Analyst Conference Summary

Conference date: March 1, 2011 @ 1:30 PM Pacific Time
for quarter ending: December 31, 2010 (fourth quarter)

Forward-looking statements

Overview: Nothing unexpected. Waiting for new Provenge machines to come online.

Basic data (GAAP):

Revenue was $25.0 million, up sequentially from $20.2 million, and up from $0.0 million in the year-earlier quarter.

Net income was negative $91.8 million, down sequentially from negative $79.3 million, and down from $32.5 million year-earlier.

EPS (earnings per share) were negative $0.64, down sequentially from negative $0.56, and down from $0.28 year-earlier.

Guidance:

For full 2011: $350 to $400 million revenue, mostly in second half of year. $310 to $350 million GAAP loss.

Highlights:

$607.3 million was raised by selling 2.875% convertible (@ $51) senior notes. Money to be used to bring Provenge to the European market, estimated at $125 million for

Currently have 12 work stations in New Jersey, with the potential of $27 to $30 million per quarter in product revenue.

Submitted applications for licensing for 36 more work stations in New Jersey and the first 36 stations in Los Angeles. Should get FDA approval for New Jersey in mid-March.

DN24-02 for bladder cancer has been approved to begin clinical trials; Phase II enrollment to begin in second half of year. DN24-02 also could be used for other cancer types.

Cash, equivalents and long-term investments ended at $277 million. Does not include cash from bond sale in January.

Cost of revenue was $13.4 million, leaving gross profit of $11.6 million. Operating expenses were $12.2 million for R&D and $85.7 million for selling, general and administrative. Loss from operations was $86.3 million. Other expense was $5.7 million.

Because more Provenge availability should come on line soon, gearing up marketing. Also working on streamlining reimbursements. Should have a Medicare national coverage decision by July 2011.

$90 million in startup costs for facilities is expected in 2011. Cost of goods sold as a percent of revenue not likely to improve until 2012.

Q&A:

It seems like you will need a lot of patients to meet your guidance? That is why we have already expanded the number of infuser accounts online. We should have 500 accounts by the end of the year.

In Q1 we are still capacity constrained, so in $27 million to $30 million range.

Pushback? We are seeing a lot of enthusiasm. We do have a learning curve, because we have to train doctors in the new techniques and in getting reimbursements.

Expense breakdown for 2011? There is potential for a lot of noise in breaking them down depending on timing of clinical trials, ramp up, etc. Not a linier process, a step up in Q1 from Q4, then ramping after that.

We are running clinical trials in Europe, so we would have R&D costs in Europe.

Academic doctors lack of reaction to Provenge? We were not doing marketing last year. We will do a lot of education on the relevance of Provenge for patients this year.

Apheresis expansion only 3 fold this year, versus 10x manufacturing, because we have excess apheresis capacity right now.

We are not worried about waiting lists because already the first slot is going to be several weeks or months out. So they will wait until we have additional capacity.

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