1235010--3/16/2006--MOMENTA_PHARMACEUTICALS

related topics

{product, candidate, development}

{product, liability, claim}

{property, intellectual, protect}

{cost, regulation, environmental}

{acquisition, growth, future}

{provision, law, control}

{customer, product, revenue}

{cost, operation, labor}

{personnel, key, retain}

{investment, property, distribution}

{stock, price, share}

{regulation, government, change}

{control, financial, internal}

{competitive, industry, competition}

{regulation, change, law}

Risks Relating to Our Business We have a limited operating history and have incurred a cumulative loss since inception. If we do not generate significant revenues, we will not be profitable. If we fail to obtain approval for and commercialize our most advanced product candidate, M-Enoxaparin, we may have to curtail our product development programs and our business would be materially harmed. We will likely face patent litigation with Sanofi-Aventis, the innovator of Lovenox. We utilize new technologies in the development of some of our products that have not been reviewed or accepted by regulatory authorities. If other generic versions of Lovenox are approved and successfully commercialized our business would suffer. If we experience manufacturing difficulties or are unable to obtain sufficient quantities of raw materials or manufacture sufficient quantities of M-Enoxaparin, our development and commercialization efforts may be materially harmed. Our revenues and profits from any of our generic product candidates may decline if our competitors introduce their own generic equivalents. We will need to develop or acquire additional technologies as part of our efforts to analyze the chemical composition of complex mixtures other than heparins. Competition in the biotechnology and pharmaceutical industries is intense, and if we are unable to compete effectively, our financial results will suffer. If we are unable to establish and maintain our key customer arrangements, sales of our products and revenues would decline. Even if we receive approval to market our drug candidates, the market may not be receptive to our drug candidates upon their commercial introduction, which could prevent us from being profitable. We will require substantial additional funds to execute our business plan and, if additional capital is not available, we may need to limit, scale back or cease our operations. If we are not able to retain our current senior management team or attract and retain qualified scientific, technical and business personnel, our business will suffer. There is a substantial risk of product liability claims in our business. If our existing product liability insurance is insufficient, a product liability claim against us that exceeds the amount of our insurance coverage could adversely affect our business. As we evolve from a company primarily involved in drug discovery and development into one that is also involved in the commercialization of drug products, we may have difficulty managing our growth and expanding our operations successfully. Acquisitions present many risks, and we may not realize the anticipated financial and strategic goals for any such transactions. Changes in stock option accounting rules may have a significant adverse affect on our operating results Risks Relating to Development and Regulatory Approval If we are not able to demonstrate therapeutic equivalence for our generic versions of complex drugs, including M-Enoxaparin, to the satisfaction of the FDA, we will not obtain regulatory approval for commercial sale of our generic product candidates, and our future results of operations will be adversely affected. If the FDA is not able to establish specific guidelines or arrive at a consensus regarding the scientific analyses required for characterizing complex protein drugs, and if the U.S. Congress does not take action to create an abbreviated regulatory pathway for follow-on protein products, then the uncertainty about the value of our glycoprotein program will be increased. If our preclinical studies and clinical trials for our development candidates are not successful, we will not be able to obtain regulatory approval for commercial sale of our novel or improved drug candidates. Failure to obtain regulatory approval in foreign jurisdictions would prevent us from marketing our products abroad. Even if we obtain regulatory approvals, our marketed drugs will be subject to ongoing regulatory review. If we fail to comply with continuing United States and foreign regulations, we could lose our approvals to market drugs and our business would be seriously harmed. If third-party payors do not adequately reimburse customers for any of our product candidates that are approved for marketing, they might not be purchased or used, and our revenues and profits will not develop or increase. New federal legislation will increase the pressure to reduce prices of pharmaceutical products paid for by Medicare, which could adversely affect our revenues, if any. If legislative and regulatory lobbying efforts by manufacturers of branded products to limit the use of generics are successful, our sales of technology-enabled generic products may suffer. Foreign governments tend to impose strict price controls, which may adversely affect our revenues, if any. If we do not comply with laws regulating the protection of the environment and health and human safety, our business could be adversely affected. Risks Relating to Our Dependence on Third Parties Our collaboration with Sandoz is important to our business. If Sandoz fails to adequately perform under our collaboration or terminates our collaboration, the development and commercialization of injectable enoxaparin would be delayed or terminated and our business would be adversely affected. We depend on third-parties for the manufacture of products. If in the future we encounter difficulties in our supply or manufacturing arrangements, our business may be materially adversely affected. We may need to enter into alliances with other companies that can provide capabilities and funds for the development and commercialization of our drug candidates. If we are unsuccessful in forming or maintaining these alliances on favorable terms, our business could be adversely affected. We enter into collaboration agreements and other similar contracts with other companies to supplement and enhance our own capabilities. If we are unable to enter into such agreements with companies or if any collaborative partner terminates or fails to perform its obligations under agreements with us, the development and commercialization of our drug candidates could be delayed or terminated. We enter into technology collaboration agreements and other similar contracts with other companies to supplement and enhance our own proprietary technology platform. If we are unsuccessful in forming or maintaining these collaborations on favorable terms or if the arrangements do not yield the intended results, our business could be adversely affected. If we are unable to establish sales and marketing capabilities or enter into agreements with third parties to market and sell our product candidates, we may be unable to generate product revenues. Our collaborations with outside scientists and consultants may be subject to restriction and change. We enter into various contracts in the normal course of our business that periodically incorporate provisions whereby we indemnify the other party to the contract. In the event we would have to perform under these indemnification provisions, it could have a material adverse effect on our business, financial position and results of operations. Risks Relating to Patents and Licenses If we are not able to obtain and enforce patent protection for our discoveries, our ability to successfully commercialize our product candidates will be harmed and we may not be able to operate our business profitably. Our competitors may allege that we are infringing their intellectual property, forcing us to expend substantial resources in resulting litigation, the outcome of which would be uncertain. Any unfavorable outcome of such litigation could have a material adverse effect on our business, financial position and results of operations. If we become involved in patent litigation or other proceedings to enforce our patent rights, we could incur substantial costs, substantial liability for damages and be required to stop our product commercialization efforts. We in-license a significant portion of our proprietary technologies and if we fail to comply with our obligations under any of the related agreements, we could lose license rights that are necessary to develop our product candidates. Confidentiality agreements with employees and others may not adequately prevent disclosure of trade secrets and other proprietary information. Our directors, executive officers and major stockholders have substantial control over matters submitted to stockholders for approval that could delay or prevent a change in corporate control. Anti-takeover provisions in our charter documents and under Delaware law could make an acquisition of us, which may be beneficial to our stockholders, more difficult and may prevent attempts by our stockholders to replace or remove our current management. Our stock price may be volatile, and purchasers of our common stock could incur substantial losses.

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1235010--3/16/2006--MOMENTA_PHARMACEUTICALS_INC