1322505--12/14/2009--Biodel

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Our short operating history may make it difficult for you to evaluate the success of our business to date and to assess our future viability. Risks Related to the Development and Commercialization of Our Product Candidates We depend heavily on the success of our most advanced product candidate, VIAject . The results from our completed pivotal Phase 3 clinical trials of VIAject may not be sufficient to file an NDA for VIAject or to obtain marketing approval from the FDA. If we are unable to commercialize VIAject or experience significant delays in doing so, our business will be materially harmed. We may never reinitiate significant expenditures on our earlier stage product candidates. The results of clinical trials do not ensure success in future clinical trials or commercial success. If the FDA does not approve our NDA, or if our clinical trials are delayed or do not produce positive results, we may incur additional costs and ultimately be unable to commercialize our product candidates. If our product candidates are found to cause undesirable side effects we may need to delay or abandon our development and commercialization efforts. The commercial success of any product candidates that we may develop, including VIAject and VIAtab will depend upon the degree of market acceptance by physicians, patients, healthcare payors and others in the medical community. If we fail to enter into strategic collaborations for the commercialization of our product candidates or if our collaborations are unsuccessful, we may be required to establish our own sales, marketing, manufacturing and distribution capabilities which will be expensive, require additional capital we do not currently have, and could delay the commercialization of our product candidates and have a material and adverse affect on our business. If we are unable to obtain adequate reimbursement from governments or third-party payors for any products that we may develop or if we are unable to obtain acceptable prices for those products, they may not be purchased or used and our revenues and prospects for profitability will suffer. We are subject to pricing pressures and uncertainties regarding Medicare reimbursement and reform. Governments outside the United States tend to impose strict price controls, which may adversely affect our revenues, if any. Product liability lawsuits against us could cause us to incur substantial liabilities and to limit commercialization of any products that we may develop. We face substantial competition in the development of our product candidates which may result in others developing or commercializing products before or more successfully than we do. Our product candidates may be rendered obsolete by technological change. Our business activities involve the storage and use of hazardous materials, which require compliance with environmental and occupational safety laws regulating the use of such materials. If we violate these laws, we could be subject to significant fines, liabilities or other adverse consequences. Risks Related to Our Dependence on Third Parties Use of third parties to manufacture our product candidates may increase the risks that we will not have sufficient quantities of our product candidates or such quantities at an acceptable cost, or that our suppliers will not be able to manufacture our products in their final dosage form. In any such case, clinical development and commercialization of our product candidates could be delayed, prevented or impaired. We rely on third parties to conduct our clinical trials and those third parties may not perform satisfactorily, including failing to meet established deadlines for the completion of such trials. If our suppliers, principally our sole insulin supplier, fail to deliver materials and provide services needed for the production of VIAject and VIAtab in a timely and sufficient manner, or if they fail to comply with applicable regulations, clinical development or regulatory approval of our product candidates or commercialization of our products could be delayed, producing additional losses and depriving us of potential product revenue. Risks Related to Our Intellectual Property If we are unable to protect our intellectual property rights, our competitors may develop and market similar or identical products that may reduce demand for our products, and we may be prevented from establishing collaborative relationships on favorable terms. We may become involved in lawsuits and administrative proceedings to protect, defend or enforce our patents that would be expensive and time-consuming. Claims by other parties that we infringe or have misappropriated their proprietary technology may result in liability for damages, royalties, or other payments, or stop our development and commercialization efforts. Risks Related to Regulatory Approval of Our Product Candidates If we fail to submit our NDA for VIAject as we intend, or if we are unable to obtain required regulatory approvals, we will not be able to commercialize VIAject as planned, or at all, and our ability to generate revenue will be materially impaired. If the FDA does not believe that our product candidates satisfy the requirements for the Section 5 approval procedure, the approval pathway will take longer and cost more than anticipated and in either case may not be successful. Any product for which we obtain marketing approval could be subject to restrictions or withdrawal from the market and we may be subject to penalties if we fail to comply with regulatory requirements or if we experience unanticipated problems with our products, when and if any of them are approved. Legislation may make it more difficult and costly for us to obtain regulatory approval of our product candidates and to produce, market and distribute our existing products. Failure to obtain regulatory approval in international jurisdictions would prevent us from marketing our products abroad. Reports of side effects or safety concerns in related technology fields or in other companies clinical trials could delay or prevent us from obtaining regulatory approval or negatively impact public perception of our product candidates. Risks Related to Employee Matters and Managing Growth Our future success depends on our ability to retain our chief executive officer and other key executives and to attract, retain and motivate qualified personnel. We may expand our development, regulatory and sales and marketing capabilities, and as a result, we may encounter difficulties in managing our growth, which could disrupt our operations. Risks Related to Our Common Stock Our executive officers, directors and principal stockholders have significant ability to control all matters submitted to stockholders for approval. Provisions in our corporate 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. If our stock price is volatile, purchasers of our common stock could incur substantial losses.

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1322505--12/14/2009--Biodel_Inc