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   &lt;div align="left" style="font-size: 10pt; margin-top: 12pt"&gt;&lt;b&gt;1. BUSINESS, PRINCIPLES OF CONSOLIDATION AND BASIS OF PRESENTATION&lt;/b&gt;
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   &lt;div align="left" style="font-size: 10pt; margin-top: 6pt"&gt;&lt;i&gt;Business&lt;/i&gt;
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   &lt;div align="left" style="font-size: 10pt; margin-top: 6pt"&gt;&amp;#160;&amp;#160;&amp;#160;&amp;#160;&amp;#160;Dendreon Corporation (&amp;#8220;Dendreon&amp;#8221;, the &amp;#8220;Company&amp;#8221;, &amp;#8220;we&amp;#8221;, &amp;#8220;us&amp;#8221;, or &amp;#8220;our&amp;#8221;), 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 immunotherapy and small molecule product candidates to
   treat a wide range of cancers. On April&amp;#160;29, 2010, the U.S. Food and Drug Administration (&amp;#8220;FDA&amp;#8221;)
   licensed PROVENGE&lt;sup style="font-size: 85%; vertical-align: text-top"&gt;&amp;#174;&lt;/sup&gt; (sipuleucel-T), an autologous cellular immunotherapy for the
   treatment of asymptomatic and minimally symptomatic, metastatic, castrate-resistant,
   hormone-refractory, prostate cancer. Commercial sale of PROVENGE began in May&amp;#160;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 own worldwide rights for PROVENGE.
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   &lt;div align="left" style="font-size: 10pt; margin-top: 12pt"&gt;&lt;i&gt;Principles of Consolidation&lt;/i&gt;
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   &lt;div align="left" style="font-size: 10pt; margin-top: 6pt"&gt;&amp;#160;&amp;#160;&amp;#160;&amp;#160;&amp;#160;Effective in the quarter ended March&amp;#160;31, 2010, Dendreon Holdings, LLC (&amp;#8220;Dendreon Holdings&amp;#8221;)
   and Dendreon Distribution, LLC (&amp;#8220;Dendreon Distribution&amp;#8221;) were established. Dendreon Holdings is a
   wholly-owned subsidiary of the Company, and Dendreon Distribution is a wholly-owned subsidiary of
   Dendreon Holdings. The consolidated financial statements for the three and six months ended June
   30, 2010 include the accounts of Dendreon and its direct and indirect wholly-owned subsidiaries,
   Dendreon Holdings and Dendreon Distribution.
   &lt;/div&gt;
   &lt;div align="left" style="font-size: 10pt; margin-top: 6pt"&gt;&amp;#160;&amp;#160;&amp;#160;&amp;#160;&amp;#160;The financial statements for the six months ended June&amp;#160;30, 2009 include the accounts of
   Dendreon and its wholly-owned subsidiary, Dendreon San Diego LLC (&amp;#8220;Dendreon San Diego&amp;#8221;) through
   February&amp;#160;2, 2009, the effective date of dissolution of the entity.
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   &lt;div align="left" style="font-size: 10pt; margin-top: 6pt"&gt;&amp;#160;&amp;#160;&amp;#160;&amp;#160;&amp;#160;All intercompany transactions and balances have been eliminated in consolidation.
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   &lt;div align="left" style="font-size: 10pt; margin-top: 12pt"&gt;&lt;i&gt;Basis of Presentation&lt;/i&gt;
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   &lt;div align="left" style="font-size: 10pt; margin-top: 6pt"&gt;&amp;#160;&amp;#160;&amp;#160;&amp;#160;&amp;#160;The accompanying unaudited financial statements reflect, in the opinion of management, all
   adjustments (consisting of only normal recurring adjustments) necessary for a fair presentation of
   our financial position, results of operations and cash flows for each period presented in
   accordance with U.S. generally accepted accounting principles for interim financial information and
   with the instructions to Form 10-Q and Article&amp;#160;10 of Regulation&amp;#160;S-X. Accordingly, information and
   note disclosures normally included in financial statements prepared in accordance with U.S.
   generally accepted accounting principles have been condensed or omitted from the accompanying
   statements. These interim financial statements should be read in conjunction with the audited
   financial statements and related notes thereto, which are included in our Annual Report on Form
   10-K for the year ended December&amp;#160;31, 2009 (the &amp;#8220;2009 Form 10-K&amp;#8221;). The accompanying financial
   information as of December&amp;#160;31, 2009 has been derived from audited financial statements. Operating
   results for the three and six month periods ended June&amp;#160;30, 2010 are not necessarily indicative of
   future results that may be expected for the year ending December&amp;#160;31, 2010 or any other future
   period.
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   &lt;div align="left" style="font-size: 10pt; margin-top: 12pt"&gt;&lt;i&gt;Net Loss Per Share&lt;/i&gt;
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   &lt;div align="left" style="font-size: 10pt; margin-top: 6pt"&gt;&amp;#160;&amp;#160;&amp;#160;&amp;#160;&amp;#160;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 and unvested
   restricted stock, as well as shares issuable in connection with the conversion of the 4.75%
   Convertible Senior Subordinated Notes due 2014 (the &amp;#8220;Notes&amp;#8221;) and our Common Stock Purchase
   Agreement with Azimuth Opportunity Ltd. (the &amp;#8220;Common Stock Purchase Agreement&amp;#8221;), from the
   calculation of diluted net loss per common share because such securities are antidilutive to the
   computation of net loss per share. As of June&amp;#160;30, 2010 and 2009, shares excluded from the
   computation of net loss per share were 22,639,752 and 31,029,660, respectively.
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