1288379--3/15/2006--NEW_RIVER_PHARMACEUTICALS

related topics

{product, candidate, development}

{property, intellectual, protect}

{product, liability, claim}

{interest, director, officer}

{product, market, service}

{personnel, key, retain}

{system, service, information}

{customer, product, revenue}

{cost, regulation, environmental}

If we are unable to develop and commercialize our product candidates successfully, we may never achieve profitability. We face intense competition in the markets targeted by our lead product candidates. Many of our competitors have substantially greater resources than we do, and we expect that all of our product candidates under development will face intense competition from existing or future drugs. If we fail to protect our intellectual property rights, our ability to pursue the development of our technologies and products would be negatively affected. We have not commissioned an extensive investigation concerning our freedom to practice or the validity or enforceability of our Carrierwave technology or product candidates, and we may be held to infringe the intellectual property rights of others. We may be involved in lawsuits to protect or enforce our patents, which could be expensive and time-consuming. If preclinical testing or clinical trials for our product candidates are unsuccessful or delayed, we will be unable to meet our anticipated development and commercialization timelines. We have received an observation from the FDA noting that we did not submit an IND before conducting certain clinical studies in 2001. If the FDA does not accept our filing under Section 505(b)(1) and we are unable to file for approval under Section 505(b)(2) of the Federal Food, Drug and Cosmetic Act or if we are required to generate additional data related to safety and efficacy in order to obtain approval under Section 505(b)(1) or 505(b)(2), we may be unable to meet our anticipated development and commercialization timelines. If the FDA requires that NRP104 be scheduled by the DEA before the product is commercially sold, we will be unable to begin commercial sale of that product until the DEA completes scheduling proceedings, and if NRP104 is scheduled by the DEA in Schedule II under the Controlled Substances Act (CSA), the potential market for the drug may be significantly reduced. We have engaged in extensive financial and operational transactions with Randal J. Kirk, our Chairman, President and Chief Executive Officer, and his affiliates. As of January 1, 2006 Randal J. Kirk controlled approximately 56.8% of our common stock and is able to control or significantly influence corporate actions, which may result in Mr. Kirk taking actions that advance his interests to the detriment of our other shareholders. We rely on Third Security, LLC, to provide us with certain services. If Third Security, LLC ceases to provide these services and we are unable to establish and maintain the necessary infrastructure to be self-sufficient, our business will be adversely affected. Our executive officers and other key personnel are critical to our business, and our future success depends on our ability to retain them. We rely on third parties to manufacture the compounds used in our trials, and we intend to rely on them for the manufacture of any approved products for commercial sale. If these third parties do not manufacture our product candidates in sufficient quantities and at an acceptable cost, clinical development and commercialization of our product candidates could be delayed, prevented or impaired. Failure by our third-party manufacturers to comply with the regulatory guidelines set forth by the FDA and DEA with respect to our product candidates could delay or prevent the completion of clinical trials, the approval of any product candidates or the commercialization of our products. We may need additional capital in the future. If additional capital is not available or is available at unattractive terms, we may be forced to delay, reduce the scope of or eliminate our research and development programs, reduce our commercialization efforts or curtail our operations. Even if we obtain regulatory approval to market our product candidates, our product candidates may not be accepted by the market. If we fail to establish marketing, sales and distribution capabilities, or fail to enter into arrangements with third parties to do this on our behalf, we will not be able to create a market for our product candidates. In the event that we are successful in bringing any products to market, our revenues may be adversely affected if we fail to obtain acceptable prices or adequate reimbursement for our products from third-party payors. We could be forced to pay substantial damage awards if product liability claims that may be brought against us are successful. We use hazardous chemicals in our business. Potential claims relating to improper handling, storage or disposal of these chemicals could be time consuming and costly. If Shire, our collaboration partner on NRP104, or any other collaborative partners we retain, do not satisfy their obligations, we will be unable to develop our partnered product candidates.

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1288379--3/15/2006--NEW_RIVER_PHARMACEUTICALS_INC