##### Table of Contents





UNITED STATES SECURITIES AND
    EXCHANGE COMMISSIONWashington, 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, 2007
  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(b) of the
    Act:
  Title of Each Class

Name of Each Exchange on Which RegisteredCommon Stock, $.01 Par Value Per Share

The NASDAQ Stock Market LLC   Securities registered pursuant to Section 12(g) of the
    Act:
 None
  o þ
  o þ
  þ o
  Regulation S-K Form 10-K Form 10-K. þ
  Rule 12b-2
  Large accelerated
    filer o

Accelerated
    filer þ

Non-accelerated
    filer o
    (Do not check if a smaller reporting company)

Smaller reporting
    company o   Rule 12b-2 o þ
      DOCUMENTS
    INCORPORATED BY REFERENCE




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TABLE OF CONTENTS  PART IITEM 1. BUSINESSITEM 1A. RISK FACTORSITEM 1B. UNRESOLVED STAFF COMMENTSITEM 2. PROPERTIESITEM 3. LEGAL PROCEEDINGSITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERSITEM 4A. EXECUTIVE OFFICERS OF THE REGISTRANTPART IIITEM 5. MARKET FOR REGISTRANTS COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIESITEM 6. SELECTED FINANCIAL DATAITEM 7. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATAITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSUREITEM 9A. CONTROLS AND PROCEDURESITEM 9B. OTHER INFORMATIONPART IIIITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCEITEM 11. EXECUTIVE COMPENSATIONITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERSITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCEITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICESPART IVITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULESCOMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGESCONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRMCERTIFICATION OF CHIEF EXECUTIVE OFFICERCERTIFICATION OF CHIEF FINANCIAL OFFICERCERTIFICATION OF CHIEF EXECUTIVE OFFICER AND CHIEF FINANCIAL OFFICER    Table of Contents  
  PART I
 
  ITEM 1.
    BUSINESS  OVERVIEW
  ®
  Product
    Candidates Overview
    Product Candidate

Target Indication(s)

StatusProduct Candidates in Clinical TrialsProvenge (sipuleucel-T)

Androgen-independent prostate cancer

Phase 3 (D9901) completeAndrogen-independent prostate cancer

Phase 3 (D9902A) completeAndrogen-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) completeNeuvengetm
(lapuleucel-T)

Breast cancer

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

Phase 1 (2000-2) complete  2




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Product
    Candidates in Research and Development
  Immunotherapy
    Targets
  CEA

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

PreclinicalSmall MoleculeTrp-p8

Lung, breast, prostate and colon cancer

Preclinical   Cancer
    Immunotherapies
      The
    Immune System
          Our
    Active Immunotherapy Approach
   3




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
    identify or in-license antigens 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
    isolate antigen-presenting cells using proprietary methods and
    combine antigen-presenting cells and engineered antigens
    in vitro.  Antigen Identification.
  Antigen Engineering. tm
    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

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)     Market
    for Provenge and Treatment Protocol
  Androgen-independent
    ®
 5




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




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Clinical Trial  D9902B.
  Other
    Provenge Clinical Trials in Early-Stage Prostate
    Cancer
  Clinical Trial 
    P-11. (P-11),
  Clinical Trial 
    P-16. P-16, ®
 7




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Cancer
  Clinical Trial  D9905.
  Product
    Candidates in Research and Development
  Active
    Immunotherapies and Immunotherapy Targets
  Neuvenge (lapuleucel-T). Journal of Clinical Oncology
  Carcinoembryonic Antigen
    (CEA).
  Carbonic Anhydrase 9 Antigen
    (CA-9).
  Anti-Serine
    Protease Monoclonal Antibodies
       8




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##### Table of Contents



Small
    Molecules
  Trp-p8.
  Collaborations
  Genentech,
    Inc.
    Amgen
    Fremont, Inc.
  t
  Manufacturing
    and Commercial Infrastructure
    scale-up
   9




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Supplies
    and Raw Materials
    Research
    and Development
    Intellectual
    Property
     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;
    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 a distribution network and other operational and
    financial systems necessary to support our increased
    scale; and
    our ability to rapidly expand the existing information
    technology infrastructure and configure existing operational,
    manufacturing and financial systems (on our own or with third
    party collaborators) necessary to support our increased scale,
    which would include existing or additional facilities and or
    partners.    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
      Anti-Kickback,
    False Claims Laws & The Prescription Drug Marketing
    Act
     14




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and/or
  EMPLOYEES
    TRADEMARKS
    AND TRADENAMES
  ® tm ® tm tm
  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.
   15




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##### Table of Contents



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.
      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.   16




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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.
        If we
    encounter difficulties enrolling patients in our clinical
    trials, our trials could be delayed or otherwise adversely
    affected.
   17




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
    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, and we
    may encounter unexpected costs or difficulties.
        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.
   18




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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 necessary
    infrastructure and preparatory 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.    Our substantial indebtedness could adversely affect our
    financial condition.
    
    increase our vulnerability to general adverse economic and
    industry conditions;
    limit our ability to raise additional funds to fund future
    working capital, capital expenditures, research and development
    and other general corporate requirements;
    require us to dedicate a substantial portion of our cash to
    service payments on our debt;
    limit our flexibility to react to changes in our business and
    the industry in which we operate or to pursue certain strategic
    opportunities that may present themselves;
    limit our ability to borrow additional funds; or
    increase our difficulty in obtaining equity financing.  Our
    stockholders may be diluted by the conversion of our outstanding
    convertible notes.
   19




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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.
  18-month
  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; 20




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
    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.    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.
   21




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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.
   22




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We may
    need to demonstrate that Provenge manufactured at the 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.
   23




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and/or
  We
    rely on single source vendors for some key components for our
    active immunotherapy candidates, which could impair our supply
    of such product.
    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.
     24




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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.
   25




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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.
   26




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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.
      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.
   27




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Risks
    Relating to an Investment in Our Common Stock
  We are
    currently subject to certain pending litigation, a stockholder
    demand and a government investigation and may be subject to
    similar claims in the future.
  and/or and/or and/or
  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 the final outcome of FDA review of our BLA for
    Provenge;
    the progression and tenor of our discussions with the FDA
    regarding our BLA 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;
    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. 28




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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   
  ITEM 3.
    LEGAL
    PROCEEDINGS   29




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McGuire v. Dendreon
    Corporation, et al. McGuire, et al. v. Dendreon Corporation, et al.,
    Loh v. Gold, et al.
     
  ITEM 4.
    SUBMISSION
    OF MATTERS TO A VOTE OF SECURITY HOLDERS   30




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ITEM 4A.
    EXECUTIVE
    OFFICERS OF THE REGISTRANT    Name

Age

PositionMitchell H. Gold, M.D.


40


President and Chief Executive OfficerMark W. Frohlich, M.D.


46


Senior Vice President for Clinical Affairs and Chief Medical
    OfficerRichard F. Hamm, Jr.


48


Senior Vice President, Corporate Development, General Counsel
    and SecretaryGregory T. Schiffman


50


Senior Vice President, Chief Financial Officer and TreasurerDavid L. Urdal, Ph.D.


58


Senior Vice President and Chief Scientific Officer   Mitchell H. Gold, M.D.
  Mark W. Frohlich, M.D.
  Richard F. Hamm, Jr.
  Gregory T. Schiffman
 31




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David L. Urdal, Ph.D.
 
  PART II
 
  ITEM 5.
    MARKET
    FOR REGISTRANTS COMMON EQUITY, RELATED STOCKHOLDER MATTERS
    AND ISSUER PURCHASES OF EQUITY SECURITIES    High


LowYear ended December 31, 2007First quarter

$
18.05


$
3.57Second quarter


25.25



4.95Third quarter


8.56



6.80Fourth quarter


8.50



4.56Year ended December 31, 2006First quarter

$
5.85


$
4.22Second quarter


4.86



3.68Third quarter


5.17



4.09Fourth quarter


5.77



3.98   Holders.
  Dividends.
  Securities Authorized for Issuance Under Equity Compensation
    Plans.
 32




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(c)Number of Securities(a)


(b)


Remaining AvailableNumber of Securities


Weighted-Average


for Future Issuanceto be Issued Upon


Exercise Price of


Under EquityExercise of


Outstanding


Compensation PlansOutstanding Options,


Options, Warrants


(Excluding SecuritiesPlan Category

Warrants and Rights


and Rights


Reflected in Column (a))Equity compensation plans approved by stockholders(1)


3,978,099
(3)

$
7.11
(3)


1,710,321
(4)Equity compensation plans not approved by stockholders(2)


1,245,840


$
7.06



2,900Total


5,223,939


$
7.10



1,713,221     (1)
    
    These plans are the 2000 Plan and the ESPP.(2)
    
    These plans are the 2002 Plan and a certain compensatory
    arrangement pursuant to which we have issued warrants to
    purchase an aggregate of 500 shares of common stock.(3)
    
    Includes information relating solely to options to purchase
    common stock under the 2000 Plan.(4)
    
    Of these shares, 1,574,954 remained available for purchase under
    the ESPP as of December 31, 2007. 33




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Performance
    Comparison Graph
    COMPARISON
    OF 5 YEAR CUMULATIVE TOTAL RETURN*
 Among Dendreon Corporation, The NASDAQ Composite Index
 And The NASDAQ Biotechnology Index
  
  *
    
    $100 invested on 12/31/02 in stock or index-including
    reinvestment of dividends. Fiscal year ending December 31. 34




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ITEM 6.
    SELECTED
    FINANCIAL DATA    Year Ended December 31,2007


2006


2005


2004


2003(In thousands, except per share amounts)Consolidated Statement of Operations Data:Revenue

$
743


$
273


$
210


$
5,035


$
27,041Operating expenses


102,362



97,629



86,673



85,427



54,606Loss from operations


(101,619
)


(97,356
)


(86,463
)


(80,392
)


(27,565
)Interest income and other expenses, net


2,355



5,714



4,916



3,590



833Loss before taxes


(99,264
)


(91,642
)


(81,547
)


(76,802
)


(26,732
)Foreign income tax benefit (expense)(1)














1,562



(1,761
)Net loss

$
(99,264
)

$
(91,642
)

$
(81,547
)

$
(75,240
)

$
(28,493Basic and diluted net loss per share

$
(1.20
)

$
(1.27
)

$
(1.36
)

$
(1.32
)

$
(0.82
)Shares used in computation of basic and diluted net loss per
    share


82,531



72,366



59,912



57,103



34,664   As of December 31,2007


2006


2005


2004


2003Consolidated Balance Sheet Data:Cash, cash equivalents, short- and long-term investments

$
120,575


$
121,283


$
166,409


$
195,730


$
113,191Working capital


81,656



89,557



121,532



170,735



92,464Total assets


161,662



163,643



207,553



217,353



137,845Long-term obligations, less current portion


95,647



17,027



15,729



2,429



1,893Total stockholders equity


40,377



125,717



168,709



198,565



118,987     (1)
    
    During 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, which eliminated
    withholding taxes on our revenue from our prior collaboration
    with Kirin Brewing Co., Ltd. 
  ITEM 7.
    MANAGEMENTS
    DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
    OPERATIONS  OVERVIEW
     35




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CRITICAL
    ACCOUNTING POLICIES AND ESTIMATES
   36




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Revenue
    Recognition
      License Fees:
  Royalty Income:
  Research
    and Development Expenses
    Accounting
    for Stock-Based Compensation
   37




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Recent
    Accounting Pronouncements
        New
    Accounting Standards Not Yet Adopted
  No. 07-3, (EITF 07-3). EITF 07-3 EITF 07-3,
   38




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No. 07-1,  (EITF 07-1), EITF 07-1 EITF 07-1
  RESULTS
    OF OPERATIONS FOR THE YEARS ENDED DECEMBER 31, 2007, 2006 AND
    2005
  Revenue
    Wilex
    Genentech
    Research
    and Development Expenses
   39




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2007


2006


2005Clinical programs:Direct costs

$
30.1


$
27.2


$
19.2Indirect costs


43.3



42.3



37.3Total clinical programs


73.4



69.5



56.5Discovery research


3.1



4.6



9.4Total research and development expense

$
76.5


$
74.1


$
65.9       
    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
   40




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Interest
    Expense
    Income
    Taxes
    Stock-Based
    Compensation Expense
        LIQUIDITY
    AND CAPITAL RESOURCES
  Cash
    Uses
     41




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##### Table of Contents




    costs for the development of marketing, manufacturing,
    information technology and other infrastructure and activities
    related to the commercialization of Provenge;
    working capital needs;
    costs associated with hiring additional specialized personnel;
    supporting clinical trials of Provenge and for our other
    products under development;
    operating and expanding the Facility; and
    continuing our internal research and development programs.    Construction
    and Facility Expenses
       42




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##### Table of Contents



Production
    and Supply Expenses
    Financings
    from the Sale of Securities
    30-day
 43




---



##### Table of Contents



18-month
    Total


1 Year


2-3 Years


4-5 Years


ThereafterContractual CommitmentsConvertible senior subordinated notes (including interest)(a)

$
111,402


$
4,049


$
8,099


$
8,099


$
91,155Facility lease obligation (including interest)(b)


14,519



809



1,714



1,839



10,157Contractual commitments(c)


8,025



8,025











Debt obligations (including interest)(b)


8,513



6,345



2,168







Operating leases(c)


15,739



3,203



6,719



3,468



2,349Capital lease obligations (including interest)(b)


870



797



73







Unconditional purchase obligations


196



196











$
159,264


$
23,424


$
18,773


$
13,406


$
103,661     (a)
    
    Refer to Note 7 to our Consolidated Financial Statements
    for additional information related to the Notes.(b)
    
    Refer to Note 6 to our Consolidated Financial Statements
    for additional information. Our facility lease obligation
    commitment reflects the initial 7 year term of the Lease
    and a 10 year renewal period.(c)
    
    Refer to Note 12 to our Consolidated Financial Statements
    for additional information related to contractual commitments.  OFF-BALANCE
    SHEET ARRANGEMENTS
   44




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##### Table of Contents



FORWARD-LOOKING
    STATEMENTS
  and/or
  
    The progress of the FDAs review of our BLA for Provenge;
    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;
    the effect that any intellectual property litigation, securities
    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;
    anticipated trends in our business and the biotechnology
    industry generally; and
    other factors described under Item 1A, Risk
    Factors.   45




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##### Table of Contents



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  Evaluation
    of Disclosure Controls and Procedures
  Rule 13a-15(e)
  Managements
    Report on Internal Control over Financial
    Reporting
  Rule 13a-15(f)
 46




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##### Table of Contents



Changes
    in Internal Control Over Financial Reporting
    Limitations
    on Controls
     47




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##### Table of Contents



Report of
    Independent Registered Public Accounting Firm
                 
    48




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##### Table of Contents



ITEM 9B.
    OTHER
    INFORMATION   
  PART III
 
  ITEM 10.
    DIRECTORS,
    EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE     
  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   49




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##### Table of Contents



PART IV
 
  ITEM 15.
    EXHIBITS AND
    FINANCIAL STATEMENT SCHEDULES    Financial Statements and Report of Independent
    Auditors.
  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   Financial Statement Schedules.
    Exhibits.
  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)3
.4

Amendment Number One to Amended and Restated Bylaws, adopted
    November 2, 2007.(4)4
.1

Specimen Common Stock certificate.(5)4
.2

Certificate of Designation of Series A Junior Participating
    Preferred Stock.(6)4
.3

Rights Agreement between the registrant and Mellon Investor
    Services LLC, as Rights Agent, dated September 18, 2002.(7)4
.4

Form of Right Certificate.(8)4
.5

Indenture, dated as of June 11, 2007, between Dendreon
    Corporation and The Bank of New York Trust Company, N.A.(9)10
.1

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

Indemnity Agreement between the registrant and each of its
    directors and certain of its officers.(11)10
.3

Amended and Restated 2000 Broad Based Equity Incentive Plan.(12)*10
.4

Amended and Restated 2002 Broad Based Equity Incentive Plan.(13)*10
.5

2000 Employee Stock Purchase Plan.(14)*10
.6

Amended and restated 2000 Employee Stock Purchase Plan 2007
    Offering.(15)*10
.7

Form of Stock Option Agreement under 2000 Equity Incentive
    Plan.(16)*10
.8

Form of Stock Option Agreement under 2002 Broad Based Equity
    Incentive Plan.(17)*10
.9

Form of Restricted Stock Award Agreement.(18)*10
.10

Dendreon Corporation Incentive Plan.(19)*10
.11

Supply Agreement, dated as of December 22, 2005, by and
    between Dendreon Corporation and Diosynth RTP.(20) 50




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##### Table of Contents



ExhibitNumber

Description10
.12

Collaborative Development and Marketing Agreement between the
    registrant and Genentech, Inc., dated August 1, 2002.(21)10
.13

Lease Agreement between First Industrial, L.P. and Dendreon
    Corporation, dated August 17, 2005.(22)10
.14

Office Lease between Selig Real Estate Holdings Fourteen and
    Dendreon Corporation, dated September 2, 2005.(23)10
.15

Third Amendment to Lease Agreement, dated August 22, 2007
    between Dendreon Corporation and
    ARE-3005
    First Avenue, LLC.(24)10
.16

Form of Promissory Note of Dendreon Corporation to General
    Electric Capital Corporation.(25)10
.17

Master Security Agreement between General Electric Capital
    Corporation and Dendreon Corporation dated December 30,
    2005.(26)10
.18

Security Deposit Pledge Agreement among General Electric Capital
    Corporation, Dendreon Corporation and Webster Bank, N.A., dated
    December 30, 2005.(27)10
.19

Security Deposit Pledge Agreement between General Electric
    Capital Corporation and Dendreon Corporation dated
    December 30, 2005.(28)10
.20

Commitment Letter, dated January 31, 2006, between Dendreon
    Corporation and General Electric Capital Corporation.(29)10
.22

Common Stock Purchase Agreement, dated October 11, 2007,
    between Dendreon Corporation and Azimuth Opportunity, Inc.(30)12


Computation of Ratio of Earnings to Fixed Charges.23
.1

Consent of Independent Registered Public Accounting Firm.24
.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 3.4 filed with the
    registrants
    Form 10-Q
    for the quarter ended September 30, 2007, File No.
    000-30681.(5)
    
    Incorporated by reference to Exhibit 4.1 filed with the
    registrants Registration Statement on
    Form S-1/A,
    File
    No. 333-31920.(6)
    
    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.(7)
    
    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.(8)
    
    Incorporated by reference to Exhibit 99.3 filed with the
    registrants
    Form 8-K,
    filed with the SEC on September 25, 2002, File No.
    000-30681.(9)
    
    Incorporated by reference to Exhibit 10.1 filed with the
    registrants Registration
    Form 8-K,
    filed with the SEC on June 12, 2007, File
    No. 000-30681.(10)
    
    Incorporated by reference to Exhibit 99.1 filed with the
    registrants
    Form 8-K,
    filed with the SEC on January 4, 2007. 51




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##### Table of Contents



(11)
    
    Incorporated by reference to Exhibit 10.1 filed with the
    registrants Registration Statement on
    Form S-1,
    File
    No. 333-47706.(12)
    
    Incorporated by reference to Exhibit 10.3 filed with the
    registrants
    Form 10-K,
    for the fiscal year ended December 31, 2006, File
    No. 000-30681.(13)
    
    Incorporated by reference to Exhibit 10.4 filed with the
    registrants
    Form 10-K,
    for the fiscal year ended December 31, 2006, File
    No. 000-30681.(14)
    
    Incorporated by reference to Exhibit 10.3 filed with the
    registrants Registration Statement on
    Form S-1,
    File
    No. 333-47706.(15)
    
    Incorporated by reference to Exhibit 10.1 filed with the
    registrants
    Form 8-K,
    filed with the SEC on August 23, 2007.(16)
    
    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.(17)
    
    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.(18)
    
    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.(19)
    
    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.(20)
    
    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.(21)
    
    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.(22)
    
    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.(23)
    
    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.(24)
    
    Incorporated by reference to Exhibit 10.1 filed with the
    registrants
    Form 8-K,
    filed with the SEC on August 23, 2007.(25)
    
    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.(26)
    
    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.(27)
    
    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.(28)
    
    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.(29)
    
    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.(30)
    
    Incorporated by reference to Exhibit 10.1 filed with the
    registrants
    Form 8-K,
    filed with the SEC on October 12, 2007
    
    Confidential treatment granted as to certain portions of this
    Exhibit.*
    
    Management compensatory plans and arrangements required to be
    filed as exhibits to this Report. 52




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##### Table of Contents



SIGNATURES
  th
    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)
 53




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##### Table of Contents



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

Title

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

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

March 12, 2008/s/  Gregory
    T. SchiffmanGregory
    T. Schiffman

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

March 12, 2008/s/  Gregory
    R. CoxGregory
    R. Cox

(Principal Accounting Officer)

March 12, 2008/s/  Richard
    B. BrewerRichard
    B. Brewer

Chairman of the Board of Directors

March 12, 2008/s/  Susan
    B. BayhSusan
    B. Bayh

Director

March 12, 2008/s/  Gerardo
    CanetGerardo
    Canet

Director

March 12, 2008/s/  Bogdan
    Dziurzynski, D.P.A.Bogdan
    Dziurzynski, D.P.A.

Director

March 12, 2008/s/  M.
    Blake Ingle, Ph.D.M.
    Blake Ingle, Ph.D.

Director

March 12, 2008/s/  Ruth
    B. KunathRuth
    B. Kunath

Director

March 12, 2008/s/  David
    L. Urdal, Ph.D.David
    L. Urdal, Ph.D.

Director

March 12, 2008/s/  Douglas
    G. WatsonDouglas
    G. Watson

Director

March 12, 2008  54




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##### Table of Contents



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




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##### Table of Contents



Report of
    Independent Registered Public Accounting Firm
               
    F-2




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##### Table of Contents



DENDREON
    CORPORATION
  CONSOLIDATED BALANCE SHEETS
  December 31,2007


2006(In thousands, exceptshare data)ASSETSCurrent assets:Cash and cash equivalents

$
75,721


$
60,964Short-term investments


27,115



45,492Restricted cash


1,553



1,440Prepaid expenses and other current assets


2,508



2,082Total current assets


106,897



109,978Property and equipment, net


27,454



30,530Long-term investments


17,739



14,827Long-term restricted cash


6,288



7,723Debt issuance costs and other assets


3,284



585$
161,662


$
163,643LIABILITIES AND STOCKHOLDERS EQUITYCurrent liabilities:Accounts payable

$
2,221


$
1,503Accrued liabilities


11,545



6,788Accrued compensation


4,598



5,312Deferred revenue


82



95Current portion of capital lease obligations


780



1,253Current portion of facility lease obligation


172



128Current portion of long-term debt


5,843



5,342Total current liabilities


25,241



20,421Deferred revenue, less current portion


397



478Capital lease obligations, less current portion


73



735Long-term debt, less current portion


2,083



7,879Facility lease obligation, less current portion


8,241



8,413Convertible senior subordinated notes


85,250



Commitments 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, 83,258,210 and 81,323,638 shares issued and
    outstanding at December 31, 2007 and 2006, respectively


83



81Additional paid-in capital


531,891



518,127Accumulated other comprehensive income (loss)


52



(106
)Accumulated deficit


(491,649
)


(392,385
)Total stockholders equity

$
40,377


$
125,717Total liabilities and stockholders equity

$
161,662


$
163,643    F-3




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##### Table of Contents



DENDREON
    CORPORATION
  CONSOLIDATED
    STATEMENTS OF OPERATIONS
  Year Ended December 31,2007


2006


2005(In thousands, except per share amounts)Revenue

$
743


$
273


$
210Operating expenses:Research and development


76,523



74,088



65,944General and administrative


25,839



23,541



20,729Total operating expenses


102,362



97,629



86,673Loss from operations


(101,619
)


(97,356
)


(86,463
)Interest income


6,461



6,050



5,267Interest expense


(4,106
)


(336
)


(351
)Net loss

$
(99,264
)

$
(91,642
)

$
(81,547
)Basic and diluted net loss per share

$
(1.20
)

$
(1.27
)

$
(1.36
)Shares used in computation of basic and diluted net loss per
    share


82,531



72,366



59,912    F-4




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##### 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, 2005


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 lossNet loss






















(81,547
)


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


















238







238Comprehensive loss


























(91,404
)Balance, December 31, 2006


81,323,638


$
81


$
518,127


$
0


$
(106
)

$
(392,385
)

$
125,717Exercise of stock options for cash


1,033,441



1



6,566















6,567Net exercise of stock warrants


68,101























Issuance of common stock under the Employee Stock Purchase Plan


307,268



1



1,082















1,083Non-cash stock-based compensation expense










6,116















6,116Issuance of restricted stock grants


525,762























Comprehensive lossNet loss






















(99,264
)


(99,264
)Net unrealized gain on securities
    available-for-sale


















158







158Comprehensive loss


























(99,106
)Balance, December 31, 2007


83,258,210


$
83


$
531,891


$
0


$
52


$
(491,649
)

$
40,377    F-5




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##### Table of Contents



DENDREON
    CORPORATION
  CONSOLIDATED STATEMENTS OF CASH FLOWS
  Year Ended December 31,2007


2006


2005(In thousands)Operating Activities:Net loss

$
(99,264
)

$
(91,642
)

$
(81,547
)Adjustments to reconcile net loss to net cash used in operating
    activities:Depreciation and amortization expense


6,241



3,855



2,955Non-cash stock-based compensation expense


6,116



5,273



805Loss (gain) on sale of fixed assets


42



(15
)


Impairment of fixed assets






419



1,007Changes in operating assets and liabilities:Amortization of securities discount and premium


(241
)


194



2,447Accounts receivable






5,636



5,211Prepaid expenses and other assets


(132
)


257



1,554Restricted cash related to lease










(3,288
)Accounts payable


718



1,075



(104
)Accrued liabilities and compensation


4,043



(5,753
)


3,873Deferred revenue


(94
)


(69
)


(90
)Net cash used in operating activities


(82,571
)


(80,770
)


(67,177
)Investing Activities:Maturities of investments


53,447



61,261



124,977Purchases of investments


(37,583
)


(37,076
)


(70,435
)Purchases of property and equipment


(3,207
)


(12,494
)


(9,388
)Net cash provided by investing activities


12,657



11,691



45,154Financing Activities:Proceeds from issuance of convertible senior subordinated notes,
    net of debt financing costs


82,257







Proceeds from equipment financing arrangement, net of debt
    financing costs






9,025



7,419Proceeds from release of (payment of) security deposits
    associated with debt


1,322



1,125



(7,000
)Payments on long-term debt


(5,295
)


(3,212
)


Payments on facility lease obligation


(128
)


(112
)


Payments on capital lease obligations


(1,135
)


(1,871
)


(1,614
)Proceeds from sale of equity securities, net of issuance costs






42,150



48,284Proceeds from exercise of stock options and other


6,567



218



820Proceeds from issuance of common stock under the Employee Stock
    Purchase Plan


1,083



771



1,562Net cash provided by financing activities


84,671



48,094



49,471Net increase (decrease) in cash and cash equivalents


14,757



(20,985
)


27,448Cash and cash equivalents at beginning of year


60,964



81,949



54,501Cash and cash equivalents at end of year


75,721



60,964


$
81,949Supplemental Disclosure of Cash Flow Information:Cash paid during the period for interest, net of amount
    capitalized

$
3,570


$
220


$
461Supplemental Schedule of Non-cash Investing and Financing
    Activities:Facility lease obligation

$



$



$
8,722Capital 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
    Reclassifications
    Cash,
    Cash Equivalents, and Investments
    available-for-sale. Available-for-sale
 F-7




---



##### Table of Contents



DENDREON
    CORPORATION
  NOTES TO
    FINANCIAL STATEMENTS  (Continued)
  other-than-temporary
  Property
    and Equipment
    Debt
    Issuance Costs
    Concentrations
    of Risk
         F-8




---



##### Table of Contents



DENDREON
    CORPORATION
  NOTES TO
    FINANCIAL STATEMENTS  (Continued)
  Revenue
    Recognition
      License Fees:
  Royalty Income:
  Research
    and Development Expenses
    Impairment
    of Long-Lived Assets
    Accounting
    for Stock-Based Compensation
   F-9




---



##### Table of Contents



DENDREON
    CORPORATION
  NOTES TO
    FINANCIAL STATEMENTS  (Continued)
  96-18.
  Use of
    Estimates
    Net
    Loss Per Share
    Fair
    Value of Financial Instruments
    Income
    Taxes
   F-10




---



##### Table of Contents



DENDREON
    CORPORATION
  NOTES TO
    FINANCIAL STATEMENTS  (Continued)
    Recent
    Accounting Pronouncements
    New
    Accounting Standards Not Yet Adopted
  No. 07-3, (EITF 07-3). EITF 07-3 EITF 07-3,
        No. 07-1,  (EITF 07-1), EITF 07-1 EITF 07-1
  2.
    SIGNIFICANT
    AGREEMENTS   F-11




---



##### Table of Contents



DENDREON
    CORPORATION
  NOTES TO
    FINANCIAL STATEMENTS  (Continued)
    Wilex
    Genentech
    Kirin
   F-12




---



##### Table of Contents



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


FairAmortized


MarketCost


Value(In thousands)December 31, 2007Due in one year or less

$
27,100


$
27,115Due after one year through two years


17,702



17,739$
44,802


$
44,854December 31, 2006Due in one year or less

$
45,578


$
45,492Due after one year through two years


14,847



14,827$
60,425


$
60,319   available-for-sale
  available-for-sale,
  Cost or


Gross


Gross


FairAmortized


Unrealized


Unrealized


MarketCost


Gains


Losses


Value(In thousands)December 31, 2007Corporate debt securities

$
35,664


$
59


$
(59
)

$
35,664Government-sponsored enterprises


5,747



9



(10
)


5,746U.S. Treasury Note


3,391



53







3,444$
44,802


$
121


$
(69
)

$
44,854December 31, 2006Corporate debt securities

$
38,351


$
5


$
(75
)

$
38,281Government-sponsored enterprises


12,110



3



(14
)


12,099U.S. Treasury Note


9,964







(25
)


9,939$
60,425


$
8


$
(114
)

$
60,319  F-13




---



##### Table of Contents



DENDREON
    CORPORATION
  NOTES TO
    FINANCIAL STATEMENTS  (Continued)
  No. 03-1 available-for-sale
  Less Than 12 Months


12 Months or More


TotalGross





Gross





GrossFair


Unrealized


Fair


Unrealized


Fair


UnrealizedValue


Losses


Value


Losses


Value


Losses(In thousands)Corporate debt securities

$
12,608


$
(59
)

$



$



$
12,608


$
(59
)Government securities


1,478



(10
)










1,478



(10
)Total

$
14,086


$
(69
)

$



$



$
14,086


$
(69
)   other-than-temporarily
  4.
    PROPERTY
    AND EQUIPMENT    December 31,2007


2006(In thousands)Furniture and office equipment

$
1,263


$
1,260Laboratory and manufacturing equipment


10,905



9,259Computer equipment and software


9,794



9,308Leasehold improvements


15,681



4,526Buildings


1,730



Construction in progress


9,966



22,12049,339



46,473Less accumulated depreciation and amortization


(21,885
)


(15,943
)$
27,454


$
30,530       No. 97-10, (EITF 97-10),
 F-14




---



##### Table of Contents



DENDREON
    CORPORATION
  NOTES TO
    FINANCIAL STATEMENTS  (Continued)
          5.
    ACCRUED
    LIABILITIES    December 31,2007


2006(In thousands)Antigen manufacturing costs

$
5,987


$
350Clinical trial costs


1,949



2,699Deferred rent


697



667Accrued legal


640



249Other accrued liabilities


2,272



2,823$
11,545


$
6,788   6.
    FINANCING
    OBLIGATIONS AND DEBT    EITF 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 31:2008

$
797


$
6,345


$
8092009


73



2,168



8412010










8732011










9052012










934Thereafter










10,157Total payments


870



8,513



14,519Less amount representing interest


(17
)


(587
)


(6,106
)Present value of payments


853



7,926



8,413Less current portion of obligations


(780
)


(5,843
)


(172
)Long-term portion of obligations

$
73


$
2,083


$
8,241   7.
    CONVERTIBLE
    SENIOR SUBORDINATED NOTES  30-day
 F-16




---



##### Table of Contents



DENDREON
    CORPORATION
  NOTES TO
    FINANCIAL STATEMENTS  (Continued)
          8.
    STOCKHOLDERS
    EQUITY    18-month
 F-17




---



##### Table of Contents



DENDREON
    CORPORATION
  NOTES TO
    FINANCIAL STATEMENTS  (Continued)
  Preferred
    Stock
    Common
    Stock
    Warrants
      9.
    STOCK-BASED
    COMPENSATION PLANS     F-18




---



##### Table of Contents



DENDREON
    CORPORATION
  NOTES TO
    FINANCIAL STATEMENTS  (Continued)
  96-18.
    YearEndedDecember 31,2005Net loss

$
(81,547
)Add: stock-based employee compensation expense included in
    reported net loss


720Deduct: pro-forma stock-based employee compensation expense


(14,524
)Pro-forma net loss

$
(95,351
)Net loss per share as reported

$
(1.36
)Pro-forma net loss per share

$
(1.59
)   out-of-the-money
    The
    Employee Stock Purchase Plan
       F-19




---



##### Table of Contents



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

Employee Stock Purchase Plan2007

2006

2005

2007

2006

2005Weighted average estimated fair value

$3.40

$3.16

$4.37

$2.03

$1.86

$1.93Weighted Average AssumptionsDividend yield(A)

0.0%

0.0%

0.0%

0.0%

0.0%

0.0%Expected volatility(B)

87%

81%

90%

124%

46%

65%Risk-free interest rate(C)

3.8%

4.6%

4.4%

4.3%

4.7%

3.3%Expected life(D)

4.8 years

4.6 years

5.0 years

0.5 years

0.5 years

0.5 years  F-20




---



##### Table of Contents



DENDREON
    CORPORATION
  NOTES TO
    FINANCIAL STATEMENTS  (Continued)
    (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 awards under the ESPP represents the
    purchase period under the plan.    2007


2006


2005Weighted





Weighted





WeightedShares


Average


Shares


Average


Shares


AverageUnder


Exercise


Under


Exercise


Under


ExerciseOption


Price


Option


Price


Option


PriceOutstanding at beginning of year


5,664,958


$
7.48



5,823,025


$
8.37



5,078,440


$
8.67Granted


1,176,562



4.94



1,550,793



4.88



1,181,683



6.20Exercised


(1,033,441
)


6.51



(90,392
)


2.41



(223,172
)


3.67Forfeited or expired


(584,640
)


7.43



(1,618,468
)


8.48



(213,926
)


8.52Outstanding at end of year


5,223,439



7.10



5,664,958



7.48



5,823,025



8.37Options exercisable at end of year


3,608,654



8.05



4,205,662



8.31



5,152,752



8.73Options available for future grant


138,267







884,366







1,178,703       Options Outstanding


Options ExercisableWeighted-Average


Weighted-





Weighted-Number


Remaining


Average


Number


AverageOutstanding As of


Contractual Life


Exercise


Exercisable as of


ExerciseExercise Prices

December 31, 2007


(In Years)


Price


December 31, 2007


Price$0.91 - $ 4.83


1,048,908



7.71


$
4.14



508,559


$
3.88$4.87 - $ 4.95


1,105,239



8.64



4.91



416,569



4.92$5.00 - $ 6.38


1,054,288



6.75



5.64



707,072



5.70$6.47 - $ 9.77


1,114,843



5.98



8.37



1,090,143



8.40$9.81 - $36.74


900,161



4.44



13.39



886,311



13.34$0.91 - $36.74


5,223,439



6.78


$
7.10



3,608,654


$
8.05    F-21




---



##### Table of Contents



DENDREON
    CORPORATION
  NOTES TO
    FINANCIAL STATEMENTS  (Continued)
    Restricted
    Stock Awards
      2007


2006


2005Weighted





Weighted





WeightedAverage





Average





AverageStock


Grant Date


Stock


Grant Date


Stock


Grant DateAwards


Fair Value


Awards


Fair Value


Awards


Fair ValueOutstanding at beginning of year


1,106,160


$
4.45



20,143


$
4.58



58,232


$
3.85Granted


1,017,004



6.68



1,159,181



4.44







Vested


(560,650
)


4.45



(25,995
)


2.44



(37,580
)


3.42Forfeited or expired


(112,827
)


4.14



(47,169
)


5.00



(509
)


6.32Outstanding at end of year


1,449,687


$
5.96



1,106,160


$
4.45



20,143


$
4.58    F-22




---



##### Table of Contents



DENDREON
    CORPORATION
  NOTES TO
    FINANCIAL STATEMENTS  (Continued)
    AwardsAvailablefor GrantBalance, January 1, 2005


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


884,366Granted


(2,193,566
)Forfeited or expired


697,467Additional shares reserved


750,000Balance at December 31, 2007


138,267   Common
    Stock Reserved
    Convertible senior subordinated notes


8,291,790Outstanding common stock options


5,223,439Employee stock purchase plan


1,574,954Available for future grant under equity plans


138,267Common stock awards


1,449,687Common stock warrants


50016,678,637   10.
    INCOME
    TAXES       F-23




---



##### Table of Contents



DENDREON
    CORPORATION
  NOTES TO
    FINANCIAL STATEMENTS  (Continued)
          December 31,2007


2006(In thousands)Deferred tax assets:Net operating loss carryforwards

$
164,344


$
181,249Research credits


15,029



22,281Stock-based compensation


1,775



1,206Capitalized research and development


321



765Other


3,814



3,847Total deferred tax assets


185,283



209,348Valuation allowance


(185,283
)


(209,348
)Net deferred tax assets and liabilities

$



$
     11.
    NET LOSS
    PER SHARE   F-24




---



##### Table of Contents



DENDREON
    CORPORATION
  NOTES TO
    FINANCIAL STATEMENTS  (Continued)
    For the Year Ended December 31,2007


2006


2005(In thousands, except share andper share amounts)Net loss

$
(99,264
)

$
(91,642
)

$
(81,547
)Weighted average shares used in computation of basic and diluted
    net loss per share


82,531



72,366



59,912Basic and diluted net loss per share

$
(1.20
)

$
(1.27
)

$
(1.36
)   12.
    COMMITMENTS
    AND CONTINGENCIES      EITF 97-10,
    OperatingLeases(In thousands)Year ending December 31:2008

$
3,2032009


3,5632010


3,1562011


3,2522012


216Thereafter


2,349Total minimum lease payments

$
15,739      F-25




---



##### Table of Contents



DENDREON
    CORPORATION
  NOTES TO
    FINANCIAL STATEMENTS  (Continued)
  McGuire v. Dendreon Corporation, et al. McGuire, et
    al. v. Dendreon Corporation, et al.,
    Loh v. Gold, et al.
      13.
    EMPLOYEE
    BENEFIT PLAN     F-26




---



##### Table of Contents



DENDREON
    CORPORATION
  NOTES TO
    FINANCIAL STATEMENTS  (Continued)
  14.
    RESTRUCTURING    BalanceAccrued in


Paid in





As ofRestructuring Charges

2007


2007


Adjustments


12/31//07(In thousands)Severance and outplacement costs

$
1,871


$
(1,508
)

$
(29
)

$
334Contract termination costs


300



(300
)






Stock compensation expense


199



(199
)






Total

$
2,370


$
(2,007
)

$
(29
)

$
334     BalanceAccrued in


Paid 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
)

$
   15.
    SUBSEQUENT
    EVENTS     F-27




---



##### Table of Contents



DENDREON
    CORPORATION
  NOTES TO
    FINANCIAL STATEMENTS  (Continued)
  16.
    QUARTERLY
    INFORMATION (UNAUDITED)    March 31


June 30


September 30


December 31(In thousands, except per share amounts)2007Revenue

$
80


$
523


$
112


$
28Total operating expenses(a)


32,037



23,387



19,813



27,125Loss from operations


(31,957
)


(22,864
)


(19,701
)


(27,097
)Net loss


(30,858
)


(22,225
)


(19,230
)


(26,951
)Basic and diluted net loss per share


(0.38
)


(0.27
)


(0.23
)


(0.32
)     (a)
    
    Total operating expenses during the quarter ended March 31
    includes contract manufacturing costs of $8.1 million to
    support commercial level production runs of the antigen used in
    Provenge. Total operating expenses during the quarter ended
    December 31, 2007 includes an increase of $7.8 million
    in contract manufacturing costs from the prior quarter.  March 31


June 30


September 30


December 31(In thousands, except per share amounts)2006Revenue

$
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
)  F-28