UPDATE 3-Dendreon gets FDA OK to quadruple Provenge capacity

* To expand New Jersey production stations to 48 from 12

* Sees increased Provenge sales beginning in 2nd quarter

* Shares up 2.1 percent (Adds CEO comment, background; updates stock price)

By Bill Berkrot

NEW YORK, March 10 (Reuters) - Dendreon Corp (DNDN.O) said it received U.S. regulatory approval to quadruple the manufacturing capacity for prostate cancer vaccine Provenge, allowing it to significantly increase availability of the drug to meet pent up demand.

Dendreon shares rose more than 2 percent after the company said the Food and Drug Administration approved 36 additional workstations at its New Jersey facility, adding to the 12 production stations already in operation.

While Provenge is widely expected to become a multibillion medicine, the 12 workstations limited sales to just $9 million to $10 million per month and meant the life extending vaccine was unavailable to many patients with advanced prostate cancer who would otherwise be candidates for the treatment.

"This additional capacity really allows us to begin serving patients across the country in a more efficient manner," Dendreon Chief Executive Mitchell Gold said in a telephone interview.

"The real effect of these additional work stations coming on line is going to effect us in Q2 and beyond."

The company maintained its full year forecast for Provenge sales of $350 million to $400 million, with half of that seen coming in the fourth quarter, when two more plants are expected to be up and running.

Dendreon expects the FDA to approve 36 workstations at its plant in Los Angeles in June and also hopes to have an Atlanta plant approved sometime later this year.

It forecast about 500 infusion centers around the country will be treating patients by the end of the year.

Provenge, which costs about $93,000 per patient for a course of three infusions, last year became the first approved cancer vaccine to treat rather than prevent the disease. It works by stimulating a patient's own immune system to attack the cancer and in late stage trials extended survival by an average of 4 months.

The company plans to seek Provenge approval in Europe late this year or early next year and is also testing the drug against bladder, kidney, breast, ovarian and colorectal cancers.

Dendreon, which is often mentioned as a takeover target, holds full worldwide rights to the drug -- a rarity for small biotechnology companies -- and has no plans to seek a partner to help market Provenge, Gold said.

"Our strategy is to retain 100 percent of global rights," he said.

"If you look at the companies that have done that, those are the companies that have been able to really control their own destiny going forward."

Dendreon shares closed up 69 cents, or 2.1 percent, at $32.91 on Nasdaq. (Reporting by Bill Berkrot and Michele Gershberg; editing by Richard Chang and Andre Grenon)