10-K

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ¨ No þ

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Exchange Act. Yes ¨ No þ

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 Web site, 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. ¨

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, 2013, as reported by the NASDAQ Stock Market, was $636,254,809.

As of February 26, 2014, the registrant had outstanding 158,975,190 shares of common stock.

Sections of the registrant’s definitive Proxy Statement, which will be filed on or before April 30, 2014 with the Securities and Exchange Commission in connection with the registrant’s 2014 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 own worldwide rights for PROVENGE.

Other potential product candidates we have under development include our investigational active cellular immunotherapy, DN24-02, which potentially may be used for the treatment of patients with bladder, breast, ovarian and other solid tumors expressing HER2/neu. 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 our portfolio. We also have investigated further development of an orally-available, small molecule targeting TRPM8 (Transient Receptor Potential, sub-family M) that could be applicable to treating multiple types of cancer. We currently do not have any active clinical programs related to CA-9, CEA or 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 2014 approximately 233,000 new cases of prostate cancer will be diagnosed in the United States, and approximately 29,480 men will die of prostate cancer in the

United States. Approximately 1 in 7 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 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 2013, Xofigo (radium RA 223 dichloride) injection was approved for the treatment of patients with castration-resistant prostate cancer (CRPC), symptomatic bone metastases and no known visceral metastatic disease. 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 asymptomatic or minimally symptomatic metastatic castrate-resistant prostate cancer.

In 2013, we achieved net revenue from the sale of PROVENGE of $283.7 million, compared to $325.3 million in 2012 and $213.5 million in 2011. Approximately 935 parent accounts, some of which have multiple sites, had infused the product as of the end of 2013. Commercial sale of PROVENGE to date has been limited to the United States and is currently supported by manufacturing facilities in Orange County, California (the “Orange County Facility”), and Atlanta, Georgia (the “Atlanta Facility”). We also manufactured PROVENGE at a manufacturing facility in Morris Plains, New Jersey (the “New Jersey Facility”) into December 2012, at which time we sold the New Jersey Facility to Novartis Pharmaceuticals Corporation (“Novartis”) for $43.0 million.

On September 17, 2013, we announced that the European Commission has granted marketing authorization for PROVENGE (autologous peripheral blood mononuclear cells activated with PAP-GM-CSF or sipuleucel-T) dispersion for infusion in the European Union for the treatment of asymptomatic or minimally symptomatic metastatic (non-visceral) castrate resistant prostate cancer in male adults in whom chemotherapy is not yet clinically indicated. The marketing authorization provides approval for the commercialization of PROVENGE in all 28 countries of the E.U. as well as Norway, Iceland and Liechtenstein. We plan to manufacture product through a contract manufacturing organization.

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 A receive PROVENGE and two weeks later begin one year of ADT. In Arm B, 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 up to 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 A patients receive PROVENGE and abiraterone acetate plus prednisone at the same time and Arm B 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 planned at 10 sites in the United States.

Clinical Trial — P12-1. In September 2013, we initiated a clinical study called PREDICT (Predictive Characteristics for Metastatic Disease in CRPC Patients), or P12-1. This multicenter United States study is currently enrolling with a target enrollment of 2,000 patients. The study’s primary objective is to evaluate characteristics predictive of a baseline imaging study positive for distant metastases (M1) in patients with castration-resistant prostate cancer (CRPC) and no known M1.

Clinical Trial — P12-2. In September 2013, we initiated a Phase 2 trial in the United States to examine PROVENGE with concurrent versus sequential administration of enzalutamide in men with metastatic castrate-

resistant prostate cancer. This multicenter trial is currently enrolling. Subjects randomized to this trial receive 3 infusions of PROVENGE and 52 weeks of enzalutamide treatment. Subjects are randomized to one of two treatment arms; Arm A patients receive PROVENGE and enzalutamide, at the same time and Arm B patients receive PROVENGE first, then enzaluatmide 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.

DN24-02. DN24-02 is our investigational active cellular 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. We enrolled our first patient in this trial in September 2011.

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 currently do not have any active clinical programs related to 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 currently do not have any active clinical programs related to 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 anticipate. 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 built our Atlanta Facility and our Orange County Facility. In December 2012, we sold the New Jersey Facility to Novartis.

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 European Medicines Agency (“EMA”) marketing approval.

As of December 31, 2013, our manufacturing operations consisted of approximately 400 employees, a decrease from 500 employees as of December 31, 2012 due to the 2013 and 2012 restructurings and workforce reductions, including the sale of the New Jersey Facility. Our commercial team included approximately 140 employees in sales, marketing, and market access support as of December 31, 2013, a decrease from 180 employees as of December 31, 2012.

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.

Starting on December 19, 2013, we agreed with FDA to notify certain physician customers that we released, in limited circumstances, one or more doses of PROVENGE that did not meet the potency release specification for CD54 upregulation. The error affected less than 0.3% of PROVENGE commercial doses released since commercial launch. CD54 upregulation is a measure of antigen presenting cell activation and one of two product potency measurements used to release product. All other release specifications for the product were met. As a result, certain doses of PROVENGE which were administered may not have been effective or as effective for the approved indication, and the notification was limited to those physicians who had patients that were affected. We promptly corrected the issue that caused these doses to be released. The FDA has not placed any restrictions on our ability to manufacture or distribute PROVENGE, and has determined the Company’s notification actions to be effective and now considers this matter closed. As a result, the Agency recently posted the related information on its website.

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”). 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. As of December 31, 2013, we had remaining commitments with Fujifilm to purchase antigen of $22.7 million. We expect payments on these commitments will continue through 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. Our United States patents related to PROVENGE are scheduled to expire between 2014 and 2018. Outside the United States, we have, in certain territories, corresponding issued patents related to PROVENGE that are scheduled to expire between 2015 and 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. In 2013, Xofigo (radium RA 223 dichloride) injection was approved for the treatment of patients with castration-resistant prostate cancer (CRPC), symptomatic bone metastases and no known visceral metastatic disease. 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 asymptomatic or minimally symptomatic 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.

We are also subject to a variety of regulations governing post-marketing obligations for our product in the European Union. As part of the approval process governed by European regulations, a company may be required to complete post marketing commitments as a condition of approval to assess additional information regarding the safety of a product. The EMA may require post-marketing studies 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 complete post-marketing requirements in a timely manner may result in substantial fines including the risk to continued marketing in the European Union.

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. The Centers for Medicare & Medicaid Services (“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 VA, 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, Medicare 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, national 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 26, 2014, we had approximately 755 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, 2013, including our consolidated financial statements and related notes, and in our other filings from time to time with the 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 efficacy or 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 efficacy or 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.

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 and the European Union. 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.

PROVENGE and other 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 after 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.

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 competing therapies and 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 sold one of our manufacturing facilities and we may close or sell more of our manufacturing facilities, which could limit our ability to supply the market and may limit our product sales.

In 2012, we sold our Morris Plains, New Jersey manufacturing facility to Novartis. We may decide to close or sell 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 with the support of third party manufacturers for certain processes and plan to manufacture any other product candidates ourselves. We have contracted with a third-party manufacturer in order to supply clinical trials and potential future commercial production in the European Union, and we are presently reliant on the ability of the third party to adequately support our clinical trials and potential future commercial production 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 information technology (IT) systems for various critical purposes, including timely delivery of product and maintaining patient confidentiality.

We have developed a comprehensive, integrated information technology (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 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 additional 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 adequate funds are not available, we may be required to:

In addition, the capital and credit markets have experienced extreme volatility and historical disruptions have led to uncertainty and liquidity issues for both companies seeking equity or debt refinancing and investors and lenders. In the future, we may not be able to obtain capital market financing on favorable terms, or at all, which could have a material adverse effect on our business and results of operations.

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 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.

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, 2013, our accumulated deficit was $2.3 billion and our net loss for year ended December 31, 2013 was $296.8 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.

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 97.2644 shares per $1,000 principal amount, or $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 $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.

Our operating results may be harmed if our restructuring plans do not achieve the anticipated results or cause undesirable consequences.

On November 12, 2013, we announced a restructuring plan which will result in a reduction in headcount of approximately 150 full-time positions. In addition, on July 30, 2012, we announced a restructuring plan which resulted 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, 2012 and 2013, 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.

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 competition for PROVENGE and 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. 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 of 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 2013, we announced the approval of PROVENGE in the European Union. Our strategy in Europe includes 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 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, or safer, or that reach the market sooner, which may diminish or eliminate the commercial success of PROVENGE or any other products we may commercialize.

We operate in a highly competitive environment. PROVENGE competes with other products or treatments for diseases in its indication. If PROVENGE is unable to compete or be combined successfully with existing approaches or if new therapies are developed for asymptomatic or minimally symptomatic, metastatic, castrate-resistant (hormone-refractory) prostate cancer, our business would be harmed.

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 institutions 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. In 2013, Xofigo (radium RA 223 dichloride) injection was approved for the treatment of patients with castration-resistant prostate cancer (CRPC), symptomatic bone metastases and no known visceral metastatic disease. 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 asymptomatic or minimally symptomatic 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 regulatory 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.

PPACA authorizes FDA approval of biosimilar products. PPACA establishes 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 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 and commercialize 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 the leukapheresis network presently available to us will be sufficient to service demand at full capacity. If our manufacturing capacity expands, we may 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”) 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 and materially affect our product sales and operating results 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, or the FDA may insist on changes to the clinical study resulting in significant delays. 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, is costly in time and effort, and may require significant capital investment.

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. The 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 develop-

ment. 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 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 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, were 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 took effect April 1, 2013. These cuts may 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 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 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 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 VA, 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, Medicare 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 requires pharmaceutical companies to report to the federal government certain payments to physicians and teaching hospitals. The Physician Payments Sunshine Act provisions required 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 that 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 or laws outside the United States.

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 commercial 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 patients’ 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.

As previously reported, the Company and three current and former officers were 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. 2:11-cv-1291 JLR. As previously reported, the lawsuit was settled on stipulated terms that received final Court approval in August 2013. The settlement has become effective, and the litigation has been dismissed against all defendants with prejudice. A group of individual investors who elected to opt out of the class action settlement commenced their own action in the District Court alleging securities fraud on May 16, 2013. That action, captioned Christoph Bolling, et al. v. Dendreon Corporation, et al., Case No. 2:13-cv-0872 JLR, names the same defendant parties and alleges generally underlying facts as were asserted in the class action – i.e., that the Company made various false or misleading statements between April 29, 2010 and August 3, 2011 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. In addition to claims under the federal securities laws, the Bolling plaintiff group also purports to assert certain claims under Washington state law. Based on information provided informally by plaintiffs’ counsel, the plaintiff group, which totals approximately 30 persons, purports to have purchased approximately 250,000 shares of Dendreon common stock during the relevant period, an amount that equates to under 0.5% of the estimated shares that comprised the plaintiff class in the class action. The Bolling plaintiffs filed an amended complaint July 16, 2013. On August 9, 2013, the defendants filed a motion to dismiss plaintiffs’ amended complaint, and the Court held a hearing on that motion January 3, 2014. On January 28, 2014, the Court issued an order granting the motion in part and denying the motion in part. Specifically, the Court dismissed plaintiffs’ claims based on the federal securities laws and the Washington Consumer Protection Act; however, the Court denied the motion as to plaintiffs’ state law claims for fraud and negligent misrepresentation. The Court granted plaintiffs 20 days leave to amend on the dismissed claims. On February 17, 2014, plaintiffs filed a Second Amended Complaint. Defendants intend to file a motion to dismiss. The Bolling plaintiffs seek unspecified damages. We cannot predict the outcome of the motion. In general, the Company intends to continue defending these 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 into a proceeding captioned In re Dendreon Corp. Derivative Litigation, Master Docket No. 2:11-cv-1345 JLR; others were filed in the Superior Court of Washington for King County and were consolidated 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 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 Company filed a motion to dismiss the Silverberg action on standing grounds; that motion was denied in a decision issued by the Court of Chancery on December 31, 2013. The Company has asked the Court to stay the litigation pending the outcome of the Bolling litigation. For his part, plaintiff in the Silverberg complaint has filed a motion to establish an expedited trial schedule in the action (a motion that the Company and defendants have opposed) and has served initial discovery requests. The motions are awaiting decision, and we cannot predict their outcome. There have been no other proceedings in the Washington-based derivative actions. 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. With respect to all of the above-described proceedings, 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 Part II Item 1 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 of 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.

Risks associated with operating in foreign countries could materially adversely affect our business.

In September 2013, PROVENGE was approved in Europe. As a result, we expect to expand our presence in Europe, which may include importing, marketing, selling and distributing our products in European countries. Our clinical and commercial supply chain activities could occur outside the United States. Consequently, we are, and will continue to be, subject to risks related to operating in foreign countries. Risks associated with conducting operations in foreign countries include:

These and other risks described elsewhere in these risk factors associated with our international operations could materially adversely affect our business.

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 with an initial term of five and a half years and one renewal term of two and a half years. In July 2012, we amended the lease to reduce the premises to 158,081 square feet. In April 2013, we amended the lease to further reduce the premises to 112,915 square feet. In addition, in April and November 2013, we subleased to two separate third parties 22,583 square feet each at these premises, commencing in May and December 2013, respectively, and continuing through the remaining term. 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. The initial 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 an agreement to lease the Atlanta Facility, 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 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 the Orange County Facility, consisting of approximately 184,000 square feet, for use as a manufacturing facility following build-out, which was completed in 2010. The initial term is for ten and a half years expiring in December 2019, with five renewal terms of five years each. We also leased the New Jersey Facility, consisting of approximately 158,000 square feet of manufacturing

space; 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. To support our commercialization efforts, we have made significant investments in manufacturing facilities and related operations. Commercial sale of PROVENGE is currently supported by our Orange County Facility and our Atlanta Facility. We believe the capacity at these two manufacturing facilities will be sufficient to handle the manufacturing of PROVENGE in the volumes that we anticipate.

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

The Company and three current and former officers were 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. 2:11-cv-1291 JLR. As previously reported, the lawsuit was settled on stipulated terms that received final Court approval in August 2013. The settlement has become effective, and the litigation has been dismissed against all defendants with prejudice. A group of individual investors who elected to opt out of the class action settlement commenced their own action in the District Court alleging securities fraud on May 16, 2013. That action, captioned Christoph Bolling, et al. v. Dendreon Corporation, et al., Case No. 2:13-cv-0872 JLR, names the same defendant parties and alleges generally underlying facts as were asserted in the class action – i.e., that the Company made various false or misleading statements between April 29, 2010 and August 3, 2011 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. In addition to claims under the federal securities laws, the Bolling plaintiff group also purports to assert certain claims under Washington state law. Based on information provided informally by plaintiffs’ counsel, the plaintiff group, which totals approximately 30 persons, purports to have purchased approximately 250,000 shares of Dendreon common stock during the relevant period, an amount that equates to under 0.5% of the estimated shares that comprised the plaintiff class in the class action. The Bolling plaintiffs filed an amended complaint July 16, 2013. On August 9, 2013, the defendants filed a motion to dismiss plaintiffs’ amended complaint, and the Court held a hearing on that motion January 3, 2014. On January 28, 2014, the Court issued an order granting the motion in part and denying the motion in part. Specifically, the Court dismissed plaintiffs’ claims based on the federal securities laws and the Washington Consumer Protection Act; however, the Court denied the motion as to plaintiffs’ state law claims for fraud and negligent misrepresentation. The Court granted plaintiffs 20 days leave to amend on the dismissed claims. On February 17, 2014, plaintiffs filed a Second Amended Complaint. Defendants intend to file a motion to dismiss. The Bolling plaintiffs seek unspecified damages. We cannot predict the outcome of the motion. In general, the Company intends to continue defending claims vigorously.

schedule in the action (a motion that the Company and defendants have opposed) and has served initial discovery requests. The motions are awaiting decision, and we cannot predict their outcome. There have been no other proceedings in the Washington-based derivative actions. 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. With respect to all of the above-described proceedings, the Company has insurance that it believes affords coverage for much of the anticipated costs, 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 April 9, 2013, GSK amended 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, 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 26, 2014, the last reported sale price of our common stock on the NASDAQ Global Market was $2.98 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 26, 2014, there were 266 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 future earnings, if any, 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, 2013 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, 2008 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, 2013.

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 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 own worldwide rights for PROVENGE.

Commercial sale of PROVENGE began in May 2010. Approximately 935 parent accounts, some of which have multiple sites, had infused our product as of the end of December 2013. Commercial sale of PROVENGE is currently supported by manufacturing facilities in Orange County, California (the “Orange County Facility”) and Atlanta, Georgia (the “Atlanta Facility”). We also manufactured PROVENGE at a manufacturing facility in Morris Plains, New Jersey (the “New Jersey Facility”) into December 2012, at which time we sold the New Jersey Facility to Novartis Pharmaceuticals Corporation (“Novartis”) for $43.0 million.

Prior to the sale of the New Jersey Facility, we announced on July 30, 2012 that we had initiated a strategic restructuring plan that included re-configuring our manufacturing model with the planned closure of the New Jersey Facility, restructuring administrative functions and strengthening commercial functions, which lowered our overall cost structure. The implementation of these restructuring initiatives has been substantially completed.

On November 12, 2013, we announced that we are restructuring the Company and implementing additional cost reduction measures. Following the restructuring, we will have approximately 800 employees. As a result of this restructuring plan, we recorded restructuring charges of $1.8 million in the third and fourth quarters of 2013 related to fees associated with planning, developing and implementing the restructuring plan, and an initial restructuring charge of $7.1 million in the fourth quarter of 2013 related to severance and other termination benefits. We expect to record additional expense of $0.4 million related to severance and other termination benefits for the 2013 restructuring in the first quarter of 2014. We expect that the benefits of this restructuring plan will begin to be realized as early as the first quarter of 2014. We expect the restructuring initiatives will take up to 6 months to implement.

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 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. 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 the CMS providing for a rebate on sales 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 historical claim information. 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.

We have 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. 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. Eligible members of the GPOs may also be entitled to receive a rebate on eligible purchases of PROVENGE 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 upon information we gather related to sales of our product to eligible GPO members.

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 the statements of operations, which resulted in zero-cost inventory. Our zero-cost inventory was fully utilized as of June 30, 2012.

We periodically evaluate our inventory for impairment by considering factors such as expiry, obsolescence and net realizable value. We review inventory for expiry risk by evaluating current and future product demand relative to inventory life. Currently, the estimated remaining life of our raw material inventory is approximately 3 years. We expect to realize the carrying value of our inventory.

In addition, we evaluate our inventory for impairment when events and circumstances indicate that our inventory may not meet the quality specifications required to be used in commercial production. If we determine it is likely that inventory does not meet quality specifications, we record an impairment of this inventory. Refer to Results of Operations – Cost of Product Revenue for disclosure of impairment losses recorded in 2013 related to inventory which no longer met quality specifications.

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 unless the employee must provide future service in excess of 60 days, in which case 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 period employee termination benefits.

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. When evaluating long-lived assets for impairment, we compare the carrying value of the asset to the asset’s estimated undiscounted future cash flows. Impairment is recorded if the estimated future cash flows are less than the carrying value of the asset. The impairment loss recognized, if any, is the excess of the asset’s carrying value over the fair value of the long-lived asset. The determination of fair value of the assets evaluated for impairment requires the use of judgmental assumptions surrounding the amount and timing of future cash flows and the highest and best use of the assets.

The long-lived assets at our manufacturing facilities in Atlanta, Georgia and in Orange County, California represent our most significant long-lived assets and have an average remaining estimated useful life of approximately 7.0 years. Our determination of the cash flows used to support the recoverability of these assets requires us to estimate future revenue growth and costs of operations, requiring significant management judgments. The estimates we used to forecast the future operating results are consistent with the plans and estimates that we use to manage our business. Significant assumptions utilized in this analysis as of December 31, 2013 included maintaining our current revenue levels and successfully implementing the cost reduction measures as further discussed in Note 13 – Restructuring, Contract Termination and Asset Impairment of Item 8 of this Form 10-K. The recoverability test is particularly sensitive to our estimates of future revenue and operating expenses. Although we believe that our current underlying assumptions supporting this assessment are reasonable, if actual product revenues do not meet the levels we have forecasted or if we do not achieve the reductions in operating expense we have forecasted, we may be required to update the assumptions in our impairment analysis. Such updates to this analysis may impact the recoverability of these assets, which may result in a material charge to our statement of operations.

initial conversion price of $51.24 per share. 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.

The 2016 Notes are accounted for in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification 470-20 (“ASC 470-20”), Debt with Conversion and Other Options, under which issuers of certain convertible debt instruments that may be settled entirely or partially 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 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 cash equivalents and investment securities (financial assets). 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 stock options and awards under our Employee Stock Purchase Plan are calculated using the Black-Scholes-Merton (“BSM”) option pricing model. The BSM model requires various judgmental assumptions regarding volatility 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.

Stock-based compensation expense also requires the estimate of forfeiture rates. In 2013, we increased our estimated forfeiture rates based on our historical data, resulting in cumulative catch-up adjustments to decrease stock-based compensation expense and net loss by $7.5 million for the year ended December 31, 2013. These adjustments decreased basic and diluted net loss per share by $0.05 for the year ended December 31, 2013.

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 February 2013, the FASB issued an Accounting Standards Update which requires companies to provide information about the amounts reclassified from accumulated other comprehensive income to net income by component. In addition, companies are required to present, either on the face of the statements of operations or in the notes to the financial statements, significant amounts reclassified from accumulated other comprehensive income by statement of operations line item. There were no reclassifications from accumulated other comprehensive income to net income for the year ended December 31, 2013.

In June 2013, the FASB ratified Emerging Issues Task Force (“EITF”) Issue 13-C, “Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists,” which concludes that an unrecognized tax benefit should be presented as a reduction of a deferred tax asset when settlement in this manner is available under the tax law. We will adopt this amendment as of January 2014, and do not believe it will have any impact on our financial position, results of operations or cash flows.

Net product revenue is from the commercial sale of PROVENGE for all years presented. Approximately 935 parent accounts, some of which have multiple sites, had infused our product as of the end of December 2013. The decrease in net product revenue in 2013 was primarily attributable to new competition entering into PROVENGE’s labeled indication, with the FDA approval of ZYTIGA^® (abiraterone acetate) in December 2012 and the compendia listing for Xtandi (Enzalutamide) in March 2013. These competitive products have primarily impacted our small- and low-volume accounts.

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 $30.2 million, $21.6 million and $14.4 million for the years ended December 31, 2013, 2012 and 2011, respectively.

During the years ended December 31, 2013 and 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 $2.8 million and $3.8 million, respectively. The following is a roll forward of our chargebacks reserve associated with the PHS and FSS programs:

The following is a roll forward of our chargebacks reserve associated with the GPO programs:

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

Royalty revenue for the years ended December 31, 2013, 2012 and 2011 resulted from the recognition of royalties pursuant to license agreements. 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 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. Collaborative revenue for the years ended December 31, 2013, 2012 and 2011 resulted from the recognition of deferred revenue related to a license agreement.

Cost of product revenue includes the costs of manufacturing and distributing PROVENGE. Costs related to the manufacture of PROVENGE for clinical patients are classified as research and development expense. The decrease in cost of product revenue in 2013 was primarily due to the sale of the New Jersey Facility to Novartis in December 2012, other restructuring activities and decreased product sales.

For the year ended December 31, 2013, we recorded a charge of $46.2 million related to antigen inventory, which no longer met quality specification and was not usable for commercial production, or which was determined to be likely to fail such quality specification. This charge is included in “Loss on inventory impairment” on our consolidated statement of operations. We have insurance coverage for up to $30 million for antigen losses of the type we believe we have sustained, although reimbursement cannot be assured with certainty at this time. We have filed an insurance claim to seek recovery for these losses. We are awaiting further information and, ultimately, reimbursement from our insurance carrier. As such, we are continuing to investigate the loss and are exploring all available options for recoverability. We believe no other antigen inventory was at risk of being out of quality specification at December 31, 2013.

The increase in cost of product revenue in 2012 was due to increased sales of PROVENGE and additional FDA approved manufacturing capacity. 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. Prior to FDA approval of these facilities, these costs were classified as selling, general and administrative expense. 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 included 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 included 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.

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 the statements of operations, which resulted in zero-cost inventory.

For the years ended December 31, 2012 and 2011, we used $4.7 million and $18.4 million, respectively, of zero-cost inventory; no zero-cost inventory remained on hand as of June 30, 2012. As a result, cost of product revenue reflects a lower average per unit cost of raw material prior to the second half of 2012.

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 and we gain efficiencies in our manufacturing processes, we anticipate cost of product revenue as a percentage of product revenue will decline.

We anticipate our cost of product revenue as a percentage of revenue will decrease in 2014, as compared to 2013, as a result of the restructuring plan announced on November 12, 2013, as further discussed in the Overview section, and in Note 13 – Restructuring, Contract Termination and Asset Impairment of Item 8 of this Form 10-K.

Expenses related to our research and development activities are categorized as costs associated with clinical programs, supplier development and research programs. Our research and development expenses were as follows:

Research and development costs associated with 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 clinical programs and employee-related expenses of departments 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.

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. In September 2013, we announced the approval of PROVENGE in the European Union. Research and development costs associated with PROVENGE in the United States and in the E.U. for each period presented were as follows:

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

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 year presented were not material.

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 that 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. In addition, the market access environment is continuously evolving and limitations on reimbursement or market access could limit a product’s potential. Further, individual countries or jurisdictions could require additional data, such as patient registries, to determine pricing and market access and the cost and time associated with these requirements could be extensive. Regardless of the nature of our efforts to complete development of our products, receive marketing approval, and receive appropriate market access, 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 that research and development expenses will decrease in future periods starting in 2014 as a result of the restructuring plan announced on November 12, 2013, as further discussed in the Overview section and in Note 13 – Restructuring, Contract Termination and Asset Impairment of Item 8 of this Form 10-K.

Selling, general and administrative expenses were $232.8 million, $317.1 million and $361.3 million for the years ended December 31, 2013, 2012 and 2011, respectively. 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 included the expenses associated with the portion of the New Jersey Facility which was not commercially opera-

tional 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.

The decrease in selling, general and administrative expenses for the year ended December 31, 2013 compared to the 2012 was primarily due to decreases in non-cash stock-based compensation and other compensation expenses due to fewer executive separations in 2013 and headcount reductions related to the restructuring plans announced on November 12, 2013 and July 30, 2012. In addition, stock-based compensation expense decreased related to increases to our estimated forfeiture rates based on our historical forfeiture data in 2013.

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 for the year ended December 31, 2011. 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.

We anticipate that selling, general and administrative expenses will decrease in 2014, as compared to 2013, as a result of the restructuring plan announced on November 12, 2013, as further discussed in the Overview section and in Note 13 – Restructuring, Contract Termination and Asset Impairment of Item 8 of this Form 10-K.

On November 12, 2013, we announced that we are restructuring the Company and implementing additional cost reduction measures. As a result of this restructuring plan, we recorded restructuring charges of $1.8 million in the third and fourth quarters of 2013 related to fees associated with planning, developing and implementing the restructuring plan, and an initial restructuring charge of $7.1 million in the fourth quarter of 2013 related to severance and other termination benefits. We expect to record additional expense of $0.4 million related to severance and other termination benefits for the 2013 restructuring in the first quarter of 2014. We expect that the benefits of this restructuring plan will begin to be realized as early as the first quarter of 2014. We expect the restructuring initiatives will take up to 6 months to implement.

On July 30, 2012, we announced that our Board of Directors had approved 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 lowered our overall cost structure. The restructuring initiatives included 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 the New Jersey Facility to Novartis for $43.0 million. As part of the agreement with Novartis, approximately 100 employees at the facility who were previously included in the workforce reduction were offered jobs with Novartis.

As a result of this workforce reduction, we recorded a charge of $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 included 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. 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.

During the year ended December 31, 2013, additional charges of $1.4 million related to severance, other termination benefits and outplacement services were offset by reductions related to outplacement services and COBRA benefits not used by employees and severance and other termination benefits that will not be paid. As a result, net expense related to the 2012 workforce reduction during the year ended December 31, 2013 was not material. We recorded restructuring charges of $1.7 million during the year ended December 31, 2013 related to relocation benefits offered to employees, expenses associated with the closure of the New Jersey Facility, contract termination expenses and other related expenses. We do not expect to incur additional charges related to the 2012 restructuring as the implementation of these initiatives is complete.

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 estimate of fair value 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 in December 2012, we recorded a recovery of approximately $47.4 million. The recovery represented 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.

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 for the year ended December 31, 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. 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 in the Durham County Superior Court of North Carolina against the Company by GSK. 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, 2013 and 2012. The ultimate financial impact of the lawsuit is not yet determinable. Therefore, no additional provision for loss has been recorded in the financial statements.

Interest income was $0.7 million, $1.3 million and $1.4 million for the years ended December 31, 2013, 2012 and 2011 respectively. We receive interest income primarily from holdings of cash and investments. The decrease in interest income in 2013, compared to 2012, was due both to lower prevailing interest rates and lower investment balances.

Interest expense was $54.4 million, $55.3 million and $47.7 million for the years ended December 31, 2013, 2012 and 2011, respectively. Interest expense includes amortization of the debt discount and debt issuance costs for the 2016 Notes, which resulted in non-cash interest expense of $28.4 million, $26.2 million and $23.0 million for the years ended December 31, 2013, 2012 and 2011, respectively. Interest expense recognized on the 2.875% stated coupon rate was $17.8 million for each of the years ended December 31, 2013 and 2012, and $16.8 million for the year ended December 31, 2011. Refer to Liquidity and Capital Resources: Financings from the 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 during each of the years ended December 31, 2013, 2012 and 2011.

Financing fees paid to the Wholesalers for the year ended December 31, 2013 decreased as compared to 2012 due to lower revenue. Similarly, Wholesaler financing fees were higher in 2012 than in 2011 due to higher revenue.

We capitalized interest expense of $0.3 million and $1.2 million for the years ended December 31, 2012 and 2011, respectively. No interest was capitalized during the year ended December 31, 2013.

We recognized no income tax expense or benefit in 2013, 2012 or 2011. As of December 31, 2013, we had federal and state net operating loss carryforwards (“NOLs”) of $1.76 billion and $541.1 million, respectively, including $156.3 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 $26.0 million and $2.6 million, respectively. The NOLs and R&D credits expire at various dates, beginning in 2014 and continuing through 2033, 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.

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. Our deferred tax assets which are fully offset by a valuation allowance were $674.2 million and $595.5 million at December 31, 2013 and 2012, 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 2013 and 2012 were $156.3 million and $156.3 million, respectively.

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 2012 deferred tax assets but are included in the balance as of December 31, 2013. R&D credits related to 2012 were approximately $1.4 million.

We recorded stock-based compensation expense in the consolidated statements of operations for 2013, 2012 and 2011 as follows:

Total stock-based compensation expense recognized in the consolidated statement of operations for 2013, 2012 and 2011 increased net loss per share by $0.09, $0.48 and $0.41, respectively. The decrease in stock-based compensation expense in 2013 was due to headcount reductions related to the restructuring plans announced on November 12, 2013 and July 30, 2012, fewer executive separations in 2013, and increases to our estimated forfeiture rates based on our historical forfeiture data in 2013. 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.

At December 31, 2013 and December 31, 2012, we had cash, cash equivalents and short-term and long-term investments of $199.4 million and $429.8 million, respectively. The decrease in these balances in 2013 was primarily attributable to cash used in operating activities, including costs associated with the commercialization of PROVENGE, research and development expenses, including costs associated with clinical programs, supplier development and research, and selling, general and administrative expenses in support of our operations. 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 a royalty for boceprevir for the treatment of chronic hepatitis C for $125 million in 2011, cash receipts from collaborative agreements and interest income.

Net cash used in operating activities for the years ended December 31, 2013, 2012 and 2011 was $217.4 million, $208.7 million and $242.3 million, respectively. The increase in net cash used in operating activities during the year ended December 31, 2013, compared to 2012, primarily resulted from increased inventory purchases, the timing of interest payments on our convertible debt, decreased sales of PROVENGE and payment of restructuring expenses in 2013, offset by decreased expenses as a result of the closure of the New Jersey Facility and other restructuring activities. The decrease in net cash used in operating activities in 2012 as compared to 2011 primarily resulted from decreased operating expenditures associated with pre-FDA approval activities and decreased headcount costs as a result of restructuring activities. We expect overall cash used in operations will decline in 2014 due to the restructuring and implementation of cost reduction measures.

Net cash provided by investing activities was $126.1 million for the year ended December 31, 2013, compared with net cash used in investing activities of $31.0 million and $71.8 million for the years ended December 31, 2012 and 2011, respectively. Expenditures related to investing activities for the year ended December 31, 2013 consisted primarily of purchases of investments of $82.7 million and purchases of property

and equipment, primarily hardware and software expenditures, of $5.6 million, offset by maturities and sales of investments of $214.5 million. The increase in net cash provided by investing activities for the year ended December 31, 2013, compared to 2012 was primarily related to a decrease in investment purchases. Purchases of property and equipment in 2012 and 2011 were primarily related to software and facilities-related expenditures. In addition, cash proceeds of $43.0 million from the sale of the New Jersey Facility to Novartis received in December 2012 are included in investing activities for 2012.

Net cash used in financing activities for the year ended December 31, 2013 was $4.6 million, compared with net cash provided by financing activities for the years ended December 31, 2012 and 2011 of $1.1 million and $608.2 million, respectively. Net cash used in financing activities in 2013 primarily related to payments on capital lease obligations, offset by the issuance of common stock under the Employee Stock Purchase Plan. Cash provided by financing activities in 2012 was primarily due to the release of security deposits and the issuance of common stock under the Employee Stock Purchase Plan, offset by payments on capital leases. 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.

We have incurred significant losses and negative cash flows from operations since our inception. As of December 31, 2013, our accumulated deficit was $2.3 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, 2013, together with revenue generated from our commercial sales of PROVENGE and the implementation of cost saving measures, as announced on November 12, 2013, will be sufficient to meet our obligations and anticipated expenditures for at least the next 12 months as we continue to invest in commercial operations, continue clinical trials, potentially invest in commercial infrastructure outside the United States and invest in research and product development. If we are unable to achieve our forecasted revenue levels or realize the cost savings expected from our recent restructuring, we will implement additional cost saving measures. 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 liquidity needs including:

In February 2011, we entered into a lease for office space of 179,656 square feet in Seattle, Washington with an initial term of five and a half years and one renewal term of two and a half years. In July 2012, we amended the lease to reduce the premises to 158,081 square feet. The related rent reduction took effect in November 2012. In April 2013, we amended the lease to further reduce the premises to 112,915 square feet. Rent payments related to the space relinquished in April 2013 cease effective October 2013 and August 2014. In addi-

tion, in April 2013 and November 2013, we subleased to two separate third parties 22,583 square feet each at these premises, commencing in May 2013 and December 2013, respectively, and continuing through the remaining term.

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. The initial term is for ten years, with one renewal term of five years.

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 term is ten and a half years, expiring in December 2019, with five renewal terms of five years each. 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 substantial completion of construction of the building shell in March 2010. The initial term is ten and a half years, expiring in August 2020, with five renewal terms of five years each.

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.

We have a supply agreement with Fujifilm Diosynth Biotechnologies (“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.

As of December 31, 2013, we had remaining commitments with Fujifilm to purchase antigen of $22.7 million. We expect payments on these commitments will continue through 2014.

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, 2013 of $6.0 million, bear interest at rates ranging from 4.4% 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 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 $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 payment of underwriting fees and expenses, were $78.3 million.

(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. 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 $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, 2013 and December 31, 2012.

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 2016 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 2016 Notes, without having to convert 2016 Notes, 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 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 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 entirely or partially 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 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. As of December 31, 2013, the net carrying amount of the liability component, which is recorded as a long-term liability in the consolidated balance sheet, was $559.1 million, and the remaining unamortized debt discount was $60.9 million. Amortization of the debt discount and debt issuance costs resulted in non-cash interest expense of $28.4 million, $26.2 million and $23.0 million for the years ended December 31, 2013, 2012 and 2011, respectively. In addition, interest expense recognized on the 2.875% stated coupon rate was $17.8 million for each of the years ended December 31, 2013 and 2012, and $16.8 million for the year ended December 31, 2011.

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 $3.0 million, were $82.3 million. The 2014 Notes were issued at face principal amount and pay interest at 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 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 the conversion price of $10.28 per share, equal to a conversion rate of 97.2644 shares per $1,000 principal amount of 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 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.

As of December 31, 2013 and December 31, 2012, the aggregate principal amount of the 2014 Notes outstanding was $27.7 million. As the 2014 Notes have a contractual maturity date of June 15, 2014, the balance is classified as a current liability as of December 31, 2013. We recorded interest expense, including the amortization of debt issuance costs, related to the 2014 Notes of $1.5 million during each of the years ended December 31, 2013, 2012 and 2011.

The following are contractual commitments at December 31, 2013 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, 2013 and December 31, 2012, we had short-term investments of $87.1 million and $165.4 million, respectively, and long-term investments of $19.8 million and $76.0 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 short-term and long-term investments as of December 31, 2013, assuming a 100 basis point increase in market interest rates, would decrease by approximately $0.7 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 that we are able to liquidate investments within the next year without significant loss. We currently believe that these securities are not 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 interim 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, 2013. Based on this evaluation, our chief executive officer and interim chief financial officer concluded that, as of December 31, 2013, 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 SEC 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, 2013 based on criteria established in Internal Control —Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission in 1992. As a result of this assessment, management concluded that, as of December 31, 2013, 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, 2013 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, 2013, 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, 2013, based on criteria established in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (1992 framework)(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, 2013, 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, 2013 and 2012, and the related consolidated statements of operations, comprehensive income (loss), stockholders’ equity (deficit) and cash flows for each of the three years in the period ended December 31, 2013 of Dendreon Corporation and our report dated March 3, 2014 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 2014 Annual Meeting of Stockholders (the “2014 Proxy Statement”) under the caption “Election of Directors.” Information relating to our executive officers is incorporated by reference to the 2014 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 2014 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 2014 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 2014 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 2014 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 2013 Employee Stock Purchase Plan (the “ESPP”).

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, 2013, 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 2014 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 2014 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 3^rd day of March, 2014.


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 R. Cox
		Gregory R. Cox Interim Chief Financial Officer and Treasurer (Principal Financial Officer and Principal Accounting Officer)

KNOW ALL PERSONS BY THESE PRESENTS, that each individual whose signature appears below constitutes and appoints John H. Johnson and Gregory R. Cox, 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, 2013 and 2012, and the related consolidated statements of operations, comprehensive income (loss), stockholders’ equity (deficit) and cash flows for each of the three years in the period ended December 31, 2013. 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 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, 2013 and 2012, and the consolidated results of its operations and its cash flows for each of the three years in the period ended December 31, 2013, 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, 2013, based on criteria established in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (1992 framework) and our report dated March 3, 2014 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 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.

Our financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”). 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, inventory, investments, fair values of assets, income taxes, financing activities, 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.

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.

We have agreements with the Centers for Medicare and Medicaid Services (“CMS”) providing for a rebate on sales 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 historical claim information. 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 years ended December 31, 2013 and 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 $2.8 million and $3.8 million, respectively.

The following is a roll forward of our chargebacks reserve associated with the PHS and FSS programs:

recorded in the period that the related revenue is recognized, resulting in a reduction in gross product revenue and trade accounts receivable. The following is a roll forward of our chargebacks reserve associated with the GPO programs:

Eligible members of the GPOs may also be entitled to receive a rebate on eligible purchases of PROVENGE 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 upon information we gather related to sales of our product to eligible GPO members. The following is a roll forward of our accrued GPO rebates and 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 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.

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 the statements of operations, which resulted in zero-cost inventory.

In addition, we evaluate our inventory for impairment when events and circumstances indicate that our inventory may not meet the quality specifications required to be used in commercial production. If we determine it is likely that inventory does not meet quality specifications, we record an impairment of this inventory. Refer to Note 5 – Inventory for disclosure of impairment losses recorded in 2013 related to inventory which no longer met quality specifications.

Property and equipment are stated at cost and are depreciated using the straight-line method over the estimated useful lives of the assets. Estimated useful lives of furniture and office equipment and laboratory and manufacturing equipment are seven years, computer equipment and software are three years and buildings are fourteen to fifteen 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 amortized over the remaining life of the lease or ten years, whichever is shorter. Included in fixed assets is the cost of internally developed software. Costs incurred during the application development stage are capitalized and amortized over the estimated useful life of the software. All other costs related to internally developed software are expensed as incurred. Construction in progress is reclassified to the appropriate fixed asset classifications and depreciated accordingly when related assets are 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 accordingly.

The long-lived assets at our manufacturing facilities in Atlanta, Georgia and in Orange County, California represent our most significant long-lived assets and have an average remaining estimated useful life of approximately 7.0 years. Our determination of the cash flows used to support the recoverability of these assets requires us to estimate future revenue growth and costs of operations, requiring significant management judgments. The estimates we used to forecast the future operating results are consistent with the plans and estimates that we use to manage our business. Significant assumptions utilized in this analysis as of December 31, 2013 included maintaining our current revenue levels and successfully implementing the cost reduction measures further discussed in Note 13 – Restructuring, Contract Termination and Asset Impairment. The recoverability test is particularly sensitive to our estimates of future revenue and operating expenses. Although we believe that our current underlying assumptions supporting this assessment are reasonable, if actual product revenues do not meet the levels we have forecasted or if we do not achieve the reductions in operating expense we have forecasted, we may be required to update the assumptions in our impairment analysis. Such updates to this analysis may impact the recoverability of these assets, which may result in a material charge to our statement of operations.

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 $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.

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 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 maximize the use of observable inputs and minimize the use of unobservable inputs.

stock-based compensation expense and net loss by $7.5 million for the year ended December 31, 2013. These adjustments decreased basic and diluted net loss per share by $0.05 for the year ended December 31, 2013.

Basic net loss per share is calculated by dividing net loss by the weighted average number of common shares outstanding. For the calculation of diluted net loss per share, we have excluded all outstanding stock options, unvested restricted stock and shares issuable upon potential conversion of the 2.875% Convertible Senior Notes due 2016 (the “2016 Notes”) and the 4.75% Convertible Senior Subordinated Notes due 2014 (the “2014 Notes”) from the calculation because all such securities are anti-dilutive; accordingly, diluted net loss per share is the same as basic 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.

Comprehensive income (loss) includes charges and credits to stockholders’ equity that are not the result of transactions with stockholders. Our comprehensive loss consisted of net loss plus changes in unrealized gain or loss on investments for the years ended December 31, 2013, 2012 and 2011.

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 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.

In February 2013, the Financial Accounting Standards Board (the “FASB”) issued an Accounting Standards Update which requires companies to provide information about the amounts reclassified from accumulated other comprehensive income to net income by component. In addition, companies are required to present, either on the face of the statements of operations or in the notes to the financial statements, significant amounts reclassified from accumulated other comprehensive income by statement of operations line item. There were no reclassifications from accumulated other comprehensive income to net income for the year ended December 31, 2013.

In June 2013, the FASB ratified Emerging Issues Task Force (“EITF”) Issue 13-C, “Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists,” which concludes that an unrecognized tax benefit should be presented as a reduction of a deferred tax asset when settlement in this manner is available under the tax law. We will adopt this amendment as of January 2014, and do not believe it will have an impact on financial position, results of operations or cash flows.

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 the years ended December 31, 2013, 2012 or 2011.

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

None of the securities have been in a continuous unrealized loss position for more than 12 months as of December 31, 2013.

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 that 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, 2013. Refer to Note 4 – Fair Value Measurements for further discussion.

Investments securing letters of credit in the aggregate amount of $5.4 million as of December 31, 2013 and $5.6 million as of December 31, 2012 are classified as long-term investments.

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 summarizes financial assets measured at fair value on a recurring basis:

Fixed income investment securities are valued using the market approach. We had no Level 3 financial assets for either period presented.

The fair value of the 2016 Notes as of December 31, 2013 and December 31, 2012 was approximately $393.8 million and $471.2 million, respectively, based on the last trading prices as of the respective period end. The fair value of the 2014 Notes as of December 31, 2013 and December 31, 2012 was approximately $27.3 million and

$25.3 million, respectively, based on the last trading prices as of the respective period end. Estimates of fair value for the 2016 Notes and the 2014 Notes are based on Level 2 inputs.

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 $54.3 million as of December 31, 2013 and $76.3 million as of December 31, 2012.

For the year ended December 31, 2013, we recorded a charge of $46.2 million related to antigen inventory, which no longer met quality specification and was not usable for commercial production, or which was determined to be likely to fail such quality specification. This charge is included in “Loss on inventory impairment” on our consolidated statement of operations. We have insurance coverage for up to $30 million for antigen losses of the type we believe we have sustained, although reimbursement cannot be assured with certainty at this time. We have filed an insurance claim to seek recovery of these losses. We are awaiting further information and, ultimately, reimbursement from our insurance carrier. As such, we are continuing to investigate the loss and are exploring all available options for recoverability. We believe no other antigen inventory was at risk of being out of quality specification at December 31, 2013.

As of December 31, 2013 and 2012, there was $5.9 million and $8.5 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.

The buildings under our manufacturing facility leases must be restored to 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 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.

For further description of the facility leases refer to Note 9 – Financing Obligations and Note 16 – Commitments and Contingencies.

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 depreciation of assets acquired through capital leases, for the years ended December 31, 2013, 2012 and 2011 was $30.8 million, $39.7 million and $36.7 million, respectively. We capitalized interest of $0.3 million and $1.2 million for the years ended December 31, 2012 and 2011, respectively. No interest was capitalized during the year ended December 31, 2013.

We lease the Orange County Facility and the Atlanta Facility, but were deemed owner of each of these manufacturing facilities during their construction periods under build-to-suit lease accounting. Upon completion of the facilities, we continued to be deemed owner, and were required to capitalize building costs related to each facility. We therefore capitalized building costs of $6.7 million related to the Orange County Facility in August

2009 and building costs of $6.4 million related to the Atlanta Facility in March 2010, and recorded corresponding financial obligations. We allocated the lease payments between the building and the land of each facility based upon estimated relative fair values. The portion of the lease payments associated with the building reduces the 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 an initial 10.5-year term 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 Facility 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, based upon the estimated 15.5-year term, was $5.3 million as of December 31, 2013.

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 an initial 10.5-year term 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 Facility 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, based upon the estimated 15.5-year term, was $5.5 million as of December 31, 2013.

Refer to 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, 2013 of $6.0 million, bear interest at rates ranging from 4.4% to 11.7% per year.

Future minimum payments due under capital lease and financing obligations were as follows as of December 31, 2013:

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. 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 accounted for in accordance with FASB Accounting Standards Codification 470-20 (“ASC 470-20”), Debt with Conversion and Other Options, under which issuers of certain convertible debt instruments that may be settled entirely or partially 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 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. 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:

We incurred debt issuance costs of $12.9 million related to the 2016 Notes. In accordance with ASC 470-20, we allocated $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 debt issuance costs of $2.8 million 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 $28.4 million, $26.2 million and $23.0 million for the years ended December 31, 2013, 2012 and 2011, respectively. In addition, interest expense recognized on the 2.875% stated coupon rate was $17.8 million for each of the years ended December 31, 2013 and 2012, and $16.8 million for the year ended December 31, 2011.

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 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 $3.0 million, were $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.

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 97.2644 shares per $1,000 principal amount of 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.

As of December 31, 2013 and 2012, the aggregate principal amount of the 2014 Notes outstanding was $27.7 million. As the 2014 Notes have a contractual maturity date of June 15, 2014, the balance is classified as a current liability as of December 31, 2013. We recorded interest expense, including the amortization of debt issuance costs, related to the 2014 Notes of $1.5 million during each of the years ended December 31, 2013, 2012 and 2011.

We have identified embedded derivatives associated with the 2014 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 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, 2013 or 2012.

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 2013, only the 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 2013, 2012 and 2011 increased our net loss per share by $0.09, $0.48 and $0.41, 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.

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. The stock options granted under the 2002 Plan are nonqualified options and expire no later than 10 years from the date of the grant. Employees, officers, members of our Board of Directors and consultants were eligible to receive awards under the 2002 Plan.

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 3.0 million shares of common stock to newly hired employees as a material induce-

ment 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 the 2013 Employee Stock Purchase Plan to replace the existing 2002 Employee Stock Purchase Plan. This new plan was subsequently approved by our stockholders at the 2013 Annual Meeting. The new ESPP plan has 10.0 million shares reserved for issuance. During the years ended December 31, 2013, 2012 and 2011, 0.5 million, 0.7 million and 0.4 million shares, respectively, were issued under the ESPP at weighted average prices of $3.18, $5.57 and $14.16, 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 also 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 years ended December 31, 2013, 2012 and 2011 we recognized $1.1 million, $0.2 million and $1.6 million, respectively, of compensation expense related to awards and options with performance conditions.

In the second quarter of 2013, we granted cash-settled stock appreciation rights with a two-year vest period to certain employees. These awards are classified as liabilities and are measured at fair value at each reporting date, with fair value being determined using the BSM model. For the year ended December 31, 2013, we recognized $0.2 million of compensation expense related to cash-settled stock appreciation rights. As of December 31, 2013, we had approximately $0.4 million of unrecognized compensation expense related to our unvested cash-settled stock appreciation rights. We expect to recognize this compensation expense over a period of 1.4 years.

As further described in Note 2 – Significant Accounting Policies, in 2013, we increased our estimated forfeiture rates based on our historical data, resulting in cumulative catch-up adjustments to decrease stock-based compensation expense by $7.5 million for the year ended December 31, 2013.

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 aggregate intrinsic value of options outstanding and options exercisable as of December 31, 2013 was not material. The weighted-average remaining contractual term for options outstanding and options exercisable as of December 31, 2013 was 6.9 years and 5.8 years, respectively. The total intrinsic value of options exercised during the year ended December 31, 2013 was not material. The total intrinsic value of options exercised during the years ended December 31, 2012 and 2011 was $0.2 million and $9.5 million, respectively. The total fair value of options vested during 2013, 2012 and 2011 was $3.3 million, $7.1 million and $8.7 million, respectively.

As of December 31, 2013 we had approximately $1.9 million of unrecognized compensation expense related to our unvested stock options. We expect to recognize this compensation expense over a weighted-average period of 1.2 years.

The total fair value of stock awards vested during 2013, 2012 and 2011 was $12.3 million, $19.5 million and $32.1 million, respectively. As of December 31, 2013, we had approximately $8.6 million in total unrecognized compensation expense related to restricted stock awards, which will be recognized over a weighted-average period of 1.1 years.

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

As of December 31, 2013, shares of common stock were reserved for issuance as follows:

On November 12, 2013, we announced that we were restructuring the Company and implementing additional cost reduction measures. As a result of this restructuring plan, we recorded restructuring charges of $1.8 million in the third and fourth quarters of 2013 related to fees associated with planning, developing and implementing the restructuring plan, and an initial restructuring charge of $7.1 million in the fourth quarter of 2013 related to severance and other termination benefits. We expect to record additional expense of $0.4 million related to severance and other termination benefits for the 2013 restructuring in the first quarter of 2014. We expect that the benefits will begin to be realized as early as the first quarter of 2014. We expect the restructuring initiatives will take up to 6 months to implement. The total net restructuring expenses of $8.9 million are included in “Restructuring, contract termination and asset impairment” on the statement of operations for the year ended December 31, 2013.

On July 30 2012, we announced that our Board of Directors had approved 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 lowered our overall cost structure. The restructuring initiatives included 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.

As a result of this workforce reduction, we recorded a charge of $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 included 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. In addition, we recorded restructuring charges of $7.8 million during 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. The total net restructuring expenses of $27.9 million are included in “Restructuring, contract termination and asset impairment” on the statement of operations for the year ended December 31, 2012.

During the year ended December 31, 2013, additional charges of $1.4 million related to severance, other termination benefits and outplacement services were offset by reductions related to outplacement services and COBRA benefits not used by employees and severance and other termination benefits that will not be paid. As a result, net expense related to the 2012 workforce reduction during the year ended December 31, 2013 was not material. We recorded restructuring charges of $1.7 million during the year ended December 31, 2013 related to relocation benefits offered to employees, expenses associated with the closure of the New Jersey Facility, contract termination expenses and other related expenses. The total net restructuring expenses of $1.6 million are included in “Restructuring, contract termination and asset impairment” on the statement of operations for the year ended December 31, 2013. We do not expect to incur additional restructuring charges related to the 2012 restructuring as the implementation of these initiatives is complete.

As a result of our decision to close the New Jersey Facility, we recorded an impairment charge of $60.0 million during the third quarter of 2012 to reduce the net book value of the related property and equipment to estimated fair value. The estimate of fair value 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 in December 2012, we recorded a recovery of $47.4 million. The recovery represented 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. The net impairment loss of $12.6 million is recorded in “Restructuring, Contract Termination, and Asset Impairment” on the consolidated statement of operations for the year ended December 31, 2012.

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 during the third quarter of 2012. The total non-cash impairment charge of $17.9 million is included in “Restructuring, contract termination and asset impairment” on the statement of operations for the year ended December 31, 2012.

On August 3, 2011, as a result of a decrease in anticipated revenue growth, 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 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 consolidated statements of operations. We did not incur additional restructuring charges in 2013 related to severance and other termination benefits in connection with the September 2011 restructuring.

On September 1, 2011 we provided written notice to GlaxoSmithKline LLC (“GSK”) of termination of a Development and Supply Agreement (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 Note 16 – Commitments and Contingencies for disclosure of a lawsuit filed in the Durham County Superior Court of North Carolina against the Company by GSK. 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, 2013 and 2012. The ultimate financial impact of the lawsuit is not yet determinable. Therefore, no additional provision for loss has been recorded in the financial statements.

Total restructuring charges of $10.5 million are included in “Restructuring, contract termination and asset impairment” on our consolidated statement of operations for the year ended December 31, 2013. We expect that the remaining liabilities associated with severance and other termination benefits related to the 2013 restructuring will be fully paid by mid-2014.

We recognized no income tax expense or benefit in 2013, 2012 or 2011. As of December 31, 2013, we had federal and state net operating loss carryforwards (“NOLs”) of $1.76 billion and $541.1 million, respectively, including $156.3 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 $26.0 million and $2.6 million, respectively. The NOLs and R&D Credits will expire at various dates, beginning in 2014 and continuing through 2033, if not utilized.

We are subject to United States federal and state income tax examinations for years after 2008 and 2007, respectively. However, carryforward attributes that were generated prior to 2007 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 unrecognized tax benefits, if any, as a component of income tax expense. During the years ended December 31, 2013, 2012 and 2011, we accrued no interest or penalties associated with unrecognized tax benefits.

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 deferred tax assets and liabilities were as follows:

The net deferred tax asset has been fully offset by a valuation allowance. The valuation allowance increased by $88.4 million, $143.1 million and $66.1 million during the years ended December 31, 2013, 2012 and 2011, respectively. In each of the years ended December 31, 2013, 2012 and 2011, 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 2013 and 2012 were $156.3 million and $156.3 million, respectively.

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 2012 deferred tax assets but are included in the balance as of December 31, 2013. R&D Credits related to 2012 were $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:

Unrecognized tax benefits that, if recognized, would affect the annual effective tax rate were zero for each of the years ended December 31, 2013, 2012 and 2011.

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 and unvested restricted stock, as well as shares issuable upon potential 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 for all periods presented. Shares excluded from the computation of diluted net loss per common share were 21.7 million, 22.8 million and 19.3 million for the years ended December 31, 2013, 2012 and 2011, respectively.

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

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 had commitments as of December 31, 2013 with Fujifilm to purchase antigen of $22.7 million. We expect that payments on these commitments will continue through 2014.

As described in Note 5 – Inventory, for the year ended December 31, 2013, we recorded a charge of $46.2 million related to antigen inventory, which no longer met quality specification and was not usable for commercial production, or which was determined to be likely to fail such quality specification. This charge is included in “Loss on inventory impairment” on our consolidated statement of operations. We have insurance coverage for up to $30 million for antigen losses of the type we believe we have sustained, although reimbursement cannot be assured with certainty at this time. We have filed an insurance claim to seek recovery of these losses. We are awaiting further information and, ultimately, reimbursement from our insurance carrier. As such, we are continuing to investigate the loss and are exploring all available options for recoverability. We believe no other antigen inventory was at risk of being out of quality specification at December 31, 2013.

We have operating lease obligations related to two leases in Seattle, Washington which cover our principal corporate offices and research facility, a corporate office lease in Bridgewater, New Jersey, and the land portions of the Orange County Facility and the Atlanta Facility.

the space relinquished in April 2013 cease effective October 2013 and August 2014. In addition, in April 2013 and November 2013, we subleased to two separate third parties 22,583 square feet each at these premises, commencing in May 2013 and December 2013, respectively, and continuing through the remaining term.

A letter of credit was required as a security deposit on the lease. A deposit of $1.1 million securing the letter of credit is included in long-term investments as of December 31, 2013 and 2012 on the consolidated balance sheets.

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. A letter of credit was required as a security deposit on the lease. A deposit of $1.1 million securing the letter of credit is included in long-term investments as of December 31, 2013 and 2012 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. The initial lease term is for ten years, with one renewal term of five years. A letter of credit was required as a security deposit on the lease. A deposit of $1.6 million securing the letter of credit is included in long-term investments as of December 31, 2013 and 2012 on the consolidated balance sheets.

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 term is ten and a half years, expiring in December 2019, with five renewal terms of five years each. A letter of credit was required as a security deposit on the lease. Deposits of $1.5 million and $1.7 million securing the letter of credit are included in long-term investments as of December 31, 2013 and 2012, respectively, 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 term is ten and a half years, expiring in August 2020, with five renewal terms of five years each.

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. The portion of the lease related to the building is treated as a facility lease obligation as further discussed in Note 9 – Financing Obligations.

Future minimum lease payments under non-cancelable operating leases, including the land portion of the Orange County Facility and the Atlanta Facility and the maintenance component of capital leases, at December 31, 2013, were as follows:

Rent expense for the years ended December 31, 2013, 2012 and 2011 was $8.4 million, $9.6 million and $11.5 million, respectively.

The Company and three current and former officers were 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. 2:11-cv-1291 JLR. As previously reported, the lawsuit was settled on stipulated terms that received final Court approval in August 2013. The settlement has become effective, and the litigation has been dismissed against all defendants with prejudice. A group of individual investors who elected to opt out of the class action settlement commenced their own action in the District Court alleging securities fraud on May 16, 2013. That action, captioned Christoph Bolling, et al. v. Dendreon Corporation, et al., Case No. 2:13-cv-0872 JLR, names the same defendant parties and alleges generally underlying facts as were asserted in the class action – i.e., that the Company made various false or misleading statements between April 29, 2010 and August 3, 2011 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. In addition to claims under the federal securities laws, the Bolling plaintiff group also purports to assert certain claims under Washington state law. Based on information provided informally by plaintiffs’ counsel, the plaintiff group, which totals approximately 30 persons, purports to have purchased approximately 250,000 shares of Dendreon common stock during the relevant period, an amount that equates to under 0.5% of the estimated shares that comprised the plaintiff class in the class action. The Bolling plaintiffs filed an amended complaint July 16, 2013. On August 9, 2013, the defendants filed a motion to dismiss plaintiffs’ amended complaint, and the Court held a hearing on that motion January 3, 2014. On January 28, 2014, the Court issued an order granting the motion in part and denying the motion in part. Specifically, the Court dismissed plaintiffs’ claims based on the federal securities laws and the Washington Consumer Protection Act; however, the Court denied the motion as to plaintiffs’ state law claims for fraud and negligent misrepresentation. The Court granted plaintiffs 20 days leave to amend on the dismissed claims. On February 17, 2014, plaintiffs filed a Second Amended Complaint. Defendants intend to file a motion to dismiss. The Bolling plaintiffs seek unspecified damages. We cannot predict the outcome of the motion. In general, the Company intends to continue defending 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 into a proceeding captioned In re Dendreon Corp. Derivative Litigation, Master Docket No. 2:11-cv-1345 JLR; others were filed in the Superior Court of Washington for King County and were consolidated 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 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 Company filed a motion to dismiss the Silverberg action on standing grounds; that motion was denied in a decision issued by the Court of Chancery on December 31, 2013. The Company has asked the Court to stay the litigation pending the outcome of the Bolling litigation. For his part, plaintiff in the Silverberg complaint has filed a motion to establish an expedited trial schedule in the action (a motion that the Company and defendants have opposed) and has served initial discovery requests. The motions are awaiting decision, and we cannot predict their outcome. There have been no other proceedings in the Washington-based derivative actions. 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. With respect to all of the above-described proceedings, the Company has insurance that it believes affords coverage for much of the anticipated costs, 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 April 9, 2013, GSK amended 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, 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 GSK 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 contributed fifty cents for each dollar of employee contribution, up to a maximum of $4,000 per employee per year in 2013, 2012 and 2011. Employer contributions in the years ended December 31, 2013, 2012 and 2011 were $2.1 million, $3.8 million and $4.1 million, respectively.

The following table summarizes the unaudited statements of operations for each quarter of 2013 and 2012:


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

1301 2ND AVENUE SEATTLE, WASHINGTON (Address of registrant’s 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, 2013
First quarter	$	7.22	$	4.50
Second quarter		4.98		3.80
Third quarter		5.38		2.69
Fourth quarter		3.52		2.23
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


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, 2013		9,137	$	2.70		—		—
November 1 — November 30, 2013		4,293		2.97		—		—
December 1 — December 31, 2013		108,982		2.99		—		—

Total		122,412	$	2.97		—		—


	Year Ended December 31,
	2013			2012			2011			2010			2009
	(In thousands, except per share amounts)
Consolidated Statement of Operations Data:
Product revenue, net	$	283,676		$	325,333		$	213,511		$	47,957		$	—
Royalty and other revenue		70			197			128,102			100			101

Total revenue		283,746			325,530			341,613			48,057			101
Operating expenses, including cost of product revenue		526,773			665,333			633,309			340,221			100,142

Loss from operations		(243,027	)		(339,803	)		(291,696	)		(292,164	)		(100,041	)
Net interest expense		(53,692	)		(53,908	)		(46,290	)		(444	)		(1,357	)
Loss on debt conversion		—			—			—			(4,716	)		—
Loss from valuation of warrant liability		—			—			—			(142,567	)		(118,763	)
Other income (expense)		(85	)		101			180			—			—
Income tax benefit		—			—			—			411			—

Net loss	$	(296,804	)	$	(393,610	)	$	(337,806	)	$	(439,480	)	$	(220,161	)

Basic and diluted net loss per share	$	(1.95	)	$	(2.65	)	$	(2.31	)	$	(3.18	)	$	(2.04	)

Shares used in computation of basic and diluted net loss per share		151,985			148,777			146,163			138,206			108,050


	As of December 31,
	2013			2012		2011		2010		2009
	(In thousands)
Consolidated Balance Sheet Data:
Cash, cash equivalents, short- and long-term investments	$	199,441		$	429,849	$	617,696	$	277,296	$	606,386
Working capital		179,987			383,348		592,506		280,315		441,550
Total assets		434,401			721,119		1,001,491		603,953		735,415
Warrant liability		—			—		—		—		132,953
Long-term liabilities and obligations, less current portion		578,291			582,564		571,138		61,100		68,915
Total stockholders’ equity (deficit)		(247,651	)		34,613		352,637		492,774		503,564


	Year Ended December 31,
	2013			2012
	(in thousands)
Beginning balance, January 1	$	3,107		$	7,065
Current provision related to sales made in current period		15,070			16,615
Current provision related to sales made in prior periods		—			50
Adjustments		(2,775	)		(3,824	)
Payments/credits		(11,862	)		(16,799	)

Balance at December 31	$	3,540		$	3,107


	Total		within 1 year		> 1 year through 3 years		> 3 years through 5 years		Thereafter
	(In thousands)
Contractual Commitments:
Convertible senior notes (2016 Notes) (including interest)(a)	$	664,563	$	17,825	$	646,738	$	—	$	—
Convertible senior subordinated notes (2014 Notes) (including interest)(a)		28,343		28,343		—		—		—
Facility lease obligations (including interest)(b)		12,405		866		2,039		2,135		7,365
Capital lease obligations (including interest)(c)		6,510		2,743		3,767		—		—
Contractual commitments(d)		22,659		22,659		—		—		—
Operating leases(e)		47,392		9,192		17,779		12,155		8,266
Unconditional purchase obligations		—		—		—		—		—

	$	781,872	$	81,628	$	670,323	$	14,290	$	15,631


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)		2,521,756	$	15.80	(3)		16,024,055
Equity compensation plans not approved by stockholders(2)		487,137	$	11.43			—

Total		3,008,893	$	15.10			16,024,055


	Page
Index to Consolidated Financial Statements		79
Report of Independent Registered Public Accounting Firm		80
Consolidated Balance Sheets		81
Consolidated Statements of Operations		82
Consolidated Statements of Comprehensive Income (Loss)		83
Consolidated Statements of Stockholders’ Equity (Deficit)		84
Consolidated Statements of Cash Flows		85
Notes to Consolidated Financial Statements		86


Signature	Title	Date

/s/ John H. Johnson John H. Johnson	President, Chief Executive Officer and Chairman of the Board of Directors (Principal Executive Officer)	March 3, 2014

/s/ Gregory R. Cox Gregory R. Cox	Interim Chief Financial Officer and Treasurer (Principal Financial Officer and Principal Accounting Officer)	March 3, 2014

/s/ Susan B. Bayh Susan B. Bayh	Director	March 3, 2014

/s/ Bogdan Dziurzynski, D.P.A. Bogdan Dziurzynski, D.P.A.	Director	March 3, 2014

/s/ Dennis M. Fenton Dennis M. Fenton	Director	March 3, 2014

/s/ Pedro P. Granadillo Pedro P. Granadillo	Director	March 3, 2014

/s/ David C. Stump David C. Stump	Director	March 3, 2014

/s/ David L. Urdal, Ph.D. David L. Urdal, Ph.D.	Director	March 3, 2014

/s/ Douglas G. Watson Douglas G. Watson	Lead Independent Director	March 3, 2014


	December 31,
	2013			2012
ASSETS
Current assets:
Cash and cash equivalents	$	92,530		$	188,408
Short-term investments		87,092			165,396
Trade accounts receivable		34,560			38,884
Inventory		54,346			76,300
Prepaid expenses and other current assets		15,220			18,302

Total current assets		283,748			487,290
Property and equipment, net		125,168			150,604
Long-term investments		19,819			76,045
Other assets		5,666			7,180

Total assets	$	434,401		$	721,119

LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)
Current liabilities:
Accounts payable	$	10,459		$	12,845
Accrued liabilities		33,619			44,821
Accrued compensation		20,144			27,050
Restructuring and contract termination liabilities		8,793			14,214
Current portion of convertible debt		27,685			—
Current portion of capital lease obligations		2,429			4,418
Current portion of facility lease obligations		632			594

Total current liabilities		103,761			103,942
Long-term accrued liabilities		5,471			5,081
Capital lease obligations, less current portion		3,575			6,219
Facility lease obligations, less current portion		10,123			10,835
Convertible senior subordinated notes due 2014		—			27,685
Convertible senior notes due 2016, net of discount		559,122			532,744
Commitments and contingencies (Note 16)
Stockholders’ equity (deficit):
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, 157,274,622 and 154,414,811 shares issued and outstanding at December 31, 2013 and 2012, respectively		153			150
Additional paid-in capital		2,003,271			1,988,666
Accumulated other comprehensive income		79			147
Accumulated deficit		(2,251,154	)		(1,954,350	)

Total stockholders’ equity (deficit)		(247,651	)		34,613

Total liabilities and stockholders’ equity (deficit)	$	434,401		$	721,119


	Common Stock				Additional Paid-in Capital			Accumulated Other Comprehensive Income (Loss)			Accumulated Deficit			Total Stockholders’ Equity (Deficit)
	Shares		Amount		Additional Paid-in Capital			Accumulated Other Comprehensive Income (Loss)			Accumulated Deficit			Total Stockholders’ Equity (Deficit)
Balance, January 1, 2011		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

Exercise of stock options		8,256		—		41			—			—			41
Issuance of common stock under the Employee Stock Purchase Plan		483,000		1		1,534			—			—			1,535
Non-cash stock-based compensation expense		—		—		14,253			—			—			14,253
Issuance of restricted stock, net of cancellations		2,368,555		2		(1,223	)		—			—			(1,221	)
Net loss		—		—		—			—			(296,804	)		(296,804	)
Other comprehensive loss		—		—		—			(68	)		—			(68	)

Balance, December 31, 2013		157,274,622	$	153	$	2,003,271		$	79		($	2,251,154	)	($	247,651	)


	Cost or Amortized Cost		Fair Market Value
	(In thousands)
December 31, 2013
Due in one year or less	$	87,027	$	87,092
Due after one year through two years		19,805		19,819

	$	106,832	$	106,911

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


	Cost or Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Market Value
	(In thousands)
December 31, 2013
Demand deposit	$	5,404	$	—	$	—		$	5,404
Corporate debt securities		64,867		59		(4	)		64,922
Government-sponsored enterprises		13,064		12		—			13,076
U.S. Treasury notes		23,497		12		—			23,509

	$	106,832	$	83	$	(4	)	$	106,911

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


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)
	(In thousands)
*Assets:*
December 31, 2013
Money market	$	68,534	$	68,534	$	—
Commercial paper		6,000				6,000
Corporate debt securities		64,922		—		64,922
Government-sponsored enterprises		13,076		—		13,076
U.S. Treasury notes		23,509		—		23,509

Total financial assets		176,041	$	68,534	$	107,507

Add: Cash		23,400

Total cash, cash equivalents and investments	$	199,441

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


	Capital Lease Obligations			Facility Lease Obligations
	(In thousands)
Year ending December 31:
2014	$	2,743		$	866
2015		2,782			999
2016		985			1,040
2017		—			1,058
2018		—			1,077
Thereafter		—			7,365

Total payments		6,510			12,405
Less amount representing interest		(506	)		(1,650	)

Present value of payments		6,004			10,755
Less current portion of obligations		(2,429	)		(632	)

	$	3,575		$	10,123


	Employee Stock Options			Employee Stock Purchase Plan
	2013	2012	2011	2013	2012	2011
Weighted average estimated fair value per share	$2.95	$5.85	$18.42	$3.78	$2.23	$12.40
Weighted Average Assumptions
Dividend yield(a)	0.0%	0.0%	0.0%	0.0%	0.0%	0.0%
Expected volatility(b)	85%	76%	78%	70%	41%	45%
Risk-free interest rate(c)	1.0%	0.9%	1.9%	0.3%	0.1%	0.0%
Expected term(d)	5.0 years	5.2 years	5.0 years	1.7 years	0.9 years	1.1 years


	Awards Available for Grant
Balance at January 1, 2011		9,752,127
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
Granted		(5,834,279	)
Forfeited and expired		2,710,994

Balance at December 31, 2013		6,507,055


Convertible senior subordinated notes due 2014			2,692,765
Convertible senior notes due 2016			12,099,920
Outstanding common stock options			3,008,893
Employee stock purchase plan			9,517,000
Common stock awards			3,919,972
Available for future grant under equity plans			6,507,055

			37,745,605


Description	Restructuring and Contract Termination Liabilities as of December 31, 2012		Charges, Net of Adjustments			Payments			Other Non-Cash Settlement			Restructuring and Contract Termination Liabilities as of December 31, 2013
	(In thousands)
*2013 Restructuring:*
Severance and other termination benefits	$	—	$	7,142		$	(2,605	)	$	(175	)	$	4,362
Other associated costs		—		1,791			(1,502	)		—			289
*2012 Restructuring:*
Severance and other termination benefits		10,083		20			(10,094	)		(9	)		—
Other associated costs		108		1,677			(1,643	)		—			142
Asset impairment		—		(109	)		—			109			—
*2011 Restructuring:*
Contract termination costs		4,023		(2	)		(21	)		—			4,000

Total	$	14,214	$	10,519		$	(15,865	)	$	(75	)	$	8,793


	Operating Leases
	(In thousands)
Year ending December 31:
2014	$	9,192
2015		8,859
2016		8,920
2017		5,989
2018		6,166
Thereafter		8,266

Total minimum lease payments	$	47,392


	March 31			June 30			September 30			December 31
	(In thousands, except per share amounts)
2013
Total revenue	$	67,594		$	73,315		$	68,002		$	74,835
Cost of product revenue(3)		43,375			43,798			40,679			38,476
Loss on inventory impairment(4)		—			—			6,254			39,992
Gross profit(2)		24,205			29,488			21,049			(3,640	)
Restructuring, contract termination and asset impairment expense		1,960			(304	)		1,188			7,675
Net loss		(72,005	)		(68,842	)		(67,215	)		(88,742	)
Basic and diluted net loss per share	$	(0.48	)	$	(0.45	)	$	(0.44	)	$	(0.58	)

	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(2)		21,931			18,233			26,193			31,084
Restructuring, contract termination and asset impairment expense(5)		(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	)