The lessor reduced the security deposit 2012, resulting in a decrease in the deposit securing the letter of credit to $1.7 million. The security deposit is recorded as a long-term investment on the consolidated balance sheets as of December 31, 2012 and 2011.

In July 2009, we entered into an agreement to lease the Atlanta Facility, consisting of approximately 156,000 square feet, for use as a manufacturing facility following build-out. The lease commenced when we took possession of the building upon completion of construction of the building shell in March 2010. The initial lease term is ten and a half years, with five renewal terms of five years each. The remaining rent payable for the Atlanta Facility under the initial lease term was $5.2 million as of December 31, 2012.

In August 2005, we entered into an agreement to lease the New Jersey Facility, consisting of approximately 158,000 square feet of commercial manufacturing space. The amended lease agreement expired in November 2022. On December 20, 2012, we announced the sale of our New Jersey Facility to Novartis, which included release from future obligations under this lease.

The New Jersey lease required us to provide the landlord with a letter of credit. We provided the bank that issued the letter of credit on our behalf a security deposit of $2.0 million to guarantee the letter of credit. The deposit was recorded as a long-term investment as of December 31, 2011 on the consolidated balance sheet. The sale of the New Jersey Facility in December 2012 released us from future obligations under the lease agreement, including the letter of credit.

As part of an agreement with the Township of Hanover relating to the permitting of the expansion of the New Jersey Facility, substantially completed in May 2010, we had $0.3 million in long-term investments as of December 31, 2011 being held as a security deposit to ensure completion of certain improvements at the property. We were released from these obligations in December 2012.

The manufacturing facility leases have provisions requiring that we restore the buildings to original condition upon lease termination. Accordingly, we have accrued the estimated costs of dismantlement and restoration associated with these obligations. Upon sale of the New Jersey Facility to Novartis in December 2012, we were released from the asset retirement obligation related to this facility, which is recorded in “Restructuring, contract termination, and asset impairment” on the statement of operations.

We have a supply agreement with Fujifilm covering the commercial production of the recombinant antigen used in the manufacture of PROVENGE. The second amendment to the supply agreement extended the term of the agreement through December 31, 2018. Unless terminated, the agreement will renew automatically thereafter for additional 5-year terms. The agreement may be terminated upon written notice by us or Fujifilm at least 24 months before the end of a renewal term or by either party in the event of an uncured material breach or default by the other party.

We currently have commitments with Fujifilm to purchase antigen related to the 2012 order of $28.3 million and related to the 2013 order of $43.8 million. We expect payments on these commitments will continue through 2014.

We have entered into various agreements for the lease of software licenses and equipment. The leases have been treated as capital leases. The capital leases, with an aggregate remaining obligation at December 31, 2012 of $10.6 million, bear interest at rates ranging from 2.9% to 11.7% per year.

On January 14, 2011, we entered into an underwriting agreement with J.P. Morgan Securities LLC (the “Underwriter”) relating to the offer and sale of $540 million aggregate principal amount of the 2016 Notes. Under the terms of the underwriting agreement, we granted the Underwriter an option, exercisable within 30 days of the date of the agreement, to purchase up to an additional $80 million aggregate principal amount of 2016 Notes to cover overallotments. We issued $540 million in aggregate principal amount of 2016 Notes upon the closing of the offering on January 20, 2011. Net proceeds, after payment of underwriting fees and expenses, were approximately $528.8 million. On January 31, 2011, the Underwriter exercised the overallotment option in full, and we closed on the sale of the additional $80 million in principal amount of 2016 Notes on February 3, 2011. Net proceeds from the exercise of the overallotment option, after deducting underwriting fees and other offering expenses, were approximately $78.3 million.

On January 20, 2011, we entered into the First Supplemental Indenture (the “Supplemental Indenture”) with The Bank of New York Mellon Trust Company, N.A., as trustee (the “Trustee”), to our existing Base Indenture (the “Base Indenture” and, together with the Supplemental Indenture, the “2016 Indenture”), dated as of March 16, 2007. The 2016 Indenture sets forth the rights and provisions governing the 2016 Notes. Interest at 2.875% per annum is payable on the 2016 Notes semi-annually in arrears on January 15 and July 15 of each year, beginning on July 15, 2011. Record dates for payment of interest on the 2016 Notes are each January 1 and July 1. The maturity date of the 2016 Notes is January 15, 2016, unless earlier converted.

The 2016 Notes are convertible at the option of the holder, and we may choose to satisfy conversions, if any, in cash, shares of our common stock, or a combination of cash and shares of our common stock, based on a conversion rate initially equal to 19.5160 shares of common stock per $1,000 principal amount of 2016 Notes, which is equivalent to an initial conversion price of approximately $51.24 per share. The conversion rate will be increased under certain circumstances described in the 2016 Indenture; however, the number of shares of common stock issued upon conversion of a 2016 Note will not exceed 27.3224 per $1,000 principal amount of 2016 Notes, subject to adjustment in accordance with the 2016 Indenture. Should a holder exercise the conversion option during the next twelve-month period, it is our intention to satisfy the conversion with shares of common stock. Consequently, the 2016 Notes are classified as a long-term liability as of December 31, 2012 and 2011.

has the right to participate in such transaction at the same time and upon the same terms as holders of common stock, and solely as a result of holding the 2016 Notes, without having to convert the 2016 Notes and as if a number of shares of common stock were held equal to the applicable conversion rate multiplied by the principal amount of 2016 Notes held.

If a “fundamental change,” as defined in the 2016 Indenture, occurs, holders of 2016 Notes may require us to repurchase all or a portion of their 2016 Notes for cash at a repurchase price equal to 100% of the principal amount of 2016 Notes to be repurchased, plus any accrued and unpaid interest and other amounts due thereon. However, if a fundamental change occurs and a holder elects to convert 2016 Notes, we will under certain circumstances, increase the applicable conversion rate for the 2016 Notes surrendered for conversion by a number of additional shares of common stock, based on the date on which the fundamental change occurs or becomes effective and the price paid per share of our common stock in the fundamental change as specified in the 2016 Indenture. At our option, we will satisfy our conversion obligation with cash, shares of common stock or a combination of cash and shares, unless the consideration for common stock in any fundamental change is comprised entirely of cash, in which case the conversion obligation will be paid in cash. The number of additional shares of common stock was determined such that the fair value of the additional shares would be expected to approximate the fair value of the convertible option at the date of the fundamental change.

In addition, we may from time to time increase the conversion rate, to the extent permitted by law, by any amount for any period of time if the period is at least 20 business days and we provide 15 business days prior written notice of such increase. We may increase the conversion rate if the Board of Directors determines that such increase would avoid or diminish United States federal income tax to holders of common stock in connection with a dividend or distribution. The 2016 Indenture contains customary covenants.

The 2016 Notes are accounted for in accordance with ASC 470-20, under which issuers of certain convertible debt instruments that may be settled in part in cash upon conversion are required to separately account for the liability (debt) and equity (conversion option) components of the instrument. The liability component of the 2016 Notes, as of the issuance date, was calculated by estimating the fair value of a similar liability issued at an 8.1% effective interest rate, which was determined by considering the rate of return investors would require in the Company’s debt structure. The amount of the equity component was calculated by deducting the fair value of the liability component from the principal amount of the 2016 Notes and resulted in a corresponding increase to debt discount. The debt discount is being amortized as interest expense through the earlier of the maturity date of the 2016 Notes or the date of conversions, if any.

The application of ASC 470-20 resulted in the initial recognition of $132.9 million as the debt discount recorded in additional paid-in capital for the 2016 Notes. At December 31, 2012, the net carrying amount of the liability component, which is recorded as a long-term liability in the consolidated balance sheet, was $532.7 million, and the remaining unamortized debt discount was $87.3 million. Amortization of the debt discount and debt issuance costs for the years ended December 31, 2012 and 2011 resulted in non-cash interest expense of $26.2 million and $23.0 million, respectively. In addition, interest expense based on the 2.875% stated coupon rate of the 2016 Notes was $17.8 million and $16.8 million for the years ended December 31, 2012 and 2011, respectively.

In 2007, an aggregate of $85.3 million of 2014 Notes was sold in a private placement to qualified institutional buyers. Proceeds from the offering, after deducting placement fees and expenses of approximately $3.0 million, were approximately $82.3 million. The 2014 Notes were issued at face principal amount and pay interest of 4.75% per annum on a semi-annual basis in arrears on June 15 and December 15 of each year. Record dates for payment of interest on the 2014 Notes are each June 1 and December 1. The maturity date of the 2014 Notes is June 15, 2014, unless earlier converted.

In certain circumstances, additional amounts may become due on the 2014 Notes as additional interest. We can elect that the sole remedy for an event of default for our failure to comply with the “reporting obligations” provisions of the indenture under which the 2014 Notes were issued (the “2014 Indenture”), for the first 180 days

after the occurrence of such event of default would be for the holders of the 2014 Notes to receive additional interest on the 2014 Notes at an annual rate equal to 1% of the outstanding principal amount of the 2014 Notes.

The 2014 Notes are convertible into our common stock at the option of the holder, initially at a conversion price of $10.28 per share, equal to a conversion rate of approximately 97.2644 shares per $1,000 principal amount of the 2014 Notes, subject to adjustment. There may be an increase in the conversion rate of the 2014 Notes under certain circumstances described in the 2014 Indenture; however, the number of shares of common stock issued will not exceed 114.2857 per $1,000 principal amount of 2014 Notes.

If a “fundamental change,” as defined in the 2014 Indenture, occurs, holders of the 2014 Notes may require us to repurchase all or a portion of their 2014 Notes for cash at a repurchase price equal to 100% of the principal amount of 2014 Notes to be repurchased, plus any accrued and unpaid interest and other amounts due thereon. However, a holder that converts 2014 Notes in connection with a fundamental change may, in some circumstances, be entitled to an increased conversion rate (i.e., a lower per share conversion price) as a make whole premium. The increased conversion rates were determined such that the fair value of the additional shares would be expected to approximate the fair value of the convertible option at the date of the fundamental change.

In addition, the conversion rate will be adjusted upon the occurrence of certain events, including stock dividends or share splits, the issuance of rights or warrants, other distribution of property, cash dividends or distributions, or tender offers or exchange offers. We will not make an adjustment to the conversion rate for any transaction described above (other than share splits or share combinations) if each holder of 2014 Notes has the right to participate in such transaction at the same time and upon the same terms as holders of common stock, and solely as a result of holding 2014 Notes, without having to convert 2014 Notes and as if a number of shares of common stock were held equal to the applicable conversion rate multiplied by the principal amount of 2014 Notes held.

In December 2010, we exchanged $24.9 million principal face amount of 2014 Notes for approximately 2.5 million shares of common stock, which included a premium of approximately 129,000 shares. The premium is recorded as a loss on debt conversion of $4.7 million in other expense in the consolidated statement of operations for 2010.

As of December 31, 2012 and 2011, the aggregate principal amount of 2014 Notes outstanding was $27.7 million. We recorded interest expense, including the amortization of debt issuance costs, related to the 2014 Notes of $1.5 million, $1.5 million and $3.9 million during 2012, 2011 and 2010, respectively.

The following are contractual commitments at December 31, 2012 associated with supply agreements and debt and lease obligations, including interest:

Some of the statements contained in this Annual Report on Form 10-K are forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and are subject to the safe harbor created by the Private Securities Litigation Reform Act of 1995. We have based these forward-looking statements largely on our expectations and projections about future events and financial trends affecting the financial condition and/or operating results of our business. Forward-looking statements involve risks and uncertainties, particularly those risks and uncertainties inherent in the process of discovering, developing and commercializing drugs that are safe and effective for use as human therapeutics. There are important factors that could cause actual results to be substantially different from the results expressed or implied by these forward-looking statements, including, among other things:

In addition, in this Annual Report on Form 10-K the words “believe,” “may,” “will,” “estimate,” “continue,” “anticipate,” “intend,” “plan,” “expect,” “potential,” “possible,” or “opportunity,” the negative of these words or similar expressions, as they relate to us, our business, future financial or operating performance or our management, are intended to identify forward-looking statements. We do not intend to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Past financial or operating performance is not necessarily a reliable indicator of future performance and you should not use our historical performance to anticipate results or future period trends.

Our investment portfolio is maintained in accordance with our investment policy, which specifies credit quality standards, limits credit exposure to any single issuer or security issuance and defines allowable investments. Pursuant to our policy, auction rate or asset-backed securities without a guarantee by the United States government are not permitted to be purchased. The fair value of cash equivalents and marketable securities is subject to change as a result of changes in market interest rates and investment risk related to the issuers’ credit worthiness.

As of December 31, 2012 and 2011, we had short-term investments of $165.4 million and $111.5 million, respectively, and long-term investments of $76.0 million and $79.1 million, respectively. Our short-term and long-term investments are subject to interest rate risk and will decline in value if market interest rates increase. The estimated fair value of our short-term and long-term investments at December 31, 2012, assuming a 100 basis point increase in market interest rates, would decrease by approximately $1.7 million, which would not materially impact results of operations, cash flows or financial position. While changes in interest rates may affect the fair value of our investment portfolio, gains or losses, if any, will not be recognized in our statement of operations until the investment is sold or if the reduction in fair value is determined to be an other-than-temporary impairment.

We actively monitor and manage our portfolio. If necessary, we believe we are able to liquidate investments within the next year without significant loss. We currently believe these securities are not significantly impaired; however, it could take until the final maturity of the underlying notes to realize our investments’ recorded values. Based on expected operating cash flows and other sources of cash, we do not anticipate the potential lack of liquidity on these investments to affect our ability to execute our current business plan.

Our financial statements, together with related notes, are listed in Item 15(a) and included herein beginning on page F-1.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

We carried out an evaluation required by the Exchange Act, under the supervision and with the participation of our chief executive officer and chief financial officer, of the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rule 13a-15(e) of the Exchange Act, as of December 31, 2012. Based on this evaluation, our chief executive officer and chief financial officer concluded that, as of December 31, 2012, our disclosure controls and procedures were effective to provide reasonable assurance that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the rules and forms of the Securities and Exchange Commission and to provide reasonable assurance that such information is accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosures.

Management is responsible for establishing and maintaining adequate internal control over financial reporting, as defined in Rule 13a-15(f) of the Exchange Act. Management has assessed the effectiveness of our internal control over financial reporting as of December 31, 2012 based on criteria established in Internal Control —Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. As a result of this assessment, management concluded that, as of December 31, 2012, our internal control over financial reporting was effective in providing reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. Ernst & Young LLP has independently assessed the effectiveness of our internal control over financial reporting and its report is included below.

There were no changes in our internal control over financial reporting during the year and quarter ended December 31, 2012 that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Management does not expect that our disclosure controls and procedures or our internal control over financial reporting will prevent or detect all error and fraud. Any control system, no matter how well designed and operated, is based upon certain assumptions and can provide only reasonable, not absolute, assurance that its objectives will be met. Further, no evaluation of controls can provide absolute assurance that misstatements due to error or fraud will not occur or that all control issues and instances of fraud, if any, within the Company have been detected.

The effectiveness of our internal control over financial reporting as of December 31, 2012, was audited by our independent registered public accounting firm, Ernst & Young LLP, as stated in its report, which is included below.

We have audited Dendreon Corporation’s internal control over financial reporting as of December 31, 2012, based on criteria established in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (the COSO criteria). Dendreon Corporation’s management is responsible for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management’s Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the company’s internal control over financial reporting based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

In our opinion, Dendreon Corporation maintained, in all material respects, effective internal control over financial reporting as of December 31, 2012, based on the COSO criteria.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheets of Dendreon Corporation as of December 31, 2012 and 2011, and the related consolidated statements of operations and comprehensive income (loss), stockholders’ equity and cash flows for each of the three years in the period ended December 31, 2012 of Dendreon Corporation and our report dated February 25, 2013 expressed an unqualified opinion thereon.

The information required by this item concerning our directors and nominees is incorporated by reference to our definitive Proxy Statement for our 2013 Annual Meeting of Stockholders (the “2013 Proxy Statement”) under the caption “Election of Directors.” Information relating to our executive officers is incorporated by reference to the 2013 Proxy Statement under the caption “Executive Officers of the Registrant.” Information on our nominating committee process, and on our audit committee members including our audit committee financial expert(s) is incorporated by reference to the headings “Governance Committee” and “Audit Committee” in the 2013 Proxy Statement. Information regarding Section 16(a) beneficial ownership reporting compliance is incorporated by reference to the material under the heading “Security Ownership of Certain Beneficial Owners and Management” in the 2013 Proxy Statement.

Our Board of Directors has adopted a Code of Business Conduct applicable to our directors and all of our officers and employees. The Code of Business Conduct is available, free of charge, through the investor relations section of our website at http://investor.dendreon.com/governance.cfm. We intend to disclose any amendment to, or waiver from, the Code of Business Conduct by posting such amendment or waiver, as applicable, on our website.

The information required by this item is incorporated by reference to the 2013 Proxy Statement under the captions “Executive Compensation” and “Director Compensation.”

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

Information regarding security ownership is incorporated by reference to the 2013 Proxy Statement under the caption “Security Ownership of Certain Beneficial Owners and Management.”

Securities Authorized for Issuance Under Equity Compensation Plans. We have equity incentives outstanding under the Company’s 2000 Equity Incentive Plan (the “2000 Plan”), 2002 Broad Based Equity Incentive Plan (the “2002 Plan”), 2009 Equity Incentive Plan (the “2009 Plan”) and 2012 Equity Incentive Inducement Plan (the “2012 Plan”). In addition, our eligible employees participate in the 2000 Employee Stock Purchase Plan (the “ESPP”). In December 2012, our Board of Directors approved the 2013 Employee Stock Purchase Plan, pursuant to which we reserved 10,000,000 shares of our common stock for issuance under the ESPP, subject to stockholder approval at the 2013 Annual Meeting. These shares have been excluded from the below table.

The 2000 Plan and the 2002 Plan expired in 2010 and February 2012, respectively, and the 2012 Plan was terminated in July 2012; however they still govern outstanding awards issued under the relevant plan. The following table provides information as of December 31, 2012, regarding the 2000 Plan, the 2002 Plan, the 2009 Plan, the 2012 Plan and the ESPP:

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE

The information required by this item is incorporated by reference to the 2013 Proxy Statement under the captions “Management and Certain Security Holders of Dendreon — Certain Transactions” and “Director Independence.”

The information required by this item is incorporated by reference to the 2013 Proxy Statement under the caption “Information Regarding Our Independent Registered Public Accounting Firm.”

The financial statements required by this item are submitted in a separate section beginning on page F-1 of this Annual Report on Form 10-K.

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized on this 25^th day of February, 2013.


DENDREON CORPORATION

By:		/s/ John H. Johnson
		John H. Johnson President, Chief Executive Officer and Chairman of the Board of Directors (Principal Executive Officer)

By:		/s/ Gregory T. Schiffman
		Gregory T. Schiffman Executive Vice President, Chief Financial Officer and Treasurer (Principal Financial Officer)

By:		/s/ Gregory R. Cox
		Gregory R. Cox Vice President, Finance (Principal Accounting Officer)

KNOW ALL PERSONS BY THESE PRESENTS, that each individual whose signature appears below constitutes and appoints John H. Johnson and Gregory T. Schiffman, his or her true and lawful attorneys-in-fact each acting alone, with full power of substitution and re-substitution, for him or her and in his or her name, place and stead in any and all capacities to sign any or all amendments to this report on Form 10-K, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact, or their substitutes, each acting alone, may lawfully do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated:

We have audited the accompanying consolidated balance sheets of Dendreon Corporation as of December 31, 2012 and 2011, and the related consolidated statements of operations and comprehensive income (loss), stockholders’ equity and cash flows for each of the three years in the period ended December 31, 2012. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of Dendreon Corporation at December 31, 2012 and 2011, and the consolidated results of its operations and its cash flows for each of the three years in the period ended December 31, 2012, in conformity with U.S. generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), Dendreon Corporation’s internal control over financial reporting as of December 31, 2012, based on criteria established in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated February 25, 2013 expressed an unqualified opinion thereon.

Dendreon Corporation (referred to as “Dendreon,” the “Company,” “we,” “us,” or “our”), a Delaware corporation, is a biotechnology company focused on the discovery, development and commercialization of novel therapeutics that may significantly improve cancer treatment options for patients. Our product portfolio includes active cellular immunotherapies and a small molecule product candidate that could be applicable to treating multiple types of cancers.

PROVENGE^® (sipuleucel-T), is our first commercialized product approved by the United States Food and Drug Administration (“FDA”), and is a first in class autologous cellular immunotherapy for the treatment of asymptomatic or minimally symptomatic, metastatic, castrate-resistant (hormone-refractory) prostate cancer. Commercial sale of PROVENGE began in May 2010. Prostate cancer is the most common non-skin cancer among men in the United States, with over one million men currently diagnosed with the disease, and the second leading cause of cancer deaths in men in the United States. We currently own worldwide rights for PROVENGE.

The consolidated financial statements include the accounts of Dendreon and its direct and indirect wholly-owned subsidiaries. All material intercompany transactions and balances have been eliminated in consolidation.

Certain prior period balances have been reclassified in order to conform to the current period presentation.

Our financial statements have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these financial statements requires us to make estimates and judgments in certain circumstances that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. In preparing these financial statements, management has made its best estimates and judgments of certain amounts included in the financial statements, giving due consideration to materiality. On an ongoing basis, we evaluate our estimates, including those related to revenue recognition, investments, fair values of assets, income taxes, financing activities, clinical trial accruals and other contingencies. Management bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances. Actual results could differ from these estimates.

PROVENGE sales are direct to physician; however, we have entered into distribution agreements with several credit-worthy third-party wholesalers (the “Wholesalers”) whereby we manufacture and ship the product direct to the physician and transfer the sale of PROVENGE to the Wholesalers. Under the distribution agreements, the Wholesalers assume all bad debt risk from the physician or institution, therefore no allowance for bad debt is recorded. In addition, under the terms of the distribution agreements, our return policy allows for the return of product that has expired or has a defect prior to delivery, product that is damaged during delivery and product that cannot be infused because it does not otherwise meet specified requirements.

We have agreements with the Centers for Medicare and Medicaid Services (“CMS”) providing for a rebate on sales to eligible Medicaid patients. For sales of our product to eligible Medicaid patients, the physician purchases our product at full price, and then receives reimbursement from the applicable state. The state, in turn, invoices us for the amount of the Medicaid rebate. Estimated rebates payable under Medicaid are recognized in the same period that the related revenue is recognized, resulting in a reduction in gross product revenue, and are classified as other accrued liabilities until paid. Our estimate of rebates payable is based on information we gather related to the physician site as well as health insurance information related to the patient being treated. Medicaid rebates were not material for each period presented.

We also have agreements with the Public Health Service (“PHS”), providing for a chargeback on sales to PHS-eligible providers, and Federal Supply Schedule (“FSS”) customers, including the Department of Veteran Affairs and the Department of Defense, providing for a chargeback on sales to eligible patients. Chargebacks occur when a contracted physician purchases our product at fixed contract prices that are lower than the price we charge the Wholesalers. Each Wholesaler, in turn, charges us back for the difference between the price initially paid by the Wholesaler and the contract price paid to the Wholesaler by the physician. These chargebacks are estimated and recorded in the period that the related revenue is recognized, resulting in a reduction in gross product revenue and trade accounts receivable. During the fourth quarter of 2012, we revised our estimate of outstanding chargebacks related to PHS-eligible providers resulting in a reduction in the chargebacks reserve and an increase in net product revenue of $3.8 million.

In the fourth quarter of 2011, we entered into agreements with certain GPOs that contract for the purchase of PROVENGE on behalf of their members and provide contract administration services. Beginning in July of 2012, eligible members of the GPOs purchase PROVENGE at contracted prices through a chargeback, and may be entitled to receive a rebate on eligible purchases at the end of each quarter. During the year ended December 31, 2012, we recorded GPO chargebacks of approximately $0.8 million. No GPO chargebacks were recorded for the years ended December 31, 2011 or 2010.

Estimated rebates and administrative fees payable to GPOs are recognized in the same period that the related revenue is recognized, resulting in a reduction in gross product revenue, and are classified as other accrued liabilities until paid. The following table is a roll forward of our accrued GPO rebates and GPO administrative fees balance:

In the third quarter of 2011, we began receiving royalties on Merck’s sales of VICTRELIS™ (boceprevir) for the treatment of chronic hepatitis C, which was approved in May 2011. We received royalties on worldwide net sales of boceprevir pursuant to the terms of a license and collaboration agreement. Royalty revenue and royalty receivables were recorded in the period earned, in advance of collection. We recorded royalty revenue of $3.0 million during the year ended December 31, 2011, related to royalties received on sales of this product. In the fourth quarter of 2011, we sold this royalty to an unrelated third-party for $125.0 million and recognized the full amount as revenue, as we have no further obligations under the agreement. No revenue will be recorded related to this royalty in future periods.

We utilize a third-party supplier, Fujifilm Diosynth Biotechnologies (“Fujifilm”), formerly Diosynth RTP, Inc., to manufacture the recombinant antigen used in the manufacture of PROVENGE. We take title to this material when accepted from Fujifilm and store it as raw material inventory for manufacturing and eventual sale. When we are required to advance funds prior to the manufacture and acceptance of inventory, we record prepaid antigen costs. The prepaid costs of these materials are transferred to inventory as antigen is received.

Nonrefundable prepayments for research and development goods and services are deferred and recognized as the services are rendered. Research and development expenses include, but are not limited to, payroll and personnel expenses, lab expenses, clinical trial and related clinical manufacturing costs, facilities and related overhead costs.

Property and equipment are stated at cost and are depreciated using the straight-line method over the estimated useful lives of the assets, which range from two to sixteen years. Included in fixed assets is the cost of internally developed software. We expense all costs related to internally developed software, other than those incurred during the application development stage. Costs incurred during the application development stage are capitalized and amortized over the estimated useful life of the software. Estimated useful lives of furniture and fixtures and laboratory and manufacturing equipment are seven years, office equipment is five years, buildings range from twelve to sixteen years and computers and software are three years. Computers and equipment financed under capital leases are amortized over the shorter of the useful lives of the related assets or the lease term. Leasehold improvements are stated at cost and amortized using the straight-line method over the remaining life of the lease or ten years, whichever is shorter. Construction in progress is reclassified to the appropriate fixed asset classifications and depreciated accordingly when related assets are deemed ready for their intended use and placed in service. We capitalize interest on borrowings during the construction period of major capital projects. Capitalized interest is added to the cost of the underlying assets and is amortized over the useful lives of the related assets.

Losses from impairment of long-lived assets used in operations are recognized when indicators of impairment are present and the undiscounted cash flows estimated to be generated by those assets are less than the assets’ carrying amount. We periodically evaluate the carrying value of long-lived assets to be held and used when events and circumstances indicate that the carrying amount of an asset may not be recovered. Refer to Note 7 – Property and Equipment and Note 13 – Restructuring, Contract Termination and Asset Impairment for details of losses from impairment of long-lived assets recorded in 2012. The determination of fair value of the assets evaluated for impairment required the use of judgmental assumptions surrounding the amount and timing of future cash flows and the highest and best use of the assets.

We consider investments in highly liquid instruments purchased with an original maturity at purchase of 90 days or less to be cash equivalents. The amounts are recorded at cost, which approximates fair value. Our cash equivalents and short-term and long-term investments consist principally of commercial paper, money market securities, treasury notes, agency bonds, corporate bonds/notes and certificates of deposit.

We have classified our entire investment portfolio as available-for-sale. Available-for-sale securities are carried at fair value, with unrealized gains and losses reported as a separate component of stockholders’ equity and included in accumulated other comprehensive income (loss). The cost of investments is adjusted for amortization of premiums and accretion of discounts to maturity. Such amortization and accretion are included in interest income. Interest earned on securities is included in interest income. Gains are recognized when realized in our consolidated statements of operations. Losses are recognized when realized or when we have determined that an other-than-temporary decline in fair value has occurred.

We periodically evaluate whether declines in fair values of our investments below their cost are other-than-temporary. This evaluation consists of several qualitative and quantitative factors regarding the severity and duration of the unrealized loss as well as our ability and intent to hold the investment until a forecasted recovery occurs. Additionally, we assess whether it is more likely than not we will be required to sell any investment before recovery of its amortized cost basis.

We consider an investment with a maturity greater than twelve months from the balance sheet date as long-term and a maturity less than twelve months as short-term at the balance sheet date. The cost of securities sold is based on the specific identification method.

For details of the issuance and additional information regarding the 2016 Notes, see Note 10 – Convertible Notes.

Debt issuance costs related to the 2016 Notes were allocated to the liability and equity components in accordance with ASC 470-20. We are amortizing the debt issuance costs allocated to the liability component of the 2016 Notes to interest expense through the earlier of the maturity date of the 2016 Notes or the date of conversions, if any. The debt issuance costs allocated to the equity component of the 2016 Notes were recorded as an offset to additional paid-in capital. See Note 10 – Convertible Notes for further details of the issuance and additional information regarding the 2016 Notes.

Debt issuance costs related to our 4.75% Convertible Senior Subordinated Notes due 2014 (the “2014 Notes”) issued in June and July of 2007 are amortized to interest expense through the earlier of the maturity date of the 2014 Notes or the date of conversions, if any.

We determine the fair value of awards under our Employee Stock Purchase Plan using the BSM model.

Basic net loss per share is calculated by dividing net loss by the weighted average number of common shares outstanding. Because we report a net loss, diluted net loss per share is the same as basic net loss per share. We have excluded all outstanding stock options, warrants, unvested restricted stock and shares issuable upon potential conversion of the 2014 Notes and the 2016 Notes from the calculation of diluted net loss per common share because all such securities are anti-dilutive to the computation of net loss per share.

Deferred taxes are measured using enacted tax rates expected to be in effect in the year(s) in which the basis difference is expected to reverse. We continue to record a valuation allowance for the full amount of deferred tax assets, which would otherwise be recorded for tax benefits relating to operating loss and tax credit carryforwards, as realization of such deferred tax assets cannot be determined to be more likely than not.

We are subject to concentration of risk from our single-source vendors for some components necessary for PROVENGE. Our risk for single-source vendors is managed by maintaining a certain level of existing stock of components and a continued effort to establish additional suppliers.

We are also subject to concentration of risk from our investments. Our investment portfolio is maintained in accordance with our investment policy, which specifies credit quality standards, limits credit exposure to any single issuer or security issuance and defines allowable investments. Pursuant to our policy, auction rate or asset-backed securities without a guarantee by the United States government are not permitted to be purchased. The fair value of our cash equivalents and marketable securities is subject to change as a result of changes in market interest rates and investment risk related to the issuers’ credit worthiness.

We actively monitor and manage our portfolio. If necessary, we believe we are able to liquidate our investments within the next year without significant loss. We currently believe these securities are not significantly impaired; however, it could take until the final maturity of the underlying notes to realize our investments’ recorded values. Based on expected operating cash flows and other sources of cash, we do not anticipate the potential lack of liquidity on these investments will affect our ability to execute our current business plan.

Securities available-for-sale at cost or amortized cost and fair market value by contractual maturity were as follows:

Our gross realized gains and losses on sales of available-for-sale securities were not material for 2012, 2011 or 2010.

Securities available-for-sale, short-term and long-term, consisted of the following:

None of our securities have been in a continuous unrealized loss position for more than 12 months as of December 31, 2012.

The declines in value of these investments are primarily related to changes in interest rates and are considered to be temporary in nature. We evaluate, among other things, the duration and extent to which the fair value of a security is less than its cost, the financial condition of the issuer, and our intent to sell, or whether it is more likely than not we will be required to sell, the security before recovery of the amortized cost basis. We have the ability and intent to hold these securities to maturity; therefore we do not consider these investments to be other-than-temporarily impaired as of December 31, 2012. See Note 4 – Fair Value Measurements for further discussion.

We had $5.6 million in secured deposits for various letters of credit as of December 31, 2012 and $8.0 million as of December 31, 2011, which are classified as long-term investments.

We measure and report at fair value our cash equivalents and investment securities (financial assets). We also measured and reported at fair value our warrant liability prior to exercise of the Warrants in the second quarter of 2010. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability, an exit price, in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value

maximize the use of observable inputs and minimize the use of unobservable inputs. The hierarchy of fair value measurements is described below:

The following table summarizes our financial assets measured at fair value on a recurring basis:

The fair value of the 2016 Notes as of December 31, 2012 and 2011 was approximately $471.2 million and $428.6 million, respectively, based on the last trading price as of the respective year end. The fair value of the 2014 Notes as of December 31, 2012 was approximately $25.3 million based on the last trading price as of year end. The fair value of the 2014 Notes as of December 31, 2011 was approximately $38.8 million based on average trading prices near year end. Estimates of fair value for the 2016 Notes and the 2014 Notes are classified as Level 2.

The carrying amounts reflected in the consolidated balance sheets for cash, prepaid expenses, other current assets, accounts payable, accrued expenses and other liabilities approximate fair value due to their short-term nature. In addition, our capital lease obligations approximate fair value based on current interest rates, which contain an element of default risk.

Inventories, stated at the lower of cost or market, consisted of raw materials of $76.3 million and $69.5 million as of December 31, 2012 and 2011, respectively.

As of December 31, 2012 and 2011, there was $0.6 million and $7.5 million, respectively, of prepaid costs associated with the purchase of the antigen used in the manufacture of PROVENGE, which Fujifilm is obligated to manufacture.

As of December 31, 2012 and 2011, there was $8.5 million and $5.2 million, respectively, included in “Prepaid expenses and other current assets” on the consolidated balance sheets related to costs associated with agreements to develop second source suppliers for materials used in the manufacture of PROVENGE and to qualify a contract manufacturer for production. In addition, as of December 31, 2011, there was $0.7 million included in “Other assets” on the consolidated balance sheet related to these agreements.

On July 30, 2012, we announced a strategic restructuring plan that included re-configuring our manufacturing model with the closure of the New Jersey Facility, restructuring administrative functions and strengthening commercial functions, which we anticipate will lower our overall cost structure. As a result of our decision to close the New Jersey Facility, we recorded an impairment charge of $60.0 million in the third quarter of 2012 to reduce the net book value of the property and equipment at the New Jersey Facility to estimated fair value. The estimate of the fair value of the New Jersey Facility utilized an expected present value cash flow model, which included probability-weighted cash flows, requiring judgments and estimates related to the amount and timing of the cash flows and the highest and best use of the facility for a market participant. We applied a risk adjusted discount rate to our estimated cash flows in determining the net present value.

Upon sale of the New Jersey Facility to Novartis Pharmaceuticals Corporation (“Novartis”) in December 2012, we recorded a recovery of approximately $47.4 million. The recovery was calculated as the proceeds from the sale of the facility of $43.0 million, plus the release of the facility-specific lease and asset retirement obligations, less the remaining net book value of the New Jersey Facility. This is recorded in the “Restructuring, Contract Termination, and Asset Impairment” line on the Statement of Operations.

The total net non-cash impairment charge of $17.9 million is included in “Restructuring, contract termination and asset impairment” on our consolidated statements of operations for the year ended December 31, 2012. Refer to Note 13 – Restructuring, Contract Termination and Asset Impairment for further details.

The buildings under our manufacturing facility leases must be restored to their original condition upon lease termination. Accordingly, we have accrued the estimated costs of dismantlement and restoration associated with these obligations. The asset retirement obligations related to our manufacturing facilities in Atlanta, Georgia (the “Atlanta Facility”) and in Orange County, California (the “Orange County Facility”) are included in “Long-term accrued liabilities” on the consolidated balance sheets. The asset retirement obligation related to the New Jersey Facility was included in “Long-term accrued liabilities” on the consolidated balance sheet as of December 31, 2011. However, upon sale of the New Jersey Facility to Novartis in December 2012, we were released from the asset retirement obligation related to this facility resulting in a gain recorded in “Restructuring, contract termination and asset impairment” on our consolidated statement of operations for the year ended December 31, 2012. Refer to Note 13 – Restructuring, Contract Termination and Asset Impairment for details regarding the closure of the New Jersey Facility.

For further description of the facility leases, see Note 9 – Financing Obligations and Debt. The following table is a roll forward of our asset retirement obligations:

For further description of the facility leases, see Note 9 – Financing Obligations and Debt and Note 16 – Commitments and Contingencies, which include the applicable future minimum payments under the leases.

In December 2010, we entered into an industrial development revenue bond transaction related to the Atlanta Facility. Pursuant to the terms of the industrial revenue bonds, we transferred title to certain fixed assets with costs of $63.3 million as of December 31, 2010, to a local governmental authority in the United States to

receive a property tax abatement related to economic development. The title to these assets will revert back to us upon retirement or cancellation of the applicable bonds. These fixed assets are still recognized in the consolidated balance sheets as all risks and benefits remain with us. Depreciation expense, including the depreciation of assets acquired through capital leases, for the years ended December 31, 2012, 2011 and 2010 was $39.7 million, $36.7 million and $15.8 million, respectively. We capitalized interest of $0.3 million, $1.2 million and $3.5 million for the years ended December 31, 2012, 2011 and 2010, respectively.

We lease building space in Orange County, California for use as a manufacturing facility. We were deemed owner of the facility during the construction period under build to suit lease accounting. Upon completion of the facility, we continued to be deemed owner. In August 2009, we capitalized building costs of approximately $6.7 million and recorded a corresponding financing obligation in connection with the facility. We allocate our lease payments between the building and the land based upon their estimated relative fair value. The portion of our lease payment associated with our building reduces our facility lease obligation, while the portion associated with the land is treated as payment of an operating lease obligation. The Orange County Facility lease obligation has an extended term of 15.5 years with an effective interest rate of 1.46%. The estimated lease term is based on the initial 10.5 year term of the Orange County lease and a 5-year renewal. The future minimum payments of the Orange County Facility lease obligation, as presented below, reflect such 15.5 year period. The Orange County lease may be renewed for up to an additional 20 years beyond the estimated 15.5-year term. The remaining facility lease obligation related to this facility was $5.6 million as of December 31, 2012.

We also lease building space in Atlanta, Georgia for use as a manufacturing facility. We were deemed owner of the facility during the construction period under build to suit lease accounting. Upon completion of the facility, we continued to be deemed owner. In March 2010, we capitalized building costs of approximately $6.4 million and recorded a corresponding financing obligation in connection with the facility. We allocate our lease payments between the building and the land based upon their estimated relative fair value. The portion of our lease payment associated with our building reduces our facility lease obligation, while the portion associated with the land is treated as payment of an operating lease obligation. The Atlanta Facility lease obligation has an extended term of 15.5 years with an effective interest rate of 3.37%. The estimated lease term is based on the initial 10.5-year term of the Atlanta Facility lease and a 5-year renewal. The future minimum payments of the Atlanta Facility lease obligation, as presented below, reflect such 15.5-year period. The Atlanta lease may be

renewed for up to an additional 20 years beyond the estimated 15.5-year term. The remaining facility lease obligation related to this facility was $5.8 million as of December 31, 2012.

We were also deemed owner of the New Jersey Facility during the construction period under build to suit lease accounting. Upon completion of the facility, we continued to be deemed owner. In 2005, we capitalized building costs of approximately $8.6 million and recorded a corresponding financing obligation in connection with the facility. We allocated our lease payments between the building and the land based upon their estimated relative fair value. The portion of our lease payment associated with the building reduced our facility lease obligation, while the portion associated with the land was treated as payment of an operating lease obligation. Upon sale of the New Jersey Facility to Novartis in December 2012, we released the remaining facility lease obligation related to this facility resulting in a gain recorded in “Restructuring, contract termination and asset impairment” on our consolidated statement of operations for the year ended December 31, 2012. Refer to Note 13 – Restructuring, Contract Termination and Asset Impairment for details regarding the closure of the New Jersey Facility.

See Note 16 – Commitments and Contingencies for a further description of the facility leases.

We have entered into agreements for the lease of software licenses and equipment which have been treated as capital leases. The capital leases, with an aggregate remaining obligation at December 31, 2012 of $10.6 million, bear interest at rates ranging from 2.9% to 11.7% per year.

Future minimum payments due under capital lease and financing obligations were as follows as of December 31, 2012:

closing of the offering on January 20, 2011. Net proceeds, after payment of underwriting fees and expenses, were approximately $528.8 million. On January 31, 2011, the Underwriter exercised the overallotment option in full, and we closed on the sale of the additional $80 million in principal amount of 2016 Notes on February 3, 2011. Net proceeds from the exercise of the overallotment option, after deducting underwriting fees and other offering expenses, were approximately $78.3 million.

The conversion rate will be adjusted upon the occurrence of certain events, including stock dividends or share splits, the issuance of rights, options or warrants, spin-offs or other distribution of property, cash dividends or distributions, or tender offers or exchange offers. We will not make an adjustment to the conversion rate for any transaction described above (other than share splits or share combinations) if each holder of the 2016 Notes has the right to participate in such transaction at the same time and upon the same terms as holders of our common stock, and solely as a result of holding the 2016 Notes, without having to convert the 2016 Notes and as if a number of shares of common stock were held equal to the applicable conversion rate multiplied by the principal amount of 2016 Notes held.

The application of ASC 470-20 resulted in the initial recognition of $132.9 million as the debt discount recorded in additional paid-in capital for the 2016 Notes. The net carrying amount of the liability component, which is recorded as a long-term liability in the consolidated balance sheets, and the remaining unamortized debt discount were as follows for each period presented:

We incurred debt issuance costs of approximately $12.9 million related to the 2016 Notes. In accordance with ASC 470-20, we allocated approximately $10.1 million of debt issuance costs to the liability component of the 2016 Notes, and are amortizing these costs to interest expense through the earlier of the maturity date of the 2016 Notes or the date of conversions, if any. The remaining $2.8 million of debt issuance costs was allocated to the equity component of the 2016 Notes and recorded as an offset to additional paid-in capital.

Amortization of the debt discount and debt issuance costs resulted in non-cash interest expense of $26.2 million and $23.0 million for the years ended December 31, 2012 and 2011, respectively. In addition, interest expense of $17.8 million and $16.8 million for the years ended December 31, 2012 and 2011, respectively, was recognized based on the 2.875% stated coupon rate.

We have identified other embedded derivatives associated with the 2016 Notes and are accounting for these embedded derivatives accordingly. These embedded derivatives meet certain criteria and are therefore not required to be accounted for separately from the 2016 Notes.

In certain circumstances, additional amounts may become due as additional interest. We can elect that the sole remedy for an event of default for our failure to comply with the “reporting obligations” provisions of the indenture under which the 2014 Notes were issued (the “2014 Indenture”), for the first 180 days after the occurrence of such event of default would be for the holders of the 2014 Notes to receive additional interest on the 2014 Notes at an annual rate equal to 1% of the outstanding principal amount of the 2014 Notes.

amount of the 2014 Notes, subject to adjustment. There may be an increase in the conversion rate of the 2014 Notes under certain circumstances described in the 2014 Indenture; however, the number of shares of common stock issued will not exceed 114.2857 per $1,000 principal amount of 2014 Notes.

In December 2010, we exchanged $24.9 million principal face amount of 2014 Notes for approximately 2.5 million shares of common stock, which included a premium of approximately 129,000 shares. The premium is recorded as a “Loss on debt conversion” of $4.7 million in other expense in the consolidated statement of operations for the year ended December 31, 2010.

We have identified embedded derivatives associated with the 2014 Notes. These embedded derivatives meet certain criteria and are therefore not required to be accounted for separately from the 2014 Notes.

We currently have 10,000,000 shares, $0.001 par value, of authorized preferred stock, of which 2,500,000 shares have been designated as Series A Junior Participating Preferred Stock. No preferred stock was issued or outstanding as of December 31, 2012 or 2011.

In April 2008, we issued 8.0 million shares of common stock, and Warrants to purchase up to 8.0 million shares of common stock to an institutional Investor. The Investor purchased the shares and Warrants for a negotiated price of $5.92 per share of common stock purchased. We received net proceeds of $46.0 million from issuance of the shares and the Warrants to the Investor. The Warrants were exercisable at any time prior to October 8, 2015, with an original exercise price of $20.00 per share of common stock and included a net exercise

feature. On May 18, 2010, the Exercise Date, we entered into an Amendment to the warrant agreement. Pursuant to the terms of the Amendment, the exercise price of the Warrants was amended from $20.00 to $8.92 per share, and the Investor concurrently exercised the warrant for 8.0 million shares of common stock, resulting in aggregate cash proceeds to the Company of $71.4 million.

The Warrants were recorded at fair value at issuance and were adjusted to fair value at each reporting period until the Exercise Date. Any change in fair value between reporting periods was recorded as other income (expense). The Warrants continued to be reported as a liability until they were exercised, at which time the Warrants were adjusted to fair value and reclassified from liabilities to stockholders’ equity. Fair value was estimated using the BSM option pricing model. The fair value of the Warrants on the Exercise Date was $275.5 million. During the year ended December 31, 2010, a loss of $142.6 million was recognized from valuation of the warrant liability.

We maintain four stock-based incentive plans under which we have granted non-qualified stock options, incentive stock options, restricted stock, restricted stock units and stock appreciation rights to employees, non-employee directors and consultants. As of December 2012, only our 2009 Plan (as defined below) remained available for future grants. We also have an Employee Stock Purchase Plan (the “ESPP”).

We recorded stock-based compensation expense in the consolidated statements of operations as follows:

Total stock-based compensation expense recognized in the consolidated statement of operations for 2012, 2011 and 2010 increased our net loss per share by $0.48, $0.41 and $0.29, respectively.

The 2000 Equity Incentive Plan (the “2000 Plan”) expired in February 2010; however it still governs outstanding awards issued under the 2000 Plan. The options granted under the 2000 Plan could be either incentive stock options or nonqualified stock options. Options granted under the 2000 Plan expire no later than 10 years from the date of grant. As amended, the option price must have been at least 100% of the fair value on the date of grant for incentive stock options, and no less than 85% of the fair value on the date of grant for nonqualified stock options. The options generally become exercisable in increments over a period of four years from the date of grant, with the first increment vesting after one year. Options could be granted with different vesting terms.

The 2002 Broad Based Equity Incentive Plan (the “2002 Plan”) expired in February 2012; however it still governs outstanding awards issued under the 2002 Plan. The 2002 Plan provided for the award of options, stock bonuses, and rights to acquire restricted stock. A total of 1.5 million shares of common stock were authorized and reserved for issuance under the 2002 Plan. The stock options granted under the 2002 Plan are nonqualified options and expire no later than 10 years from the date of the grant. The exercise price for options granted under the plan was 100% of the fair market value of the common stock on the date of the grant. Employees, officers, members of our Board of Directors and consultants were eligible to receive awards under the 2002 Plan. However, no more than 49% of the number of shares underlying options granted under the 2002 Plan could be

awarded to directors and senior officers of Dendreon. The options generally become exercisable in increments over a period of four years from the date of grant, with the first increment vesting after one year. Options could be granted with different vesting terms. The Compensation Committee of the Board of Directors determined the vesting period and the purchase price with respect to restricted stock awards.

The 2009 Equity Incentive Plan (the “2009 Plan”) will expire in 2019. In March 2012, our Board of Directors approved an increase to the number of shares reserved for issuance under the 2009 Plan from 13.2 million shares to 22.2 million shares of common stock. This increase was subsequently approved by our stockholders at the 2012 Annual Meeting. The 2009 Plan authorizes our Board of Directors to provide equity-based compensation in the form of incentive or nonqualified stock options, stock appreciation rights, restricted stock, restricted stock units, and other stock-based awards. Any common stock shares that are subject to option rights or stock appreciation rights are counted against this limit as one common share for every one common share subject to such option awards or stock appreciation rights and any common stock shares that are subject to awards other than option awards or stock appreciation rights are counted against this limit as 1.37 common shares for every one common share subject to such other awards. Shares issued under the 2009 Plan may be shares of original issuance or treasury shares or a combination of both. Options granted under the 2009 Plan expire no later than 10 years from the date of grant. The option price must be at least 100% of the fair value on the date of grant. Options and restricted stock awards generally become exercisable in increments over a period of four years from the date of grant, with the first increment vesting after one year. Options and restricted stock awards, however, may be granted with different vesting terms.

In January 2012, we adopted the 2012 Equity Incentive Inducement Plan (the “2012 Plan”), pursuant to which we could issue up to 3,000,000 shares of common stock to newly hired employees as a material inducement to their decision to join the company. The 2012 Plan was terminated in July 2012 upon stockholder approval of an increase in shares reserved for issuance under our 2009 Plan; however it still governs outstanding awards issued under the 2012 Plan.

In December 2012, our Board of Directors approved a new 2013 Employee Stock Purchase Plan to replace the existing 2002 Employee Stock Purchase Plan. The new ESPP plan has 10.0 million shares reserved for issuance, subject to stockholder approval at the 2013 Annual Meeting. In 2012, 2011 and 2010, 0.7 million, 0.4 million and 0.6 million shares, respectively, were issued under the ESPP at average prices of $5.57, $14.16 and $6.93, respectively.

Stock options generally vest and are expensed over three- to four-year periods. Restricted stock awards generally vest and are expensed over two- to four-year periods. We have granted restricted stock awards and stock options with certain performance conditions to certain executive officers and key employees. At each reporting date, we evaluate whether achievement of the performance conditions is probable. Compensation expense is recorded over the appropriate service period based upon our assessment of accomplishing each performance provision or the occurrence of other events which may cause the awards or options to accelerate and vest. For the year ended December 31, 2012, we recognized $0.2 million of compensation expense related to awards and options granted in 2012 with performance conditions. For the year ended December 31, 2011, we recognized $1.6 million in compensation expense related to awards granted in 2011 with performance conditions. No expense was recognized related to these awards for the year ended December 31, 2010. No restricted stock awards granted in 2010 and 2011 with performance conditions remain outstanding as of December 31, 2012.

The fair value of stock options and employee stock purchases was estimated at the date of grant using the BSM model with the following weighted average assumptions for the years ended December 31:

The following table summarizes our stock option activity during the years ended December 31:

The aggregate intrinsic value of options outstanding and options exercisable as of December 31, 2012 was $0.4 million and $0.1 million, respectively. The weighted-average remaining contractual term for options outstanding and options exercisable as of December 31, 2012 was 7.8 years and 6.3 years, respectively. The total intrinsic value of options exercised during the years ended December 31, 2012, 2011 and 2010 was $0.2 million,

$9.5 million and $62.4 million, respectively. The total fair value of the options vested during 2012, 2011 and 2010 was $7.1 million, $8.7 million and $5.4 million, respectively.

As of December 31, 2012, we had approximately $7.3 million of unrecognized compensation expense related to our unvested stock options, which we expect to recognize over a weighted average period of approximately 1.4 years.

The following table summarizes our restricted stock award activity during the years ended December 31:

As of December 31, 2012 we had approximately $18.5 million of unrecognized compensation expense related to our restricted stock awards, which will be recognized over a weighted average period of approximately 1.0 years.

Equity based awards (including stock options and stock awards) available for future issuances are as follows:

As of December 31, 2012, shares of common stock were reserved for issuance as follows:

On December 20, 2012, we announced the sale of our New Jersey Facility to Novartis for $43.0 million, and payment was received in December 2012. As part of the agreement with Novartis, approximately 100 employees at the facility that were previously included in the workforce reduction were offered jobs with Novartis.

As a result of this workforce reduction, we recorded a charge of approximately $20.1 million during the year ended December 31, 2012 related to severance, other termination benefits, outplacement services and non-cash stock-based compensation due to the accelerated vesting of options and restricted stock awards of certain employees with employment agreements. This includes an adjustment to reduce restructuring expense related to employee termination benefits by $0.3 million in the fourth quarter of 2012, related to employees accepting offers with Novartis. We expect to incur and record an additional $1.3 million in restructuring charges related to employee severance benefits through the second quarter of 2013, as employees who were notified the week of September 17, 2012 continue to transition out of the Company. We expect the implementation of the restructuring initiatives will be substantially completed by June 2013.

As a result of our decision to close the New Jersey Facility, we recorded an impairment charge of approximately $60.0 million during the third quarter of 2012 to reduce the net book value of the property and equipment at the New Jersey Facility to estimated fair value. The calculation of estimated fair value of the New Jersey Facility assets required judgment in the assumptions used in the probability-weighted estimated future cash flows related to the highest and best use of the assets, including estimated salvage values.

the New Jersey Facility. This is recorded in the “Restructuring, Contract Termination, and Asset Impairment” line on the Statement of Operations.

The total non-cash impairment charge of $17.9 million and total net restructuring expenses of $27.9 million are included in “Restructuring, contract termination and asset impairment” on our consolidated statement of operations for the year ended December 31, 2012.

The following table summarizes the utilization of the 2012 restructuring liability:

As a result of this workforce reduction, we recorded a charge of $19.4 million during 2011 related to severance, other termination benefits, outplacement services and non-cash stock-based compensation due to the accelerated vesting of options and restricted stock awards of certain employees with employment agreements. During the year ended December 31, 2012, we decreased our restructuring liability by $0.1 million related to other termination benefits, including outplacement services and COBRA benefits, not used by employees. These amounts are included in “Restructuring, contract termination and asset impairment” in the statements of operations. We do not expect to incur additional restructuring charges in 2013 related to severance and other termination benefits in connection with the September 2011 restructuring.

Refer to Note 16– Commitments and Contingencies for disclosure of a lawsuit filed against the Company by GSK in November 2011, purporting claims for monies due and owing and breach of the Company’s obligations under the GSK Agreement. On January 25, 2013, GSK filed a motion to amend its complaint to add a claim for breach of North Carolina’s unfair and deceptive trade practices act, which Dendreon will oppose. Although the ultimate financial impact of the lawsuit is not yet determinable, the Company expects to pay approximately $4.0 million in fees in connection with the termination of the GSK Agreement. This amount is included in the “Restructuring and contract termination liabilities” on the consolidated balance sheets as of December 31, 2012 and 2011.

The following table summarizes the utilization of the 2011 restructuring and contract termination liabilities:

The 2012 and 2011 restructuring and contract termination liabilities are recorded as current liabilities on the balance sheets as of December 31, 2012.

We recognized no income tax expense or benefit in 2012 or 2011, and $0.4 million in income tax benefit in 2010 relating to refundable credits.

As of December 31, 2012, we had federal and state net operating loss carryforwards (“NOLs”) of approximately $1.55 billion and $456.3 million, respectively, including $131.1 million of NOLs related to excess tax benefits associated with stock option exercises which are recorded directly to stockholder’s equity only when realized. We also had federal and state research and development credit carryforwards (“R&D Credits”) of approximately $24.6 million and $2.6 million, respectively. The NOLs and R&D Credits will expire at various dates, beginning in 2013 through 2032, if not utilized.

We are subject to United States federal and state income tax examinations for years after 2007 and 2006, respectively. However, carryforward attributes that were generated prior to 2006 may still be adjusted by a taxing authority upon examination if the attributes have been or will be used in a future period.

We recognize interest and penalties accrued on any unrecognized tax benefits as a component of income tax expense. During the years ended December 31, 2012, 2011 and 2010, we did not have any accrued interest or penalties associated with any unrecognized tax benefits.

The net deferred tax asset has been fully offset by a valuation allowance. The valuation allowance increased by $143.1 million, $66.1 million and $113.0 million during the years ended December 31, 2012, 2011 and 2010, respectively. In each of the years ended December 31, 2012, 2011 and 2010, tax deductions related to stock-based compensation expense were not recognized because of the availability of net operating losses, and therefore no financing cash flows were reported.

Realization of deferred tax assets is dependent on future earnings, if any, the timing and amount of which are uncertain. Accordingly, the deferred tax assets have been offset by a valuation allowance. The valuation allowance relates primarily to net deferred tax assets from operating losses. Excess tax benefits associated with stock option exercises are recorded directly to stockholders’ equity only when realized. As a result, the excess tax benefits included in net operating loss carryforwards, but not reflected in deferred tax assets, for fiscal years 2012 and 2011 were $131.1 and $156.1 million, respectively.

Deferred tax assets do not include R&D Credits generated for the fiscal year 2012. The American Taxpayer Relief Act of 2012 was signed into law on January 3, 2013, which retroactively extended the R&D Credit back to January 1, 2012. ASC 740 requires that the effect of tax legislation is taken into account in the interim period in which the law was enacted. Therefore, the 2012 R&D Credits are not contained in the deferred tax assets but will be included in 2013. Fiscal year 2012 R&D Credits were approximately $1.4 million.

The reconciliation of the total gross amounts of unrecognized tax benefits (excluding interest, penalties, foreign tax credits and the federal tax benefit of state taxes related to unrecognized tax benefits) were as follows:

The unrecognized tax benefits that if recognized would affect the annual effective tax rate were zero for each of the years ended December 31, 2012, 2011 and 2010.

The computation of basic and diluted net loss per share is based on the weighted average number of shares of common stock outstanding during the year, and excludes all outstanding stock options, warrants and unvested restricted stock, as well as shares issuable in connection with the conversion of the 2014 Notes and the 2016 Notes from the calculation of diluted net loss per common share, as all such securities are anti-dilutive to the computation of net loss per share for all periods presented. Shares excluded from the computation of diluted net loss per common share were 22.8 million, 19.3 million and 7.6 million for the years ended December 31, 2012, 2011 and 2010, respectively.

The following table presents the calculation of basic and diluted net loss per share:

We currently have commitments with Fujifilm to purchase antigen related to a 2012 order of $28.3 million and related to a 2013 order of $43.8 million. We expect payments on these commitments will continue through 2014.

The majority of our operating lease payments relate to two leases entered into in 2011 in Seattle, Washington, which collectively cover our principal corporate offices in Seattle, and a corporate office lease in Bridgewater, New Jersey, entered into in 2012. Additionally, we have entered into leases for the New Jersey

Facility, the Orange County Facility and the Atlanta Facility. The New Jersey Facility lease was assigned to Novartis in December 2012 as further discussed in Note 13 – Restructuring, Contract Termination and Asset Impairment, and we have no further obligations under this lease.

In February 2011, we entered into a lease for office space of 179,656 square feet in Seattle, Washington. In July 2012, we amended the lease to reduce the premises to 158,081 square feet. The initial lease term is for five and a half years, with one renewal term of two and a half years. The lease required us to provide the landlord with a letter of credit as a security deposit. We have provided the bank that issued the letter of credit on our behalf, a security deposit of $2.2 million to guarantee the letter of credit. The lessor reduced the security deposit during 2012, resulting in a decrease in the deposit securing the letter of credit to $1.1 million. The security deposit is recorded as a long-term investment as of December 31, 2012 and 2011 on the consolidated balance sheets.

Also in February 2011, we entered into a sublease for laboratory and office space of 97,365 square feet in Seattle, Washington. The lease term is for eight years. The lease required us to provide the landlord with a letter of credit which we have secured with a $1.1 million security deposit. The security deposit is recorded as a long-term investment as of December 31, 2012 and 2011 on the consolidated balance sheets.

In July 2012, we entered into a lease for office space of 39,937 square feet in Bridgewater, New Jersey. We currently anticipate taking occupancy in mid-2013. The initial lease term is for ten years, with one renewal term of five years. The lease required us to provide the landlord with a letter of credit which we have secured with a $1.6 million security deposit. The security deposit is recorded as a long-term investment as of December 31, 2012 on the consolidated balance sheet.

In August 2009, we entered into an agreement to lease the Orange County Facility, comprising approximately 184,000 square feet, for use as a manufacturing facility following build-out. The initial lease term is ten and a half years, expiring in December 2019, with five renewal terms of five years each.

The Orange County Facility lease required us to provide the landlord with a letter of credit of $2.1 million as a security deposit. We have provided the bank that issued the letter of credit on our behalf a security deposit of $2.2 million to guarantee the letter of credit. The lessor reduced the security deposit during 2012, resulting in a decrease in the deposit securing the letter of credit to $1.7 million. The deposit is recorded as a long-term investment as of December 31, 2012 and 2011 on the consolidated balance sheets.

In July 2009, we entered into an agreement to lease the Atlanta Facility, comprising approximately 156,000 square feet, for use as a manufacturing facility following build-out. The lease commenced when we took possession of the building upon substantial completion of construction of the building shell in March 2010. The initial lease term is ten and a half years, with five renewal terms of five years each.

In August 2005, we entered into an agreement to lease the New Jersey Facility, comprising approximately 158,000 square feet of commercial manufacturing space. The amended lease agreement expired in November 2022. On December 20, 2012, we announced the sale of our New Jersey Facility to Novartis, releasing us from future obligations under this lease.

We account for the Orange County Facility and the Atlanta Facility as assets with related facility lease obligations due to our significant investment in the build-out of the facilities. The lease payments are allocated to the building and land based on their estimated relative fair values. The portion of the lease related to land is treated as an operating lease and included in the payment schedule below. The portion of the lease related to the building is treated as a facility lease obligation as further discussed in Note 9 – Financing Obligations and Debt.

Future minimum lease payments under non-cancelable operating leases, including the land portion of our manufacturing facilities and the maintenance component of capital leases, at December 31, 2012, were as follows:

Rent expense for the years ended December 31, 2012, 2011 and 2010 was $9.6 million, $10.8 million and $6.1 million, respectively.

The Company and three current and former officers are named defendants in a consolidated putative securities class action proceeding filed in August 2011 with the United States District Court for the Western District of Washington (the “District Court”) under the caption In re Dendreon Corporation Class Action Litigation, Master Docket No. C 11-1291 JLR. Lead Plaintiff, San Mateo County Employees Retirement Association purports to state claims for violations of federal securities laws on behalf of a class of persons who purchased the Company’s common stock between April 29, 2010 and August 3, 2011. A consolidated amended complaint was filed on February 24, 2012. In general, the complaints allege that the defendants issued materially false or misleading statements concerning the Company, its finances, business operations and prospects with a focus on the market launch of PROVENGE and related forecasts concerning physician adoption, and revenue from sales of PROVENGE as reflected in the Company’s August 3, 2011 release of its financial results for the quarter ended June 30, 2011. The Company and other defendants filed a motion to dismiss the consolidated amended complaint on April 27, 2012, and that motion is fully briefed. The Court has indicated that it wishes to hear argument on the motion, but no hearing has yet been scheduled. We cannot predict the outcome of that motion or of these lawsuits; however, the Company believes the claims lack merit and intends to defend the claims vigorously. The ultimate financial impact of these proceedings if any is not yet determinable and therefore, no provision for loss, if any, has been recorded in the financial statements. The Company has insurance that it believes affords coverage for much of the anticipated costs of these proceedings, subject to the policies’ terms and conditions

Delaware, captioned Herbert Silverberg, derivatively on behalf of Dendreon Corporation v. Mitchell H. Gold, et al., Case No. 7646-VCP. The complaints filed in Washington all name as defendants the three individuals who are defendants in the securities action together with the other members of the Company’s Board of Directors. While the complaints filed in Washington assert various legal theories of liability, the lawsuits generally allege that the defendants breached fiduciary duties owed to the Company in connection with the launch of PROVENGE and by purportedly subjecting the Company to potential liability for securities fraud. The complaints also include claims against certain of defendants for supposed misappropriation of Company information and insider trading; the Silverberg complaint, which names one additional former officer of the Company as a defendant, asserts only this claim. The derivative actions pending in Washington are all the subject of stipulated orders staying proceedings until the District Court rules on the motion to dismiss the consolidated amended complaint in the securities action. The parties in the Delaware action agreed to extend the deadline for a response to the Silverberg complaint to February 22, 2013. Shortly before that deadline, the Company filed a motion to stay the litigation consistent with the stay in place in the Washington cases, and it expects to press motions to dismiss on various grounds if the stay motion be denied. While the Company has certain indemnification obligations, including obligations to advance legal expense to the named defendants for defense of these lawsuits, the purported derivative lawsuits do not seek relief against the Company. Additionally, the Securities and Exchange Commission (“SEC”) is conducting a formal investigation, which the Company believes relates to some of the same issues raised in the securities and derivative actions. The Company is cooperating fully with the SEC investigation. The ultimate financial impact of these various proceedings if any is not yet determinable and therefore, no provision for loss, if any, has been recorded in the financial statements. The Company has insurance that it believes affords coverage for much of the anticipated costs of these proceedings, subject to the policies’ terms and conditions.

The Company received notice in November 2011 of a lawsuit filed in the Durham County Superior Court of North Carolina against the Company by GSK. The lawsuit purports claims for monies due and owing and breach of the Company’s obligations under the GSK Agreement terminated as of October 31, 2011. On January 25, 2013, GSK filed a motion to amend its complaint to add a claim for breach of North Carolina’s unfair and deceptive trade practices act. The Company does not believe the lawsuit has merit, filed a Counterclaim and Answer on January 6, 2012, will oppose GSK’s motion to amend its complaint, and intends to defend its position vigorously. The Company expects to pay approximately $4.0 million in fees in connection with the termination of the Development and Supply Agreement. The ultimate financial impact of the lawsuit is not yet determinable. Therefore, no additional provision for loss has been recorded in the financial statements.

We have a 401(k) plan for our employees who meet eligibility requirements. Eligible employees may contribute up to 60% of their eligible compensation, subject to Internal Revenue Service limitations.

Our contributions to the plans are discretionary as determined by the Board of Directors. We match employee contributions fifty cents for each dollar, up to a maximum of $4,000 per employee per year in 2012, 2011 and 2010. Employer contributions in the years ended December 31, 2012, 2011 and 2010 were $3.8 million, $4.1 million and $2.1 million, respectively.

The following table summarizes the unaudited statements of operations for each quarter of 2012 and 2011:

Upon sale of the New Jersey Facility to Novartis in December 2012, restructuring, contract termination and asset impairment expense for the quarter ended December 31, 2012 includes the recovery of approximately $47.4 million. The recovery was calculated as the proceeds from the sale of the facility of $43.0 million, plus the release of the facility-specific lease and asset retirement obligations, less the remaining net book value of the New Jersey Facility. See Note 13 – Restructuring.


DELAWARE		22-3203193
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

1301 2ND AVENUE SEATTLE, WASHINGTON		98101 (Zip Code)
(Address of principal executive offices)		98101 (Zip Code)


Title of Each Class		Name of Each Exchange on Which Registered
Common Stock, $0.001 Par Value Per Share		The NASDAQ Stock Market LLC


Large accelerated filer þ	Accelerated filer ¨	Non-accelerated filer ¨	Smaller reporting company ¨
	(Do not check if a smaller reporting company)


	High		Low
Year ended December 31, 2012
First quarter	$	17.04	$	7.31
Second quarter		12.21		5.69
Third quarter		7.48		4.17
Fourth quarter		5.64		3.69
Year ended December 31, 2011
First quarter	$	38.95	$	31.31
Second quarter		43.96		36.45
Third quarter		42.00		8.62
Fourth quarter		11.40		6.46


Period	Total Number of Shares Purchased(1)		Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs		Maximum Number of Shares that May Yet be Purchased Under the Plans or Programs
October 1 — October 31, 2012		3,524	$	4.15		—		—
November 1 — November 30, 2012		460		4.45		—		—
December 1 — December 31, 2012		40,468		5.29		—		—

Total		44,452	$	5.19		—		—


	Year Ended December 31,
	2012			2011			2010			2009			2008
	(In thousands, except per share amounts)
Consolidated Statement of Operations Data:
Product revenue, net	$	325,333		$	213,511		$	47,957		$	—		$	—
Royalty and other revenue		197			128,102			100			101			111

Total revenue		325,530			341,613			48,057			101			111
Operating expenses, including cost of product		665,333			633,309			340,221			100,142			70,589

Loss from operations		(339,803	)		(291,696	)		(292,164	)		(100,041	)		(70,478	)
Net interest expense		(53,908	)		(46,290	)		(444	)		(1,357	)		(1,537	)
Loss on debt conversion		—			—			(4,716	)		—			—
(Loss) gain from valuation of warrant liability		—			—			(142,567	)		(118,763	)		371
Other income		101			180			—			—			—
Income tax benefit		—			—			411			—			—

Net loss	$	(393,610	)	$	(337,806	)	$	(439,480	)	$	(220,161	)	$	(71,644	)

Basic and diluted net loss per share	$	(2.65	)	$	(2.31	)	$	(3.18	)	$	(2.04	)	$	(0.79	)

Shares used in computation of basic and diluted net loss per share		148,777			146,163			138,206			108,050			90,357


	As of December 31,
	2012		2011		2010		2009		2008
	(In thousands)
Consolidated Balance Sheet Data:
Cash, cash equivalents, short- and long-term investments	$	429,849	$	617,696	$	277,296	$	606,386	$	110,577
Working capital		383,348		592,506		280,315		441,550		84,485
Total assets		721,119		1,001,491		603,953		735,415		147,204
Warrant liability		—		—		—		132,953		14,190
Long-term liabilities and obligations, less current portion		582,564		571,138		61,100		68,915		93,802
Total stockholders’ equity		34,613		352,637		492,774		503,564		27,006


	Year Ended December 31,
	2012			2011
	(in thousands)
Beginning balance, January 1	$	885		$	—
Current provision related to sales made in current period		7,600			885
Current provision related to sales made in prior periods		57			—
Payments/credits		(6,592	)		—

Balance at December 31	$	1,950		$	885


	Total		1 year		2-3 Years		4-5 Years		Thereafter
	(In thousands)
Contractual Commitments:
Convertible senior notes (2016 Notes) (including interest)(a)	$	682,388	$	17,825	$	35,650	$	628,913	$	—
Convertible senior subordinated notes (2014 Notes) (including interest)(a)		29,658		1,315		28,343		—		—
Facility lease obligations (including interest)(b)		13,372		889		1,943		2,098		8,442
Capital lease obligations (including interest)(c)		11,693		4,932		5,776		985		—
Contractual commitments(d)		72,141		72,141		—		—		—
Operating leases(e)		60,295		10,717		19,405		15,741		14,432
Unconditional purchase obligations		—		—		—		—		—

	$	869,547	$	107,819	$	91,117	$	647,737	$	22,874


Plan Category	(a) Number of Securities to be Issued Upon Exercise of Outstanding Options, Warrants and Rights		(b) Weighted-Average Exercise Price of Outstanding Options, Warrants and Rights			(c) Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (Excluding Securities Reflected in Column(a))
Equity compensation plans approved by stockholders(1)		3,116,098	$	19.17	(3)		9,630,340	(4)
Equity compensation plans not approved by stockholders(2)		641,606	$	16.76			—

Total		3,757,704	$	18.71			9,630,340


	Page
Index to Consolidated Financial Statements		77
Report of Independent Registered Public Accounting Firm		78
Consolidated Balance Sheets		79
Consolidated Statements of Operations		80
Consolidated Statements of Comprehensive Income (Loss)		81
Consolidated Statements of Stockholders’ Equity		82
Consolidated Statements of Cash Flows		83
Notes to Consolidated Financial Statements		84


Signature	Title	Date

/s/ John H. Johnson John H. Johnson	President, Chief Executive Officer and Chairman of the Board of Directors (Principal Executive Officer)	February 25, 2013

/s/ Gregory T. Schiffman Gregory T. Schiffman	Executive Vice President, Chief Financial Officer and Treasurer (Principal Financial Officer)	February 25, 2013

/s/ Gregory R. Cox Gregory R. Cox	Vice President, Finance (Principal Accounting Officer)	February 25, 2013

/s/ Susan B. Bayh Susan B. Bayh	Director	February 25, 2013

/s/ Gerardo Canet Gerardo Canet	Director	February 25, 2013

/s/ Bogdan Dziurzynski, D.P.A. Bogdan Dziurzynski, D.P.A.	Director	February 25, 2013

/s/ Dennis M. Fenton Dennis M. Fenton	Director	February 25, 2013

/s/ Pedro P. Granadillo Pedro P. Granadillo	Director	February 25, 2013

/s/ David C. Stump David C. Stump	Director	February 25, 2013

/s/ David L. Urdal, Ph.D. David L. Urdal, Ph.D.	Director	February 25, 2013

/s/ Douglas G. Watson Douglas G. Watson	Lead Independent Director	February 25, 2013


	December 31,
	2012			2011
ASSETS
Current assets:
Cash and cash equivalents	$	188,408		$	427,100
Short-term investments		165,396			111,525
Trade accounts receivable		38,884			35,541
Inventory		76,300			69,502
Prepaid antigen costs		643			7,490
Prepaid expenses and other current assets		17,659			19,064

Total current assets		487,290			670,222
Property and equipment, net		150,604			242,505
Long-term investments		76,045			79,071
Other assets		7,180			9,693

Total assets	$	721,119		$	1,001,491

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	12,845		$	7,807
Accrued liabilities		44,821			35,581
Accrued compensation		27,050			24,703
Restructuring and contract termination liabilities		14,214			4,752
Current portion of capital lease obligations		4,418			3,855
Current portion of facility lease obligations		594			1,018

Total current liabilities		103,942			77,716
Long-term accrued liabilities		5,081			7,087
Capital lease obligations, less current portion		6,219			9,384
Facility lease obligations, less current portion		10,835			18,564
Convertible senior subordinated notes due 2014		27,685			27,685
Convertible senior notes due 2016		532,744			508,418
Commitments and contingencies (Note 16)
Stockholders’ equity:
Preferred stock, $0.001 par value; 10,000,000 shares authorized, no shares issued or outstanding		—			—
Common stock, $0.001 par value; 250,000,000 shares authorized, 154,414,811 and 149,169,279 shares issued and outstanding at December 31, 2012 and 2011, respectively		150			147
Additional paid-in capital		1,988,666			1,913,265
Accumulated other comprehensive income (loss)		147			(35	)
Accumulated deficit		(1,954,350	)		(1,560,740	)

Total stockholders’ equity		34,613			352,637

Total liabilities and stockholders’ equity	$	721,119		$	1,001,491


	Common Stock				Additional Paid-in Capital			Accumulated Other Comprehensive Income (Loss)			Accumulated Deficit			Total Stockholders’ Equity
	Shares		Amount		Additional Paid-in Capital			Accumulated Other Comprehensive Income (Loss)			Accumulated Deficit			Total Stockholders’ Equity
Balance, January 1, 2010		133,485,415	$	131	$	1,286,891		($	4	)	($	783,454	)	$	503,564
Exercise of stock options and other		1,596,258		2		12,358			—			—			12,360
Issuance of common stock under the Employee Stock Purchase Plan		636,369		1		4,406			—			—			4,407
Conversion of convertible debt		2,546,232		3		29,582			—			—			29,585
Non-cash stock-based compensation expense		—		—		40,262			—			—			40,262
Issuance of restricted stock, net of cancellations		1,183,934		—		(4,849	)		—			—			(4,849	)
Exercise of warrants		8,000,000		8		346,872			—			—			346,880
Net loss		—		—		—			—			(439,480	)		(439,480	)
Other comprehensive income		—		—		—			45			—			45

Balance, December 31, 2010		147,448,208		145		1,715,522			41			(1,222,934	)		492,774

Exercise of stock options		475,225		1		6,128			—			—			6,129
Issuance of common stock under the Employee Stock Purchase Plan		414,589		—		5,872			—			—			5,872
Issuance of convertible debt		—		—		130,118			—			—			130,118
Non-cash stock-based compensation expense		—		—		58,583			—			—			58,583
Issuance of restricted stock, net of cancellations		831,257		1		(2,958	)		—			—			(2,957	)
Net loss		—		—		—			—			(337,806	)		(337,806	)
Other comprehensive loss		—		—		—			(76	)		—			(76	)

Balance, December 31, 2011		149,169,279		147		1,913,265			(35	)		(1,560,740	)		352,637

Exercise of stock options		49,551		—		249			—			—			249
Issuance of common stock under the Employee Stock Purchase Plan		741,159		1		4,129			—			—			4,130
Non-cash stock-based compensation expense		—		—		73,097			—			—			73,097
Issuance of restricted stock, net of cancellations		4,454,822		2		(2,074	)		—			—			(2,072	)
Net loss		—		—		—			—			(393,610	)		(393,610	)
Other comprehensive income		—		—		—			182			—			182

Balance, December 31, 2012		154,414,811	$	150	$	1,988,666		$	147		($	1,954,350	)	$	34,613


	Cost or Amortized Cost		Fair Market Value
	(In thousands)
December 31, 2012
Due in one year or less	$	165,295	$	165,396
Due after one year through two years		75,999		76,045

	$	241,294	$	241,441

December 31, 2011
Due in one year or less		111,539	$	111,525
Due after one year through two years		79,090		79,071

	$	190,629	$	190,596


	Cost or Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Market Value
	(In thousands)
December 31, 2012
Demand deposit	$	5,641	$	—	$	—		$	5,641
Corporate debt securities		104,652		91		(17	)		104,726
Government-sponsored enterprises		33,438		18		—			33,456
U.S. Treasury notes		97,563		57		(2	)		97,618

	$	241,294	$	166	$	(19	)	$	241,441

December 31, 2011
Demand deposit		7,999	$	—	$	—		$	7,999
Corporate debt securities		144,771		93		(126	)		144,738
Government-sponsored enterprises		25,348		—		(18	)		25,330
U.S. Treasury notes		12,511		18		—			12,529

	$	190,629	$	111	$	(144	)	$	190,596


Level 1	—	Observable inputs for identical assets or liabilities such as quoted prices in active markets,

Level 2	—	Inputs other than quoted prices in active markets that are either directly or indirectly observable such as quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the asset or liability (i.e., interest rates, yield curves, etc.), and inputs that are derived principally from or corroborated by observable market data by correlation or other means (market corroborated inputs), and

Level 3	—	Unobservable inputs in which little or no market data exists, therefore determined using estimates and assumptions developed by us, which reflect those that a market participant would use.


Description	Balance		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
	(In thousands)
*Assets:*
December 31, 2012
Money market	$	184,167	$	184,167	$	—	$	—
Corporate debt securities		104,726		—		104,726		—
Government-sponsored enterprises		33,456		—		33,456		—
U.S. Treasury notes		97,618		—		97,618		—

Total financial assets	$	419,967	$	184,167	$	235,800	$	—

Add: Cash		9,882

Total cash, cash equivalents and investments	$	429,849

December 31, 2011
Money market	$	396,193	$	396,193	$	—	$	—
Commercial paper		17,990		—		17,990		—
Corporate debt securities		144,738		—		144,738		—
Government-sponsored enterprises		25,330		—		25,330		—
U.S. Treasury notes		12,529		—		12,529		—

Total financial assets	$	596,780	$	396,193	$	200,587	$	—

Add: Cash		20,916

Total cash, cash equivalents and investments	$	617,696


	Capital Lease Obligations			Facility Lease Obligations
	(In thousands)
Year ending December 31:
2013	$	4,932		$	889
2014		2,994			944
2015		2,782			999
2016		985			1,040
2017		—			1,058
Thereafter		—			8,442

Total payments		11,693			13,372
Less amount representing interest		(1,056	)		(1,943	)

Present value of payments		10,637			11,429
Less current portion of obligations		(4,418	)		(594	)

	$	6,219		$	10,835


	Employee Stock Options			Employee Stock Purchase Plan
	2012	2011	2010	2012	2011	2010
Weighted average estimated fair value	$5.85	$18.42	$21.72	$2.23	$12.40	$17.36
Weighted Average Assumptions
Dividend yield(a)	0.0%	0.0%	0.0%	0.0%	0.0%	0.0%
Expected volatility(b)	76%	78%	77%	41%	45%	100%
Risk-free interest rate(c)	0.9%	1.9%	1.7%	0.1%	0.0%	0.3%
Expected term(d)	5.2 years	5.0 years	4.4 years	0.9 years	1.1 years	0.6 years


	Awards Available for Grant
Balance at January 1, 2010		12,630,046
Additional shares reserved		—
Granted		(3,004,528	)
Forfeited and expired		126,609

Balance at December 31, 2010		9,752,127
Additional shares reserved		—
Granted		(2,593,708	)
Forfeited and expired		808,305

Balance at December 31, 2011		7,966,724
Additional shares reserved — 2009 Plan		9,000,000
Additional shares reserved — 2012 Plan		3,000,000
Granted		(9,748,353	)
Forfeited and expired		1,838,580
Cancelled—2012 Plan		(2,426,611	)

Balance at December 31, 2012		9,630,340


Convertible senior subordinated notes due 2014			2,692,765
Convertible senior notes due 2016			12,099,920
Outstanding common stock options			3,757,704
Employee stock purchase plan			10,000,000
Common stock awards			4,217,355
Available for future grant under equity plans			9,630,340

			42,398,084


	2012 Restructuring
Description	Charges for the Year ended December 31, 2012		Cash Payments			Stock Vesting			Other Non-Cash Settlement			Restructuring and Contract Termination Liabilities as of December 31, 2012
	(In thousands)
Severance and other termination benefits	$	20,113	$	(8,015	)	$	(2,015	)	$	—		$	10,083
Other associated costs		7,817		(7,270	)		—			(439	)		108
Asset impairment		17,853		(20	)		—			(17,833	)		—

Total	$	45,783	$	(15,305	)	$	(2,015	)	$	(18,272	)	$	10,191


	2011 Restructuring
Description	Restructuring and Contract Termination Liabilities as of December 31, 2011		Cash Payments			Adjustments for the Year Ended December 31, 2012			Restructuring and Contract Termination Liabilities as of December 31, 2012
	(In thousands)
Severance and other termination benefits	$	684	$	(592	)	$	(92	)	$	—
Contract termination costs		4,068		(21	)		(24	)		4,023

Total	$	4,752	$	(613	)	$	(116	)	$	4,023


	Operating Leases
	(In thousands)
Year ending December 31:
2013	$	10,717
2014		9,793
2015		9,612
2016		9,757
2017		5,984
Thereafter		14,432

Total minimum lease payments	$	60,295


	March 31			June 30			September 30			December 31
	(In thousands, except per share amounts)
2012
Total revenue(1)	$	82,074		$	79,992		$	77,971		$	85,493
Cost of product revenue		60,041			61,731			51,749			54,371
Gross profit(3)		21,931			18,233			26,193			31,084
Restructuring, contract termination and asset impairment expense(4)		(124	)		1,099			80,994			(36,302	)
Net loss		(103,914	)		(96,137	)		(154,864	)		(38,695	)
Basic and diluted net loss per share	$	(0.70	)	$	(0.65	)	$	(1.04	)	$	(0.26	)