1108271--3/16/2006--CONOR_MEDSYSTEMS

related topics

{product, candidate, development}

{product, liability, claim}

{property, intellectual, protect}

{stock, price, share}

{stock, price, operating}

{control, financial, internal}

{provision, law, control}

{cost, regulation, environmental}

{personnel, key, retain}

{operation, international, foreign}

Risks Related to Intellectual Property If any patent infringement or other intellectual property claims asserted against us are successful, we could be enjoined, or prevented, from commercializing our CoStar stent or other product candidates. Intellectual property litigation against or by us could significantly disrupt our development and commercialization efforts, divert our management s attention and quickly consume our financial resources. If we are unable to obtain and maintain intellectual property protection covering our products, others may be able to make, use or sell our products, which would adversely affect our market share, and, therefore, our revenues. Risks Related to Our Business We are depending heavily on the success of our CoStar stent. If we are unable to successfully commercialize our CoStar stent in Europe, the United States or other major markets or experience significant delays in doing so, our ability to generate revenue will be significantly delayed and our business will be harmed. We have limited manufacturing resources and experience, and if our manufacturing facilities are unable to provide an adequate supply of our CoStar stent, our growth could be limited and our business could be harmed. Quality issues in our manufacturing processes could delay commercialization of our CoStar stent and our clinical trials. Our CoStar stent may never achieve market acceptance. If our distributors sales and marketing efforts are not successful or if we are unable to establish sales and marketing capabilities, our business may be harmed. The medical device industry is highly competitive and subject to rapid technological change. If our competitors are better able to develop and market products that are safer and more effective than our CoStar stent or other products we may develop, our commercial opportunity will be reduced or eliminated. If we fail to obtain an adequate level of reimbursement for our CoStar stent by third-party payors, there may be no commercially viable markets for our CoStar stent or the markets may be much smaller than expected. We depend on single source suppliers for our CoStar stent components and the manufacturing components used in our CoStar stent. The loss of these suppliers could delay or prevent commercialization or delay our clinical trials of our CoStar stent. Our manufacturing facilities and the manufacturing facilities of our suppliers must comply with applicable regulatory requirements. If we fail to achieve or maintain regulatory approval for these manufacturing facilities, our business and our results of operations would be harmed. If we fail to comply with ongoing regulatory requirements, or if we experience unanticipated problems with our CoStar stent, our CoStar stent could be subject to restrictions or withdrawal from the market. If we are unable to manage our expected growth, we may not be able to successfully commercialize our CoStar stent and other product candidates. Even though our CoStar stent has received CE Mark approval, we do not have the necessary regulatory approvals to market our CoStar stent or any other product candidates in the United States or other major markets, and we may never obtain regulatory approval. We have designed the protocol of our U.S. pivotal clinical trial for our CoStar stent based in part on prior clinical trials that used different stents. The results of these prior clinical trials may not be indicative of the clinical results we would obtain for our U.S. pivotal clinical trial. The clinical results we have reported to date may not be indicative of future clinical results. Our current and planned clinical trials may not begin on time, or at all, and may not be completed on schedule, or at all. If the third parties on whom we rely to conduct our clinical trials and to assist us with pre-clinical development do not perform as contractually required or expected, we may not be able to obtain regulatory approval for or commercialize our product candidates. Problems with the stent to be used in the control group could adversely affect our U.S. pivotal clinical trial for our CoStar stent. Our product candidates are based on a new technology, and we have only limited experience in regulatory affairs, which may affect our ability or the time required to obtain necessary regulatory approvals, if at all. Pre-clinical development is a long, expensive and uncertain process, and we may terminate one or more of our pre-clinical development programs. We may not be successful in our efforts to expand our portfolio of products and develop additional drug delivery technologies. We have incurred losses since inception and anticipate that we will incur continued losses for the foreseeable future. We may need substantial additional funding and may be unable to raise capital when needed, which would force us to delay, reduce or eliminate our product development programs or commercialization efforts. We depend on our officers, and if we are not able to retain them or recruit additional qualified personnel, our business will suffer. Changes in foreign currency exchange rates may increase our expenses or reduce our revenues. Risks Related to Our Industry Legislative or regulatory reform of the healthcare system may affect our ability to sell our products profitably. We face the risk of product liability claims and may not be able to obtain insurance. If we initiate a product recall our ability to generate revenue will be significantly impaired. Our operations involve hazardous materials, and we must comply with environmental laws and regulations, which can be expensive. Risks Related to Our Common Stock Failure to maintain effective internal controls in accordance with Section 404 of the Sarbanes-Oxley Act of 2002 could have a material adverse effect on our stock price. Anti-takeover defenses that we have in place could prevent or frustrate attempts to change our direction or management. Our principal stockholders and management own a significant percentage of our stock and are able to exercise significant influence over our affairs. If our stock price is volatile, purchasers of our common stock could incur substantial losses. If there are substantial sales of our common stock, our stock price could decline. If securities or industry analysts do not publish research or reports about our business, or publish negative reports about our business, our stock price and trading volume could decline. We do not intend to pay cash dividends on our common stock in the foreseeable future.

Full 10-K form ▸

1108271--3/16/2006--CONOR_MEDSYSTEMS_INC