1310094--8/16/2010--ACCENTIA_BIOPHARMACEUTICALS

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Risks Related to Our Business We are largely dependent on the success of BiovaxID and Revimmune and we may not be able to successfully commercialize these therapies. If we fail to obtain FDA approval of BiovaxID, Revimmune or any of our future product candidates, we will be unable to commercialize these products. Before we can seek regulatory approval of BiovaxID or Revimmune, we may need to successfully complete clinical trials, outcomes of which are uncertain. We have incurred significant costs in our development efforts to date and may never generate significant revenue from commercial sales of our product candidates, if approved. We have not filed required annual or quarterly SEC reports since October 2008. We anticipate that we will need substantial additional funding in the future, and if we are unable to raise capital when needed, we would be forced to delay, reduce, or eliminate our product development programs or commercialization efforts. There is a high risk of failure because we are trying to develop both a novel autoimmune disease treatment and a new anti-cancer vaccine. We might be unable to manufacture our vaccine on a commercial scale. Because the product development and the regulatory approval process for Revimmune and BiovaxID will be expensive and its outcome is uncertain, we must incur substantial expenses that might not result in any viable product and the process could take longer than expected. We cannot predict the impact, if any, that Fast Track designation will have on the regulatory approval process for BiovaxID . We may experience difficulties in manufacturing BiovaxID or in obtaining approval of the change in manufacturing site from the FDA, which could prevent or delay us in the commercialization of BiovaxID. Because we have limited experience, we might be unsuccessful in our efforts to develop, obtain approval for, commercially produce or successfully market BiovaxID and/or Revimmune. Competing technologies may adversely affect us. Our clinical trials for BiovaxID may not be regarded by the FDA or other regulatory authorities as conclusive, and we may decide, or regulators may require us, to conduct additional clinical testing for this product candidate or cease our trials. The ongoing detailed analysis being performed in our clinical trials for BiovaxID may produce negative or inconclusive results and may delay our efforts to obtain approval for this product. The clinical trials for BiovaxID have demonstrated that certain side effects may be associated with this treatment and ongoing or future clinical trials may reveal additional unexpected or unanticipated side effects. Inability to obtain regulatory approval for our BiovaxID manufacturing facility or to manufacture on a commercial scale may delay or disrupt our commercialization efforts. We cannot predict the impact, if any, that Orphan Drug exclusivity status will have on the regulatory approval process for BiovaxID . The NCI is not precluded from working with other companies on developing products that are competitive with BiovaxID . We are not able to prevent third parties, including potential competitors, from developing and selling an anti-cancer vaccine for NHL having the same composition of matter as BiovaxID If we acquire other complementary technologies or companies, our financial performance could suffer, and such acquisitions involve a number of risks. Our proprietary rights may not adequately protect our technologies and product candidates. If we are sued for infringing intellectual property rights of third parties, such litigation will be costly and time consuming, and an unfavorable outcome would have a significant adverse effect on our business. We currently depend on sole-source suppliers for cyclophosphamide, the primary agent utilized in Revimmune treatment, and for KLH, a critical raw material used in the manufacture of BiovaxID, and physicians who administer BiovaxID depend on a sole-source supplier for GM-CSF, an immune system stimulant administered with BiovaxID. The market may not be receptive to our products upon their introduction. Risks Related to Our Industry Our competitors may develop products that are less expensive, safer, or more effective, which may diminish or eliminate the commercial success of any future products that we may commercialize. If we fail to comply with extensive regulations enforced by the FDA, EMEA, and other agencies, the sale of our product candidates would be prevented or delayed. The insurance coverage and reimbursement status of newly approved products is uncertain and failure to obtain or maintain adequate coverage and reimbursement for new or current products could limit our ability to market those products and decrease our ability to generate revenue. We may not be able to maintain sufficient product liability insurance to cover claims against us. We could be negatively impacted by the application or enforcement of federal and state fraud and abuse laws, including anti-kickback laws and other federal and state anti-referral laws. Risks Related to Our Operations The failure to attract and retain skilled personnel could impair our product development and commercialization efforts. We expect to expand our development, clinical research, and marketing capabilities, and as a result, we may encounter difficulties in managing our growth, which could disrupt our operations. We have a limited operating history and financial results are uncertain. The existence of minority stockholders in our Biovest subsidiary creates potential for conflicts of interest. Shares of the Biovest stock held by us are transferable under debentures and warrants issued by us. We occasionally become subject to commercial disputes that could harm our business by distracting our management from the operation of our business, by increasing our expenses and, if we do not prevail, by subjecting us to potential monetary damages and other remedies. Risks Related to Our Common Stock Evolving regulation of corporate governance and public disclosure may result in additional expenses and continuing uncertainty. We have limited experience attempting to comply with public company obligations, including Section 404 of the Sarbanes-Oxley Act of 2002. Our common stock is quoted on the Pink Sheets. The price of our stock may be highly volatile. We may be unable to obtain necessary additional financing. There may not be a market for our common stock. We have not been the subject of an independent valuation. Our shareholders could suffer significant dilution upon the issuance of additional shares. We have filed a Petition for Reorganization pursuant to Chapter 11. We may not be able to obtain confirmation of the Plan. Our emergence from Chapter 11 is not assured. The conditions precedent to the effective date of the Plan may not occur.

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1310094--8/16/2010--ACCENTIA_BIOPHARMACEUTICALS_INC