1161924--3/29/2006--ADVANCIS_PHARMACEUTICAL

related topics

{product, candidate, development}

{product, liability, claim}

{property, intellectual, protect}

{stock, price, share}

{product, market, service}

{cost, regulation, environmental}

{personnel, key, retain}

{investment, property, distribution}

{provision, law, control}

{stock, price, operating}

{customer, product, revenue}

Substantially all of our product candidates are based on a finding that could ultimately prove to be incorrect, or could have limited applicability. Our delivery technology may not be effective, which would prevent us from commercializing products that are more effective than those of our competitors. If a competitor produces and commercializes an antibiotic that is superior to our pulsatile antibiotics, the market for our potential products would be reduced or eliminated. We have not commissioned an extensive third party patent infringement, invalidity and enforceability investigation on pulsatile dosing and we are aware of one issued patent covering pulsatile delivery. We have not sought patent protection for certain aspects of our technology. If we are unable to develop and successfully commercialize our product candidates, we may never achieve profitability. If we do not successfully attract and retain collaborative partners, or our partners do not satisfy their obligations, we will be unable to develop our partnered product candidates. If we cannot enter into new licensing arrangements or otherwise gain access to products, our ability to develop a diverse product portfolio could be limited. Our executive officers and other key personnel are critical to our business and our future success depends on our ability to retain them. Our ability to complete clinical trials and ultimately commercialize products will be delayed if we are unable to obtain sufficient APIs or finished products from certain suppliers. Clinical trials for our product candidates may be delayed due to our dependence on third parties for the conduct of such trials. If clinical trials for our products are unsuccessful or delayed, we will be unable to meet our anticipated development and commercialization timelines. We will need additional capital in the future. If additional capital is not available, we may be forced to delay or curtail the development of our product candidates. We could be forced to pay substantial damage awards if product liability claims that may be brought against us are successful. If our PULSYS products are not accepted by the market, our revenues and profitability will suffer. Because we depend on a single manufacturer for Keflex, we may be unable to obtain sufficient quantities of these products at commercially acceptable rates. We rely upon a limited number of pharmaceutical wholesalers and distributors, which could impact our ability to sell our Keflex product. We are subject to therapeutic equivalent substitution, Medicaid reimbursement and price reporting. Our ability to conduct clinical trials will be impaired if we fail to qualify our clinical supply manufacturing facility and we are unable to maintain relationships with current clinical supply manufacturers or enter into relationships with new manufacturers. If we fail to establish sales, marketing, and distribution capabilities, or fail to enter into arrangements with third parties, we will not be able to commercialize our products. Risks Related to our Industry Any inability to protect our intellectual property could harm our competitive position. If we do not compete successfully in the development and commercialization of products and keep pace with rapid technological change, we will be unable to capture and sustain a meaningful market position. If we experience delays in obtaining regulatory approvals, or are unable to obtain or maintain regulatory approvals, we may be unable to commercialize any products. The manufacture and storage of pharmaceutical and chemical products is subject to environmental regulation and risk. Market acceptance of our products will be limited if users of our products are unable to obtain adequate reimbursement from third-party payors. HealthCare Ventures V, L.P., HealthCare Ventures VI, L.P. and HealthCare Ventures VII, L.P. have substantial control over our business and the interests of the HealthCare Ventures partnerships may not be consistent with the interests of our other stockholders. Future sales of our common stock, or the perception that these sales may occur, could depress our stock price. Our certificate of incorporation and provisions of Delaware law could discourage a takeover you may consider favorable or could cause current management to become entrenched and difficult to replace. The price of our common stock has been and will likely continue to be volatile. We could be forced to pay liquidated damages if we do not maintain the effectiveness of our S-3 registration statement.

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1161924--3/29/2006--ADVANCIS_PHARMACEUTICAL_CORP