Dendreon Corporation is developing novel immunotherapies to treat cancer. It has one product, Provenge, approved for late-stage prostate cancer which works by re-engaging the immune system. While showing promise, Provenge faces challenges of high costs, lengthy approval delays, and lawsuits seeking earlier access. Dendreon needs to diversify its pipeline and pursue financing to support clinical trials and market expansion.

1. Dendreon Corporation (DNDN): Targeting Cancer,Transforming Lives ™ Market Analysis & Strategic Plan Report Anam Ali Jair Campos Bill Halkiadakis

2. Biotech Industry Analysis Growing at the rate of 13.95% yearly U.S Biotechnology industry is expected to touch mark of $131.8 Billion by the end of 2010. Companies in the Biotech Industry draw heavily upon research in genetic engineering or recombinant DNA technology to produce biological compounds (such as human insulin or vaccines) in large quantities for commercial use. Biotechnology will play an important role in Agricultural sector by developing large number of genetically modified seeds. The biomedical sector accounts for the major share of overall biotech industry in US and will continue to dominate in future as well.

3. Biotech Industry Biotech Industry Distribution Participants Customers Pricing Marketing & Promotion Regulation Joint Ventures/ Alliances Products R&D and Manufacturing Competitors Markets

4. Biotech & Pharmaceutical Market (worldwide) Source: IMS World Review 2007

5. Worldwide Incidence of Prostate Cancer Prostate cancer kills 200,000 men annually worldwide. Men over fifty or w/familial history are more susceptible Red and swollen areas indicate a higher rate. North America world leader Europe and Japan close second Courtesy of Science Creative Quarterly

6. Company Overview Dendreon was founded in 1992, in Seattle, Washington, and is traded on NASDAQ under the ticker DNDN. Company is engaged in discovering, developing and commercialization of novel therapeutics that harness the immune system to fight cancer. Employs about 232 people between their headquarters in Seattle and their manufacturing facility in Morris Plains, NJ. Dendreon has a market cap of $618.67 million, and reported sales of $111,000.00 million in 2008. The company's key products and services include the following: Provenge (sipuleucel-T) Neuvenge (lapuleucel-T) Trp-p8 CEA CA-9 Anti-Serine Protease

7. Defining the Business Who is being satisfied? Individual Patients, Physicians, Large Scale Purchasers, Governments What is being satisfied? Medical treatment for diseases How are customer needs being satisfied? Through the discovery and development of breakthrough medicines

8. Dendreon’s Purpose Dendreon’s uniqueness, innovation, and scientific advancement leads to introducing new therapeutic vaccines to treat forms of cancer Transforming lives, offering hope, and offering reliable, feasible & manageable treatment for men in late stage of prostrate cancer Heading towards becoming a leader in revolutionizing the treatment of prostrate cancer patients and immunological diseases worldwide

9. Key Points of the Firm Provides expertise in antigen identification, engineering and cell processing Active cellular immunotherapy holds promise providing patients with a clinical benefit, such as survival, and low toxicity Provenge has shown significant positive results in clinical trials. Dendreon studied 512 patients, and saw a 22% survival rate increase.

10. Treatment Cycle for PROVENGE® Active cellular immunotherapy (ACI) is a treatment approach that capitalizes on the power of live human cells to re-engage the patient's own immune system to fight cancer. The goal of Dendreon’s approach is to turn the immune system "back on" to elicit a specific and long-lasting response against cancer.

11. Our Potential Customers Late stage prostrate cancer patients Cancer clinical centers, physicians, hospitals Research/scientific community

12. Porter’s Five Forces Barriers to Entry - High High Capital requirements, high start up cost, economies of scales offer larger companies higher competitive advantage, complexity of design. Buyer’s Power – Medium Many buyers to choose from, HMO’s & PPO’s dictate what choice of drugs is allotted to customers Suppliers Power – Low Limited amount of products to offer the firm Threat of Substitutes - Medium Bio-tech firms can continuously produce more products & more patents can be filed Nature of Rivalry Within the Industry – High Intense competition with others in specialty market segment High exit barriers because of enormous R&D investments

13. Innovative therapeutic vaccine – Late stage Less toxic vs. chemo First mover advantage Exclusive patent rights Company size Lack of financial resources No products out on the market At the mercy of the FDA FDA rejection Market size Takeover by larger competitors Unfavorable results from R&D & clinical trials Future innovation & technological advances Niche products with high potential market penetration No competition from generics expected for yrs Fast growth expected in incidence of cancer

14. Firms Problems Approval delays from FDA - more data required not likely available till 2010. Rejection & lawsuits from agencies of cancer patients who wanted to access the drug now, investors, and patient advocates. This puts pressure on the firm to allocate more time & funds towards more clinical trials. Logistics and distribution costs likely to be higher than GVAX, more added steps involved.

15. Recommendations Growth Strategy Diversified Product Pipeline - expand portfolio beyond oncology drugs Needs to do financing to get more cash, diluting current investors Raise cash from secondary offering of the common stock. Stock price is high so more cash can be generated this way Market alignment and promotion.

16. Biotechnology Industry Very Large Range in Industry Capitalization Top 6 companies represent 80 percent of the market. Dramatic increase in revenue (119 percent) over the last 5 years. Little to Negative Revenue among Startups.

17. Industry Growth (2004 – 2008)

18. Industry Projections Financial Analysis Methodology Projected growth of Revenues are declining since companies are getting more mature. 48 percent increase in revenue over the next years. Large changes in capitalization & revenue is expected from the smaller companies within market segment. .

19. Projected Growth (2009 – 2013)

20. Evaluation of Industry Trend Growth Results The Financial Growth of large established Companies can be possibly predicted based on the previous financial results. It can be reasonably predicted in the very short term, but any financial estimates spanning several years most probably will be highly inaccurate. A five year Analysis may be too unrealistic in a market segment as fluid as Biotechnology. The next Market leader may not even be in the picture. The Financial Growth of a company like Dendreon cannot be predicted using traditional Industry Trend Growth. The long term growth of Dendreon will be the result of Disruptive New Technologies and Visionary Products that have a huge financial potential for the firm.

21. Financial Analysis (Stock Price) Phenomenal Stock Price Explosion in the last 30 days. $ 4.30 on April 03, 2009 $ 20.08 on April 24, 2009 $ 607 Million Market Cap on April 3 $ 1.97 Billion Market Cap on April 24, 2009. Company Fundamentals remain the same. The company has not produce a any profit over the last five years.

22. Financial Analysis (Fundamentals) For the last four years Dendreon has been consistently loosing money from $ 86.46 Million in 2005 to $ 70.48 Million in 2008. Revenues 2008 2007 2006 2005 (In Million) Revenue 0.11 100.0% 0.74 100.0% 0.27 100.0% 0.21 100.0% Other Revenue 0 0.0% 0 0.0% 0 0.0% 0 0.0% Total Revenue 0.11 100.00% 0.74 100.00% 0.27 100.00% 0.21 100.00% Income Statement 2008 2007 2006 2005 (In Million) Total operating Revenue 0.11 52.4% 0.74 352.4% 0.27 128.6% 0.21 100.0% Total Costs and Expenses 70.59 81.4% 102.36 118.1% 97.63 112.6% 86.67 100.0% Net Income -70.48 81.5% -101.62 117.5% -97.36 112.6% -86.46 100.0%

23. Ratio Analysis

24. Financial Analysis (Conclusion) Do Traditional Financial Analysis Tools apply for a company like Dendreon ? How does someone perform a valuation analysis for a company that it’s future Growth will be the result of Disruptive New Technologies and Visionary Products?

25. Questions?