1033025--3/17/2006--PRAECIS_PHARMACEUTICALS

related topics

{product, candidate, development}

{property, intellectual, protect}

{financial, litigation, operation}

{control, financial, internal}

{stock, price, operating}

{cost, regulation, environmental}

{acquisition, growth, future}

{product, liability, claim}

{stock, price, share}

{provision, law, control}

{personnel, key, retain}

{cost, operation, labor}

{regulation, change, law}

We have a history of losses and we may not be profitable in the future. If we are unable to successfully carry out our strategic operating plan, we may have to obtain additional sources of funding or significantly modify our strategic operating plan. Our DirectSelect drug discovery technology is still under development, and we may not be able to enter into pharmaceutical partnerships with respect to this technology and/or discover compounds that will provide significant revenues for our Company and lead to marketable products. We are subject to extensive government regulation that increases our costs and could prevent us from developing, and ultimately commercializing, potential products. We may be unable to enter into and maintain corporate collaborations necessary to support the discovery and development of products using our DirectSelect technology or the further development and potential commercialize of PPI-2458 or other potential products in the future. If we lose our key personnel or are unable to attract and retain additional skilled personnel, we may be unable to pursue the development of our drug discovery technology or our product development and commercialization efforts. Due to the termination by Schering AG of our collaboration agreement, absent a third party sale or license agreement, we do not expect that Plenaxis will be commercialized outside of the United States or continue to be available for patients in the United States. Because we depend on third parties to rapidly analyze data generated by our DirectSelect technology and to conduct laboratory testing and human clinical studies and assist us with regulatory compliance, we may encounter delays in our drug discovery and development efforts. If we fail to develop and maintain our relationships with third-party manufacturers, or if these manufacturers fail to perform adequately, we may be unable to develop and commercialize PPI-2458 or any other future product candidate or to continue to support the commercialization of Plenaxis. Our one-for-five reverse stock split could have various negative effects on our common stock and our stockholders. We may have substantial exposure to product liability claims and may not have adequate insurance to cover those claims. Many of our competitors have substantially greater resources than we do and may be able to discover and develop product candidates or technologies that make our potential products and technologies obsolete or non-competitive. If we are unable to obtain and enforce valid patents, we could lose any competitive advantage we may have. If we are unable to protect our trade secrets and proprietary information, we could lose any competitive advantage we may have. If our technologies, processes or products conflict with the patents or other intellectual property rights of competitors, universities or others, we could have to engage in costly litigation and be unable to commercialize those products. If third parties terminate our licenses, our efforts to license or sell Plenaxis to a third party could be adversely affected. We are a defendant in purported class action securities lawsuits regarding the adequacy of our public disclosure which could have a material adverse affect on our financial condition. Pharmaceutical companies have been the target of lawsuits and investigations and there is no assurance that if we were to be involved in any such lawsuits or investigation, that our defense would be successful. We use hazardous chemicals and radioactive and biological materials in our business and any claims relating to the handling, storage or disposal of these materials could be time consuming and costly. Changes in the securities laws and regulations have increased, and are likely to continue to increase, our costs. The market price of our common stock may experience extreme price and volume fluctuations. We expect that our quarterly results of operations will fluctuate, and this fluctuation could cause our stock price to decline. If we or our independent registered public accounting firm are unable to affirm the effectiveness of our internal control over financial reporting in future years, the market value of our common stock could be adversely affected. Anti-takeover provisions in our charter and by-laws, our rights agreement and certain provisions of Delaware law may make an acquisition of us more difficult, even if an acquisition would be beneficial to our stockholders. If we engage in an acquisition, we will incur a variety of costs and may never realize the anticipated benefits of the acquisition.

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1033025--3/17/2006--PRAECIS_PHARMACEUTICALS_INC