1023024--3/31/2006--BIOSANTE_PHARMACEUTICALS

related topics

{product, candidate, development}

{property, intellectual, protect}

{product, liability, claim}

{control, financial, internal}

{financial, litigation, operation}

{regulation, government, change}

{personnel, key, retain}

{stock, price, operating}

We are a development stage company, making it difficult for you to evaluate our business and your investment. Our proposed products are in the development stages and will likely not be commercially introduced for one or more years, if at all. If we fail to obtain regulatory approval to commercially manufacture or sell any of our future products, or if approval is delayed or withdrawn, we will be unable to generate revenue from the sale of our products. A request by an FDA advisory committee for additional safety data which may require Procter Gamble to conduct additional studies to learn more about the long-term safety of testosterone treatment in women for FSD prior to granting approval of Procter Gamble s Intrinsa testosterone patch could increase the time, cost and expense of obtaining regulatory approval for our LibiGel product, which might cause us to abandon the product depending on the extent of the additional time and cost to develop LibiGel. 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 hormone therapy products and the trading price of our common stock. Because our industry is very competitive and many of our competitors have substantially greater capital resources and more experience in research and development, manufacturing and marketing than us, we may not succeed in developing our proposed products and bringing them to market. We license the technology underlying most of our proposed hormone therapy products and a portion of our CaP technology from third parties and may lose the rights to license them, which could have a material adverse effect on our business, financial position and operating results and could cause the market value of our common stock to decline. We have licensed two of our proposed hormone therapy products to third parties and any breach by these parties of their obligations under these sublicense agreements or a termination of these sublicense 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 proposed products. We do not have any facilities appropriate for clinical testing, we lack significant manufacturing experience and we have very limited sales and marketing personnel. We are currently dependent upon our licensees or others for several of these functions and may remain dependent upon others for these functions. Even if our proposed products receive FDA approval, they may not achieve expected levels of market acceptance, which could have a material adverse effect on our business, financial position and operating results and could cause the market value of our common stock to decline. 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. 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. We have very limited staffing and will continue to be dependent upon key employees. We are engaged in pending legal proceedings with two former employees which have caused and will continue to cause us to incur significant legal fees and expenses and may distract our management from the operation of our business. The price and trading volume of our common stock has been, and may continue to be, volatile. Failure to achieve and maintain effective internal controls in accordance with Section 404 of the Sarbanes-Oxley Act could have a material adverse effect on our stock price.

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1023024--3/31/2006--BIOSANTE_PHARMACEUTICALS_INC