1180145--3/27/2007--REPLIDYNE

related topics

{product, candidate, development}

{stock, price, share}

{property, intellectual, protect}

{product, liability, claim}

{regulation, change, law}

{stock, price, operating}

{control, financial, internal}

{acquisition, growth, future}

{financial, litigation, operation}

{cost, operation, labor}

Because of the termination of our collaboration with Forest Laboratories to develop and commercialize faropenem medoxomil, we plan to identify a new partner. If we do not obtain a new partner on acceptable terms, we likely will not be able to develop and commercialize faropenem medoxomil for adult indications and may not be able to develop faropenem medoxomil for pediatric indications or generate any future revenue from faropenem medoxomil. If we fail to enter into new strategic collaborations, we may have to reduce or delay our rate of product development and commercialization and/or increase our expenditures. Securing a strategic partner to develop and commercialize our product candidates may require us to relinquish valuable rights and will render us dependent on the efforts of any future collaboration partners, over which we would have limited control, and if our collaborations are unsuccessful, our potential to develop and commercialize product candidates and to generate future revenue from our product candidates would be significantly reduced. The type of trials that the FDA is recommending for faropenem medoxomil will be novel in design without historical formal guidance and may require alternative dosing regimens. Further delays in clinical testing or approval could result in increased costs to us and delay our ability to generate revenue. The success of our current business strategy will depend in part on our ability to obtain FDA approval of faropenem medoxomil for pediatric use and, if FDA approval is obtained, to successfully market an oral liquid formulation for the pediatric market. All of the Phase III clinical trials of faropenem medoxomil included in our NDA filed in December 2005 were conducted using a 300 mg, twice per day, dose. We expect that future clinical trials will be conducted at the alternate 600 mg, twice per day, dose. If the incidence of adverse events from use of faropenem medoxomil at the 600 mg, twice per day dose is significantly higher than that observed in completed clinical studies at the 300 mg, twice per day we may not be able to generate future revenue from faropenem medoxomil. We have limited experience in acquiring or in-licensing product candidates, and integrating third parties products, businesses and technologies into our current infrastructure. If we determine that future acquisition or in-licensing opportunities are desirable and do not successfully execute on and integrate such targets, we may incur costs and disruptions to our business and we may be unable to grow our business. Our drug discovery approach and technologies and our product candidates other than faropenem medoxomil are unproven and in very early stages of development, which may not allow us to establish or maintain a clinical development pipeline or successful collaborations, and may never result in the discovery or development of commercially viable products. We are at an early stage of development as a company, with no current sources of revenue, and we may never generate future revenue or become profitable. We have incurred significant operating losses since inception and anticipate that we will incur continued losses for the foreseeable future. If we fail to obtain additional financing, we may be unable to complete the development and commercialization of faropenem medoxomil and other product candidates, or continue our research and development programs. We have limited manufacturing capabilities and will depend on third parties to manufacture faropenem medoxomil and future products. If these manufacturers fail to meet our requirements and strict regulatory standards, we may be unable to develop or commercialize our products. If the FDA does not approve Nippon Soda s facility, we may be unable to develop or commercialize faropenem medoxomil. Any of our product candidates that are in clinical trials or that we advance into clinical trials are subject to extensive regulation, which can be costly and time consuming, cause unanticipated delays, or prevent the receipt of the required approvals to commercialize our product candidates. If we fail to attract and keep senior management and key scientific personnel, we may be unable to successfully develop our product candidates, conduct our clinical trials and commercialize our product candidates. We currently have no sales organization. If we are unable to establish a direct sales force in the U.S. to promote our product candidates, the commercial opportunity for our product candidates may be diminished. The commercial success of our product candidates will depend upon attaining significant market acceptance of these products among physicians, patients, health care payors and the medical community. If our product candidates are unable to compete effectively with generic and branded antibiotics, our commercial opportunity will be reduced or eliminated. If product liability lawsuits are successfully brought against us or any future collaboration partners, we may incur substantial liabilities and may be required to limit commercialization of our product candidates. We may be required to suspend or discontinue clinical trials due to side effects or other safety risks that could preclude approval of our product candidates. We rely on third parties to conduct our clinical trials. If these third parties do not successfully carry out their contractual duties or meet expected deadlines, we may not be able to obtain regulatory approval for or commercialize our product candidates. Our ability to pursue the development and commercialization of our product candidates depends upon the continuation of our licenses from third parties. If we fail to gain and maintain approval for our product candidates in international markets, our market opportunities will be limited. We may not be able to enter into acceptable agreements to market and commercialize our product candidates in international markets. Even if we receive regulatory approval for our product candidates, we will be subject to ongoing significant regulatory obligations and oversight. Our corporate compliance program cannot guarantee that we are in compliance with all potentially applicable regulations. Reimbursement may not be available for our product candidates, which could diminish our sales or affect our ability to sell any future products profitably. We may need to modify the size of our organization, and we may experience difficulties in managing either growth or restructuring. Risks Related to our Intellectual Property It is difficult and costly to protect our proprietary rights, and we may not be able to ensure their protection. We may incur substantial costs as a result of litigation or other proceedings relating to patent and other intellectual property rights and we may be unable to protect our rights to, or use, our technology. Risks Related to Ownership of our Common Stock The market price of our common stock is highly volatile. We are at risk of securities class action litigation or may become subject to stockholder activism efforts that each could cause material disruption to our business. Our principal stockholders and management own a significant percentage of our stock and are able to exercise significant influence over matters subject to stockholder approval. We will incur significant increased costs as a result of operating as a public company, and our management will be required to devote substantial time to new compliance initiatives. Substantial sales of our common stock in the public market could cause our stock price to fall. Future sales and issuances of our common stock or rights to purchase common stock, including pursuant to our equity incentive plans, could result in additional dilution of the percentage ownership of our stockholders and could cause our stock price to fall.

Full 10-K form ▸

1180145--3/27/2007--REPLIDYNE_INC