1047699--2/26/2010--KING_PHARMACEUTICALS

related topics

{regulation, government, change}

{product, liability, claim}

{customer, product, revenue}

{financial, litigation, operation}

{product, candidate, development}

{property, intellectual, protect}

{debt, indebtedness, cash}

{acquisition, growth, future}

{tax, income, asset}

{provision, law, control}

{operation, international, foreign}

{stock, price, operating}

If we cannot successfully defend our rights under the patents relating to our key products, such as Skelaxin , or if we are unable to secure or defend our rights under other patents and trademarks and protect our trade secrets and other intellectual property, additional competitors could enter the market, and sales of affected products may decline materially. An expansion of restrictions on, or bans of, the use of antibiotics used in food-producing animals could result in a decrease in our sales. Potential adverse effects on human health linked to the raising or consumption of food-producing animals using our products could result in a decrease in our sales. Unfavorable results in pending and future claims and litigation matters could have a material adverse effect on our business, results of operations, financial condition and cash flows. If we cannot integrate the business of companies or products we acquire, or appropriately and successfully manage and coordinate third-party collaborative development activities, our business may suffer. The terms of our Revolving Credit Facility restricts, and other borrowing arrangements in the future could similarly restrict, our activities in various ways. Any significant delays or difficulties in the manufacture of, or supply of materials for, our products may reduce our profit margins and revenues, limit the sales of our products, or harm our products reputations. We are subject to the risks of doing business outside of the United States. We are required annually, or on an interim basis as needed, to review the carrying value of our intangible assets and goodwill for impairment. If sales of our products decline because of, for example, generic competition or an inability to manufacture or obtain sufficient supply of product, the intangible asset value of any declining product could become impaired, which could result in a material adverse effect on our business, financial condition and results of operations. We have entered into agreements with manufacturers and/or distributors of generic pharmaceutical products with whom we are presently engaged, or have previously been engaged, in litigation, and these agreements could subject us to claims that we have violated federal and/or state anti-trust laws. Sales of Thrombin-JMI may be affected by the perception of risks associated with some of the raw materials used in its manufacture. If we are unable to maintain purification procedures at our facilities that are in accordance with the FDA s expectations for biological products generally, the FDA could limit our ability to manufacture biological products at those facilities, which could have a material adverse effect on our business, financial condition, results of operations and cash flows. Our charter and bylaws and applicable state laws discourage unsolicited takeover proposals and could prevent shareholders from realizing a premium on their common stock. At times, our stock price has been volatile, and such volatility in the future could result in substantial losses for our investors. Compliance with the terms and conditions of our corporate integrity agreement with the Office of Inspector General of the United States Department of Health and Human Services requires significant resources and management time and, if we fail to comply, we could be subject to penalties or, under certain circumstances, excluded from government health care programs, which could materially reduce our sales. Risks Related to Our Industries New legislation or regulatory proposals may adversely affect our revenues, our business, financial condition, results of operations and cash flows. Failure to comply with laws and government regulations could adversely affect our ability to operate our business. Any reduction in reimbursement levels by managed care organizations or other third-party payors may have an adverse effect on our revenues. Wholesaler and distributor buying patterns and other factors may cause our quarterly results to fluctuate, and these fluctuations may adversely affect our short-term results. Further, our access to wholesaler and distributor inventory levels and sales data affects our ability to estimate certain reserves included in our financial statements. An increase in product liability claims or product recalls could harm our business and our financial condition, results of operations and cash flows could be materially adversely affected. The publication of negative results of studies or clinical trials may adversely affect the sales of our products or the values of the intangible assets associated with them. The insolvency of, or decreased purchasing by, any of our principal customers, who are wholesale pharmaceutical distributors, could have a material adverse effect on our business, financial condition, results of operations and cash flows.

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1047699--2/26/2010--KING_PHARMACEUTICALS_INC