UPDATE 3-Dendreon: Provenge boosts survival 40 pct

* Provenge extends 3-yr survival by 40 pct vs placebo

* Shares rise 2.9 percent after hours (Adds trial detail, sales projection, updates share price, paragraphs 2-4, 7)

By Deena Beasley

LOS ANGELES, March 3 (Reuters) - Updated trial results show that an experimental cancer vaccine developed by Dendreon Corp (DNDN.O) improved three-year survival of patients with advanced prostate cancer by 40 percent compared with a placebo.

Dendreon shares rose nearly 3 percent in after-hours trade.

The results, based on just over three years of follow-up, confirm earlier 34-month data presented last year, which showed that the drug improved survival by 38 percent in men whose prostate cancer had stopped responding to hormone blockers.

Patients in the 512-patient study who received Dendreon's Provenge, also known as sipuleucel-T, lived an average of 4.1 months longer than those who were given a placebo, according to the latest tally announced by the company on Wednesday.

Unlike traditional vaccines that prevent disease, Provenge treats it by stimulating the body's own immune system to attack cancer cells. It is produced by taking cells from a patient's tumor, incorporating them into a vaccine, then returning them to a physician to be injected back into the patient.

The U.S. Food and Drug Administration is slated to decide by May 1 whether to approve Provenge for treating advanced prostate cancer.

The closely watched product could be a blockbuster for the biotech company, which has said it would ramp up production capacity to handle an expected $1.2 billion to $2.5 billion of annual sales by late 2011.

Prostate cancer is the most common cancer in American men aside from skin cancers, according to the American Cancer Society. More than 1 million men have the disease in the United States and one in six men will be diagnosed with prostate cancer during their lifetime.

If approved, Provenge, which is administered in three doses at two-week intervals, would be the first cancer immunotherapy on the market.

Adverse events seen in patients taking Provenge were chills, fever and headache that lasted one to two days following infusion. This is seen as an enormous advantage over the debilitating side effects typical of chemotherapy.

Seattle-based Dendreon said the latest clinical trial data will be presented on Friday at a meeting of the American Society of Clinical Oncology in San Francisco.

Shares of Dendreon rose to $34.67 after closing at $33.62 on Nasdaq. (Reporting by Deena Beasley; Editing by Steve Orlofsky, Gary Hill and David Gregorio)