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April 7, 2006

Dendreon reduces size of Provenge plant

Posted by Benjamin J. Romano at 2:31 PM

Dendreon said in a regulatory filing today that it was reducing the scope of its Provenge manufacturing plant under construction in Hanover, N.J.

The Seattle biotech company amended its construction agreement to "reduce the size of the New Jersey manufacturing facility from a 48 workstation facility to a 12 workstation facility with appropriate laboratory and support areas."

Company spokeswoman Monique Greer said the move was part of the company's efforts to shift resources to prepare for its regulatory application and commercialization of Provenge. The company expects to file for regulatory approval to market the prostate-cancer treatment later this year.

She said 12 clean rooms, where the treatment will be manufactured, "is absolutely sufficient to meet the demand that we expect on launch of Provenge."

Biotech Stock Research, a Seattle-based investor publication, said in an investor note today the decision raises concerns:

The worry is this could be another Enbrel, where developer Immunex had a big hit on their hands and ended up not realizing the true promise of it due to lack of manufacturing capacity. They eventually sold themselves to Amgen (AMGN) at far below what their ultimate value would have been if they calculated manufacturing capacity at something other than the bare minimum necessary for launch.

In those terms, we see this reduction in capacity as further proof the company is positioning itself to be sold relatively quickly after Provenge is approved.

Greer said BSR was "reading a lot more into it than there really is. It doesn't mean any change in the company's commitment to Provenge or the timelines."

Dendreon shares closed down 3 cents to $4.35 today.

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Tricia Duryee
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