1011582--9/12/2006--DIGENE

related topics

{property, intellectual, protect}

{customer, product, revenue}

{acquisition, growth, future}

{product, liability, claim}

{gas, price, oil}

{cost, operation, labor}

{personnel, key, retain}

{provision, law, control}

{regulation, change, law}

{control, financial, internal}

{operation, international, foreign}

We have the only fully commercialized and FDA-approved test for the detection of HPV, which provides us with a competitive advantage that may be adversely impacted if other companies develop and commercialize alternative HPV tests. We are dependent on a relatively small number of national laboratories for a significant portion of our sales to laboratory customers. Changes in our senior management team could impact our ability to successfully operate and grow our business. We may encounter difficulties expanding our manufacturing operations as demand for our products increases, which would negatively impact our revenues. We depend on a single facility for the manufacture of all of our diagnostic test kits and any temporary stoppage at that site would have a material adverse effect on our business. We may not be able to successfully integrate future acquisitions. Future acquisitions may harm our operating results, dilute our stockholders equity and create other financial difficulties for us. If more third-party health insurance payors do not adequately reimburse for our HPV test products, the use of our HPV test products may not increase, thus negatively affecting our ability to grow our revenues. We may need to initiate lawsuits to protect or enforce our patents, which would be expensive and, if we lose, may cause us to lose some, if not all, of our intellectual property rights, and thereby impair our ability to compete. We may inadvertently infringe upon the intellectual property rights of third parties, which could expose us to expensive intellectual property litigation, impose a significant strain on our resources and prevent us from developing or marketing our products. Single suppliers or a limited number of suppliers provide key components of our products. If these suppliers fail to supply these components, we may be unable to manufacture sufficient product to satisfy demand which would negatively impact our revenues. We are required to obtain and maintain royalty-bearing licenses to third party patents or patent applications, and loss of such licenses, or the need to obtain additional licenses, could materially adversely affect our ability to commercialize our products. We have incurred cumulative net losses to date and need to continue to spend substantial funds. We may not remain profitable and may need to seek additional financing. The growth of our European operations has been slower than expected, and we may not achieve the desired increase in our profitability from such market. The time and expense needed to obtain regulatory approval and respond to changes in regulatory requirements could adversely affect our ability to commercially distribute our products and generate revenue therefrom. We may be sued for product liability claims or face product recalls for which our insurance may be inadequate. Our international sales are subject to currency, market and regulatory risks that are beyond our control. Compliance with changing corporate governance and public disclosure regulations result in additional expenses. We have adopted anti-takeover provisions that may prevent or frustrate any attempt to replace or remove our current management by the stockholders or discourage bids for our common stock. These provisions may also affect the market price of our common stock.

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1011582--9/12/2006--DIGENE_CORP