1003642--3/12/2009--IMPAX_LABORATORIES

related topics

{product, candidate, development}

{stock, price, share}

{operation, natural, condition}

{regulation, government, change}

{product, liability, claim}

{customer, product, revenue}

{property, intellectual, protect}

{control, financial, internal}

{product, market, service}

{stock, price, operating}

{personnel, key, retain}

{provision, law, control}

{cost, regulation, environmental}

{tax, income, asset}

{loss, insurance, financial}

{debt, indebtedness, cash}

{acquisition, growth, future}

The SEC previously revoked the registration of our common stock due to our failure to file periodic reports required by the Exchange Act. If we fail to timely file these reports in the future, public information about us would become more limited and the SEC could again seek to deregister our common stock, which could negatively impact our business and liquidity, significantly reduce the liquidity of our common stock and prevent investors from buying or selling our common stock in the public market. If we fail to maintain an effective system of internal control over financial reporting, we may not be able to accurately report our financial results, timely file our periodic reports, maintain our reporting status or prevent fraud. We have experienced operating losses and negative cash flow from operations and our future profitability is uncertain. Our limited capital may make it difficult for us to repay indebtedness, or require us to modify our business operations and plans by spending less money on research and development programs, developing fewer products, and filing fewer drug applications with the FDA. If Wachovia is unable to perform its obligations under our credit agreement or if we are unable to obtain a new credit facility upon the expiration of our credit agreement with Wachovia, there can be no assurance that we will be able to obtain a new credit agreement with another bank or group of lenders on favorable terms or at all. Any delays or unanticipated expenses in connection with the construction of our Taiwan facility could have a material adverse effect on our results of operations, liquidity and financial condition. Our continued growth is dependent on our ability to continue to successfully introduce new products to the market. We are routinely subject to patent litigation that can delay or prevent our commercialization of products, force us to incur substantial expense to defend, and expose us to substantial liability. Our ability to develop or license, or otherwise acquire, and introduce new products on a timely basis in relation to our competitors product introductions involves inherent risks and uncertainties. Our approved products may not achieve expected levels of market acceptance. We expend a significant amount of resources on research and development efforts that may not lead to successful product introductions. The time necessary to develop generic drugs may adversely affect whether, and the extent to which, we receive a return on our capital. We face intense competition from both brand-name and generic manufacturers. Approvals for our new drug products may be delayed or become more difficult to obtain if the FDA institutes changes to its approval requirements. Our inexperience in conducting clinical trials and submitting New Drug Applications could result in delays or failure in development and commercialization of our own branded products, which could have a material adverse effect on our results of operations, liquidity, and financial condition. The risks and uncertainties inherent in conducting clinical trials could delay or prevent the development and commercialization of our own branded products, which could have a material adverse effect on our results of operations, liquidity, financial condition, and growth prospects. We rely on third parties to conduct clinical trials for our product candidates, and if they do not properly and successfully perform their legal and regulatory obligations, as well as their contractual obligations to us, we may not be able to obtain regulatory approvals for our product candidates. A substantial portion of our total revenues is derived from sales to a limited number of customers. We are dependent on a small number of suppliers for our raw materials that we use to manufacture our products. We depend on qualified scientific and technical employees, and our limited resources may make it more difficult to attract and retain these personnel. We may be adversely affected by alliance agreements or licensing arrangements we make with other companies. We are subject to significant costs and uncertainties related to compliance with the extensive regulations that govern the manufacturing, labeling, distribution, and promotion of pharmaceutical products as well as environmental, safety and health regulations. We may experience reductions in the levels of reimbursement for pharmaceutical products by governmental authorities, HMOs or other third-party payers. Any such reductions could have a material adverse effect on our business, financial position and results of operations. Reporting and payment obligations under the Medicaid rebate program and other government programs are complex, and failure to comply could result in sanctions and penalties or we could be required to reimburse the government for underpayments, which could have a material adverse affect on our business. Legislative or regulatory programs that may influence prices of prescription drugs could have a material adverse effect on our business. We depend on our intellectual property, and our future success is dependent on our ability to protect our intellectual property and not infringe on the rights of others. We are subject to potential product liability claims that can result in substantial litigation costs and liability. We face risks relating to our goodwill and intangibles. Our revenues and operating income could fluctuate significantly. If we are unable to manage our growth, our business will suffer. There are inherent uncertainties involved in estimates, judgments and assumptions used in the preparation of financial statements in accordance with GAAP. Any future changes in estimates, judgments and assumptions used or necessary revisions to prior estimates, judgments or assumptions could lead to a restatement of our results. Terrorist attacks and other acts of violence or war may adversely affect our business. Because of the location of our manufacturing and research and development facilities, our operations could be interrupted by an earthquake. Risks Related to Our Stock There is currently a limited market for our common stock. Our stockholders may sustain future dilution in ownership as a result of the terms of some of our outstanding securities or future issuances of securities. Our stock price is volatile. We may in the future issue shares of preferred stock which could adversely affect the rights of holders of our common stock and the value of our common stock. We have adopted certain provisions that may have the effect of hindering, delaying or preventing third party takeovers, which may prevent our stockholders from receiving premium prices for shares of their common stock in an unsolicited takeover.

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1003642--3/12/2009--IMPAX_LABORATORIES_INC