1093649--3/4/2009--IDENIX_PHARMACEUTICALS

related topics

{product, candidate, development}

{stock, price, operating}

{property, intellectual, protect}

{interest, director, officer}

{loss, insurance, financial}

{stock, price, share}

{provision, law, control}

{control, financial, internal}

{financial, litigation, operation}

{product, liability, claim}

{personnel, key, retain}

{cost, regulation, environmental}

{condition, economic, financial}

Our research and development efforts may not result in additional drug candidates being discovered on anticipated timelines, if at all, which could limit our ability to generate revenues. Our failure to successfully acquire or develop and market additional drug candidates or approved drugs would impair our ability to grow. Our investments are subject to general credit, liquidity, market and interest rate risks, which may be exacerbated by the volatility in the U.S. credit markets. The markets which we intend to enter are subject to intense competition. If we are unable to compete effectively, products we successfully develop and our drug candidates may be rendered noncompetitive or obsolete. If we are not able to attract and retain key management and scientific personnel and advisors, we may not successfully develop our drug candidates or achieve our other business objectives. Our business has a substantial risk of product liability claims. If we are unable to obtain or maintain appropriate levels of insurance, a product liability claim against us could adversely affect our business. Our insurance policies are expensive and protect us only from some business risks, which will leave us exposed to significant, uninsured liabilities. If the estimates we make, and the assumptions on which we rely, in preparing our financial statements prove inaccurate, our actual results may vary from those reflected in our projections and accruals. If we fail to design and maintain an effective system of internal controls, we may not be able to accurately report our financial results or prevent fraud. As a result, current and potential stockholders could lose confidence in our financial reporting, which could harm our business and the trading price of our common stock. Factors Related to Development, Clinical Testing and Regulatory Approval of Our Drug Candidates All of our drug candidates are in development. Our drug candidates remain subject to clinical testing and regulatory approval. If we are unable to develop our drug candidates, we will not be successful. If our clinical trials are not successful, we will not obtain regulatory approval for the commercial sale of our drug candidates. If our drug candidates fail to obtain U.S. and/or foreign regulatory approval, we and our partners will be unable to commercialize our drug candidates. Our products will be subject to ongoing regulatory review even after approval to market such products is obtained. If we or our partners fail to comply with applicable U.S. and foreign regulations, we or our partners could lose approvals we or our partners have been granted and our business would be seriously harmed. If we or our partners fail to comply with ongoing regulatory requirements after receipt of approval to commercialize a product, we or our partners may be subject to significant sanctions imposed by the FDA, EMEA or other U.S. and foreign regulatory authorities. If we do not comply with laws regulating the protection of the environment and health and human safety, our business could be adversely affected. Factors Related to Our Relationship with Novartis Novartis has substantial control over us and could delay or prevent a change in corporate control. Novartis has the right to exercise control over certain corporate actions that may not otherwise require stockholder approval as long as it holds at least 19.4% of our voting stock. We currently depend on Novartis for substantially all our revenues and for the commercialization of Tyzeka /Sebivo and for support in the development of drug candidates Novartis has licensed from us. If our development, license and commercialization agreement with Novartis terminates, our business and, in particular, the development of our drug candidates and the commercialization of any products that we successfully develop could be harmed. Novartis has the option to license from us drug candidates we discover, or in some cases, acquire. If Novartis does not exercise its option with respect to a drug candidate, our development, manufacture and/or commercialization of such drug candidate may be substantially delayed or limited. If we breach any of the numerous representations and warranties we made to Novartis under the development and commercialization agreement or the stock purchase agreement, Novartis has the right to seek indemnification from us for damages it suffers as result of such breach. These amounts could be substantial. If we materially breach our obligations or covenants arising under the development and commercialization agreement with Novartis, we may lose our rights to develop or commercialize our drug candidates. If we issue capital stock, in certain situations Novartis will be able to purchase shares at par value to maintain its percentage ownership in Idenix and, if that occurs, this could cause dilution. In addition, Novartis has the right, under specified circumstances, to purchase a pro rata portion of other shares that we may issue. If Novartis terminates or fails to perform its obligations under the development and commercialization agreement, we may not be able to successfully commercialize our drug candidates licensed to Novartis and the development and commercialization of our other drug candidates could be delayed, curtailed or terminated. Novartis has the right to market and sell products that compete with the drug candidates and products that we license to it, and any competition by Novartis could have a material adverse effect on our business. Factors Related to Our Dependence on Third Parties If we seek to enter into collaboration agreements for any drug candidates other than those licensed to Novartis and GSK and we are not successful in establishing such collaborations, we may not be able to continue development of those drug candidates. Our license agreement with GSK is important to our business. The royalties and other payments we receive under our licensing arrangement with GSK could be delayed, reduced or terminated if GSK terminates or fails to perform its obligations under its agreement with us or if GSK is unsuccessful in its sales efforts. Our collaborations with outside scientists may be subject to restriction and change. We have depended on third-party manufacturers to manufacture products for us. If in the future we manufacture any of our products, we will be required to incur significant costs and devote significant efforts to establish these capabilities. Factors Related to Patents and Licenses If we are unable to adequately protect our patents and licenses related to our drug candidates, or if we infringe the rights of others, it may not be possible to successfully commercialize products that we develop. Confidentiality agreements with employees and others may not adequately prevent disclosure of trade secrets and other proprietary information. If any of our agreements that grant us the exclusive right to make, use and sell our drug candidates are terminated, we and/or collaboration partners may be unable to develop or commercialize our drug candidates. If our cooperative research agreement with the University of Cagliari is terminated for breach, we may be unable to utilize research results arising out of that work prior to the termination. Factors Related to Our Common Stock Sales of additional shares of our common stock could result in dilution to existing stockholders and cause the price of our common stock to decline. Fluctuation of our quarterly results may cause our stock price to decline, resulting in losses to you. An investment in our common stock may decline in value as a result of announcements of business developments by us or our competitors. We could be subject to class action litigation due to stock price volatility, which, if it occurs, will distract our management and could result in substantial costs or large judgments against us.

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1093649--3/4/2009--IDENIX_PHARMACEUTICALS_INC