1005201--3/16/2006--DEPOMED

related topics

{product, candidate, development}

{product, liability, claim}

{control, financial, internal}

{acquisition, growth, future}

{regulation, change, law}

{property, intellectual, protect}

{stock, price, operating}

{provision, law, control}

{system, service, information}

BUSINESS Competition, Patents and Proprietary Rights, Manufacturing, Marketing and Sales, Government Regulation, Product Liability, and Employees We depend heavily on our marketing partners for the successful commercialization of our lead products, ProQuin XR and Glumetza. If we fail to enhance our marketing, sales and distribution capabilities, or fail to enter into arrangements with third parties, we will not be able to create a market for Glumetza in the United States. We are expecting operating losses in the future. Our product candidates are at early stages of development and may not be successful or achieve market acceptance. Our quarterly operating results may fluctuate and affect our stock price. Our collaborative arrangements may give rise to disputes over commercial terms, contract interpretation and ownership of our intellectual property and may adversely affect the commercial success of our products. It is difficult to develop a successful product. If we do not develop a successful product we may not be able to raise additional funds. If we do not achieve our projected development and commercialization goals in the timeframes we announce and expect, the commercialization of our product candidates may be delayed and our business will be harmed. If we are unable to obtain or maintain regulatory approval, we will be limited in our ability to commercialize our products, and our business will be harmed. The approval process outside the United States is uncertain and may limit our ability to develop, manufacture and sell our products internationally. If we or our licensees are unable to obtain acceptable prices or adequate reimbursement for our products from third-party payers, we will be unable to generate significant revenues. We depend on third parties who are single source suppliers to manufacture ProQuin XR, Glumetza and our later stage product candidates. If these suppliers are unable to manufacture ProQuin XR, Glumetza or our product candidates, our business will be harmed. If we choose to acquire new and complementary businesses, products or technologies instead of developing them ourselves, we may be unable to complete these acquisitions or to successfully integrate them in a cost effective and non-disruptive manner. We have implemented certain anti-takeover provisions. Increased costs associated with corporate governance compliance may significantly impact our results of operations. If we are unable to satisfy regulatory requirements relating to internal controls, our stock price could suffer. Business interruptions could limit our ability to operate our business.

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1005201--3/16/2006--DEPOMED_INC