1162192--3/31/2009--AVALON_PHARMACEUTICALS

related topics

{product, candidate, development}

{property, intellectual, protect}

{stock, price, operating}

{stock, price, share}

{acquisition, growth, future}

{product, liability, claim}

{interest, director, officer}

{control, financial, internal}

{investment, property, distribution}

{cost, operation, labor}

{financial, litigation, operation}

Uncertainty regarding the merger and the effects of the merger could cause our licensors, collaborators, suppliers or other strategic partners to delay or defer decisions, which could increase costs of the on-going business for us. The merger is subject to closing conditions that could result in the completion of the merger being delayed or not consummated, which could negatively impact our stock price and future business and operations. Failure to complete the merger could negatively impact the market price of our common stock and the future business and financial results of Avalon, and the merger agreement limits our ability to pursue alternatives to the merger. During the pendency of the merger, we may not be able to enter into certain business arrangements with other parties because of restrictions in the merger agreement. Risks Related to Our Business We have an immediate need for capital and will need to raise additional capital in the future to continue our business, and our independent registered public accounting firm has expressed substantial doubt as to our ability to continue as a going concern. We have a history of losses, we expect to continue to incur losses for the foreseeable future, and we may never achieve or sustain profitability. Our stock price is volatile. Our common stock may be delisted from the Nasdaq Global Market prior to the closing of the merger, which could reduce the value of your investment and make your shares of our stock more difficult to sell. We have no products approved for commercial sale and do not expect to have any products approved for commercial sale for the next several years. The drug discovery methods we employ through AvalonRx are new and unproven and may not lead to the development of commercially viable drugs. If we fail to enter into new strategic collaborations, or if existing collaborations are terminated, we will not grow our revenue and our ability to exploit AvalonRx to discover drugs for diseases other than cancer will be limited; our rights to AvalonRx We face intense competition in the development and commercialization of our drug candidates. We may face liability claims related to the use or misuse of our drug candidates in clinical trials. If our insurance coverage is not sufficient, a product liability claim against us could adversely affect our business. Our operating results may vary significantly from period to period, which may result in a decrease in the price of our common stock. Risks Related to Our Intellectual Property If we are unable to obtain and enforce patent protection for our drug candidates, our business could be materially harmed. Third parties may challenge the validity of our potential patents or other intellectual property rights and could deprive us of valuable rights. If we infringe patents or other proprietary rights of third parties, we could incur substantial liability. Our drug discovery technology is not patented, and the value of our technology and drug candidates could be adversely affected if we are unable to protect the confidentiality of our proprietary information, know-how and trade secrets. Risks Related to Regulatory Matters Preclinical and clinical testing are time consuming, expensive, and uncertain processes. Even if our drug candidates obtain regulatory approval, we will be subject to ongoing government regulation.

Full 10-K form ▸

1162192--3/31/2009--AVALON_PHARMACEUTICALS_INC