1160308--3/17/2008--ADVENTRX_PHARMACEUTICALS

related topics

{product, candidate, development}

{product, liability, claim}

{stock, price, share}

{property, intellectual, protect}

{acquisition, growth, future}

{stock, price, operating}

{capital, credit, financial}

{operation, natural, condition}

{regulation, change, law}

{control, financial, internal}

{provision, law, control}

{personnel, key, retain}

{customer, product, revenue}

{product, market, service}

{competitive, industry, competition}

RISKS RELATED TO OUR BUSINESS Risks Related to Our Financial Performance and Operations We have incurred losses since our inception, we expect our operating expenses to continue to exceed our revenues for the foreseeable future and we may never generate revenues sufficient to achieve profitability. We will need to obtain additional funding to support our planned level of operations, and we may not be able to obtain such capital on a timely basis or under commercially reasonable terms, if at all. Raising additional capital may cause dilution to our existing stockholders, require us to relinquish proprietary rights or restrict our operations. If we are unable to raise additional capital, we may be forced to reduce or abandon research and development programs, partner product candidates at inopportune times or pursue less-expensive but higher-risk development paths. If we are successful in our development efforts for our product candidates, we will need to increase the size of our organization, and we may experience difficulties in managing growth. We may be unable to retain skilled personnel and maintain key relationships. We may seek to merge with or be acquired by another company and the terms of that transaction may not be desirable. If we fail to maintain registration of the shares of common stock issued or issuable pursuant to the exercise of warrants we issued in our July 2005 private placement, we will be required to pay the holders of those securities liquidated damages, which could be material in amount. Our operations might be interrupted by the occurrence of a natural disaster or other catastrophic event. Risks Related to Drug Development and Commercialization Further testing of our product candidates is required and regulatory approval may be delayed or denied, which would limit or prevent us from marketing our product candidates and significantly impair our ability to generate revenues. We may not achieve our projected development goals in the time frames we announce. Delays in the commencement or completion of preclinical testing, clinical trials or regulatory activities could result in increased costs to us and delay or limit our ability to generate revenues. Positive results in our preclinical testing and clinical trials do not ensure that future clinical trials will be successful or that our product candidates will receive the regulatory approvals necessary for their commercialization. If any of our product candidates for which we receive regulatory approval do not achieve broad market acceptance (including as a result of failing to differentiate our products from competitor products or as a result of failing to obtain reimbursement rates for our products that are competitive from the healthcare provider s perspective), the revenues we generate from their sales will be limited and our business may not be profitable. We do not have manufacturing capabilities and are dependent on single source manufacturers and suppliers for certain of our product candidates and their component materials, and the loss of any of these manufacturers or suppliers, or their failure to provide us with an adequate supply of products or component materials on commercially acceptable terms, or at all, could harm our business. We rely in part on third parties to conduct our clinical trials and other aspects of our research and development programs and if those third parties do not satisfactorily perform their contractual obligations or meet anticipated deadlines, the clinical development of our product candidates could be adversely affected. We currently have no sales capability and only limited marketing capability and our failure to develop these capabilities internally or contract with third parties to perform these activities successfully could delay and/or limit our ability to generate revenues in the event one or more of our product candidates obtains regulatory approval. Even if we receive regulatory approval for our product candidates, we may face competition from generic products, which could put downward pressure on pricing and market share and limit our ability to generate revenues. Even if we receive regulatory approval for any of our product candidates, we may rely on third parties to perform many essential services for our commercial products, including services related to the distribution, storage and transportation of our products. If we receive regulatory approval in the United States for ANX-530 and/or ANX-514, we will likely depend on a limited number of group purchasing organizations for retail distribution of these products, and if we subsequently lose any significant GPO customer, our business could be harmed. Even if our product candidates receive regulatory approval, they may still face future development and regulatory difficulties that could materially and adversely affect our business, financial condition and results of operations and cause our stock price to decline. Even if our product candidates receive regulatory approval in the United States, we may never receive approval or commercialize our products outside of the United States, which would limit our ability to realize the full market potential of our product candidates. Our product candidates may cause undesirable side effects or have other properties that could delay or prevent their regulatory approval or commercialization. Risks Related to Our Intellectual Property Our success will depend on patents and other protection we and our licensors obtain on our product candidates and proprietary technology. Exclusivity for our emulsion-formulation product candidates and CoFactor may be limited because of the nature of patent protection available for these candidates. We have licensed several of our product candidates from third parties and, if we default on any of our obligations, we could lose rights to our product candidates. The United States government and USC retain certain rights in the technologies we have licensed from USC. If we are sued for infringing the proprietary rights of third parties, it will be costly and time consuming, and an unfavorable outcome would have an adverse effect on our business. RISKS RELATED TO OUR INDUSTRY We expect intense competition in the marketplace for all of our product candidates. We are subject to uncertainty relating to healthcare reform measures and reimbursement policies that, if not favorable to our products, could hinder or prevent our products commercial success. We face potential product liability exposure and, if successful claims are brought against us, we may incur substantial liability for a product or product candidate and may have to limit its commercialization. In the future, we anticipate that we will need to obtain additional or increased product liability insurance coverage and it is uncertain that such increased or additional insurance coverage can be obtained on commercially reasonable terms. Changes in laws and regulations that affect the governance of public companies have increased our operating expenses and may continue to do so. RISKS RELATED TO OUR COMMON STOCK Our common stock may be delisted from AMEX if we fail to maintain compliance with continued listing criteria. The market price of our common stock has been and is likely to continue to be highly volatile. Sales of substantial amounts of our common stock or the perception that such sales may occur could cause the market price of our common stock to drop significantly, even if our business is performing well. Anti-takeover provisions in our charter documents and under Delaware law may make an acquisition of us, which may be beneficial to our stockholders, more difficult, which could depress our stock price. Alternatively, prohibitions on anti-takeover provisions in our charter documents may restrict us from acting in the best interests of our stockholders. Concentration of ownership of our common stock among our existing executive officers, directors and principal stockholders may prevent new investors from influencing significant corporate decisions.

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1160308--3/17/2008--ADVENTRX_PHARMACEUTICALS_INC