1060736--3/13/2009--SEATTLE_GENETICS_INC

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Risks Related to Our Business Our near-term prospects are substantially dependent on SGN-35, our lead product candidate. If we are unable to successfully develop and obtain regulatory approval for SGN-35 for the treatment of patients with relapsed or refractory Hodgkin lymphoma, our ability to generate revenue from product sales will be significantly delayed. Although we have reached agreement with the FDA on a special protocol assessment relating to our SGN-35 pivotal trial, this agreement does not guarantee any particular outcome with respect to regulatory review of the pivotal trial or with respect to regulatory approval of SGN-35. Other than SGN-35, our product candidates are at an early stage of development, and it is possible that none of our product candidates will ever become commercial products. If we or our collaborators are not able to obtain required regulatory approvals, we or our collaborators will not be able to commercialize our product candidates, our ability to generate revenue will be materially impaired and our business will not be successful. Our clinical trials may fail to demonstrate acceptable levels of safety and efficacy of our product candidates, which could prevent or significantly delay their regulatory approval. Clinical trials for our product candidates are expensive and time consuming, may take longer than we expect or may not be completed at all, and their outcome is uncertain. In some circumstances we rely on collaborators to assist in the research and development of our product candidates, as well as to utilize our ADC technology. If we are not able to locate suitable collaborators or if our collaborators do not perform as expected, it may affect our ability to commercialize our product candidates and/or generate revenues through technology licensing. We have no experience in commercializing products on our own and, to the extent we do not develop this ability or contract with a third party to assist us, we may not be able to successfully commercialize our product candidates that may be approved for commercial sale. We depend on a small number of collaborators for most of our current revenue. The loss of any one of these collaborators could result in a substantial decline in our revenue. We currently rely on third-party manufacturers and other third parties for production of our drug products and our dependence on these manufacturers may impair the development of our product candidates. We rely on third parties to provide services in connection with our preclinical and clinical development programs. The inadequate performance by or loss of any of these service providers could affect our product candidate development. Our ADC technology has not been incorporated into a commercial product and is still at a relatively early stage of development. We have a history of net losses. We expect to continue to incur net losses and may not achieve or maintain profitability for some time, if at all. We will continue to need significant amounts of additional capital that may not be available to us. We rely on license agreements for certain aspects of our product candidates and technology. Failure to maintain these license agreements or to secure any required new licenses could prevent us from developing or commercializing our product candidates and technology. If we are unable to enforce our intellectual property rights, we may not be able to commercialize our product candidates. Similarly, if we fail to sustain and further build our intellectual property rights, competitors may be able to develop competing therapies. We may incur substantial costs and lose important rights as a result of litigation or other proceedings relating to patent and other intellectual property rights. If we lose our key personnel or are unable to attract and retain additional qualified personnel, our future growth and ability to compete would suffer. We face intense competition and rapid technological change, which may result in others discovering, developing or commercializing competing products before or more successfully than we do. We face product liability risks and may not be able to obtain adequate insurance to protect us against losses. Our operations involve hazardous materials and are subject to environmental, health and safety controls and regulations. We may engage in future acquisitions that increase our capital requirements, dilute our stockholders, cause us to incur debt or assume contingent liabilities and subject us to other risks. Legislative actions, potential new accounting pronouncements and higher insurance costs are likely to impact our future financial position or results of operations. Current global credit and financial market conditions may negatively impact or impair the value of our current portfolio of cash equivalents, short-term investments or auction rate securities and our ability to fund our planned operations. Risks Related to Our Stock Our stock price is volatile and our shares may suffer a decline in value. Our existing stockholders have significant control of our management and affairs. Anti-takeover provisions could make it more difficult for a third party to acquire us.

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1060736--3/13/2009--SEATTLE_GENETICS_INC_/WA