1080014--2/27/2008--THERAVANCE

related topics

{product, candidate, development}

{product, liability, claim}

{provision, law, control}

{property, intellectual, protect}

{stock, price, share}

{stock, price, operating}

{cost, regulation, environmental}

{operation, natural, condition}

{personnel, key, retain}

{control, financial, internal}

{regulation, government, change}

{financial, litigation, operation}

Risks Related to our Business If telavancin is not approved by regulatory agencies, including the U.S. Food and Drug Administration, our business will be adversely affected and the price of our securities will decline. If our product candidates, in particular telavancin, are determined to be unsafe or ineffective in humans, our business will be adversely affected and the price of our securities will decline. Any failure of a product candidate in clinical studies or any delay in commencing or completing clinical studies for our product candidates would harm our business and cause our stock price to decline. If our product candidates that we develop on our own or through collaborative partners are not approved by regulatory agencies, including the FDA, we will be unable to commercialize them. We rely on a number of manufacturers for our product candidates and we rely on a single manufacturer for supply of telavancin, and our business will be seriously harmed if these manufacturers are not able to satisfy our demand and alternative sources are not available. If approved, telavancin may not be accepted by physicians, patients, third party payors, or the medical community in general. Even if our product candidates receive regulatory approval, commercialization of such products may be adversely affected by regulatory actions. We have incurred operating losses in each year since our inception and expect to continue to incur substantial losses for the foreseeable future. If we fail to obtain the capital necessary to fund our operations, we may be unable to develop our product candidates and we could be forced to share our rights to commercialize our product candidates with third parties on terms that may not be favorable to us. If our partners do not satisfy their obligations under our agreements with them, we will be unable to develop our partnered product candidates as planned. Our relationship with GSK may have a negative effect on our ability to enter into relationships with third parties. If we are unable to enter into future collaboration arrangements or if any such collaborations with third parties are unsuccessful, our profitability may be delayed or reduced. We depend on third parties in the conduct of our clinical studies for our product candidates. We face substantial competition from companies with more resources and experience than we have, which may result in others discovering, developing, receiving approval for or commercializing products before or more successfully than we do. We have no experience selling or distributing products and no internal capability to do so. If we lose key scientists or management personnel, or if we fail to recruit additional highly skilled personnel, it will impair our ability to discover, develop and commercialize product candidates. Our principal facility is located near known earthquake fault zones, and the occurrence of an earthquake, extremist attack or other catastrophic disaster could cause damage to our facilities and equipment, which could require us to cease or curtail operations. Risks Related to our Alliance with GSK GSK's ownership of a significant percentage of our stock and its right to membership on our board of directors may create conflicts of interest, and may inhibit our management's ability to continue to operate our business in the manner in which it is currently being operated. GSK's rights under the strategic alliance and governance agreements may deter or prevent efforts by other companies to acquire us, which could prevent our stockholders from realizing a control premium. After September 2008, GSK could sell or transfer a substantial number of shares of our common stock, which could depress the price of our securities or result in a change in control of our company. Risks Related to Legal and Regulatory Uncertainty If our efforts to protect the proprietary nature of the intellectual property related to our technologies are not adequate, we may not be able to compete effectively in our market. Litigation or third-party claims of intellectual property infringement would require us to divert resources and may prevent or delay our drug discovery and development efforts. Product liability lawsuits could divert our resources, result in substantial liabilities and reduce the commercial potential of our medicines. Government restrictions on pricing and reimbursement, as well as other healthcare payor cost-containment initiatives, may negatively impact our ability to generate revenues. If we use hazardous and biological materials in a manner that causes injury or violates applicable law, we may be liable for damages. The price of our securities may be extremely volatile and purchasers of our securities could incur substantial losses. Concentration of ownership will limit your ability to influence corporate matters. Anti-takeover provisions in our charter and bylaws, in our rights agreement and in Delaware law could prevent or delay a change in control of our company.

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1080014--2/27/2008--THERAVANCE_INC