1145404--3/26/2009--CORNERSTONE_THERAPEUTICS

related topics

{product, candidate, development}

{product, liability, claim}

{property, intellectual, protect}

{stock, price, operating}

{regulation, change, law}

{control, financial, internal}

{personnel, key, retain}

{system, service, information}

{stock, price, share}

{customer, product, revenue}

{loss, insurance, financial}

{regulation, government, change}

{acquisition, growth, future}

{operation, international, foreign}

{cost, operation, labor}

Concerns regarding the safety profile of ZYFLO CR and ZYFLO may limit market acceptance of ZYFLO CR. Concerns regarding the potential toxicity and addictiveness of propoxyphene and the known liver toxicity of acetaminophen may limit market acceptance of our propoxyphene/acetaminophen products or cause the FDA to remove these products from the market. Our strategy of obtaining, through product acquisitions and in-licenses, rights to products and product candidates for our development pipeline and to proprietary drug delivery and formulation technologies for our life cycle management of current products may not be successful. If we are unable to attract, hire and retain qualified sales and marketing personnel, the commercial opportunity for our products and product candidates may be diminished. We face competition, which may result in others discovering, developing or commercializing products before or more successfully than us. As our competitors introduce their own generic equivalents of our generic products, our net revenues from such products are expected to decline. If we fail to manage successfully our product acquisitions, our ability to develop our product candidates and expand our product pipeline may be harmed. A failure to maintain optimal inventory levels could harm our reputation and subject us to financial losses. If our third-party manufacturers and packagers do not obtain the necessary quota for controlled substances needed to supply us with our products or the quotas are not sufficient, we may be unable to meet commercial demand for the products. If we or our contract manufacturers fail to comply with regulatory requirements for our controlled substance products and product candidates, the DEA may take regulatory actions detrimental to our business, resulting in temporary or permanent interruption of distribution, withdrawal of products from the market or other penalties. Product liability lawsuits against us could cause us to incur substantial liabilities and to limit commercialization of any products that we may develop. Risks Relating to Product Development and Regulatory Matters If we are unable to develop safe and efficacious formulations of our product candidates, or our clinical trials for the SPECTRACEF Suspension line extension or our other product candidates are not successful, we may not be able to develop, obtain regulatory approval for and commercialize these product candidates successfully. If clinical trials for our product candidates are delayed, we would be unable to obtain regulatory approval and commercialize our product candidates on a timely basis, which would require us to incur additional costs and delay the receipt of any revenues from product sales. If our clinical trials do not demonstrate safety and efficacy in humans, we may experience delays, incur additional costs and ultimately be unable to commercialize our product candidates. If we are not able to obtain required regulatory approvals, we will not be able to commercialize our product candidates, and our ability to generate revenue will be materially impaired. Our limited experience in obtaining regulatory approvals could delay, limit or prevent such approvals for our product candidates. Some of our specialty pharmaceutical products are now being marketed without approved NDAs or ANDAs. Our sales depend on payment and reimbursement from third-party payors, and a reduction in the payment rate or reimbursement could result in decreased use or sales of our products. If we fail to comply with regulatory requirements for our products or if we experience unanticipated problems with them, the FDA may take regulatory actions detrimental to our business, resulting in temporary or permanent interruption of distribution, withdrawal of products from the market or other penalties. State and federal pharmaceutical marketing and promotional compliance and reporting requirements may expose us to regulatory and legal action by government authorities. We may be subject to investigations or other inquiries concerning our compliance with reporting obligations under federal health care program pharmaceutical pricing requirements. Our corporate compliance and corporate governance programs cannot guarantee that we are in compliance with all potentially applicable regulations. We will spend considerable time and money complying with federal and state laws and regulations, and, if we are unable to fully comply with such laws and regulations, we could face substantial penalties. Recent proposed legislation may permit re-importation of drugs from foreign countries into the United States, including foreign countries where the drugs are sold at lower prices than in the United States, which could force us to lower the prices of our products and impair our ability to derive revenue from our products. Risks Relating to Our Dependence on Third Parties We use third parties to manufacture all of our products and product candidates. This may increase the risk that we will not have sufficient quantities of our products or product candidates at an acceptable cost, which could result in clinical development and commercialization of product candidates being delayed, prevented or impaired. We rely on third-party manufacturers for compliance with applicable regulatory requirements. This may increase the risk of sanctions being imposed on us or on a manufacturer of our products or product candidates, which could result in our inability to obtain sufficient quantities of these products or product candidates. Difficulties relating to the supply chain for ZYFLO CR tablets could significantly inhibit our ability to meet, or prevent us from meeting, commercial demand for the product. We rely on third parties to conduct our clinical trials, and those third parties may not perform satisfactorily, including failing to meet established deadlines for the completion of such trials. We rely on third parties to market and promote some products, and these third parties may not successfully commercialize these products. The concentration of our product sales to only a few wholesale distributors increases the risk that we will not be able to effectively distribute our products if we need to replace any of these customers, which would cause our sales to decline. Our business could suffer as a result of a failure to manage and maintain our distribution network. If any of the third parties that we rely upon for assistance in researching, developing, manufacturing, promoting and distributing our products and product candidates defaults on or is unable to refinance at maturity its third party indebtedness, our operating performance would be adversely affected. We depend on MedImmune and Beckman Coulter and expect to depend on additional collaborators in the future for a portion of our revenues and to develop, conduct clinical trials with, obtain regulatory approvals for, and manufacture, market and sell some of our product candidates. These collaborations may not be successful. Risks Relating to Intellectual Property and Licenses If we are unable to obtain and maintain protection for the intellectual property relating to our technology and products, the value of our technology and products will be adversely affected. The composition of matter patent for the API in SPECTRACEF and in the SPECTRACEF line extension product candidates will expire in April 2009, and the composition of matter patent for the API in ZYFLO CR and ZYFLO will expire in December 2010 and none of our other current products or current product candidates have, or will have, composition of matter patent protection. Trademark protection of our products may not provide us with a meaningful competitive advantage. 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. If we infringe or are alleged to infringe intellectual property rights of third parties, our business will be adversely affected. Risks Relating to Financial Results We may need additional funding and may be unable to raise capital when needed, which could force us to delay, reduce or eliminate our product development or commercialization efforts. The terms of any additional capital funding that we require may not be favorable to us or our stockholders. We have incurred significant losses and may incur losses in the future. If the estimates that we make, or the assumptions upon which we rely, in preparing our financial statements prove inaccurate, the actual results may vary from those reflected in our projections. Our short operating history may make it difficult for you to evaluate the success of our business to date and to assess our future viability. Our operating results are likely to fluctuate from period to period. Risks Relating to Employee Matters and Managing Growth If we fail to attract and retain key personnel, or to retain our executive management team, we may be unable to successfully develop or commercialize our products. Our management will be required to devote substantial time to comply with public company regulations. Risks Relating to Common Stock Our stock price is subject to fluctuation, which may cause an investment in our stock to suffer a decline in value. If we fail to continue to meet all applicable continued listing requirements of The NASDAQ Capital Market and NASDAQ determines to delist our common stock, the market liquidity and market price of our common stock could decline. If our quarterly results of operations fluctuate, this fluctuation may subject our stock price to volatility, which may cause an investment in our stock to suffer a decline in value. If significant business or product announcements by us or our competitors cause fluctuations in our stock price, an investment in our stock may suffer a decline in value.

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1145404--3/26/2009--CORNERSTONE_THERAPEUTICS_INC