1093557--2/27/2006--DEXCOM

related topics

{product, candidate, development}

{product, liability, claim}

{property, intellectual, protect}

{product, market, service}

{cost, regulation, environmental}

{regulation, change, law}

{customer, product, revenue}

{control, financial, internal}

{regulation, government, change}

{personnel, key, retain}

{operation, natural, condition}

We are a development stage company and we do not have, and may never have, any products. We are subject to claims of infringement or misappropriation of the intellectual property rights of others, which could prohibit us from shipping affected products, require us to obtain licenses from third parties or to develop non-infringing alternatives, and subject us to substantial monetary damages and injunctive relief. We have incurred losses since inception and anticipate that we will incur continued losses for the foreseeable future. We have not received, and may never receive, FDA approval to market our continuous glucose monitoring systems. We expect to operate in a highly competitive market, we face competition from large, well-established medical device manufacturers with significant resources, and we may not be able to compete effectively. No continuous glucose monitoring system has yet received FDA clearance as a replacement for single-point finger stick devices, and our products may never be approved for that indication. If we are unable to successfully complete the pre-clinical studies or clinical trials necessary to support additional PMA applications, our ability to commercialize our continuous glucose monitoring systems and our financial position will be impaired. If we are unable to obtain acceptable prices or adequate reimbursement for our products from third-party payors, we will be unable to generate significant revenue. Our continuous glucose monitoring systems may never achieve market acceptance even if we obtain regulatory approvals. We depend on clinical investigators and clinical sites to enroll patients in our clinical trials and other third parties to manage the trials and to perform related data collection and analysis, and, as a result, we may face costs and delays that are outside of our control. We may be unable to complete the development and commercialization of our continuous glucose monitoring systems or other products without additional funding. If we are unable to establish sales, marketing and distribution capabilities or enter into and maintain arrangements with third parties to sell, market and distribute our continuous glucose monitoring systems, our business may be harmed. We have limited manufacturing capabilities and manufacturing personnel, and if our manufacturing capabilities are insufficient to produce an adequate supply of products, our growth could be limited and our business could be harmed. Additionally, the production of our continuous glucose monitoring systems must occur in a highly controlled and clean environment to minimize particles and other yield- and quality-limiting contaminants. Weaknesses in process control or minute impurities in materials may cause a substantial percentage of defective products in a lot. If we are not able to maintain stringent quality controls, or if contamination problems arise, our clinical development and commercialization efforts could be delayed, which would harm our business and our results of operations.Our manufacturing operations are dependent upon third-party suppliers, making us vulnerable to supply problems and price fluctuations, which could harm our business. Technological breakthroughs in the glucose monitoring market could render our products obsolete. Potential long-term complications from our continuous glucose monitoring systems may not be revealed by our clinical experience to date. Even if our products are approved by regulatory authorities, if we or our suppliers fail to comply with ongoing regulatory requirements, or if we experience unanticipated problems with our products, these products could be subject to restrictions or withdrawal from the market. We face the risk of product liability claims and may not be able to maintain or obtain insurance. We conduct business in a heavily regulated industry and if we fail to comply with these laws and government regulations, we could suffer penalties or be required to make significant changes to our operations. Our inability to adequately protect our intellectual property could allow our competitors and others to produce products based on our technology, which could substantially impair our ability to compete. The prosecution and enforcement of patents licensed to us by third parties are not within our control, and without these technologies, our products may not be successful and our business would be harmed. The majority of our operations are conducted at a single location. Any disruption at our facility could increase our expenses. We may be liable for contamination or other harm caused by materials that we handle, and changes in environmental regulations could cause us to incur additional expense. Failure to obtain regulatory approval in foreign jurisdictions will prevent us from marketing our products abroad. Our success will depend on our ability to attract and retain our personnel. We will incur increased costs as a result of recently enacted and proposed changes in laws and regulations relating to corporate governance matters. Changes in or interpretations of accounting rules and regulations, such as expensing of stock options, could result in unfavorable accounting charges or require us to change our compensation policies.

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1093557--2/27/2006--DEXCOM_INC