1145404--3/4/2010--CORNERSTONE_THERAPEUTICS

related topics

{product, candidate, development}

{product, liability, claim}

{property, intellectual, protect}

{control, financial, internal}

{stock, price, operating}

{personnel, key, retain}

{system, service, information}

{customer, product, revenue}

{loss, insurance, financial}

{provision, law, control}

{regulation, change, law}

{acquisition, growth, future}

{cost, operation, labor}

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. We face competition, which may result in others discovering, developing or commercializing products before or more successfully than us. If we fail to manage successfully our product acquisitions, our ability to develop our product candidates and expand our product pipeline may be harmed. As our competitors introduce their own pharmaceutical and/or therapeutic equivalents of our products, our net revenues from such products are expected to decline. 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 or packagers 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. Fluoroquinolone products have been associated with the risk of tendonitis and tendon ruptures. FACTIVE is a fluoroquinolone product and must comply with the FDA directives on prescribing information for fluoroquinolones. 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. Concerns regarding the safety profile of ZYFLO CR and ZYFLO may limit market acceptance of ZYFLO CR. 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 experience financial distress and is unable to provide this assistance, our operating performance would be adversely affected. 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. A failure to maintain optimal inventory levels could harm our reputation and subject us to financial losses. 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 Some of our specialty pharmaceutical products are now being marketed without approved NDAs or ANDAs. If we are unable to develop safe and efficacious formulations of our product candidates, or our clinical trials for our 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 incur additional costs and delay the receipt of any revenues from product sales. If we are unable to obtain required regulatory approvals, we will be unable to commercialize our product candidates, and our ability to generate revenue will be materially impaired. If our clinical trials and other studies do not demonstrate safety and efficacy in humans, we may experience delays, incur additional costs and ultimately be unable to commercialize our product candidates. 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. 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. 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. 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 ZYFLO CR and ZYFLO will expire in December 2010 and the composition of matter patent for the API in FACTIVE will expire in April 2017. None of our other current products or current product candidates have, or will have, composition of matter patent protection. Our patents may be challenged by ANDA applicants. 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 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 operating results are likely to fluctuate from period to period. If we fail to maintain an effective system of internal control over financial reporting, we may not be able to accurately report our financial results. As a result, current and potential stockholders could lose confidence in our financial reporting, which would harm our business and the trading price of our stock. 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. 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. Chiesi has substantial control over us and could delay or prevent a change in corporate control, including a transaction in which our stockholders could sell or exchange their shares for a premium.

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1145404--3/4/2010--CORNERSTONE_THERAPEUTICS_INC