* Deal covers vaccine-related antigen production and supply
* Deal terms are through Dec. 31. 2015
* Dendreon has options to request extensions
Sept 21 (Reuters) - Dendreon Corp DNDN.O said it signed a development and supply agreement with GlaxoSmithKline (GSK.L) on its novel prostate cancer vaccine, alleviating investors' concerns about the biotech firm's ability to provide an adequate supply of the vaccine.
The agreement covers the commercial production and supply of the antigen used in the manufacture of the vaccine Provenge that was approved in April. [ID:nN29198388]
Dendreon has already placed an initial order for about $8.3 million of antigen, and delivery will commence in August 2011.
The terms of the agreement are through Dec. 31, 2015, unless earlier terminated, and provides an option to Dendreon to request one or more two-year extensions to the then expiring term, Dendreon said in a regulatory filing.
Provenge, which the tiny biotech firm began selling in May, is the first therapeutic vaccine that actually treats cancer.
The vaccine, given via three infusions at a cost of $31,000, treats prostate cancer by stimulating the body's own immune system to attack malignant cells.
Dendreon shares, which jumped 27 percent after the news of the approval, have since then fallen back mostly on concerns related to the company's ability to fully realize the vaccine's commercial potential.
The shares closed at $42.30 Monday on Nasdaq. (Reporting by Esha Dey in Bangalore; Editing by Jarshad Kakkrakandy)