The Annual Meeting of Stockholders (the “Annual Meeting”) of Dendreon Corporation, a Delaware corporation (the “Company”), will be held on Wednesday, June 10, 2009, at 9:00 a.m., Pacific time, at 3005 First Avenue, Seattle, Washington 98121, for the following purposes:

The Board of Directors has fixed the close of business on April 22, 2009 as the record date for the determination of stockholders entitled to notice of and to vote at the Annual Meeting and at any adjournments or postponements thereof.

All stockholders are cordially invited to attend the Annual Meeting in person. However, to assure your representation at the Annual Meeting, please vote as soon as possible using one of the following methods: (1) by using the Internet as instructed on the proxy card; (2) by telephone by calling the toll-free number as instructed on the proxy card; or (3) by mail by completing, signing, dating and returning the proxy card in accordance with its instructions. If you vote in advance of the Annual Meeting using the Internet, telephone or proxy card, you may still vote in person if you attend the Annual Meeting. Please note, however, that if your shares are held of record by a broker, bank or other nominee and you wish to vote at the Annual Meeting, you must obtain from the record holder a proxy issued in your name.

Your proxy is solicited on behalf of the Board of Directors of Dendreon Corporation, a Delaware corporation (“Dendreon”, the “Company”, “we”, “us”, or “our”), for use at the Annual Meeting of Stockholders (the “Annual Meeting”), to be held on June 10, 2009, at 9:00 a.m., Pacific time, and at any adjournments or postponements thereof, for the purposes set forth herein and in the accompanying Notice of Annual Meeting. The Annual Meeting will be held at 3005 First Avenue, Seattle, Washington 98121.

You have previously received a Notice of Internet Availability of Proxy Materials from either our transfer agent or from your bank, broker or other nominee, as applicable. The Notice of Internet Availability of Proxy Materials, this proxy statement and our Annual Report on Form 10-K for the fiscal year ended December 31, 2008 will be available on or about May 1, 2009 at http://bnymellon.mobular.net/bnymellon/dndn for stockholders of record who hold shares in their own name and at http://bnymellon.mobular.net/bnymellon/dndn_beneficial for beneficial stockholders who hold their shares in a brokerage account or through a nominee holder. Additionally, a proxy card will be mailed to all registered stockholders and requests for voting instructions will be forwarded to beneficial stockholders entitled to vote at the Annual Meeting on or about May 1, 2009. Our Annual Report on Form 10-K for the fiscal year ended December 31, 2008 includes financial statements and a financial statement schedule, but excludes exhibits, as filed with the Securities and Exchange Commission (the “SEC”). Our Annual Report, and the exhibits thereto, as well as our other filings with the SEC may be accessed, free of charge, at http://www.sec.gov, as soon as practicable after filing.

Only holders of record our Common Stock, par value $0.001 per share (“Common Stock”), at the close of business on April 22, 2009 (the “Record Date”) will be eligible to vote at the Annual Meeting. As of the Record Date, there were           shares of Common Stock outstanding. Each stockholder will be entitled to one vote for each share owned. Stockholders have no right to cumulative voting as to any matter to be voted on at the meeting. A list of stockholders of record will be open to the examination of any stockholder for any purpose germane to the meeting at Dendreon Corporation, 3005 First Avenue, Seattle, Washington 98121, for a period of ten days prior to the Annual Meeting.

A plurality of the votes duly cast at the Annual Meeting is required for the election of director nominees. The two director nominees receiving the highest number of votes cast by the holders of our Common Stock entitled to vote at the Annual Meeting will be elected.

The approval of the new Dendreon Corporation 2009 Equity Incentive Plan and the ratification of the appointment of Ernst & Young LLP as the Company’s independent registered public accounting firm for the fiscal year ending December 31, 2009 each requires the affirmative vote of a majority of votes cast by the holders of our Common Stock entitled to vote at the Annual Meeting.

The approval of the proposed amendment to the Company’s Amended and Restated Certificate of Incorporation to increase the authorized number of shares of Common Stock from 150,000,000 shares to 250,000,000 shares requires the affirmative vote of the holders of a majority of all outstanding shares of our Common Stock entitled to vote at the Annual Meeting.

We will bear the cost of the solicitation of proxies for the Annual Meeting, including preparation of this proxy statement, the proxy card and any additional information furnished to stockholders, including any mailing charges. We have retained the services of BNY Mellon Shareholder Services LLC to assist in the solicitation of proxies. We expect to pay approximately $8,500 for these services, plus out-of-pocket expenses. We will, upon request, furnish hard copies of the solicitation materials to record holders of our Common Stock as well as forward materials to beneficial holders upon instruction by banks, brokerage houses, fiduciaries and custodians who are record holders of our Common Stock. We may, on request, reimburse persons representing beneficial owners of our Common Stock for their costs of forwarding solicitation materials to beneficial owners. Proxies may be solicited by telephone, facsimile or personal solicitation. No additional compensation will be paid to our directors, officers or other employees for such services.

At the Annual Meeting, inspectors of election shall determine the presence of a quorum and shall tabulate the results of the vote of the stockholders. The holders of a majority of the total number of outstanding shares of Common Stock entitled to vote must be present in person or by proxy to constitute a quorum for any business to be transacted at the Annual Meeting. Properly executed proxies marked “abstain” and “broker non-votes” will be considered “present” for purposes of determining whether a quorum is present at the Annual Meeting. “Broker non-votes” occur when certain nominees holding shares for beneficial owners do not vote those shares on a particular proposal because the nominees do not have discretionary authority to do so and have not received voting instructions with respect to the proposal from the beneficial owners. For purposes of calculating votes in the election of directors, broker non-votes and abstentions will not be counted as votes and will not affect the results of the vote. Brokers have discretionary authority to vote on the amendment of our Amended and Restated Certificate of Incorporation to increase the number of authorized shares of our Common Stock and on the ratification of our independent registered public accounting firm but not on the approval of the new 2009 Equity Incentive Plan. If a broker submits a “non-vote” on these proposals, it will have the same effect as a vote against the approval of the new 2009 Equity Incentive Plan, the amendment of our Amended and Restated Certificate of Incorporation and the ratification of our independent registered public accounting firm.

The shares represented by all valid proxies received will be voted in the manner specified on the proxies. Where specific instructions are not indicated on a valid proxy, the shares represented by such proxies received will be voted: “For” the election of the director nominees named in this proxy statement, “For” the approval of the new 2009 Equity Incentive Plan, “For” the amendment to our Amended and Restated Certificate of Incorporation to approve the increase in the number of authorized shares of Common Stock, “For” the ratification of the selection Ernst & Young LLP as our independent registered public accounting firm for the current year and in accordance with the best judgment of the persons named in the proxy for any other matter that properly comes before the Annual Meeting.

Stockholders may vote shares of our Common Stock using any of the following means:

Representatives of BNY Mellon Shareowner Services LLC, the transfer agent and registrar for our Common Stock, will count the votes and act as the independent inspector of the election at the Annual Meeting.

Each stockholder’s notice must contain certain prescribed information required by our Amended and Restated Bylaws as to each matter the stockholder proposes to bring before the annual meeting, as well as a representation whether the stockholder intends to deliver a proxy statement and/or form of proxy to holders of at least the percentage of our outstanding capital stock required to approve the nomination or proposal and/or otherwise to solicit proxies from stockholders in support of the nomination or proposal. The full text of the provisions of our Bylaws dealing with stockholder nominations and proposals is available on the SEC’s website, free of charge, at http://www.sec.gov. In addition, a copy of the full text of our Bylaws may be obtained from our Corporate Secretary upon written request.

Under the SEC’s rules, stockholders who wish to submit proposals for inclusion in the proxy statement of our Board of Directors for the 2010 Annual Meeting of Stockholders must submit such proposals so that they are received by us at 3005 First Avenue, Seattle, Washington 98121, on or before December 31, 2009. Stockholders

Our Board of Directors is currently composed of eight members. There are three directors in the class whose term of office expires at the close of the Annual Meeting in 2009: Susan B. Bayh, M. Blake Ingle, Ph.D. and David L. Urdal, Ph.D. Mr. Ingle has determined not to stand for re-election to the Board of Directors for a new three-year term and our Board of Directors has adopted a resolution to reduce the size of our Board of Directors from eight to seven members concurrent with the close of the Annual Meeting. Accordingly, the class elected at the Annual Meeting will consist of two directors. Each of the nominees for election to this class is currently a director of our Company who was previously elected by the stockholders and has been nominated for re-election upon recommendation of our Corporate Governance Committee and our Board of Directors. If elected at the Annual Meeting, Ms. Bayh and Dr. Urdal would serve until the 2012 Annual Meeting and until her or his successor is elected and has been duly qualified, or until such director’s earlier death, resignation or removal.

Directors are elected by a plurality of the votes cast, present in person or represented by proxy and entitled to vote at the Annual Meeting. Proxies will be voted, unless authority is withheld, for the election of the two nominees named below. In the event that any nominee should become unavailable for election as a result of an unexpected occurrence, such shares will be voted for the election of such substitute nominee as the Board of Directors may propose. Each person nominated for election has agreed to serve if elected, and management has no reason to believe that any nominee will be unable to serve.

Set forth below is biographical information for each person nominated for election at the Annual Meeting for a term expiring at the 2012 Annual Meeting and each person whose term of office as a director will continue after the Annual Meeting.

Susan B. Bayh, age 49, has served as one of our directors since our acquisition of Corvas International, Inc. (“Corvas”), a biotechnology company, in July 2003. Prior to that, she had served as a director of Corvas since June 2000. From 1994 to 2004, she has been a Distinguished Visiting Professor at the College of Business Administration at Butler University in Indianapolis, Indiana. From 1994 to 2001, she was a Commissioner for the International Commission between the United States and Canada, overseeing compliance with environmental and water level treaties for the United States-Canada border. From 1989 to 1994, Ms. Bayh served as an attorney in the Pharmaceutical Division of Eli Lilly and Company, a pharmaceutical company. She currently serves on the Boards of Directors of Wellpoint, Inc., a health benefits company, Dyax Corp., a biotechnology company, Curis, Inc., a therapeutic drug development company, Emmis Communications, a diversified media company, and MDRNA, Inc., a biotechnology company. Ms. Bayh received a B.S. from the University of California, Berkeley and her J.D. from the University of Southern California Law School.

David L. Urdal, Ph.D., age 59, has served as our Senior Vice President and Chief Scientific Officer since June 2004. In January 2006, Dr. Urdal assumed oversight of manufacturing operations for the Company. Prior to June 2004, he served as Vice Chairman of the Company’s Board of Directors and Chief Scientific Officer since joining the Company in July 1995. He served as the Company’s President from January 2001 to December 2003, and he served as the Company’s Executive Vice President from January 1999 through December 2000. From 1982 until July 1995, Dr. Urdal held various positions with Immunex Corporation, a biotechnology company, including President of Immunex Manufacturing Corporation, Vice President and Director of Development, and head of the

Gerardo Canet, age 63, has served as one of our directors since December 1996. Mr. Canet is Chairman of the Board of Directors of IntegraMed America, Inc., and from 1994 to 2005, served as its Chief Executive Officer. IntegraMed provides services to patients and medical practices that specialize in the diagnosis and treatment of infertility. Mr. Canet received a B.A. in Economics from Tufts University and an M.B.A. from Suffolk University.

Bogdan Dziurzynski, D.P.A., age 60, has served as one of our directors since May 2001. Since 2001, Dr. Dziurzynski has been a consultant in strategic regulatory management to the biotechnology industry and serves on the Board of Directors of Allostera Pharma Inc. and the Biologics Consulting Group, Inc. Dr. Dziurzynski is a fellow and past chairman of the board of the Regulatory Affairs Professional Society. He also serves as an advisory board member of Integrated Biotherapeutics, Inc. From 1994 to 2001, Dr. Dziurzynski was the Senior Vice President of Regulatory Affairs and Quality Assurance for MedImmune, Inc., a biotechnology company. From 1988 to 1994, Dr. Dziurzynski was Vice President of Regulatory Affairs and Quality Assurance for Immunex Corporation, a biotechnology company. Dr. Dziurzynski has a B.A. in Psychology from Rutgers University, an M.B.A. from Seattle University and a Doctorate in Public Administration from the University of Southern California.

Douglas G. Watson, age 64, has served as one of our directors since February 2000. Mr. Watson is Chief Executive Officer of Pittencrieff Glen Associates, a consulting firm that he founded in July 1999. From January 1997 to May 1999, Mr. Watson served as President and Chief Executive Officer of Novartis Corporation, the U.S. subsidiary of Novartis AG. From April 1996 to December 1996, Mr. Watson served as President and Chief Executive Officer of Ciba-Geigy Corporation, which merged into Novartis Corporation in December 1996. Mr. Watson’s career spanned 33 years with Novartis, having joined Geigy (UK) Ltd. in 1966. Mr. Watson also currently serves as chairman of OraSure Technologies, Inc., a medical diagnostics company, chairman of Javelin Pharmaceuticals, Inc., a pharmaceutical company, and as a director of Genta Incorporated, a biopharmaceutical company, and BioMimetic Therapeutics, Inc., a pharmaceutical company. Mr. Watson received an M.A. in Pure Mathematics from Churchill College, Cambridge University and holds an ACMA qualification as an Associate of the Chartered Institute of Management Accountants.

Richard B. Brewer, age 58, has served as our Chairman of the Board of Directors since June 2004 and has served as one of our directors since February 2004. He is the founding partner of Crest Asset Management, a management advisory and investment firm, a position he has held since January 2003. Since 2006, Mr. Brewer has served as the President and CEO of Arca Biopharma, Inc., a biopharmaceutical company focused on genetically-targeted therapies for heart failure. From September 1998 until February 2004, Mr. Brewer served as Chief Executive Officer and President of Scios Inc., a biopharmaceutical company. From 1996 until 1998, Mr. Brewer served as the Chief Operating Officer at Heartport, a cardiovascular device company. From 1984 until 1995, Mr. Brewer was employed by Genentech, Inc., a biotechnology company, and served as its Senior Vice President of Sales and Marketing, and Senior Vice President of Genentech Europe and Canada. Mr. Brewer serves as a director of SRI International, an independent, non-profit research group. He is an advisory board member at the Kellogg Graduate School of Management Center for Biotechnology at Northwestern University. Mr. Brewer holds a B.S. from Virginia Polytechnic Institute and an M.B.A. from Northwestern University.

Mitchell H. Gold, M.D., age 42, has served as our Chief Executive Officer since January 1, 2003, and as a director since May 2002. Dr. Gold also served as our Vice President of Business Development from June 2001 to May 2002, and as our Chief Business Officer from May 2002 through December 2002. From April 2000 to May

Our Corporate Governance Committee and our Board of Directors have determined that all six of our current and all five of our continuing non-employee directors are independent under the rules of the SEC and the listing standards of The Nasdaq Stock Market, Inc. (“Nasdaq”). Those continuing independent directors are Ms. Bayh, Mr. Brewer, Mr. Canet, Dr. Dziurzynski, and Mr. Watson. Dr. Gold and Dr. Urdal are not independent based on their service as our Chief Executive Officer and President, and our Senior Vice President and Chief Scientific Officer, respectively. In making its independence determinations, the Corporate Governance Committee each year reviews any transactions and relationships between the director, or any member of his or her immediate family, and the Company, and is based on information provided by the director, Company records and publicly available information during the year. Specifically, the Corporate Governance Committee will consider the following types of relationships and transactions: (1) principal employment of and other public company directorships held by each non-employee director; (2) contracts or arrangements that are ongoing or which existed during any of the past three fiscal years between our Company and any entity for which the non-employee director, or his or her immediate family member, is an executive officer or greater-than-10% stockholder; and (3) contracts or arrangements that are ongoing or which existed during any of the past three fiscal years between our Company and any other public company for which the non-employee director serves as a director. During 2008, there were no relationships or transactions in these categories reviewed by the Corporate Governance Committee, nor were there any other similar relationships or transactions the Corporate Governance Committee considered.

Our Amended and Restated Certificate of Incorporation and Amended and Restated Bylaws provide for the division of our Board of Directors into three classes, each class consisting, as nearly as possible, of one-third of the total number of directors, with each class having a three-year term. Vacancies on the Board of Directors may be filled only by persons elected by a majority of the remaining directors. A director elected by the Board of Directors to fill a vacancy (including a vacancy created by an increase in the number of directors) shall serve for the remainder of the full term of the class of directors in which the vacancy occurred and until such director’s successor is elected and qualified.

In 2008, the Board of Directors held eight meetings. We encourage but do not require the directors to attend the Annual Meeting. We schedule a regular meeting of the Board of Directors immediately following the Annual Meeting. All of our directors attended the 2008 Annual Meeting of Stockholders. All directors attended more than 75% of the aggregate of the meetings of the Board and the committees on which he or she served.

The Board of Directors has three standing committees: an Audit Committee, a Compensation Committee and a Corporate Governance Committee, each of which has a written charter that is available on our investor relations

The primary responsibility of the Audit Committee is to oversee our financial reporting process on behalf of the Board of Directors. Among other things, the Audit Committee is responsible for overseeing our accounting and financial reporting processes and audits of our financial statements, reviewing and discussing with our independent auditors critical accounting policies and practices for our Company, engaging in discussions with management and the independent auditors to assess risk for the Company and management thereof, and reviewing with management and the independent auditors the effectiveness of our internal controls and disclosure controls and procedures. The Audit Committee is directly responsible for the appointment, compensation, retention and oversight of the work of our independent auditors, including the resolution of disagreements, if any, between management and the auditors regarding financial reporting. In addition, the Audit Committee is responsible for reviewing and approving any related party transaction that is required to be disclosed pursuant to Item 404 of Regulation S-K promulgated under the Exchange Act.

During 2008 the Audit Committee was composed of Mr. Watson (Chair) and Drs. Dziurzynski and Ingle, each of whom the Board of Directors determined was independent under SEC rules and Nasdaq listing standards. The Audit Committee met eight times during 2008. The Board of Directors determined based on relevant business experience that each of Mr. Watson and Dr. Ingle is an “audit committee financial expert,” as that term is defined in Item 407(d)(5) of Regulation S-K.

The Compensation Committee develops compensation policies and implements compensation programs, makes recommendations annually concerning salaries and incentive compensation, awards stock options and restricted stock to officers and employees under our stock incentive plans and otherwise determines compensation levels and performs such other functions regarding compensation as the Board of Directors may delegate in accordance with the Compensation Committee Charter, which is available on our investor relations website. Compensation for our named executive officers each year is usually determined prior to the first quarter of the relevant year. When determining annual compensation levels and targets, the Compensation Committee reviews and approves individual and corporate goals and objectives for the current year, evaluates individual performance in light of the goals and objectives established for the prior year, considers competitive market data and establishes compensation based on these factors or in the case of our named executive officers, makes recommendations to our Board of Directors, who then act as a whole to set compensation based on these factors. The values of each component of total direct compensation (base salary, target annual cash incentive and equity awards) for the current year, as well as total annual compensation for the prior year are all considered collectively by our Compensation Committee as part of this process.

Our Compensation Committee has the authority to engage the services of outside advisors, experts and others to assist our Compensation Committee in determining the compensation of our executive officers. Our Compensation Committee may, from time to time, delegate certain authority to authorized persons internally, including our human resources department, to carry out certain administrative duties. The Compensation Committee holds executive sessions (with no members of management present) at the majority of its meetings.

The Compensation Committee is currently composed of Mr. Canet (Chair), Ms. Bayh and Dr. Dziurzynski, each of whom is independent under Nasdaq listing standards. The Compensation Committee met six times during 2008. No member of our Compensation Committee has been an officer or employee of our Company at any time. None of our executive officers during 2008 served as a director or as a member of the compensation committee of another entity that has an executive officer who served as a director of the Company or on our Compensation Committee during 2008.

The Corporate Governance Committee considers and makes recommendations regarding corporate governance requirements and principles, periodically reviews the performance and operations of the standing committees of the Board of Directors and evaluates and recommends individuals for membership on the Company’s Board of Directors and committees. The Corporate Governance Committee Charter is available on our investor relations website.

Potential nominees for director are referred to the Corporate Governance Committee for consideration and evaluation. If the Committee identifies a need to replace a current member of the Board of Directors, to fill a vacancy in or to expand the size of the Board of Directors, the Corporate Governance Committee will consider those individuals recommended as candidates for Board membership, including those recommended by stockholders, and hold meetings to evaluate biographical information and background material relating to candidates, and interview any selected candidates.

According to its adopted policy, the Corporate Governance Committee may use multiple sources for identifying director candidates, including its own contacts and referrals from other directors, members of management, our advisors and executive search firms. The Corporate Governance Committee will consider director candidates recommended by stockholders and will evaluate those candidates in the same manner as candidates recommended by other sources if stockholders submitting recommendations follow the procedures established by the Corporate Governance Committee. We did not implement any changes to our process for stockholder recommendations of director nominees during 2008.

In making recommendations for director nominees for an annual meeting of stockholders, the Corporate Governance Committee will consider any written recommendations of director candidates by stockholders received by our Corporate Secretary not later than the close of business on the 90^th day nor earlier than the 120^th day prior to the first anniversary of the previous year’s annual meeting of stockholders. Recommendations must include the candidate’s name and contact information and a statement of the candidate’s background and qualifications, as well as the name and contact information of the stockholder or stockholders making the recommendation, and such other information as may be required under our Amended and Restated Bylaws. Recommendations must be mailed to Dendreon Corporation, 3005 First Avenue, Seattle, Washington 98121, Attention: Corporate Secretary, faxed to our Corporate Secretary at (206) 219-7211 or e-mailed to secretary@dendreon.com.

No stockholder recommendations for director nominees were received for consideration at the Annual Meeting.

The Board of Directors does not currently prescribe any minimum qualifications for director candidates. The Corporate Governance Committee will consider our current needs and the qualities needed for Board of Directors service, including experience and achievement in business, finance, biotechnology, health sciences or other areas relevant to our activities; reputation, ethical character and maturity of judgment; diversity of viewpoints, backgrounds and experiences; absence of conflicts of interest that might impede the proper performance of the responsibilities of a director; independence under SEC rules and the listing standards of Nasdaq; service on other boards of directors; sufficient time to devote to Board of Directors matters; and the ability to work effectively with other members of our Board of Directors.

The Corporate Governance Committee is currently composed of Ms. Bayh (Chair), Mr. Brewer and Dr. Ingle. Each Committee member is independent under Nasdaq listing standards. The Corporate Governance Committee met four times during 2008.

We have established a procedure for stockholders to communicate with the Board of Directors or a particular Board committee. Communications should be in writing, addressed to: Dendreon Corporation, 3005 First Avenue, Seattle, Washington 98121, and marked to the attention of the Board of Directors or any of its individual committees. Copies of all communications so addressed will be promptly forwarded to the chair of the committee involved, or in the case of communications addressed to the Board of Directors as a whole, to the Corporate Governance Committee.

We compensate only our non-employee directors for serving on our Board of Directors. Our Board of Directors has adopted guidelines for the compensation of our non-employee directors, which were revised in December 2008 to be applicable on a prospective basis. During 2008, each non-employee director received an annual retainer of $35,000 that is paid ratably at the end of each quarter. In addition, the Chairman of the Board received an additional $75,000 retainer per year, and the chairs of each of our Audit, Compensation and Corporate Governance Committees received an additional $10,000, $8,000 and $4,000, respectively, retainer per year. These amounts are also paid ratably at the end of each quarter. For 2008, the total aggregate cash compensation earned by our non-employee directors was $324,500. These guidelines were updated for 2009, such that the annual retainer paid to each board member will be $40,000, and the chairs of our Audit, Compensation and Corporate Governance Committees will receive an additional retainer of $15,000, $10,000 and $6,000, respectively. We also reimburse each of our directors for expenses incurred in connection with attending Board of Directors’ meetings and for their service as directors in accordance with Company policy.

During 2008, our policy was to grant our non-employee directors an initial equity grant of an option to purchase 22,500 shares of Common Stock under our amended 2000 Equity Incentive Plan, which we refer to as our 2000 Equity Incentive Plan. The option vested as to 7,500 of the shares on each of the grant date and the first two anniversaries of the grant date. In December 2008, these guidelines were changed such that the initial equity grant to non-employee directors would instead be an award not to exceed two times the amount of the then-current annual grant. The 2000 Equity Incentive Plan also provides that each non-employee director will receive, in the third December following his or her election to the Board of Directors and each December thereafter, an annual grant of a fully exercisable option to purchase the number of shares of Common Stock equal to $100,000 divided by a number representing the value of an option to purchase one share of Common Stock as of the grant date. In lieu of the automatic grant for 2008, in December 2008 our non-employee directors approved the grant of 12,500 shares to each director serving at the end of 2008, which vested upon grant in January 2009. Under the 2000 Equity Incentive Plan, we determine the value of the grant to our non-employee directors of an option to purchase one share of Common Stock each year using the Black-Scholes-Merton option valuation methodology and assumptions described in our financial statements to estimate the value of compensatory stock options. All options granted to our non-employee directors are granted with an exercise price equal to the closing price of our Common Stock on the Nasdaq Global Market on the grant date.

The table below sets forth, for each non-employee director, the amount of cash compensation paid by us and the value of stock awards received from us for his or her service during 2008:

Under the corporate governance principles adopted by our Board of Directors in 2005, our non-employee directors are encouraged to own stock in our Company in an amount equal to one times the annual general Board of Directors’ retainer. This ownership target is intended to be achieved within twenty-four months after a director joins our Board of Directors, and stock acquired to satisfy the target is expected to be a long-term investment. As of December 31, 2008, half of our non-employee directors met their applicable ownership guidelines. However, following the grant of shares to each non-employee director in January 2009 in lieu of option grants for 2008 service, each of our non-employee directors met this goal.

Our Company’s mission is to discover, develop and commercialize new therapeutics that target cancer and have the power to transform lives. To achieve this mission, we seek to attract and retain the most talented executive officers and other employees, reward them for helping achieve our business objectives and motivate them to enhance long-term stockholder value by achieving commercialization of our primary product candidate and other corporate goals. As a result, the goals of our executive compensation program are to align senior executive compensation with the achievement of our Company’s business objectives and corporate performance. Each year, we expect that if we achieve our corporate objectives, our executive compensation program will reward our named executive officers for the multiple responsibilities that they have met in helping us succeed in reaching our goals. We also expect that compensation for our named executive officers will be less in years in which we do not achieve all of our corporate objectives. We also set individual goals for our executive officers, the achievement or partial achievement of which will also factor into our annual compensation review.

Our Company’s compensation policies and practices are developed by the Compensation Committee of our Board of Directors and implemented by our Board of Directors upon the recommendation of the Compensation Committee. The Compensation Committee’s responsibility is to review and consider annually the performance of our management in achieving both corporate and individual goals and objectives and to assure that our Company’s compensation policies and practices are competitive and effective to motivate management. The responsibilities of the Compensation Committee are laid out in its charter and include:

Our Compensation Committee met six times in 2008. In addition, the Compensation Committee held discussions with management, approved compensation plan awards, adopted a new offering under our employee stock purchase plan, reviewed and structured our corporate objectives, which are also approved by the full Board, determined individual performance against previously established goals and reviewed the elements and structure of our total compensation packages for 2008. In addition, in August 2008 the Compensation Committee retained Radford Surveys and Consulting (referred to as Radford) to conduct a new review of our compensation programs and recommend changes to align our executive pay practices to maintain a competitive market position.

At the time the Compensation Committee recommended executive pay structure for 2008, in particular base salary and bonus targets for our named executive officers, the primary resources used were a comprehensive November 2004 executive compensation analysis conducted by Mellon Human Resources & Investor Solutions (which we refer to as the Mellon report) and a report rendered in 2006 by Mercer Human Resource Consulting (which we refer to as the Mercer report). The Mellon report contained various valuation assessments upon which compensation decisions, including the level and amount of equity awards, had been based in following years, and the Mercer report had served as an updated review with regard to our benchmarking practices and market assessment of the competitiveness of our pay practices. In addition, we obtained current Radford survey data regarding other comparable biotechnology companies as a means to verify the continuing validity of the practices adopted in light of the recommendations of the Mellon and Mercer reports. Our Compensation Committee also reviewed again for 2008 our compensation allocation practices for our named executive officers regarding cash

In August 2008, our Compensation Committee chose, after a detailed request for proposal process, to retain Radford to conduct a comprehensive competitive review and analysis of our executive and equity compensation programs with the specific goal of helping position the Company for the potential commercialization of our products during 2009. As part of its review, Radford reviewed our compensation philosophy and existing peer group, and in November 2008 presented its findings to the Compensation Committee regarding its competitive assessment of the base salary, target total cash compensation, long-term incentives and total direct compensation that we pay our executive officers. In addition, Radford reviewed our existing executive employment agreements, which contain change-in-control severance benefits. In conducting its analysis, Radford reviewed the compensation payable to our named executive officers, and also six other vice president-level positions, within our Company. The November 2008 Radford survey reflected a finding that the equity component of the Company’s compensation program was significantly lower than the approved peer group, consisting of biotechnology companies pre-commercial product launch or at an early stage of commercialization and a market capitalization range of approximately $275 million to $1.7 billion, approximately 33 — 300% to that of our Company at that time. This peer group was chosen as a blend of companies reflecting our Company’s stage of development and taking into consideration possible outcomes of the Company’s ongoing Phase III trial for Provenge. The December 2008 Radford survey peer group consisted of:

Overall, the November 2008 Radford survey found that the base salary component for our Company, including base and target bonus, fell between the 50^th and 60^th percentile of the determined peer group, with individual

Our Compensation Committee historically reviews a tally sheet setting forth all components of total compensation paid and payable to our named executive officers, including base compensation, annual cash incentives, long-term incentives consisting of equity awards, accumulated realized and unrealized stock option and restricted stock awards, and potential change of control and severance benefits. This tally sheet is helpful because it highlights the effect of compensation decisions made over time on each named executive officer’s total annual compensation, which historical information our Compensation Committee was able to review on the same page for comparative purposes. In this way, the tally sheet helps our Compensation Committee see the equity stake that each of our named executive officers holds in the Company, which is then used to review and evaluate potential equity awards in the current fiscal year. Our Compensation Committee continued the practice of reviewing a tally sheet for 2008 compensation decisions.

We encourage appropriate involvement by our senior management team in determining our compensation practices. In general, our senior management team supports our Compensation Committee with its tasks of developing and implementing our executive compensation programs. Our management team, primarily through our human resources department, annually reviews Radford survey data for comparable biotechnology companies and determines management’s recommendations for overall annual salary increases across the entire Company and compensation levels for each of our executive officers, taking into consideration factors such as individual contributions and industry and competitive considerations. Performance goals are personally tailored for each of our named executive officers. Our Chief Executive Officer also conducts all performance evaluations for our senior vice presidents, which performance reviews factor into decisions with respect to annual cash incentive awards described below. Our Chief Executive Officer and our Senior Vice President of Corporate Development and General Counsel regularly attend Compensation Committee meetings, and our Chief Executive Officer presents his recommendations and performance evaluation results to the Compensation Committee generally at the Compensation Committee’s November meeting.

As mentioned above, the objective of our executive compensation programs is to attract, motivate and retain highly qualified employees, including senior executive officers, to help us achieve our business objectives. The principal components of our executive compensation program are base salary, annual cash incentives and long-term equity incentives. Our Compensation Committee determines the amounts to recommend to the Board of Directors for each compensation element for each named executive officer as a result of management recommendations, any relevant consultant recommendations and benchmarking reviews, as well as based on its review of past corporate performance and goals for future corporate performance. Historically, given our lack of profitability to date and in order to provide a performance incentive, we have heavily-weighted total compensation in favor of equity incentive awards as compared to cash compensation. We expect to continue this practice as we continue to focus on sustainable business growth.

We have designed the elements of our executive compensation program, and our decisions regarding the amount paid for each element, to work together to meet our overall compensation objectives. Decisions regarding each element of compensation are considered when our Compensation Committee reviews the total compensation arrangement for each named executive officer and our executive officers as a group. In terms of the overall design of our executive compensation program, we generally emphasize incentive compensation components that are flexible and take into consideration our overall strategic advancement during the relevant calendar year with respect to designated corporate goals and, when applicable, individual contributions. As a result of our benchmarking activities described above, each component of our executive compensation program has been chosen to

Our long-term incentive program, in particular, is designed so that a significant portion of each named executive officer’s total direct compensation is delivered in the form of equity (which for 2008 consisted of both stock options and restricted stock awards), rather than cash, to create incentives for long-term performance and to promote alignment with stockholder interests over the relevant periods. In this way, our named executive officers will receive substantially increased compensation if our stockholders experience increased value, instead of simply receiving median salary compensation adjustments year-after-year, regardless of Company performance. Based on the recommendation of management, our named executive officers did not receive an increase in base salary for 2008 and instead received increased long-term equity awards, as discussed below. We believe options remain a desirable incentive tool for both executive officers and employees generally. However in recent years we have emphasized restricted stock awards for existing employees as a more stable award to incentivize employees given the volatility of our stock, and also due to the declining pool of available shares under our existing equity award plans.

We also encourage important individual contributions to our Company’s success and attempt to appropriately spur extraordinary efforts and achievement by rewarding our named executive officers for attaining our Company’s objectives. Under the incentive components of our executive compensation program, we focus on achievement of significant Company objectives, which are discussed in further detail below.

Achieving our corporate objectives is essential for the success of our business, and we place significant focus on pay for performance. The still early-growth stage of our Company means that individual performance is critical in our achievement of our corporate objectives. We seek to encourage and reward both individual performance and the achievement of our corporate objectives through our incentive compensation components.

Annual cash incentive target opportunities are established each year as a percentage of base salary for each named executive officer. As discussed further below, payouts for the annual cash incentive opportunities are made based on two distinct evaluations: corporate objectives and individual performance. In this way, the annual cash incentive award is earned based on whether our Company achieves its pre-established strategic objectives as well as on an assessment of each named executive officer’s annual individual performance. Individual performance is evaluated based on the named executive officer’s individual contributions toward the achievement of our corporate objectives, which evaluation measures performance regarding factors including leadership, staff development, modeling Company values, fiscal responsibility, technical capabilities, teamwork, effective communication, quality and excellence, and corporate stewardship. For 2008, factors considered by the Compensation Committee included leadership, staff development and teamwork, as well as each named executive officer’s achievements against individually pre-determined goals for the year. In reviewing these factors, the Compensation Committee considered each named executive officer’s ability to lead his group or department, follow-through on commitments, contributions to teamwork,; and ability to coach and mentor employees.

Our named executive officers earn the Company performance portion of their annual cash incentive awards based on pre-established corporate objectives, and the individual performance portion of each annual cash incentive award is also based on pre-established targets or objectives. These objectives are subject to change over the course of the year as deemed appropriate by the Compensation Committee and our Board of Directors. The individual performance portion is subject to a discretionary, hindsight evaluation as to whether the officer is entitled to an increased or decreased reward for his or her efforts. Our Chief Executive Officer conducts all performance evaluations for our senior vice presidents, and our Chairman of the Board of Directors conducts the performance evaluation for our Chief Executive Officer.

The Compensation Committee does consider internal pay equity factors when setting individual performance goals and annual cash incentive target percentages and equity awards, and accordingly our senior vice presidents are frequently aligned in pay practices.

As discussed above, we review and compare our total compensation and each compensation element through benchmarking processes to ensure the competitiveness of both our executive compensation program as a whole and the total compensation packages for our named executive officers. The principal components for the compensation of each of our named executive officers are:

Base Salary.  Base salary serves as the foundation of our executive compensation program. We pay base salary to attract and retain executives and to remain comparable with our peer companies. We establish the other key components of each named executive officer’s compensation package, including long-term equity incentives and termination payments, with reference to his or her base salary.

We establish base salaries for our named executive officers when they join our Company or upon promotion. Our Compensation Committee and Board of Directors annually review each named executive officer’s base salary. When reviewing base salaries, the Compensation Committee and Board of Directors consider corporate performance and executive performance reviews for the prior year, levels of responsibility, prior experience, breadth of knowledge and competitive pay practices. Annual increases in base salary are also generally tied to annual cost of living increases and market-driven annual salary increases across the entire Company or within our industry, as recommended by management based on its review of Radford survey data.

For 2008, our management team presented a proposal to the Compensation Committee for our senior executives to receive increased long-term equity compensation awards instead of base salary increases for the fiscal year. Our Compensation Committee reviewed, considered and adopted management’s proposal, and accordingly there were no increases in base salary for 2008 for the named executive officers. Our Compensation Committee made this decision based on its review of the benchmarking data and its determination at the end of 2007 that our named executive officers’ current equity compensation was generally lower than that paid by the peer group. For more information about our base salaries for 2006, 2007 and 2008, see “Executive Compensation — 2008 Summary Compensation Table” below.

Annual Cash Incentives.  As discussed above, we pay annual cash incentives to encourage and reward our named executive officers for both the achievement of our corporate objectives and individual performance. Actual payouts for our annual cash incentive awards for each named executive officer are based on a combination of achievement of specified Company and personal objectives established at the beginning of the year and individual performance (evaluated as discussed above), which is evaluated at the end of the year.

Annual cash incentive opportunities for our named executive officers for 2008 were established by our Compensation Committee in December 2007 as percentages of base salary. Our named executive officers’ 2008 target cash incentive awards, expressed as a percentage of base salary, were: Dr. Gold, 50%; Mr. Schiffman, 40%; Dr. Frohlich, 40%; Mr. Hamm, 40%; and Dr. Urdal, 40%. These bonus opportunity thresholds were established many years ago and are included in our executive employment agreements. For 2008, the corporate portion of our annual cash incentive opportunity was established at 80% for Dr. Gold and 75% for each of Messrs. Hamm and Schiffman and Drs. Frohlich and Urdal. These percentages were originally chosen when we adopted our management incentive plan in 2005 based on each named executive officer’s expected ability to impact corporate performance. Each year, our Compensation Committee retains the discretion to adjust target annual cash incentive awards to take into account changes in corporate circumstances and individual opportunities and performance throughout the year. Our Company’s primary mission for 2008 was to continue to advance Provenge^® (sipuleucel-T), our most advanced active cellular immunotherapy product candidate, toward commercialization, which remains significantly dependent on the U.S. Food and Drug Administration, or FDA, response to our

We use generally non-quantifiable objectives such as these because advancing our primary product to market, and ensuring that we have enough capital to do so, are the primary ways in which we will achieve near-term Company success and secure value for our stockholders. For 2008, we achieved each of these goals with the exception of goal 3, and our Compensation Committee recommended a 85% payout of the corporate portion of the annual cash incentive target opportunities for Dr. Gold and Messrs. Hamm and Schiffman (based on a 125% achievement of goal 4 as a result of the two equity offerings undertaken during 2008) and a 80% payout of the corporate portion of the annual cash incentive target opportunities for Drs. Frohlich and Urdal, which recommendation our Board of Directors approved. Our corporate goals for 2009 will again consist mostly of operating, strategic and financial goals that are similar to last year’s goals with the primary focus on continuing to prepare for the commercialization of Provenge. Significantly, our corporate goals related to advancing towards commercialization of Provenge depend on a number of factors outside of our immediate control, including regulatory approvals, results from ongoing and new clinical trials and manufacturing requirements.

The balance of each named executive officer’s annual cash incentive payout was then determined based on individual performance, which was determined by our Compensation Committee through its evaluation of each officer’s performance review and measurement of the material factors as described above under “— Impact of Company and Individual Performance on Executive Compensation.” After reviewing each named executive officer’s 2008 performance evaluation, our Compensation Committee determined that the 20% individual performance component of Dr. Gold’s annual cash incentive opportunity would payout at 100%, resulting in Dr. Gold achieving 85% of his total annual cash incentive opportunity and a payout of approximately 47% (target was 50%) of his base salary. The Compensation Committee also determined that the 25% individual performance component of each of Drs. Frohlich and Urdal’s, and each of Messrs. Hamm and Schiffman’s, annual cash incentive opportunities would payout at 100%. Accordingly, while each named executive officer achieved 100% of his personal goals, total awards were capped at an amount equal to corporate goal performance. Our management incentive plan provides that the total bonus pool available to all employees is capped by our achievement of the Company’s corporate goals. For more information about our annual cash incentive awards and payouts for 2008, see “Executive Compensation — Summary Compensation Table” and “Executive Compensation — 2008 Grants of Plan-Based Awards Table” below.

Long-Term Equity Incentives.  We provide long-term equity incentive opportunities to our named executive officers to align senior executive compensation with our stockholders’ ownership interests, and to motivate our named executive officers to work to achieve specific operating goals that will generate stockholder value. By generating additional stockholder value, our named executive officers will also create equity rewards for themselves that bring their total compensation to competitive levels.

Our long-term incentive program for our named executive officers consists of stock options and restricted stock grants pursuant to our 2000 Equity Incentive Plan and our 2002 Broad-Based Equity Incentive Plan, each as amended. We refer to these two plans together as our stock plans. Our long-term incentive program also consists of

Our Compensation Committee has historically granted a mix of stock options and restricted stock as equity awards for both incentive and retention purposes under our stock plans. Stock options and restricted stock granted to our named executive officers under the stock plans generally vest over a four-year period, which time-based vesting encourages our executives to remain employed by us. We also believe in the inherent performance nature of options, as the value of the stock option to the executive will increase based on goal achievement that causes market appreciation of our Common Stock. We also believe that performance-based restricted stock grants allow us to target specific performance targets and reward named executive officers if those targets are met. Finally, we believe that time-based restricted stock grants serve as a strong retention vehicle at this critical juncture in our Company’s history. Through stock option and restricted stock grants, executives and employees receive significant equity as an incentive to assist us in building long-term stockholder value.

We generally make incentive equity awards during December and January each year, and occasionally make additional awards during the year for retention purposes. Additionally, in the event that an executive officer or a designated key employee is hired during the year, a grant may be made at the time of his or her commencement of employment. When making equity awards for 2008, our Compensation Committee agreed on an award measured in dollars for each named executive officer, and then distributed the agreed-upon value to the executive in the form of equity measured using the Black-Scholes-Merton method. Our Compensation Committee considers the number of outstanding options, both vested and unvested, and also prior restricted stock awards, both vested and unvested, held by our named executive officers when awarding new grants, which consideration may cause the Compensation Committee to increase or decrease the size of an additional grant.

For performance in 2008, the Compensation Committee approved restricted stock awards in December 2008, which were granted in January 2009, as a long term equity incentive in lieu of options primarily due to the decreasing share reserve under our stock plans, and the fact that restricted stock awards use proportionately fewer shares than option grants. The restricted stock awards made for 2008 were time-vested only given the significant percentage of outstanding equity grants for named executive officers which remain subject to a performance vesting condition. The number of shares subject to each award to the named executive officers was determined after considering the December 2008 Radford report regarding the competitiveness of our equity compensation practices, and, specifically, the finding that our Company’s historical equity awards to named executive officers were deemed to be below the target percentile when compared to our peer group. In December 2008, our Board of Directors approved the Compensation Committee’s recommendation to make the following time-based equity grants to our named executive officers:

Perquisites and Other Elements of Compensation.  We generally do not provide significant perquisites to our named executive officers. In 2008, we paid for executive disability insurance premiums for Drs. Gold, Frohlich and Urdal and Messrs. Hamm and Schiffman. We additionally paid for the cost of certain health and non-health executive club memberships held by our named executive officers, which memberships may frequently involve business entertainment by our named executive officers on our behalf. Our $2,000 matching 401(k) plan contribution was available to all our employees.

We have entered into employment agreements with each of our named executive officers, which we refer to as our executive employment agreements. Each of our named executive officers are employed on an at-will basis

For more information about our executive employment agreements, see “Executive Compensation — Summary of Executive Employment Agreements and Compensatory Terms” below.

The executive employment agreements also provide for certain post-termination payments and benefits as follows:

The provisions covering post-termination compensation and benefits described above were developed in 2004. In 2007 we synthesized and combined the terms of our then-existing employment agreements and our previous Executive Change in Control Severance Plan (terminated in 2007) into our new executive employment agreements, which embody these provisions. For more information about our new executive employment agreements, see “Executive Compensation — Summary of Executive Employment Agreements and Compensatory Terms” below. In reviewing and evaluating the compensation and benefits payable under these arrangements, the members of our Compensation Committee relied on their knowledge of similar post-termination arrangements for other companies with which the members were affiliated or familiar. For more information about our post-termination compensation and benefits, see “Executive Compensation — Potential Payments Upon Termination” below.

We have not adopted stock ownership or equity retention guidelines for our named executive officers. To date, our compensation programs have been heavily weighted toward long-term equity incentives, and each of our named executive officers has a sizable equity interest in the Company, which equity interest consists of both stock options exercisable for shares of Common Stock and also restricted Common Stock. We may consider adopting equity ownership guidelines in the future if we determine it is appropriate and in the best interests of our Company and our stockholders.

Section 162(m) of the Internal Revenue Code limits us to a deduction for federal income tax purposes of no more than $1 million of compensation paid to certain executive officers in a taxable year. Compensation above $1 million may be deducted if it is performance-based compensation within the meaning of the Internal Revenue Code. Our Compensation Committee’s policy with respect to Section 162(m) is to try and preserve the deductibility of compensation payable to our named executive officers, although deductibility is only one among a number of factors considered in determining appropriate levels or means of compensation for these officers.

Our Compensation Committee has determined that stock options granted under the 2000 Equity Incentive Plan and the 2002 Equity Plan with an exercise price at least equal to the closing price of our Common Stock on the Nasdaq Global Market on the grant date will be treated as performance-based compensation.

Section 409A of the Internal Revenue Code requires that “nonqualified deferred compensation” be deferred and paid under plans or arrangements that satisfy the requirements of that statute with respect to the timing of deferral elections, timing of payments and certain other matters. Failure to satisfy these requirements can expose employees to accelerated income tax liabilities and penalty taxes and interest on their vested compensation under such plans. Accordingly, as a general matter, it is our intention to design and administer our compensation and benefits plans and arrangements for all of our employees, including our named executive officers, so that they are either exempt from, or satisfy the requirements of, Section 409A.

The Compensation Committee reviewed and discussed the Compensation Discussion and Analysis required by Item 402(b) of Regulation S-K and contained within this proxy statement with management and, based on such review and discussions, recommended to the Board of Directors that the Compensation Discussion and Analysis be included in this proxy statement and incorporated into the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2008.

From the members of the Compensation Committee of the Board of Directors,

The table below summarizes the total compensation earned during 2006, 2007 and 2008 by our principal executive officer, principal financial officer and our three other most highly-paid executive officers. We refer to these officers collectively as our named executive officers. The named executive officers were determined by us as of December 31, 2008.

Treatment of stock options and restricted stock awards upon an executive’s termination of employment under various scenarios are summarized under “Executive Compensation — Potential Payments Upon Termination” below.

In January 2007, we entered into a new form of executive employment agreement with each of Drs. Gold and Urdal and Messrs. Hamm and Schiffman in connection with the termination of our Executive Change in Control Severance Plan and prior employment agreements with no material changes to either the plan or the form of the employment agreements. On December 7, 2007, we entered into an executive employment agreement with Mark W. Frohlich, M.D. The executive employment agreements provide for annual base salaries for calendar year 2008 as follows: Dr. Gold, $500,000; Dr. Frohlich, $300,000; Mr. Hamm, $329,175; Mr. Schiffman, $360,000; and Dr. Urdal, $391,875. If performance targets set in advance by the Board of Directors are met, each executive is eligible under his employment agreement for an annual cash incentive award, as determined by the Board, of up to 50% of base salary for Dr. Gold, and up to 40% of base salary for Drs. Frohlich and Urdal and Messrs. Hamm and Schiffman.

Our executive employment agreements have no specified term, and the employment relationship may be terminated by the executive officers or by us at any time. If we terminate the named executive officer’s employment without cause, or if the named executive officer resigns for good reason, the named executive officer will be entitled to severance payments as detailed under the section heading “Executive Compensation — Potential Payments Upon Termination.” As defined in each executive employment agreement, a named executive officer is entitled to “good reason” resignation upon the occurrence of the following:

Each executive employment agreement requires the named executive officer not to compete with us after termination of employment for a period of one year for Dr. Gold, and nine months for our other named executive officers, and provides for a one-year post-termination non-solicitation obligation for each of the named executive officers.

The table below summarizes the named executive officers’ equity awards that were unvested or unexercised, as applicable, as of December 31, 2008.

The following table provides information regarding stock options exercised by, and restricted stock awards vested for, our named executive officers during 2008.

The amounts shown in the tables below assume that the noted triggering event occurred on December 31, 2008. Other relevant assumptions and explanations are provided in the footnotes following the tables. The amounts shown reflect only the additional payments or benefits that a named executive officer would have received upon the occurrence of the respective triggering events listed below; they do not include the value of payments or benefits that would have been earned, or any amounts associated with equity awards that would have vested absent the triggering event.