1023024--3/30/2010--BIOSANTE_PHARMACEUTICALS

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Raising additional funds by issuing equity securities may cause dilution to existing stockholders, raising additional funds by issuing additional debt financing may restrict our operations and raising additional funds by through licensing arrangements may require us to relinquish proprietary rights. Our committed equity financing facility with Kingsbridge Capital Limited may not be available to us if we elect to make a draw down. As a result of our merger with Cell Genesys, we have substantial indebtedness, which we may not be able to pay when it becomes due and payable. The indentures governing our convertible notes contain covenants, which if not complied with, could result in an event of default and the acceleration of all amounts due under the notes. As a result of our merger with Cell Genesys, we possess not only all of the assets but also all of the liabilities of Cell Genesys. Discovery of previously undisclosed liabilities could have an adverse effect on our business, operating results and financial condition. Risks Related to Our Business Most of our products are in the development stages and likely will not be introduced commercially for several years, if at all. If we fail to obtain regulatory approval to manufacture commercially or sell any of our future products, or if approval is delayed or withdrawn, we will be unable to generate revenue from the sale of our products. Although we successfully have completed and reached agreement with the FDA under the Special Protocol Assessment process for our Phase III safety and efficacy clinical trial program for LibiGel, we still may not obtain FDA approval of LibiGel within a reasonable period of time or ever, which would harm our business and likely decrease our stock price. Uncertainties associated with the impact of published studies regarding the adverse health effects of certain forms of hormone therapy could adversely affect the market for our hormone therapy products and the trading price of our common stock. If clinical trials for our products are prolonged or delayed, we may be unable to commercialize our products on a timely basis, which would require us to incur additional costs and delay our receipt of any revenue from potential product sales or licenses. We entered into an exclusive license agreement with Azur Pharma International II, Limited for the marketing of Elestrin in the United States. Our ability to obtain sales-based milestones of up to $140 million from Azur is dependent upon Azur s ability to market and sell Elestrin. Our other products, if they receive FDA approval and are introduced commercially may not achieve expected levels of market acceptance, which could harm our business, financial position and operating results and could cause the market value of our common stock to decline. We and our licensees depend on third-party manufacturers to produce our products and if these third parties do not manufacture successfully these products our business would be harmed. We have very limited staffing and will continue to be dependent upon key employees. Risks Related to Our Industry Because our industry is very competitive, we may not succeed in bringing certain of our products to market and any products we introduce commercially may not be successful. Because the pharmaceutical industry is heavily regulated, we face significant costs and uncertainties associated with our efforts to comply with applicable regulations. Should we fail to comply, we could experience material adverse effects on our business, financial position and results of operations, and the market value of our common stock could decline. Risks Related to Our Intellectual Property We license rights to the technology underlying LibiGel and many of our other products and technologies from third parties. The loss of these rights, including in particular, our rights underlying LibiGel, could have an adverse effect on our business and future prospects and could cause the market value of our common stock to decline. We have licensed some of our products to third parties and any breach by these parties of their obligations under these license agreements or a termination of these license agreements by these parties could adversely affect the development and marketing of our licensed products. In addition, these third parties also may compete with us with respect to some of our products. If we are unable to protect our proprietary technology, we may not be able to compete as effectively. Claims by others that our products infringe their patents or other intellectual property rights could adversely affect our financial condition. Risks Related to Our Common Stock The price of our common stock has been volatile. As a result, we could become subject to class action litigation, which even if without merit, could be costly to defend and could divert the time and attention of our management, which could harm our business and financial condition. If we fail to meet continued listing standards of the Nasdaq Global Market, our common stock may be delisted which could have a material adverse effect on the liquidity of our common stock. Provisions in our charter documents and Delaware law could discourage or prevent a takeover, even if an acquisition would be beneficial to our stockholders.

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1023024--3/30/2010--BIOSANTE_PHARMACEUTICALS_INC