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<div align="left" style="font-family: 'Times New Roman',Times,serif">
<div align="left" style="font-size: 10pt; margin-top: 12pt"><b>2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES</b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt"><i>Revenue Recognition</i>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     We recognize revenue primarily from the sale of PROVENGE and collaborative research
agreements. Revenue from the sale of PROVENGE is recorded net of product returns and estimated
healthcare provider contractual chargebacks. Revenues from sales of PROVENGE are recognized upon
our confirmed product delivery to and issuance of the product release form to the physician site.
As we executed a drop shipment agreement with a credit worthy third party wholesaler (“wholesaler”)
to sell PROVENGE, the wholesaler assumes all bad debt risk from the physician, and no allowance for
bad debt is recorded. Due to the limited usable life of our product, actual returns are credited
against sales in the month they are incurred. Healthcare provider contractual chargebacks are the
result of contractual commitments by us to provide products to healthcare providers at specified
prices or discounts such as pursuant to mandatory federal programs. Chargebacks occur when a
contracted healthcare provider purchases our products through the wholesaler at fixed contract
prices that are lower than the price we charge the wholesaler. The 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 healthcare providers. These chargebacks will be recognized in the
same period that the related revenue is recognized, resulting in a reduction in product sales
revenue and are recorded as other accrued liabilities. For the nine months ended September 30, 2010
we did not record any chargebacks.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     We recognize collaborative research revenue from up-front payments, milestone payments, and
personnel-supported research funding. The payments received under these research collaboration
agreements are generally contractually not refundable even if the research effort is not
successful. Performance under our collaborative agreements is measured by scientific progress, as
mutually agreed upon by us and our collaborators.
</div>
<div align="left" style="font-size: 10pt; margin-top: 12pt"><i>Inventory</i>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     Inventories are determined at the lower of cost or market value with cost determined under the
specific identification method. Inventories consist of raw materials, work in process and finished
goods. We began capitalizing raw material inventory in mid April 2009 in preparation for our
PROVENGE product launch when the product was considered to have a high probability of regulatory
approval and the related costs were expected to be recoverable through the commercialization of the
product. Such costs incurred prior to mid April 2009 had been recorded as research and development
expense in our statement of operations. As a result, inventory balances and cost of revenue for the
next few quarters will reflect a lower average per unit cost.
</div>
<div align="left" style="font-size: 10pt; margin-top: 12pt"><i>Prepaid Antigen Costs</i>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     The Company utilizes third party suppliers to manufacture and package the recombinant antigen
used in the manufacture of PROVENGE. The Company takes title to this material when accepted from
the third party supplier and stores it as raw material inventory for manufacturing and eventual
sale. As of September 30, 2010, there was $26.2 million of prepaid costs associated with the
purchase of the antigen used in the manufacture of PROVENGE, which Diosynth RTP, Inc. (“Diosynth”)
is obligated to manufacture. Delivery of antigen began in the quarter ended September 30, 2010.
</div>
<div align="left" style="font-size: 10pt; margin-top: 12pt"><i>Research and Development Expenses</i>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     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.
</div>
<div align="left" style="font-size: 10pt; margin-top: 12pt"><i>Accounting for Stock-Based Compensation</i>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     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.
Compensation cost for all stock-based awards is measured at fair value as of the grant date. The
fair value of our stock options is calculated using the Black Scholes Merton (“BSM”) option pricing
model. The BSM model requires various highly 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 in the future from that recorded in the current period.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     We also grant restricted stock awards that generally vest over a four year period; however, in
2006 and 2007 we granted restricted stock awards with certain performance conditions to all
employees. At each reporting date, we were required to estimate the probability of achieving each
acceleration provision. The restricted stock awards granted in 2006 and 2007 with remaining
performance conditions all vested upon marketing approval for PROVENGE by the FDA on April 29, 2010
(the “Approval Date”).
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     At September 30, 2010 and December 31, 2009, we had equity-based employee incentive plans,
which are described more fully in Note 9 in the 2009 Form 10-K, and in the Definitive Proxy
Statement for our 2010 Annual Meeting of Stockholders.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     Stock compensation expense for the nine months ended September 30, 2010 and 2009 was as
follows:
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="76%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6"><b>Nine months ended</b></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 1px solid #000000"><b>September 30,</b></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td nowrap="nowrap" align="left" style="border-bottom: 1px solid #000000"><b>(in millions)</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2010</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2009</b></td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Cost of revenue
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">0.9</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">—</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Research and development
</div></td>
<td> </td>
<td> </td>
<td align="right">6.5</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">4.9</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Selling, general and administrative
</div></td>
<td> </td>
<td> </td>
<td align="right">18.5</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">5.5</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">25.9</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">10.4</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     For the nine months ended September 30, 2010 and 2009, tax deductions related to stock
compensation expense were not reported as a financing cash flow, versus an operating cash flow,
because of the availability of net operating losses.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     The fair value of stock options was estimated at the date of grant using the BSM option
valuation model. The following weighted average assumptions were used to determine fair value of
options granted and shares purchased under the employee stock purchase plan during the three and
nine months ended September 30, 2010 and 2009:
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="52%"> </td>
<td width="5%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="5%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="5%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="5%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="7"><b>Employee Stock Options</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="7"><b>Employee Stock Purchase Plan</b></td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="7"><b>For the Three Months ended</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="7"><b>For the Three Months ended</b></td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="7" style="border-bottom: 1px solid #000000"><b>September 30,</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="7" style="border-bottom: 1px solid #000000"><b>September 30,</b></td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000"><b>2010</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000"><b>2009</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000"><b>2010</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000"><b>2009</b></td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Weighted average estimated fair value
</div></td>
<td> </td>
<td align="right">$</td>
<td align="right">20.70</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">17.23</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">17.37</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">21.23</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px"><b>Weighted Average Assumptions:</b>
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">Dividend yield (A)
</div></td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right">0.0</td>
<td nowrap="nowrap">%</td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right">0.0</td>
<td nowrap="nowrap">%</td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right">0.0</td>
<td nowrap="nowrap">%</td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right">0.0</td>
<td nowrap="nowrap">%</td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Expected volatility (B)
</div></td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right">75.4</td>
<td nowrap="nowrap">%</td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right">93.5</td>
<td nowrap="nowrap">%</td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right">67.2</td>
<td nowrap="nowrap">%</td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right">137.0</td>
<td nowrap="nowrap">%</td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">Risk-free interest rate (C)
</div></td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right">0.96</td>
<td nowrap="nowrap">%</td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right">1.5</td>
<td nowrap="nowrap">%</td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right">0.19</td>
<td nowrap="nowrap">%</td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right">0.4</td>
<td nowrap="nowrap">%</td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Expected term (D)
</div></td>
<td> </td>
<td colspan="2" nowrap="nowrap" align="right">4.5 years</td>
<td> </td>
<td> </td>
<td colspan="2" nowrap="nowrap" align="right">4.4 years</td>
<td> </td>
<td> </td>
<td colspan="2" nowrap="nowrap" align="right">0.5 years</td>
<td> </td>
<td> </td>
<td colspan="2" nowrap="nowrap" align="right">1.0 years</td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="52%"> </td>
<td width="5%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="5%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="5%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="5%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="7"><b>Employee Stock Options</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="7"><b>Employee Stock Purchase Plan</b></td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="7"><b>For the Nine Months ended</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="7"><b>For the Nine Months ended</b></td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="7" style="border-bottom: 1px solid #000000"><b>September 30,</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="7" style="border-bottom: 1px solid #000000"><b>September 30,</b></td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000"><b>2010</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000"><b>2009</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000"><b>2010</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000"><b>2009</b></td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Weighted average estimated fair value
</div></td>
<td> </td>
<td align="right">$</td>
<td align="right">22.10</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">17.23</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">17.36</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">10.71</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px"><b>Weighted Average Assumptions:</b>
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">Dividend yield (A)
</div></td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right">0.0</td>
<td nowrap="nowrap">%</td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right">0.0</td>
<td nowrap="nowrap">%</td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right">0.0</td>
<td nowrap="nowrap">%</td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right">0.0</td>
<td nowrap="nowrap">%</td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Expected volatility (B)
</div></td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right">78.6</td>
<td nowrap="nowrap">%</td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right">93.5</td>
<td nowrap="nowrap">%</td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right">100.0</td>
<td nowrap="nowrap">%</td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right">137.0</td>
<td nowrap="nowrap">%</td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">Risk-free interest rate (C)
</div></td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right">1.6</td>
<td nowrap="nowrap">%</td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right">1.5</td>
<td nowrap="nowrap">%</td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right">0.27</td>
<td nowrap="nowrap">%</td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right">0.6</td>
<td nowrap="nowrap">%</td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Expected term (D)
</div></td>
<td> </td>
<td colspan="2" nowrap="nowrap" align="right">4.5 years</td>
<td> </td>
<td> </td>
<td colspan="2" nowrap="nowrap" align="right">4.4 years</td>
<td> </td>
<td> </td>
<td colspan="2" nowrap="nowrap" align="right">0.6 years</td>
<td> </td>
<td> </td>
<td colspan="2" nowrap="nowrap" align="right">1.3 years</td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="left">
<div style="font-size: 3pt; margin-top: 16pt; width: 18%; border-top: 1px solid #000000"> 
</div>
</div>
<table width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; text-align: left">
<tr>
<td width="3%"></td>
<td width="1%"></td>
<td width="96"></td>
</tr>
<tr valign="top">
<td nowrap="nowrap" align="left">(A)</td>
<td> </td>
<td>We have not paid dividends in the past and do not plan to pay dividends in the near future.</td>
</tr>
<tr style="font-size: 3pt">
<td> </td>
</tr>
<tr valign="top">
<td nowrap="nowrap" align="left">(B)</td>
<td> </td>
<td>The expected stock price volatility is based on the weighted average of the historical
volatility of our stock and the volatilities of certain peer companies.</td>
</tr>
</table>
<!-- Folio -->
<!-- /Folio -->
</div>
<!-- PAGEBREAK -->
<div style="font-family: 'Times New Roman',Times,serif">
<table width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; text-align: left">
<tr>
<td width="3%"></td>
<td width="1%"></td>
<td width="96"></td>
</tr>
<tr valign="top">
<td nowrap="nowrap" align="left">(C)</td>
<td> </td>
<td>The risk-free interest rate is based on the implied yield available on U.S. Treasury
zero-coupon issues with a term equal to the expected life of the award on the date of grant.</td>
</tr>
<tr style="font-size: 3pt">
<td> </td>
</tr>
<tr valign="top">
<td nowrap="nowrap" align="left">(D)</td>
<td> </td>
<td>The expected term of the options for the quarter and year ended September 30, 2010 represents
the estimated period of time until exercise and is based on the weighted average of the
historical experience of similar awards, giving consideration to the contractual terms,
vesting schedules and expectations of future employee behavior, and the expected terms of
certain peer companies. The expected term of the options for the quarter and year ended
September 30, 2009 represents the estimated period of time until exercise and is based on
historical experience of similar awards, giving consideration to the contractual terms,
vesting schedules and expectations of future employee behavior. The expected term of awards
under the employee stock purchase plan represents the weighted average purchase periods of
each offering.</td>
</tr>
</table>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     The following table summarizes our stock option activity during the nine months ended
September 30, 2010:
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="52%"> </td>
<td width="5%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="5%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="5%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="5%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"><b>Shares</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"><b>Weighted-Average</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"><b>Weighted-Average</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"><b>Subject to</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"><b>Exercise Price per</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"><b>Remaining</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"><b>Aggregate Intrinsic</b></td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000"><b>Options</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000"><b>Share</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000"><b>Contractual Life</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000"><b>Value</b></td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Outstanding, January 1, 2010
</div></td>
<td> </td>
<td> </td>
<td align="right">3,274,615</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">11.73</td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Granted
</div></td>
<td> </td>
<td> </td>
<td align="right">533,750</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">36.70</td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Exercised
</div></td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right">(1,547,865</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">7.39</td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Forfeited
</div></td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right">(44,585</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">24.67</td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Outstanding, September 30, 2010
</div></td>
<td> </td>
<td> </td>
<td align="right">2,215,915</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">20.51</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">7.88</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">47,338,198</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Exercisable, September 30, 2010
</div></td>
<td> </td>
<td> </td>
<td align="right">699,709</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">9.35</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">5.72</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">22,284,101</td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     As of September 30, 2010 we had approximately $13.4 million of unrecognized compensation
expense related to our unvested stock options. We expect to recognize this compensation expense
over a weighted average period of approximately 1.3 years.
</div>
<div align="left" style="font-size: 10pt; margin-top: 12pt"><i>Restricted Stock Awards</i>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     Restricted stock awards generally vest over a four-year period; however, in 2006 we granted
restricted stock awards with performance conditions to executive employees and restricted stock
awards with time-vesting and performance conditions to non-executive employees. On January 12,
2007, vesting for 40 percent of these shares accelerated upon acceptance of our Biologics License
Application by the FDA. The balance vested for non-executive employees upon the earlier of the
dates that the requisite service periods were rendered or the approval of PROVENGE for
commercialization by the FDA on the Approval Date. On June 20, 2007, we granted restricted stock
awards with performance conditions to executive employees and restricted stock awards with
time-vesting and performance conditions to non-executive employees. Awards granted to executive
employees vested 100% upon the Approval Date. Awards granted to non-executive employees vested 50%
in June 2008 and the balance vested upon the Approval Date. Each of these awards required the
relevant executive or non-executive employee to be employed by us on the date of achievement of the
performance condition in order for the shares to vest. Compensation expense was recorded based upon
management’s estimate of the completion of the performance conditions. The remaining performance
conditions related to these restricted stock awards were considered completed upon the Approval
Date; all expense related to these performance-based stock awards has accordingly been recorded.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     The following table summarizes our restricted stock award activity during the nine months
ended September 30, 2010 and 2009:
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="52%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="7" style="border-bottom: 1px solid #000000"><b>2010</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="7" style="border-bottom: 1px solid #000000"><b>2009</b></td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"><b>Weighted</b></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"><b>Weighted</b></td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"><b>Average</b></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"><b>Average</b></td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"><b>Grant</b></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"><b>Grant</b></td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"><b>Stock</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"><b>Date</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"><b>Stock</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"><b>Date</b></td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000"><b>Awards</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000"><b>Fair Value</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000"><b>Awards</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000"><b>Fair Value</b></td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Outstanding at beginning of period
</div></td>
<td> </td>
<td> </td>
<td align="right">2,360,138</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">7.71</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">1,462,936</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">6.13</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Granted
</div></td>
<td> </td>
<td> </td>
<td align="right">1,105,994</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">33.82</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">1,405,115</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">7.01</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Vested
</div></td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right">(1,248,946</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">6.95</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right">(426,308</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">5.55</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Forfeited or expired
</div></td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right">(100,480</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">15.83</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right">(114,938</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">5.74</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td align="right" colspan="2" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td align="right" colspan="2" style="border-top: 0px solid #000000"> </td>
<td> </td>
<td> </td>
<td align="right" colspan="2" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td align="right" colspan="2" style="border-top: 0px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Outstanding at end of period
</div></td>
<td> </td>
<td> </td>
<td align="right">2,116,706</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">21.41</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">2,326,805</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">6.79</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td align="right" colspan="2" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td align="right" colspan="2" style="border-top: 0px double #000000"> </td>
<td> </td>
<td> </td>
<td align="right" colspan="2" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td align="right" colspan="2" style="border-top: 0px double #000000"> </td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<!-- Folio -->
<!-- /Folio -->
</div>
<!-- PAGEBREAK -->
<div style="font-family: 'Times New Roman',Times,serif">
<div align="left" style="font-size: 10pt; margin-top: 6pt">     As of September 30, 2010 we had approximately $26.3 million in total unrecognized compensation
expense related to our restricted stock awards that is to be recognized over a weighted average
period of approximately 1.4 years.
</div>
<div align="left" style="font-size: 10pt; margin-top: 12pt"><i>Fair Value</i>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     We currently measure and report at fair value our cash equivalents and investment securities.
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 must maximize the use of observable inputs and minimize the use of
unobservable inputs.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     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 Accounting Standards
Codification (“ASC”) 360-10, “Property, Plant and Equipment,” and asset retirement obligations
initially measured under ASC 410-20, “Asset Retirement and Environmental Obligations.”
</div>
<div align="left" style="font-size: 10pt; margin-top: 12pt"><i>Warrant Liability</i>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     On April 3, 2008, we issued 8.0 million shares (the “Shares”) of our common stock, and
warrants to purchase up to 8.0 million shares of common stock (the “Warrants”) to an institutional
investor (the “Investor”). The Investor purchased the Shares and Warrants for a negotiated price of
$5.92 per share of common stock purchased. 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 (the
“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 8,000,000 shares of common stock, resulting in aggregate cash proceeds to the
Company of $71.4 million.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     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. The fair value of the Warrants was estimated using the BSM
option pricing model. The fair value of the Warrants on the Exercise Date was $275.5 million of
which $142.6 million was recognized as a loss from valuation of warrant liability during the nine
months ended September 30, 2010 and of which $122.8 million was recognized as a loss during the
nine months ended September 30, 2009.
</div>
<div align="left" style="font-size: 10pt; margin-top: 12pt"><i>Income Taxes</i>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     We recognized $0.4 million in income tax benefit for the three months and nine months ended
September 30, 2010 relating to refundable credits, compared with no income tax expense or benefit
for the same periods of 2009.
</div>
</div>
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<!-- Begin Block Tagged Notefalsefalsefalseus-types:textBlockItemTypetextblockThis element may be used to describe all significant accounting policies of the reporting entity.Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher AICPA
-Name Accounting Principles Board Opinion (APB)
-Number 22
-Paragraph 8
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