There's nothing quite as exciting, and simultaneously frustrating, as watching a supply-constrained company. The product is useful and customers want it, but the company can't maximize its revenue because it can't produce fast enough.

Dendreon (Nasdaq: DNDN) will be able to relieve some of that frustration -- but only a little.

The company ramped up sales rather quickly after getting prostate cancer treatment Provenge approved last year. Competing with sanofi-aventis' (NYSE: SNY) Taxatore didn't seem to be a problem. The company gained reimbursement approvals from major health insurers -- Aetna (NYSE: AET), Humana (NYSE: HUM), Kaiser, and others -- and initial Medicare coverage.

But production at its manufacturing plant maxed out quickly. The facility has been running full-tilt over the past few months.

Provenge is a personalized treatment where the patient's own blood cells are shipped to the company, activated, and then infused back into the patient where they attack the cancer. There's no way to stock up; the only way to make more Provenge is to have more workstations available to produce the treatments as patients need them.

Yesterday, the company announced that the FDA had signed off on an expansion of its manufacturing plant, quadrupling the number of workstations.

While that sounds good, it still puts the maximum output at only $40 million per month, or $480 million a year, which is far from blockbuster status. Dendreon will need to get its manufacturing plants in Atlanta and Los Angeles approved to hit its goal of $175 million to $200 million in the fourth quarter. The apparently smooth approval process for the expansion of its current plant should give investors confidence that it'll be able to gain approval of the other two sites without a hitch.

Now investors can go back to worrying about the final outcome of the Medicare coverage.

Interested in keeping track of Dendreon as it expands Provenge sales and tries to get it paid for? Click here to add it to My Watchlist, which will help you keep track of all our Foolish analysis on Dendreon.

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