Executive Summary
A GROWING MARKET The worldwide cancer market growing at 6-11% annually.5,6 With over $206
billion being spent on both direct and indirect costs for cancer, we project the therapeutic market to
grow from $46 billion in 2007 to $89 billion by 2011.7,8 While we believe indirect costs should
decrease over time as novel therapeutics with good side-effect profiles are approved, direct costs will
increase as the baby boom generation ages and costs of therapies increase.
CANCER VACCINES REPRESENT A PARADIGM SHIFT ON THE HORIZON We believe a
paradigm shift in oncology treatments is building on the horizon. Cancer vaccines represent a long
sought after, novel approach to combat existing cancer as well as the potential to prevent the
formation of new tumors. With an ever-increasing list of clinical trials underway, we believe today’s
cancer vaccine companies have designed “better mouse traps” and are well positioned to develop
therapeutics with outstanding efficacy and safety.
NEAR-TERM COMMERCIALIZATION POTENTIAL Based on our analysis of the cancer vaccine
space and the upcoming milestones expected from several of the late stage companies, we believe
the first set of pivotal clinical trial results will be reported from the end of 2007 through 2010. If all
goes well, we believe the first cancer vaccine could be approved by as early as 2009. However, if we
conservatively factor in certain risk scenarios, we believe that the first cancer vaccine could be on the
market by 2011. No matter which scenario we choose, we believe the next 5 years will prove to be
very significant for cancer vaccine companies and their shareholders.
BLOCKBUSTER MARKET POTENTIAL Several of the late stage companies are targeting
indications such as asymptomatic metastatic prostate cancer and follicular non-Hodgkin’s lymphoma.
In combination with a potential therapeutic cost of $25-50,000 in annual treatment, we believe these
indications represent billion dollar market opportunities. Furthermore, while initial therapeutic
indications may represent niche markets, we believe the ultimate use of cancer vaccines will shift to
earlier stage patients with healthier immune systems and less tumor burden, thereby increasing the
potential addressable market to multi-billion dollar opportunities.
BIG PHARMA STARTING TO TAKE NOTICE To date, only a handful of licensing deals have been
consummated. Several of these deals have resulted in big players, including GlaxoSmithKline, Merck
KgaA, and Sanofi-Aventis, launching and evaluating cancer vaccines in ongoing Phase 3 clinical
trials. Going forward, we believe other pharmaceutical companies are likely to take a growing
interest, as the successes of some, and the failures of others, result in an exponentially growing
understanding of the power of cancer immunotherapeutics.
RISK IS ABUNDANT AS WELL Many companies in late stage development are currently facing
binary events within the next 24 months. Furthermore, every success and every failure will likely
result in a rippling effect that impacts the valuation of all the players in the space. Therefore,
investors must not only have intimate knowledge of the companies they invest in but also knowledge
of the companies in the space as well as the timing of binary events.
INVESTMENT OPINION Investing in market leaders with therapeutics in advanced stages of clinical
development, broad pipelines addressing multiple indications, and substantial cash positions to allow
for the continued development of pipeline products, should mitigate some of the risk associated with
the binary nature of clinical and regulatory hurdles. In conjunction with this report, we are initiating
coverage on four immunotherapy companies including Cell Genesys (Market Perform), Dendreon
(Market Perform), Favrille (Market Perform), and IDM Pharma (Market Outperform).

Table of Contents
PAGE
KEY POINTS 3
EXECUTIVE SUMMARY 4
1. THE CANCER VACCINE LANDSCAPE
1.1 Introduction 6
1.2 How Cancer Evades the Immune System 8
1.3 Cancer Vaccines: An Overview 13
1.4 Different Strokes for Different Folks 18
1.5 Public and Private Cancer Vaccine Companies 24
1.6 Take Home Points 30
2. CANCER VACCINE DEVELOPMENT
2.1 Overview 31
2.2 Proof of Principle Clinical Trials 33
2.3 Efficacy Trials 38
2.4 Select Clinical Trials: The Past, Present, and Future 44
2.5 Take Home Points 74
3. VALUING CANCER VACCINE COMPANIES
3.1 Overview 75
3.2 Current Valuation Approaches 76
3.3 Valuing Cancer Vaccine Companies 81
3.4 Let’s Make a Deal 86
3.5 Take Home Points 88
4. APPENDIX
4.1 Immunology Overview 89
4.2 Scientific Background on Prostate Cancer 106
4.2 Scientific Background on Non-Hodgkin’s Lymphoma 122
4.4 Scientific Background on Osteosarcroma 132
4.5 Scientific Background on Bladder Cancer 135
4.6 Scientific Background on Melanoma 141
4.7 Scientific Background on Non-Small Cell Lung Cancer 147
4.8 Public and Private Company Profiles 178