1107601--3/10/2006--ATHEROGENICS

related topics

{product, candidate, development}

{property, intellectual, protect}

{product, liability, claim}

{debt, indebtedness, cash}

{stock, price, share}

{financial, litigation, operation}

{cost, regulation, environmental}

{personnel, key, retain}

{control, financial, internal}

{provision, law, control}

{stock, price, operating}

{acquisition, growth, future}

Risks Related to Our Financial Results and Need for Additional Financing We have a history of operating losses, and we may not generate revenue or achieve profitability in the future. If we need additional financing and cannot obtain it, we may not be able to develop or market our products. Risks Related to Development and Commercialization of Product Candidates and Dependence on Third Parties We depend heavily on the success of our most advanced internal product candidate, AGI-1067 for atherosclerosis, which is in clinical development. If we are unable to commercialize this product candidate, or experience significant delays in doing so, our business will be materially harmed. We are substantially dependent on our collaboration with AstraZeneca for the development and commercialization of AGI-1067. If we do not successfully develop our other product candidates, we will have limited ability to generate revenue. If we fail to demonstrate adequately the safety and efficacy of a product candidate, we will not be able to commercialize that product candidate. We may not be successful in establishing collaborations for product candidates we may seek to commercialize, which could adversely affect our ability to discover, develop and commercialize products. In addition to our collaboration with AstraZeneca, we expect to depend significantly on collaborations with third parties to develop and commercialize some of our product candidates. If a potential collaborator were to change its strategy or the focus of its development and commercialization efforts with respect to our relationship, the success of our product candidates and our operations could be adversely affected. Third parties failure to synthesize and manufacture our product candidates to our specifications could delay our clinical trials or hinder our commercialization prospects. The commercial success of any products that we may develop will depend on the degree of market acceptance by physicians, patients, healthcare payors and others in the medical community. If our competitors develop and market products that are more effective, have fewer side effects or are less expensive than our current or future product candidates, we may have limited commercial opportunities. We have not previously sold, marketed or distributed any products and may not be able to successfully commercialize AGI-1067, or other drug candidates. If we are unable to obtain adequate coverage and reimbursement from third party payors for any products that we may develop or acceptable prices for those products, our revenues and prospects for profitability will suffer. If plaintiffs bring product liability lawsuits against us, we may incur substantial financial loss or may be unable to obtain future product liability insurance at reasonable prices, if at all, either of which could diminish our ability to commercialize our future products. Risks Related to Our Intellectual Property Our failure to protect adequately or enforce our intellectual property rights or secure rights to third party patents could materially adversely affect our proprietary position in the marketplace or prevent the commercialization of our products. If we infringe or are alleged to infringe intellectual property rights of third parties, it will adversely affect our business. If we fail to comply with our obligations in our intellectual property licenses with third parties, we could lose license rights that are important to our business. If we are unable to protect the confidentiality of our proprietary information and know-how, the value of our technology and products could be adversely affected. Risks Related to Regulatory Approval of Our Product Candidates Because we cannot predict whether or when we will obtain regulatory approval to commercialize our product candidates, we cannot predict the timing of any future revenue from these product candidates. We may experience delays in our clinical trials that could adversely affect our financial results and our commercial prospects. Failure to obtain regulatory approval in international jurisdictions would prevent us from marketing our products abroad. If we do not comply with applicable regulatory requirements in the manufacture and distribution of our products, we may incur penalties that may inhibit our ability to commercialize our products and adversely affect our revenue. Even if the FDA approves our product candidates, the approval will be limited to those indications and conditions for which we are able to show clinical safety and efficacy. Risks Related to Our Operations Our failure to attract, retain and motivate skilled personnel and cultivate key academic collaborations could materially adversely affect our research and development efforts. The outcome of informal inquiries by the SEC and NASD regarding our announcement of interim results from the CART-2 clinical trial for AGI-1067 and related trading in our common stock is uncertain. Our activities involve the use of hazardous materials, which subject us to regulation, related costs and delays and potential liabilities. Risks Related to our Common Stock and Indebtedness Our stock price has been and may continue to be volatile. Our existing indebtedness and any future indebtedness we incur exposes us to risks that could adversely affect our business, operating results and financial condition. Conversion of our convertible notes will dilute the ownership interest of existing shareholders and could adversely affect the market price of our common stock. Our shareholder rights plan and anti-takeover provisions in our charter documents may make an acquisition of us, which may benefit our shareholders, more difficult.

Full 10-K form ▸

1107601--3/10/2006--ATHEROGENICS_INC