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An Open Letter to Dendreon’s Chairman


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of Dendreon for quite some time. It is telling to review them again in the context of Wednesday’s news. They have clearly become much worse while the board has stood still. Please recall the five key issues:

• The company’s settlement of shareholder lawsuits is concerning.

• Important statements and guidance communicated by management to the investment community have often conflicted with reality or changed significantly throughout time.

• Disclosure of pertinent, and I believe material, information to shareholders has been lacking.

• Many actions by the board and individual company executives have not been shareholder friendly and send the wrong message to long-term investors. These include generous gifts of stock and options to executives, dilutive financings, and significant insider sales.

• Management, in my view, seems unprepared to effectively recognize and answer the public relations challenges facing the company that are outside of the scientific realm.

While these things were obviously apparent in the past to some, I think most would agree they are now indisputable. They cannot be left to linger if Dendreon seriously expects to regain the faith of its investor base. Something must be done.

When we spoke in June, you indicated that you agreed with the need for improvement on many of these ideas. However, no clear path forward was given on a change to the board, which is by far the most important factor for getting these things back on track. In my view, Wednesday’s events have confirmed the need for a new solution and a new path forward. I hope you agree.

In light of recent events, I would be interested to hear your updated thoughts on this issue. I have the upmost respect for this company and want to see it succeed.

Best Regards,

Brad Loncar

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  • Brad,

    Yours is an eloquent reminder about the power of the “virtual pen.” Shareholders, customers, and prospects have a voice which can be amplified rather loudly with the Internet.

    Joe Hage
    Medical Marcom

  • Hi Brad, As a shareholder I second your call for Board change. Nicely put.

    Thank you, Dan

  • Brad, did anything become of your letter?

    Keep us posted.

    Joe Hage

  • Brad Loncar

    Mr. Hage,

    Thank you very much for your question.

    I received what I would describe as a routine response from Dendreon last week. They said they appreciated the input and that “the company is currently working hard to process information and develop detailed action plans.” Other than that, they provided no specific response to the issues nor any clear path to improvement. They also said they believe the company has indeed stepped up transparency lately, which, in my view, is a rather incredible thing to say. Perhaps it will improve much more in the future.

    Additionally, Dendreon elected a new member to the board on Monday – John H. Johnson, the current CEO of Savient Pharmaceuticals. I have tremendous respect for Mr. Johnson, and Savient is going through many of the same issues as Dendreon. Therefore, I view this as an incrementally positive step for the company, but I also believe Dendreon should diversify beyond biotech and try to include shareholder representation as well. This was a smart move and a small step in the right direction. There is still much work to be done.

    Thanks a lot for your interest!