1131324--3/22/2006--GENOMIC_HEALTH

related topics

{product, candidate, development}

{product, liability, claim}

{product, market, service}

{acquisition, growth, future}

{property, intellectual, protect}

{cost, regulation, environmental}

{customer, product, revenue}

{personnel, key, retain}

{regulation, change, law}

{control, financial, internal}

We expect to continue to incur significant research and development expenses, which may make it difficult for us to achieve profitability. If third-party payors, including managed care organizations and Medicare, do not provide reimbursement for Oncotype DX, its commercial success could be compromised. If the U.S. Food and Drug Administration, or FDA, were to begin regulating our products, we could be forced to stop sales of Oncotype DX, we could experience significant delays in commercializing any future products, we could incur substantial costs and time delays associated with meeting requirements for premarket approval or we could experience decreased demand for or reimbursement of our test. If we were required to conduct additional clinical trials prior to marketing our products, those trials could lead to delays or failure to obtain necessary regulatory approvals and harm our ability to become profitable. Complying with numerous regulations pertaining to our business is an expensive and time-consuming process, and any failure to comply could result in substantial penalties. Our financial results depend on sales of one product, Oncotype DX, and we will need to generate sufficient revenues from this and other products to run our business. We may experience limits on our revenues if only a small number of physicians decide to adopt our test. We may experience limits on our revenues if only a small number of patients decide to use our test. If we are unable to develop products to keep pace with rapid medical and scientific change, our operating results and competitive position would be harmed. Our rights to use technologies licensed from third parties are not within our control, and we may not be able to sell our products if we lose our existing rights or cannot obtain new rights on reasonable terms. Our competitive position depends on maintaining intellectual property protection. We may face intellectual property infringement claims that could be time-consuming and costly to defend and could result in our loss of significant rights and the assessment of treble damages. If we are unable to compete successfully, we may be unable to increase or sustain our revenues or achieve profitability. Our research and development efforts will be hindered if we are not able to contract with third parties for access to archival tissue samples. If we cannot maintain our current clinical collaborations and enter into new collaborations, our product development could be delayed. New product development involves a lengthy and complex process, and we may be unable to commercialize any of the products we are currently developing. The loss of key members of our senior management team or our inability to retain highly skilled scientists, clinicians and salespeople could adversely affect our business. If our sole laboratory facility becomes inoperable, we will be unable to perform our tests and our business will be harmed. Changes in healthcare policy could subject us to additional regulatory requirements that may interrupt commercialization of Oncotype DX and increase our costs. We rely on a sole supplier for some of our laboratory instruments and may not be able to find replacements in the event our sole supplier no longer supplies that equipment. If we are unable to support demand for our products, our business may suffer. We may be unable to manage our future growth effectively, which would make it difficult to execute our business strategy. If we were sued for product liability, we could face substantial liabilities that exceed our resources. If we use biological and hazardous materials in a manner that causes injury, we could be liable for damages. Our dependence on distributors for foreign sales of Oncotype DX could limit or prevent us from selling our products in foreign markets and from realizing long-term international revenue growth. We may acquire other businesses or form joint ventures that could harm our operating results, dilute your ownership of us, increase our debt or cause us to incur significant expense. Our inability to raise additional capital on acceptable terms in the future may limit our ability to develop and commercialize new products and technologies.

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1131324--3/22/2006--GENOMIC_HEALTH_INC