##### Table of Contents



UNITED STATES SECURITIES AND
    EXCHANGE COMMISSION
 Washington, DC 20549
      Form 10-K
      ANNUAL REPORT PURSUANT TO
    SECTION 13 OR 15(D)
    OF THE SECURITIES EXCHANGE ACT OF 1934
  For the fiscal year ended December 31, 2006
  Commission File Number
    000-30681
      DENDREON CORPORATION
 (Exact name of registrant as
    specified in its charter)
      DELAWARE

22-3203193(State or other jurisdiction of
    
    incorporation or organization)

(I.R.S. Employer
    Identification No.)3005 FIRST AVENUE,
    SEATTLE, WASHINGTON(Address of principal
    executive offices)

98121(Zip
    Code)  (206) 256-4545
 (Registrants telephone number, including area code)
      Securities registered pursuant to Section 12(g) of the
    Act:
 COMMON STOCK, $0.001 PAR VALUE
 PREFERRED STOCK PURCHASE RIGHTS
  o þ
  o þ
  þ o
  Regulation S-K Form 10-K Form 10-K. þ
  Rule 12b-2
 o þ o
  Rule 12b-2 o þ
      DOCUMENTS
    INCORPORATED BY REFERENCE




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PART I
  ITEM 1.
    BUSINESS  OVERVIEW
  ®
  Product
    Candidates Overview
    Product Candidate

Target Indication(s)

StatusProduct Candidates in
    Clinical TrialsProvenge (sipuleucel-T)

Asymptomatic androgen-independent
    prostate cancer

Phase 3 (D9901, D9902A)
    complete; BLA under reviewAndrogen-independent prostate
    cancer

Phase 3 (D9902B) ongoingAndrogen-dependent prostate cancer

Phase 3
    (P-11)
    ongoingAndrogen-dependent prostate cancer

Phase 2
    (P-16)
    completeAndrogen-dependent prostate cancer

Phase 2 (D9905) completeNeuvenge (lapuleucel-T)

Breast cancer

Phase 1 (2000-1) completeBreast, ovarian and colon cancer

Phase 1 (2000-2) completeProduct Candidates in
    Research and DevelopmentImmunotherapy TargetsTrp-p8 (in collaboration with
    Genentech, Inc.)

Lung, breast, prostate and colon
    cancer

PreclinicalCEA

Breast, lung and colon cancer

PreclinicalCA-9 (MN)

Kidney, colon and cervical cancer

PreclinicalMonoclonal AntibodyAnti-Serine Protease (in
    collaboration with Amgen Fremont, Inc.)

Multiple cancers

PreclinicalTrp-p8 (in collaboration with
    Genentech, Inc.)

Lung, breast, prostate and colon
    cancer

PreclinicalSmall MoleculeTrp-p8

Lung, breast, prostate and colon
    cancer

Preclinical  2




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Cancer
    Immunotherapies
      The
    Immune System
          Our
    Active Immunotherapy Approach
      
    identify or in-license antigens present on cancer cells that are
    suitable targets for cancer therapy;
    create proprietary, genetically engineered antigens that will be
    optimally processed by antigen-presenting cells; and 3




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
    isolate antigen-presenting cells using proprietary methods and
    combine antigen-presenting cells and engineered antigens
    in vitro.  Antigen Identification.
  Antigen Engineering.
    Active Immunotherapy Production and
    Delivery.
  Provenge
    (sipuleucel-T)
   4




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Studies 1 and 2Study 1 (D9901)

Study 2 (D9902A)

IntegratedN = 127

N = 98

N = 225Median Survival in months:Provenge

25.9

19.0

23.2Placebo

21.4

15.7

18.9Median Survival Benefit: % (months)

21% (4.5)

21% (3.3)

23% (4.3)Hazard Ratio

1.7

1.3

1.5p-value (log rank)

p=0.010

p=0.331

p=0.011Hazard Ratio (adjusted)

2.1

1.9

1.8p-value (Cox regression)

p=0.002

p=0.023

p=0.000636-Month
    Survival: % (patients)Provenge

34% (28)

32% (21)

33% (49)Placebo

11% (5)

21% (7)

15%(12)Primary

Supportive     Market
    for Provenge and Treatment Protocol
      ®
  benefit-to-risk
 5




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##### Table of Contents



Provenge
    Clinical Trials in Advanced Stage Prostate Cancer
  Clinical Trial  D9901.
  follow-up intent-to-treat (p-value
  Clinical Trial  D9902A.
  intent-to-treat
   6




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intent-to-treat
  Clinical Trial  D9902B.
  Other
    Provenge Clinical Trials in Early-Stage Prostate
    Cancer
  Clinical Trial 
    P-11. (P-11),
  Clinical Trial 
    P-16. P-16, ® Cancer.
  Clinical Trial  D9905.
  Product
    Candidates in Research and Development
  Active
    Immunotherapies and Immunotherapy Targets
  Neuvenge (lapuleucel-T).
 7




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Trp-p8.
  Carcinoembryonic Antigen
    (CEA).
  Carbonic Anhydrase 9 Antigen
    (CA-9).
  Anti-Serine
    Protease Monoclonal Antibodies
        Small
    Molecules
  Trp-p8.
  Collaborations
  Genentech,
    Inc.
   8




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Amgen
    Fremont, Inc.
    Manufacturing
    and Commercial Infrastructure
    scale-up
         9




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Supplies
    and Raw Materials
    Research
    and Development
    Intellectual
    Property
      and/or
 10




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Competition
  ®
      
    our ability to meet all necessary regulatory requirements to
    advance Provenge through the FDA approval process and our other
    product candidates through clinical trials and through the FDA
    approval process;
    the perception by physicians and other members of the health
    care community of the safety, efficacy and benefits of Provenge
    or our other products compared to those of competing products or
    therapies;
    our ability to manufacture Provenge and other products we may
    develop on a commercial scale;
    the effectiveness of our sales and marketing efforts;
    the willingness of physicians to adopt a new treatment regimen
    represented by our antigen-presenting cell technology;
    our ability to meet demand for Provenge and for our other
    products, if approved for sale;
    our ability to secure reimbursement for Provenge and our other
    product candidates,
    the price of Provenge and that of other products we may develop
    and commercialize relative to competing products; 11




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
    our ability to recruit, train, retain, manage and motivate our
    employees;
    our ability to accurately forecast and meet demand for our
    product candidates if regulatory approvals are achieved; and
    our ability to develop a commercial scale infrastructure either
    on our own or with a collaborator, which would include expansion
    of existing facilities, including our manufacturing facilities,
    development of specialized information technology systems and a
    distribution network, and other operational and financial
    systems necessary to support our increased scale.    Government
    Regulation
  General
    FDA
    Approval Process
       12




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and/or
  and/or
    Fast
    Track Designation / Priority Review
       13




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Ongoing
    Regulatory Requirements
    direct-to-consumer
    and/or
  EMPLOYEES
    TRADEMARKS
    AND TRADENAMES
  ® tm ® tm tm
 14




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AVAILABLE
    INFORMATION
  Form 10-K, Form 10-Q, Form 8-K 1-800-SEC-0330. http://www.dendreon.com http://investor.dendreon.com/edgar.cfm.
  ITEM 1A.
    RISK
    FACTORS  Risks
    Relating to our Clinical and Commercialization
    Pursuits
  Our
    near-term prospects are highly dependent on Provenge, our lead
    product candidate. If we fail to obtain FDA approval for
    Provenge or fail to successfully commercialize Provenge, our
    business would be harmed and our stock price would likely
    decline.
  and/or
  Provenge
    and our other product candidates are based on novel
    technologies, which may raise new regulatory issues that could
    delay or make FDA approval more difficult.
     15




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If
    testing of a particular product candidate does not yield
    successful results, then we will be unable to commercialize that
    product.
    
    safety and efficacy results from human clinical trials may show
    the product candidate to be less effective or safe than desired
    or those results may not be replicated in later clinical trials;
    the results of preclinical studies may be inconclusive or they
    may not be indicative of results that will be obtained in human
    clinical trials;
    after reviewing relevant information, including preclinical
    testing or human clinical trial results, we may abandon or
    substantially restructure projects that we might previously have
    believed to be promising;
    we or the FDA may suspend or terminate clinical trials if the
    participating patients are being exposed to unacceptable health
    risks or for other reasons; and
    the effects of our product candidates may not be the desired
    effects or may include undesirable side effects or other
    characteristics that interrupt, delay or cause us or the FDA to
    halt clinical trials or cause the FDA or foreign regulatory
    authorities to deny approval of the product candidate for any or
    all target indications.    The
    FDA or its Advisory Committee may determine our clinical trials
    data regarding safety or efficacy are insufficient for
    regulatory approval.
  and/or
  We may
    take longer to complete our clinical trials than we project, or
    we may not be able to complete them at all.
   16




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If we
    encounter difficulties enrolling patients in our clinical
    trials, our trials could be delayed or otherwise adversely
    affected.
      
    design of the trial protocol;
    the size of the patient population;
    eligibility criteria for the study in question;
    perceived risks and benefits of the product candidate under
    study;
    availability of competing therapies and clinical trials;
    efforts to facilitate timely enrollment in clinical trials;
    patient referral practices of physicians;
    the ability to monitor patients adequately during and after
    treatment; and
    proximity and availability of clinical trial sites for
    prospective patients.    We
    must expand our operations to commercialize our products, which
    we may not be able to do.
   17




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Risks
    Relating to our Financial Position and Need for Additional
    Financing
  We
    have a history of operating losses. We expect to continue to
    incur losses for the near future, and we may never become
    profitable.
      We are
    likely to require additional funding, and our future access to
    capital is uncertain.
    
    the costs of developing the manufacturing, marketing and other
    supporting resources and systems to support FDA approval of
    Provenge;
    our timetable and costs for the development of marketing,
    manufacturing, information technology and other infrastructure
    and activities related to the commercialization of Provenge;
    the rate of progress and cost of our research and development
    and clinical trial activities;
    the introduction of competing products and other adverse market
    developments; and
    whether we enter into a collaboration for the commercialization
    of Provenge. 18




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We may
    elect to issue additional shares of our common stock or other
    securities that may be convertible into our common stock, which
    could result in further dilution to our existing
    stockholders.
    Risks
    Related to Regulation of our Industry
  The
    industry within which we operate and our business is subject to
    extensive regulation, which is costly, time consuming and may
    subject us to unanticipated delays.
      Commercialization
    of our product candidates in the United States requires FDA
    approval, which may not be granted, and foreign
    commercialization requires similar approvals.
    
    a product candidate may not demonstrate sufficient safety in
    human trials or efficacy in treatment;
    the FDA may interpret data from preclinical testing and clinical
    trials in different ways than we interpret the data or may
    require additional
    and/or
    different categories of data than what we obtained in our
    clinical trials;
    the FDA may require additional information about the efficacy,
    safety, purity, stability, identity or functionality of a
    product candidate;
    the FDA may not approve our manufacturing processes or
    facilities or the processes or facilities of our contract
    manufacturers; and
    the FDA may change its approval policies or adopt new
    regulations.   19




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Failure
    to comply with foreign regulatory requirements governing human
    clinical trials and 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.
    Even
    if approved, Provenge and any other product we may commercialize
    and market may be later withdrawn from the market or subject to
    promotional limitations.
  and/or
  The
    availability and amount of reimbursement for our product
    candidates and the manner in which government and private payers
    may reimburse for our potential products is
    uncertain.
     20




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The
    pharmaceutical and medical device industries are subject to
    significant regulation in the United States.
          Risks
    Relating to Manufacturing Activities
  We
    have no commercial or other large-scale manufacturing
    experience.
   21




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We
    will need to demonstrate that Provenge manufactured at our new
    facility is comparable to Provenge used in clinical
    trials.
      We and
    our contract manufacturers are subject to significant regulation
    with respect to manufacturing of our products.
  and/or
    We
    must rely at present on relationships with third-party contract
    manufacturers, which will limit our ability to control the
    availability of, and manufacturing costs for, our product
    candidates in the
    near-term.
   22




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and/or
  We use
    hazardous materials in our business and must comply with
    environmental laws and regulations, which can be
    expensive.
    Risks
    from Competitive Factors
  Our
    competitors may develop and market products that are less
    expensive, more effective, safer or reach the market sooner,
    which may diminish or eliminate the commercial success of any
    products we may commercialize.
    ®
   23




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Our
    products may not be accepted in the marketplace; therefore, we
    may not be able to generate significant revenue, if
    any.
    Failure
    to retain key personnel could impede our ability to develop our
    products and to obtain new collaborations or other sources of
    funding.
      Risks
    Relating to Collaboration Arrangements
  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.
   24




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
    the collaborator may not apply the expected financial resources
    or required expertise in developing the physical resources and
    systems necessary to successfully commercialize Provenge;
    the collaborator may not invest in the development of a sales
    and marketing force and the related infrastructure at levels
    that ensure that sales of Provenge reach their full potential;
    disputes may arise between us and a collaborator that delay the
    commercialization of Provenge or adversely affect its sales or
    profitability; or
    the collaborator may independently develop, or develop with
    third parties, products that could compete with Provenge.    Risks in
    Protecting our Intellectual Property
  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.
       25




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We may
    be subject to litigation that will be costly to defend or pursue
    and uncertain in its outcome.
      We are
    exposed to potential product liability claims, and insurance
    against these claims may not be available to us at a reasonable
    rate in the future.
    Risks
    Relating to an Investment in Our Common Stock
  Market
    volatility may affect our stock price, and the value of an
    investment in our common stock may be subject to sudden
    decreases.
    
    timing and outcome of FDA review of our BLA submitted for
    Provenge;
    preclinical and clinical trial results and other product
    development activities;
    our historical and anticipated operating results, including
    fluctuations in our financial and operating results; 26




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
    changes in government regulations affecting product approvals,
    reimbursement or other aspects of our or our competitors
    businesses;
    announcements of technological innovations or new commercial
    products by us or our competitors;
    developments concerning our key personnel and intellectual
    property rights;
    announcements regarding significant collaborations or strategic
    alliances;
    publicity regarding actual or potential performance of products
    under development by us or our competitors;
    market perception of the prospects for biotechnology companies
    as an industry sector; and
    general market and economic conditions.    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.
        ITEM 1B.
    UNRESOLVED
    STAFF COMMENTS    ITEM 2.
    PROPERTIES   27




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ITEM 3.
    LEGAL
    PROCEEDINGS    ITEM 4.
    SUBMISSION
    OF MATTERS TO A VOTE OF SECURITY HOLDERS    ITEM 4A.
    EXECUTIVE
    OFFICERS OF THE REGISTRANT    Name

Age

PositionMitchell H. Gold, M.D.


39


President and Chief Executive
    OfficerDavid L. Urdal, Ph.D.


57


Senior Vice President and Chief
    Scientific OfficerGregory T. Schiffman


49


Senior Vice President, Chief
    Financial Officer and TreasurerRichard F. Hamm, Jr.


47


Senior Vice President, Corporate
    Development, General Counsel and Secretary   Mitchell H. Gold, M.D.
  David L. Urdal, Ph.D.
  Gregory T. Schiffman
 28




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Richard F. Hamm, Jr.
  PART II
  ITEM 5.
    MARKET
    FOR REGISTRANTS COMMON EQUITY, RELATED STOCKHOLDER MATTERS
    AND ISSUER PURCHASES OF EQUITY SECURITIES    High


LowYear ended December 31,
    2005First quarter

$
11.04


$
5.34Second quarter


6.48



4.31Third quarter


7.37



5.05Fourth quarter


7.00



4.79Year ended December 31,
    2006First quarter

$
5.85


$
4.22Second quarter


4.86



3.68Third quarter


5.17



4.09Fourth quarter


5.77



3.98       RECENT
    SALES OF UNREGISTERED SECURITIES
  Warrants
   29




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COMPARISON
    OF 5 YEAR CUMULATIVE TOTAL RETURN*
    Among Dendreon Corporation, The NASDAQ Composite Index
    And The NASDAQ Biotechnology Index
  
  *
    $100 invested on 12/31/01 in stock or index-including
    reinvestment of dividends.   30




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ITEM 6.
    SELECTED
    FINANCIAL DATA    Year Ended December 31,2006


2005


2004


2003


2002(In thousands, except per share amounts)Consolidated Statement of
    Operations Data:Revenue

$
273


$
210


$
5,035


$
27,041


$
15,269Operating expenses


97,629



86,673



85,427



54,606



41,188Loss from operations


(97,356
)


(86,463
)


(80,392
)


(27,565
)


(25,919
)Interest income and other
    expenses, net


5,714



4,916



3,590



833



1,450Loss before taxes


(91,642
)


(81,547
)


(76,802
)


(26,732
)


(24,469
)Foreign income tax benefit
    (expense)(1)










1,562



(1,761
)


(200
)Net loss

$
(91,642
)

$
(81,547
)

$
(75,240
)

$
(28,493
)

$
(24,669Basic and diluted net loss per
    share

$
(1.27
)

$
(1.36
)

$
(1.32
)

$
(0.82
)

$
(0.96
)Shares used in computation of
    basic and diluted net loss per share


72,366



59,912



57,103



34,664



25,576   December 31,2006


2005


2004


2003


2002Consolidated Balance Sheet Data:Cash, cash equivalents, short- and
    long-term investments

$
121,283


$
166,409


$
195,730


$
113,191


$
54,979Working capital


89,557



121,532



170,735



92,464



37,104Total assets


163,643



207,553



217,353



137,845



63,724Long-term obligations, less
    current portion


17,027



15,729



2,429



1,893



1,081Total stockholders equity


125,717



168,709



198,565



118,987



44,743     (1)
    
    During the year ended December 31, 2004, we reversed our
    foreign tax liability and recognized a tax benefit of
    $1.6 million based on a new tax treaty with Japan, which
    eliminated withholding taxes on our revenue from our
    collaboration with Kirin Brewing Co. 31




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ITEM 7.
    MANAGEMENTS
    DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
    OPERATIONS  OVERVIEW
           32




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CRITICAL
    ACCOUNTING POLICIES AND ESTIMATES
      Revenue
    Recognition
      License Fees:
  Milestones:
  Royalty Income:
 33




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Research
    and Development Expenses
    Accounting
    for Stock-Based Compensation
        Recent
    Accounting Pronouncements
  paid-in-capital
   34




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RESULTS
    OF OPERATIONS FOR THE YEARS ENDED DECEMBER 31, 2006, 2005
    AND 2004
  Revenue
      Research
    and Development Expenses
   35




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2006


2005


2004Clinical programs:Cancer

$
27.2


$
19.2


$
27.2Cardiovascular (from our
    acquisition of Corvas)










1.6Indirect costs


42.3



37.3



25.8Total clinical programs


69.5



56.5



54.6Discovery research


4.6



9.4



9.8Total research and development
    expense

$
74.1


$
65.9


$
64.4       
    the timeframe over which our projects are likely to be completed;
    whether they will be completed;
    if they are completed, whether they will provide therapeutic
    benefit or be approved for commercialization by the necessary
    regulatory agencies; or
    whether, if approved, they will be scalable to meet commercial
    demand.  General
    and Administrative Expenses
    Interest
    Income
   36




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Interest
    Expense
    Foreign
    Tax Benefit (Expense)
    Income
    Taxes
    Stock-Based
    Compensation Expense
    out-of-the-money
     37




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LIQUIDITY
    AND CAPITAL RESOURCES
  Cash
    Uses and Proceeds
          
    costs for the development of marketing, manufacturing,
    information technology and other infrastructure and activities
    related to the commercialization of Provenge;
    working capital needs;
    supporting additional clinical trials of Provenge and for our
    other products under development;
    operating and expanding our New Jersey manufacturing
    facility; and
    continuing our internal research and development programs.    Construction
    and Facility Expenses
   38




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Production
    and Supply Expenses
      Equity
    Financings
   39




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Contractual Commitments

Total


1 Year


2-3 Years


4-5 Years


ThereafterContractual commitments(a)

$
22,181


$
22,181











Facility lease obligation
    (including
    interest)(b)


15,295



776



1,650



1,778



11,091Debt obligations (including
    interest)


14,901



6,345



8,556







Operating leases


10,067



3,193



3,898



411



2,565Capital lease obligations
    (including 
    interest)


2,218



1,342



876







Unconditional purchase obligations


93



93











$
64,755


$
33,930


$
14,980


$
2,189


$
13,656     (a)
    
    Refer to Note 12 to our consolidated financial statements
    for additional information related to contractual commitments.(b)
    
    Refer to Note 4 to our consolidated financial statements
    for additional information.  OFF-BALANCE
    SHEET ARRANGEMENTS
    FORWARD-LOOKING
    STATEMENTS
  and/or
  
    whether we have adequate financial resources and access to
    capital to fund commercialization of Provenge and that of other
    potential product candidates we may develop;
    our ability to successfully obtain regulatory approvals and
    commercialize our products that are under development and
    develop the infrastructure necessary to support
    commercialization if regulatory approvals are received;
    our ability to complete and achieve positive results in ongoing
    and new clinical trials;
    our ability to successfully manufacture Provenge and other
    product candidates in necessary quantities with required quality;
    our dependence on single-source vendors for some of the
    components used in our product candidates, including the Antigen
    Delivery Cassette for Provenge;
    the extent to which the costs of any products that we are able
    to commercialize will be reimbursable by third-party payors;
    the extent to which any products that we are able to
    commercialize will be accepted by the market;
    our dependence on our intellectual property and ability to
    protect our proprietary rights and operate our business without
    conflicting with the rights of others; 40




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
    the effect that any intellectual property litigation or product
    liability claims may have on our business and operating and
    financial performance;
    our expectations and estimates concerning our future operating
    and financial performance;
    the impact of competition and regulatory requirements and
    technological change on our business;
    our ability to recruit and retain key personnel;
    our ability to enter into future collaboration
    agreements; and
    anticipated trends in our business and the biotechnology
    industry generally.    ITEM 7A.
    QUANTITATIVE
    AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK    ITEM 8.
    FINANCIAL
    STATEMENTS AND SUPPLEMENTARY DATA  page F-1.
  ITEM 9.
    CHANGES
    IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
    FINANCIAL DISCLOSURE    ITEM 9A.
    CONTROLS
    AND PROCEDURES  Rule 13a-15(e) 15d-15(e)
    Managements
    Report On Internal Control Over Financial
    Reporting
  Rule 13(a)-15(f)
 41




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Internal Control  Integrated
    Framework
   42




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Report of
    Independent Registered Public Accounting Firm
  
              
   43




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ITEM 9B.
    OTHER
    INFORMATION    PART III
  ITEM 10.
    DIRECTORS,
    EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE    http://investor.dendreon.com/governance.cfm.
  ITEM 11.
    EXECUTIVE
    COMPENSATION    ITEM 12.
    SECURITY
    OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
    RELATED STOCKHOLDER MATTERS    ITEM 13.
    CERTAIN
    RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR
    INDEPENDENCE    ITEM 14.
    PRINCIPAL
    ACCOUNTANT FEES AND SERVICES   44




---



##### Table of Contents



PART IV
  ITEM 15.
    EXHIBITS AND
    FINANCIAL STATEMENT SCHEDULES      page F-1
  PageIndex to Consolidated
    Financial Statements


F-1Report of Independent
    Registered Public Accounting Firm


F-2Consolidated Balance Sheets


F-3Consolidated Statements of
    Operations


F-4Consolidated Statements of
    Stockholders Equity


F-5Consolidated Statements of
    Cash Flows


F-6Notes to Consolidated
    Financial Statements


F-7         ExhibitNumber

Description3
.1

Amended and Restated Certificate
    of Incorporation.(1)3
.2

Certificate of Amendment to
    Amended and Restated Certificate of Incorporation.(2)3
.3

Amended and Restated Bylaws.(3)4
.1

Specimen Common Stock
    certificate.(4)4
.2

Certificate of Designation of
    Series A Junior Participating Preferred Stock.(5)4
.3

Rights Agreement between the
    registrant and Mellon Investor Services LLC, as Rights Agent,
    dated September 18, 2002.(6)4
.4

Form of Right Certificate.(7)10
.1

Form of Amended Executive
    Employment Agreement with named executive officers.(8)*10
.2

Indemnity Agreement between the
    registrant and each of its directors and certain of its
    officers.(9)10
.3

Amended and Restated 2000 Broad
    Based Equity Incentive Plan*10
.4

Amended and Restated 2002 Broad
    Based Equity Incentive Plan*10
.5

2000 Employee Stock Purchase
    Plan.(10)*10
.6

Form of Stock Option Agreement
    under 2000 Equity Incentive Plan.(11)*10
.7

Form of Stock Option Agreement
    under 2002 Broad Based Equity Incentive Plan.(12)*10
.8

Form of Restricted Stock Award
    Agreement.(13)*10
.9

Dendreon Corporation Incentive
    Plan.(14)*10
.10

Bioprocessing Services Agreement,
    dated March 16, 2001, between the registrant and Covance
    Biotechnology Services, Inc. (now Diosynth RTP, Inc.)(15)10
.11

Second Amendment to Bioprocessing
    Services Agreement, dated October 19, 2004, between
    Dendreon Corporation and Diosynth RTP, Inc.(16)10
.12

Supply Agreement, dated as of
    December 22, 2005, by and between Dendreon Corporation and
    Diosynth RTP ,Inc.(17)10
.13

Collaborative Development and
    Marketing Agreement between the registrant and Genentech, Inc.,
    dated August 1, 2002.(18) 45




---



##### Table of Contents



ExhibitNumber

Description10
.14

Lease Agreement between First
    Industrial, L.P. and Dendreon Corporation, dated August 17,
    2005.(19)10
.15

Office Lease between Selig Real
    Estate Holdings Fourteen and Dendreon Corporation, dated
    September 2, 2005.(20)10
.16

Form of Promissory Note of
    Dendreon Corporation to General Electric Capital Corporation.(21)10
.17

Master Security Agreement between
    General Electric Capital Corporation and Dendreon Corporation
    dated December 30, 2005.(22)10
.18

Security Deposit Pledge Agreement
    among General Electric Capital Corporation, Dendreon Corporation
    and Webster Bank, N.A., dated December 30, 2005.(23)10
.19

Security Deposit Pledge Agreement
    between General Electric Capital Corporation and Dendreon
    Corporation dated December 30, 2005.(24)10
.20

Commitment Letter, dated
    January 31, 2006, between Dendreon Corporation and General
    Electric Capital Corporation.(25)23
.1

Consent of Independent Registered
    Public Accounting Firm24
.1

Power of Attorney (contained on
    signature page)31
.1

Certification of Chief Executive
    Officer pursuant to Section 302 of the Sarbanes-Oxley Act
    of 2002.31
.2

Certification of Chief Financial
    Officer pursuant to Section 302 of the Sarbanes-Oxley Act
    of 2002.32


Certification of Chief Executive
    Officer and Chief Financial Officer pursuant to 18 U.S.C
    § 1350 as adopted pursuant to Section 906 of the
    Sarbanes-Oxley Act of 2002.     (1)
    
    Incorporated by reference to Exhibit 3.1 filed with the
    registrants
    Form 10-Q
    for the quarter ended March 31, 2002, File
    No. 000-30681.(2)
    
    Incorporated by reference to Exhibit 3.1 filed with the
    registrants
    Form 8-K,
    filed with the SEC on June 13, 2005, File
    No. 000-30681.(3)
    
    Incorporated by reference to Exhibit 3.2 filed with the
    registrants
    Form 10-Q
    for the quarter ended June 30, 2004, File
    No. 000-30681.(4)
    
    Incorporated by reference to Exhibit 4.1 filed with the
    registrants Registration Statement on
    Form S-1/A,
    File
    No. 333-31920.(5)
    
    Incorporated by reference to Exhibit 4.1 filed with the
    registrants Registration
    Form 8-K,
    filed with the SEC on September 25, 2002, File
    No. 000-30681.(6)
    
    Incorporated by reference to Exhibit 99.2 filed with the
    registrants Registration
    Form 8-K,
    filed with the SEC on September 25, 2002, File
    No. 000-30681.(7)
    
    Incorporated by reference to Exhibit 99.3 filed with the
    registrants Registration
    Form 8-K,
    filed with the SEC on September 25, 2002, File
    No. 000-30681.(8)
    
    Incorporated by reference to Exhibit 99.1 filed with the
    registrants
    Form 8-K,
    filed with the SEC on January 4, 2007, File
    No. 000-30681.(9)
    
    Incorporated by reference to Exhibit 10.1 filed with the
    registrants Registration Statement on
    Form S-1,
    File
    No. 333-47706.  (10)
    
    Incorporated by reference to Exhibit 10.3 filed with the
    registrants Registration Statement on
    Form S-1,
    File
    No. 333-47706.(11)
    
    Incorporated by reference to Exhibit 10.33 filed with the
    registrants
    Form 8-K,
    filed with the SEC on June 13, 2005, File
    No. 000-30681.(12)
    
    Incorporated by reference to Exhibit 10.34 filed with the
    registrants
    Form 8-K,
    filed with the SEC on June 13, 2005, File
    No. 000-30681.(13)
    
    Incorporated by reference to Exhibit 10.46 filed with the
    registrants
    Form 8-K,
    filed with the SEC on January 24, 2006, File
    No. 000-30681. 46




---



##### Table of Contents



(14)
    
    Incorporated by reference to Exhibit 10.31 filed with the
    registrants
    Form 8-K,
    filed with the SEC on June 13, 2005, File
    No. 000-30681.(15)
    
    Incorporated by reference to Exhibit 10.1 filed with the
    registrants
    Form 10-Q
    for the quarter ended March 31, 2001, File
    No. 000-30681.(16)
    
    Incorporated by reference to Exhibit 10.1 filed with the
    registrants
    Form 10-Q
    for the quarter ended June 30, 2004, File
    No. 000-30681.(17)
    
    Incorporated by reference to Exhibit 10.41 filed with the
    registrants
    Form 8-K,
    filed with the SEC December 28, 2005, File
    No. 000-30681.(18)
    
    Incorporated by reference to Exhibit 10.1 filed with the
    registrants
    Form 10-Q
    for the quarter ended September 30, 2002, File
    No. 000-30681.(19)
    
    Incorporated by reference to Exhibit 10.36 filed with the
    registrants
    Form 8-K,
    filed with the SEC on August 18, 2005, File
    No. 000-30681.(20)
    
    Incorporated by reference to Exhibit 10.37 filed with the
    registrants
    Form 10-Q
    for the quarter ended September 30, 2005, File
    No. 000-30681.(21)
    
    Incorporated by reference to Exhibit 10.42 filed with the
    registrants
    Form 8-K,
    filed with the SEC on January 5, 2006, File
    No. 000-30681.(22)
    
    Incorporated by reference to Exhibit 10.43 filed with the
    registrants
    Form 8-K,
    filed with the SEC on January 5, 2006, File
    No. 000-30681.(23)
    
    Incorporated by reference to Exhibit 10.44 filed with the
    registrants
    Form 8-K,
    filed with the SEC on January 5, 2006, File
    No. 000-30681.(24)
    
    Incorporated by reference to Exhibit 10.45 filed with the
    registrants
    Form 8-K,
    filed with the SEC on January 5, 2006, File
    No. 000-30681.(25)
    
    Incorporated by reference to Exhibit 10.47 filed with the
    registrants
    Form 8-K,
    filed with the SEC on February 3, 2006, File
    No. 000-30681.
    
    Confidential treatment granted as to certain portions of this
    Exhibit.*
    
    Management compensatory plans and arrangements required to be
    filed as exhibits to this Report. 47




---



##### Table of Contents



SIGNATURES
      By:
    /s/  Mitchell
    H. Gold, M.D.  Mitchell H. Gold, M.D.
  President and Chief Executive Officer
  By:
    /s/  Gregory
    T. Schiffman  Gregory T. Schiffman
  Senior Vice President, Chief Financial Officer
     and Treasurer (Principal Financial Officer)
  By:
    /s/  Gregory
    R. Cox  Gregory R. Cox
  (Principal Accounting Officer)
 48




---



##### Table of Contents



POWER OF
    ATTORNEY
  attorneys-in-fact Form 10-K, attorneys-in-fact attorneys-in-fact,
    Signature

Title

Date/s/  Mitchell
    H.
    Gold, M.D.Mitchell
    H. Gold, M.D.

President, Chief Executive Officer
    and Director (Principal Executive Officer)

March 13, 2007/s/  Gregory
    T.
    SchiffmanGregory T.
    Schiffman

Senior Vice President, Chief
    Financial Officer and Treasurer (Principal Financial Officer)

March 13, 2007/s/  Gregory
    R. CoxGregory
    R. Cox

(Principal Accounting Officer)

March 13, 2007/s/  Richard
    B. BrewerRichard
    B. Brewer

Chairman of the Board of Directors

March 13, 2007Susan
    B. Bayh

Director/s/  Gerardo
    CanetGerardo
    Canet

Director

March 13, 2007/s/  Bogdan
    DziurzynskiBogdan
    Dziurzynski, D.P.A.

Director

March 13, 2007/s/  M.
    Blake IngleM.
    Blake Ingle, Ph.D.

Director

March 13, 2007/s/  Ruth
    B. KunathRuth
    B. Kunath

Director

March 13, 2007/s/  David
    L. UrdalDavid
    L. Urdal, Ph.D.

Director

March 13, 2007/s/  Douglas
    G. WatsonDouglas
    G. Watson

Director

March 13, 2007  49




---



##### 



DENDREON
    CORPORATION
  INDEX TO
    FINANCIAL STATEMENTS
  
  PageReport of
    Independent Registered Public Accounting Firm


F-2Consolidated
    Balance Sheets


F-3Consolidated
    Statements of Operations


F-4Consolidated
    Statements of Stockholders Equity


F-5Consolidated
    Statements of Cash Flows


F-6Notes to
    Consolidated Financial Statements


F-7   F-1




---



##### Table of Contents



Report of
    Independent Registered Public Accounting Firm               
    F-2




---



##### Table of Contents



DENDREON
    CORPORATION
  CONSOLIDATED
    BALANCE SHEETS
  December 31,2006


2005(In thousands, except share and per share amounts)ASSETSCurrent assets:Cash and cash equivalents

$
60,964


$
81,949Short-term investments


45,492



52,273Accounts receivable






5,636Restricted cash


1,440



1,974Prepaid and other current assets


2,082



2,255Total current assets


109,978



144,087Property and equipment, net


30,530



22,296Long-term investments


14,827



32,187Long-term restricted cash


7,723



8,314Deposits


585



669$
163,643


$
207,553LIABILITIES AND
    STOCKHOLDERS EQUITYCurrent liabilities:Accounts payable

$
1,503


$
428Accrued liabilities


6,788



13,619Accrued compensation


5,312



4,234Deferred revenue


95



82Current portion of capital lease
    obligations


1,253



1,955Current portion of long-term debt
    and facility lease obligation


5,470



2,237Total current liabilities


20,421



22,555Deferred revenue, less current
    portion


478



560Capital lease obligations, less
    current portion


735



1,904Long-term debt, less current
    portion


7,879



5,283Facility lease obligation, less
    current portion


8,413



8,542Commitments and contingencies
    (Note 12)Stockholders equity:Preferred stock, $0.001 par
    value; 10,000,000 shares
    authorized, no shares issued or outstanding






Common stock, $0.001 par
    value; 150,000,000 shares 
    authorized, 81,323,638 and 71,115,910 shares 
    issued and outstanding at December 31, 2006 and 2005,
    respectively


81



71Additional paid-in capital


518,127



469,845Deferred stock-based compensation






(120
)Accumulated other comprehensive
    loss


(106
)


(344
)Accumulated deficit


(392,385
)


(300,743
)Total stockholders equity

$
125,717


$
168,709Total liabilities and
    stockholders equity

$
163,643


$
207,553    F-3




---



##### Table of Contents



DENDREON
    CORPORATION
  CONSOLIDATED
    STATEMENTS OF OPERATIONS
  Year Ended December 31,2006


2005


2004(In thousands, except share and per share amounts)Revenue

$
273


$
210


$
5,035Operating expenses:Research and development


74,088



65,944



64,390General and administrative


23,541



20,729



21,037Total operating expenses


97,629



86,673



85,427Loss from operations


(97,356
)


(86,463
)


(80,392
)Interest income


6,050



5,267



4,135Interest expense


(336
)


(351
)


(255
)Other expense










(290
)Loss before income taxes


(91,642
)


(81,547
)


(76,802
)Foreign income tax benefit










1,562Net loss


(91,642
)

$
(81,547
)

$
(75,240
)Basic and diluted net loss per
    share

$
(1.27
)

$
(1.36
)

$
(1.32
)Shares used in computation of
    basic and diluted net loss per share


72,366,047



59,911,721



57,102,863    F-4




---



##### Table of Contents



DENDREON
    CORPORATION
  CONSOLIDATED
    STATEMENTS OF STOCKHOLDERS EQUITY
  Common Stock








AccumulatedAdditional


Deferred


Other





TotalPaid-in


Stock-Based


Comprehensive


Accumulated


StockholdersShares


Amount


Capital


Compensation


Income (Loss)


Deficit


Equity(In thousands, except share amounts)Balance, January 1, 2004


44,926,284



45



263,610



(651
)


(61
)


(143,956
)


118,987Exercise of stock options for cash


1,064,944



1



5,818















5,819Net exercise of stock warrants


9,169























Stock option modifications










576















576Issuance of common stock under the
    Employee Stock Purchase Plan


858,277



1



3,733















3,734Issuance of common stock for
    services


428,396







4,429















4,429Issuance of common stock for cash
    (net of issuance cost of $9,500)


11,764,705



12



140,450















140,462Issuance of restricted stock grants










588



(588
)










Amortization of deferred
    stock-based compensation














301











301Reversal of deferred stock-based
    compensation due to forfeitures










(275
)


275











Comprehensive loss


Net loss






















(75,240
)


(75,240
)Net unrealized loss on securities
    available-for-sale


















(503
)






(503
)Comprehensive loss


























(75,743
)Balance, December 31, 2004


59,051,775



59



418,929



(663
)


(564
)


(219,196
)


198,565Exercise of stock options for cash


223,172







820















820Net exercise of stock warrants


1,161























Stock option modifications










156















156Issuance of common stock under the
    Employee Stock Purchase Plan


316,763







1,695















1,695Issuance of common stock for
    services










85















85Issuance of common stock for cash
    (net of issuance cost of $3,466)


11,500,000



12



48,272















48,284Amortization of deferred
    stock-based compensation














431











431Issuance of restricted stock grants


23,039























Reversal of deferred stock-based
    compensation due to forfeitures










(112
)


112











Comprehensive loss


















Net loss






















(81,547
)


(81,547
)Net unrealized income on securities
    available-for-sale


















220







220Comprehensive loss


























(81,327
)Balance, December 31, 2005


71,115,910



71



469,845



(120
)


(344
)


(300,743
)


168,709Exercise of stock options for cash


90,392







218















218Issuance of common stock under the
    Employee Stock Purchase Plan


201,720







771















771Issuance of common stock for cash
    (net of issuance cost of $2,850)


9,890,110



10



42,140















42,150Non-cash stock-based compensation
    expense










5,153



120











5,273Issuance of restricted stock grants


25,506























Comprehensive lossNet loss






















(91,642
)


(91,642
)Net unrealized income on securities
    available-for-sale


















238







238Comprehensive loss


























(91,404
)Balance, December 31, 2006


81,323,638


$
81


$
518,127


$
0


$
(106
)

$
(392,385
)

$
125,717    F-5




---



##### Table of Contents



DENDREON
    CORPORATION
  CONSOLIDATED
    STATEMENTS OF CASH FLOWS
  Year Ended December 31,2006


2005


2004(In thousands)Operating Activities:Net loss

$
(91,642
)

$
(81,547
)

$
(75,240
)Adjustments to reconcile net loss
    to net cash used in operating activities:Depreciation and amortization
    expense


3,855



2,955



2,408Common stock issued for services










4,429Non-cash stock-based compensation
    expense


5,273



805



3,465Gain on sale of fixed assets


(15
)






Non-cash interest expense










16Impairment of fixed assets


419



1,007



689Changes in operating assets and
    liabilities:Accounts receivable


5,636



5,211



4,785Other current assets


173



1,488



(785
)Deposits


84



66



303Restricted cash related to lease






(3,288
)


Accounts payable


1,075



(104
)


(689
)Accrued liabilities and
    compensation


(5,753
)


3,873



(542
)Deferred revenue


(69
)


(90
)


(100
)Net cash used in operating
    activities


(80,964
)


(69,624
)


(61,261
)Investing Activities:Purchases of investments


(481,129
)


(488,428
)


(286,027
)Maturities of investments


505,508



545,417



213,136Proceeds from asset disposals










174Purchases of property and equipment


(12,494
)


(9,388
)


(4,558
)Net cash provided by (used in)
    investing activities


11,885



47,601



(77,275
)Financing Activities:Proceeds from equipment financing
    arrangement, net of debt financing costs


9,025



7,419



Proceeds from release of (payment
    of) security deposits associated with debt


1,125



(7,000
)


Proceeds from sale-leaseback
    financing arrangement










2,861Payments on long-term debt


(3,212
)






Payments on facility lease
    obligation


(112
)






Payments on capital lease
    obligations


(1,871
)


(1,614
)


(1,600
)Proceeds from sale of equity
    securities, net of issuance costs


42,150



48,284



140,462Proceeds from exercise of stock
    options and warrants


218



820



5,819Proceeds from issuance of common
    stock under the Employee Stock Purchase Plan


771



1,562



1,146Net cash provided by financing
    activities


48,094



49,471



148,688Net increase (decrease) in cash
    and cash equivalents


(20,985
)


27,448



10,152Cash and cash equivalents at
    beginning of year


81,949



54,501



44,349Cash and cash equivalents at end
    of year


60,964


$
81,949


$
54,501Supplemental Disclosure of Cash
    Flow Information:Cash paid during the period for
    interest

$
1,756


$
461


$
238Supplemental Schedule of Non-cash
    Investing andFinancing Activities:Facility lease obligation

$



$
8,722


$
Capital purchases financed through
    capital lease

$



$
1,850


$
    F-6




---



##### Table of Contents



DENDREON
    CORPORATION
  NOTES TO FINANCIAL STATEMENTS
  1.
    ORGANIZATION
    AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES  Organization
    Principles
    of Consolidation
    Cash,
    Cash Equivalents, and Investments
    available-for-sale. Available-for-sale other-than-temporary
  Property
    and Equipment
    Concentrations
    of Risk
   F-7




---



##### Table of Contents



DENDREON
    CORPORATION
  NOTES TO FINANCIAL STATEMENTS  (Continued)
    Revenue
    Recognition
      License Fees:
  Milestones:
  Royalty Income:
  Research
    and Development Expenses
   F-8




---



##### Table of Contents



DENDREON
    CORPORATION
  NOTES TO FINANCIAL STATEMENTS  (Continued)
   Impairment
    of Long-Lived Assets
    Accounting
    for Stock-Based Compensation
  96-18.
  Use of
    Estimates
    Net
    Loss Per Share
    Fair
    Value of Financial Instruments
   F-9




---



##### Table of Contents



DENDREON
    CORPORATION
  NOTES TO FINANCIAL STATEMENTS  (Continued)
    Income
    Taxes
    Recent
    Accounting Pronouncements
  paid-in-capital
         F-10




---



##### Table of Contents



DENDREON
    CORPORATION
  NOTES TO FINANCIAL STATEMENTS  (Continued)
    2.
    SIGNIFICANT
    AGREEMENTS        Nuvelo
    Genentech
   F-11




---



##### Table of Contents



DENDREON
    CORPORATION
  NOTES TO FINANCIAL STATEMENTS  (Continued)
   Kirin
    Amgen
    Fremont
    3.
    INVESTMENTS  available-for-sale
  Cost or


FairAmortized


MarketCost


Value(In thousands)December 31, 2006Due in one year or less

$
45,578


$
45,492Due after one year through three
    years


14,847



14,827$
60,425


$
60,319December 31, 2005Due in one year or less

$
52,495


$
52,273Due after one year through two
    years


32,309



32,187$
84,804


$
84,460   available-for-sale
 F-12




---



##### Table of Contents



DENDREON
    CORPORATION
  NOTES TO FINANCIAL STATEMENTS  (Continued)
   available-for-sale,
  Cost or


Gross


GrossAmortized


Unrealized


Unrealized


Fair MarketCost


Gains


Losses


Value(In thousands)December 31, 2006Corporate debt securities

$
38,351


$
5


$
(75
)

$
38,281Government securities


12,110



3



(14
)


12,088U.S. Treasury Note


9,964







(25
)


9,950$
60,425


$
8


$
(114
)

$
60,319December 31, 2005Corporate debt securities

$
62,085


$
14


$
(304
)

$
61,795Government securities


12,844







(53
)


12,791U.S. Treasury Note


9,875







(1
)


9,874$
84,804


$
14


$
(358
)

$
84,460   No. 03-1 available-for-sale
  Less Than 12 Months


12 Months or More


TotalGross





Gross





GrossUnrealized


Fair


Unrealized





UnrealizedFair Value


Losses


Value


Losses


Fair Value


Losses(In thousands)Corporate debt securities

$
16,955


$
(36
)

$
13,532


$
(39
)

$
30,487


$
(75
)Government securities


3,357



(11
)


1,496



(3
)


4,853



(14
)U.S. Treasury Note










9,939



(25
)


9,939



(25
)Total

$
20,312


$
(47
)

$
24,967


$
(67
)

$
45,279


$
(114
)   other-than-temporarily
  4.
    CONSTRUCTION
    IN PROGRESS    No. 97-10, No. 97-10),
 F-13




---



##### Table of Contents



DENDREON
    CORPORATION
  NOTES TO FINANCIAL STATEMENTS  (Continued)
      5.
    PROPERTY
    AND EQUIPMENT    December 31,2006


2005(In thousands)Furniture and office equipment

$
1,260


$
1,232Laboratory and manufacturing
    equipment


9,259



9,226Computer equipment and software


9,308



2,822Leasehold improvements


4,526



4,374Construction in progress


22,120



16,77146,473



34,425Less accumulated depreciation and
    amortization


(15,943
)


(12,129
)$
30,530


$
22,296    F-14




---



##### Table of Contents



DENDREON
    CORPORATION
  NOTES TO FINANCIAL STATEMENTS  (Continued)
   6.
    ACCRUED
    LIABILITIES    December 31,2006


2005(In thousands)Clinical trial costs

$
2,699


$
3,103Construction costs


210



2,681Antigen manufacturing costs


350



4,055Deferred rent


667



895Other accrued liabilities


2,862



2,885$
6,788


$
13,619   7.
    FINANCING
    OBLIGATIONS AND DEBT    No. 97-10,
   F-15




---



##### Table of Contents



DENDREON
    CORPORATION
  NOTES TO FINANCIAL STATEMENTS  (Continued)
     Capital





FacilityLease


Debt


LeaseObligations


Obligations


Obligations(In thousands)Year ending December 31:2007

$
1,342


$
6,345


$
7762008


782



6,345



8092009


94



2,211



8412010










8732011










905Thereafter










11,091Total payments


2,218



14,901



15,295Less amount representing interest


(230
)


(1,680
)


(6,754
)Present value of payments


1,988



13,221



8,541Less current portion of obligations


(1,253
)


(5,342
)


(128
)Long-term portion of obligations

$
735


$
7,879


$
8,413   8.
    STOCKHOLDERS
    EQUITY    Preferred
    Stock
    Common
    Stock
  No. 333-127521)
   F-16




---



##### Table of Contents



DENDREON
    CORPORATION
  NOTES TO FINANCIAL STATEMENTS  (Continued)
   Warrants
      9.
    STOCK-BASED
    COMPENSATION PLANS    96-18
    Year


YearEnded


EndedDecember 31,


December 31,2005


2004Net loss

$
(81,547
)

$
(75,240
)Add: stock-based employee
    compensation expense included in reported net loss


720



3,465Deduct: pro forma stock-based
    employee compensation expense


(14,524
)


(7,459
)Pro forma net loss

$
(95,351
)

$
(79,234
)Net loss per share as reported

$
(1.36
)

$
(1.32
)Pro forma net loss per share

$
(1.59
)

$
(1.39
)  F-17




---



##### Table of Contents



DENDREON
    CORPORATION
  NOTES TO FINANCIAL STATEMENTS  (Continued)
   out-of-the-money
      The
    Employee Stock Purchase Plan
          Stock
    Option Plans
   F-18




---



##### Table of Contents



DENDREON
    CORPORATION
  NOTES TO FINANCIAL STATEMENTS  (Continued)
        Stock
    Options and Employee Stock Purchases
    Employee Stock Options


Employee Stock Purchase Plan2006


2005


2004


2006


2005


2004Weighted average estimated fair
    value

$
3.16


$
4.37


$
7.03


$
1.86


$
1.93


$
3.09Weighted Average
    AssumptionsDividend yield(A)


0.0%



0.0%



0.0%



0.0%



0.0%



0.0%Expected volatility(B)


80.5%



90.0%



94.7%



45.9%



65.3%



65.3%Risk-free interest rate(C)


4.6%



4.4%



3.5%



4.7%



3.3%



3.3%Expected life(D)


4.6 years



5.0 years



4.9 years



0.5 years



0.5 years



0.5 years     (A)
    
    We have not paid dividends in the past and do not plan to pay
    any dividends in the near future.(B)
    
    The expected stock price volatility is based on the historical
    volatility of our stock.(C)
    
    The risk-free interest rate is based on the implied yield
    available on U.S. Treasury zero-coupon issues with a term
    equal to the expected life on the date of grant.(D)
    
    The expected life of the options represents the estimated period
    of time until exercise and is based on historical experience of
    similar awards, giving consideration to the contractual terms,
    vesting schedules and expectations of future employee behavior.
    The expected life of the employee stock purchase plan represents
    the purchase period under the plan. F-19




---



##### Table of Contents



DENDREON
    CORPORATION
  NOTES TO FINANCIAL STATEMENTS  (Continued)
     2006


2005


2004Weighted Average





Weighted Average





Weighted AverageShares Under


Exercise


Shares Under


Exercise


Shares Under


ExerciseOption


Price


Option


Price


Option


PriceOutstanding at beginning of year


5,823,025


$
8.37



5,078,440


$
8.67



5,104,282


$
8.17Granted


1,550,793



4.88



1,181,683



6.20



1,750,950



10.50Exercised


(90,392
)


2.41



(223,172
)


3.67



(1,064,944
)


5.50Forfeited or expired


(1,618,468
)


8.48



(213,926
)


8.52



(711,848
)


14.42Outstanding at end of year


5,664,958



7.48



5,823,025



8.37



5,078,440



8.67Options exercisable at end of year


4,205,662



8.31



5,152,752



8.73



2,355,850



8.56Options available for future grant


884,366







1,178,703







1,395,951       Options Outstanding


Options ExercisableWeighted-Number


Average


Weighted-


Number


Weighted-Outstanding As of


Remaining


Average


Exercisable as of


AverageDecember 31,


Contractual


Exercise


December 31,


ExerciseExercise Prices

2006


Life


Price


2006


Price(In years)$0.75 - $4.87


1,180,416



8.16


$
3.88



555,186


$
3.25$4.88 - $5.60


1,213,816



7.84



5.30



495,195



5.10$5.65 - $7.56


1,142,586



7.08



6.51



1,032,141



6.56$7.66 - $10.69


1,228,350



7.20



9.33



1,223,350



9.33$10.77 - $36.74


899,790



5.72



13.83



899,790



13.83$0.75 - $36.74


5,664,958



7.28


$
7.48



4,205,662


$
8.31        F-20




---



##### Table of Contents



DENDREON
    CORPORATION
  NOTES TO FINANCIAL STATEMENTS  (Continued)
   Restricted
    Stock Awards
      2006


2005


2004Weighted





Weighted





WeightedAverage





Average





AverageGrant Date Fair





Grant Date Fair





Grant Date FairStock Awards


Value


Stock Awards


Value


Stock Awards


ValueOutstanding at beginning of year


20,143


$
4.58



58,232


$
3.85



48,656


$
6.32Granted


1,159,181



3.56











52,000



3.96Vested


(25,995
)


2.44



(37,580
)


3.42



(42,424
)


6.82Forfeited or expired


(47,169
)


5.00



(509
)


6.32







Outstanding at end of year


1,106,160


$
3.54



20,143


$
4.58



58,232


$
3.85       AwardsAvailablefor GrantBalance, January 1, 2004


1,737,053Granted


(1,802,950
)Forfeited or expired


711,848Additional shares reserved


750,000Balance, December 31, 2004


1,395,951Granted


(1,181,683
)Forfeited or expired


214,435Additional shares reserved


750,000Balance, December 31, 2005


1,178,703Granted


(2,709,974
)Forfeited or expired


1,665,637Additional shares reserved


750,000Balance at December 31, 2006


884,366  F-21




---



##### Table of Contents



DENDREON
    CORPORATION
  NOTES TO FINANCIAL STATEMENTS  (Continued)
  Common
    Stock Reserved
    Outstanding common stock options


5,664,958Employee stock purchase plan


1,882,222Available for future grant under
    equity plans


884,366Common stock awards


1,106,160Common stock warrants


19,6889,557,394   10.
    INCOME
    TAXES        December 31,2006


2005(In thousands)Deferred tax assets:Net operating loss carryforwards

$
181,249


$
156,037Research credits


22,281



19,834Stock Based Compensation


1,206



Capitalized research and
    development


765



1,350Other


3,847



3,305Total deferred tax assets


209,348



180,526Deferred tax liabilities:Accrued revenue  US






(1,700
)Total deferred tax liabilities






(1,700
)Total deferred tax assets and
    liabilities


209,348



178,826Valuation allowance


(209,348
)


(178,826
)Net deferred tax assets and
    liabilities

$



$
    F-22




---



##### Table of Contents



DENDREON
    CORPORATION
  NOTES TO FINANCIAL STATEMENTS  (Continued)
     11.
    NET LOSS
    PER SHARE      For the Year Ended December 31,2006


2005


2004(In thousands, except share and per share amounts)Net loss

$
(91,642
)

$
(81,547
)

$
(75,240
)Weighted average shares used in
    computation of basic and diluted net loss per share


72,366,047



59,911,721



57,102,863Basic and diluted net loss per
    share

$
(1.27
)

$
(1.36
)

$
(1.32
)   12.
    COMMITMENTS
    AND CONTINGENCIES          97-10,
 F-23




---



##### Table of Contents



DENDREON
    CORPORATION
  NOTES TO FINANCIAL STATEMENTS  (Continued)
      OperatingLeases(In thousands)Year ending December 31:2007

$
3,1932008


3,2032009


6952010


2022011


209Thereafter


2,565Total minimum lease payments

$
10,067     13.
    EMPLOYEE
    BENEFIT PLAN    14.
    RESTRUCTURING    Paid





BalanceAccrued in


in





As ofRestructuring Charges

2006


2006


Adjustments


12/31//06(In thousands)Severance and outplacement costs

$
1,314


$
(1,297
)

$
(17
)

$
Stock compensation expense


60



(60
)






Total

$
1,374


$
(1,357
)

$
(17
)

$
  F-24




---



##### Table of Contents



DENDREON
    CORPORATION
  NOTES TO FINANCIAL STATEMENTS  (Continued)
  15.
    QUARTERLY
    INFORMATION (UNAUDITED)    March 31


June 30


September 30


December 31(In thousands, except per share amounts2006Revenue

$
25



78



84



86Total operating expenses


25,565



26,337



21,728



23,999Loss from operations


(25,540
)


(26,259
)


(21,644
)


(23,913
)Net loss


(24,357
)


(25,056
)


(20,743
)


(21,486
)Basic and diluted net loss per
    share


(0.34
)


(0.35
)


(0.29
)


(0.28
)   March 31


June 30


September 30


December 31(In thousands, except per share amounts2005Revenue

$
57


$
58


$
58


$
37Total operating expenses


20,661



18,748



21,012



26,252Loss from operations


(20,604
)


(18,690
)


(20,954
)


(26,215
)Net loss


(19,501
)


(17,520
)


(19,687
)


(24,839
)Basic and diluted net loss per
    share


(0.33
)


(0.30
)


(0.33
)


(0.40
)  F-25