1047699--3/2/2009--KING_PHARMACEUTICALS

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We undertook borrowings totaling $625 million in connection with our acquisition of Alpharma. Our obligations to repay these borrowings will materially limit our ability to invest in other aspects of our business, to borrow other funds, to engage in other transactions and to take a variety of other actions. In addition, our future cash flows may not be sufficient to repay these borrowings. 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. In particular, there are risks associated with the integration of our business with Alpharma Inc., which we acquired in December 2008. The uncertainty and expense of the drug development process, actions by our competitors and other factors may adversely affect our ability to implement our strategy to grow our business through increased sales, acquisitions, development and in-licensing, and, as a result, our business or competitive position in the pharmaceutical industry may suffer. 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. 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. An expansion of the ban of the use of antibiotics used in food-producing animals could result in a decrease in our sales. Unfavorable results in pending and future claims and litigation matters could have an adverse impact on us. 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. 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. 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. 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. Our relationships with the U.S. Department of Defense and other government entities subject us to risks associated with doing business with the government. We are subject to the risks of doing business outside of the United States. 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. 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. Risks Related to Our Industries Failure to comply with laws and government regulations could adversely affect our ability to operate our business. New legislation or regulatory proposals may adversely affect our revenues. An increase in product liability claims or product recalls could harm our business. If we fail to comply with our reporting and payment obligations under the Medicaid rebate program or other governmental pricing programs, we could be required to reimburse government programs for underpayments and could be required to pay penalties, sanctions and fines which could have a material adverse effect on our business. The insolvency of 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. Any reduction in reimbursement levels by managed care organizations or other third-party payors may have an adverse effect on our revenues. If we fail to comply with the safe harbors provided under various federal and state laws, our business could be adversely affected. In the future, 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. A WARNING ABOUT FORWARD-LOOKING STATEMENTS

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1047699--3/2/2009--KING_PHARMACEUTICALS_INC