1340744--3/30/2006--Altus_Pharmaceuticals

related topics

{product, candidate, development}

{property, intellectual, protect}

{product, liability, claim}

{stock, price, share}

{provision, law, control}

{acquisition, growth, future}

{personnel, key, retain}

{system, service, information}

{control, financial, internal}

{debt, indebtedness, cash}

{operation, international, foreign}

{cost, regulation, environmental}

{stock, price, operating}

We are obligated under our agreement with CFFTI and under the terms of our redeemable preferred stock to make significant payments upon the occurrence of specified events. We may not have sufficient resources to make these payments when they become due. We have a history of net losses, which we expect to continue for at least several years and, as a result, we are unable to predict the extent of any future losses or when, if ever, we will achieve, or be able to maintain, profitability. Our competitors may develop products that are less expensive, safer or more effective, which may diminish or prevent the commercial success of any product candidates that we bring to market. Raising additional capital by issuing securities or through collaboration and licensing arrangements may cause dilution to existing stockholders, restrict our operations or require us to relinquish proprietary rights. We may not be successful in maintaining our existing collaborations or in establishing and maintaining additional collaborations on acceptable terms, which could adversely affect our ability to develop and commercialize our products. We are in discussions with our collaborator Dr. Falk regarding its claim that we have breached a representation in our collaboration agreement. If we are unable to successfully resolve this matter, our business may be materially harmed. Risks Related to Development of Our Product Candidates If we are unable to commercialize either of our lead product candidates, or experience significant delays in doing so, our business will be materially harmed. Because our product candidates are in clinical development, there is a significant risk of failure. If we observe serious or other adverse events during the time our product candidates are in development or after our products are approved and on the market, we may be required to perform lengthy additional clinical trials, may be denied regulatory approval of such products, may be forced to change the labeling of such products or may be required to withdraw any such products from the market, any of which would hinder or preclude our ability to generate revenues. If clinical trials for our product candidates are prolonged or delayed, we may be unable to commercialize our product candidates on a timely basis, or at all, which would require us to incur additional costs and delay our receipt of any revenue from potential product sales. Risks Related to Regulatory Approval of Our Product Candidates and Other Government Regulations If we do not obtain required regulatory approvals, we will be unable to commercialize our product candidates, and our ability to generate revenue will be materially impaired. Failure to obtain regulatory approvals or to comply with regulatory requirements in foreign jurisdictions would prevent us or our collaborators from marketing our products internationally. Our product candidates will remain subject to ongoing regulatory requirements even if they receive marketing approval, and if we fail to comply with these requirements, we could lose these approvals, and the sales of any approved commercial products could be suspended. We deal with hazardous materials and must comply with environmental laws and regulations, which can be expensive and restrict how we do business. Risks Related to Our Dependence on Third Parties We have no manufacturing capacity, and we have relied and expect to continue to rely on third-party manufacturers to produce our product candidates. We currently rely on a single manufacturer for the clinical supply of each of our product candidates, and we have no arrangements in place for the commercial supply of any of our product candidates, which could delay or prevent the clinical development and commercialization of our product candidates. Any performance failure on the part of our existing or future manufacturers could delay clinical development or regulatory approval of our product candidates or commercialization of any approved products. We rely on third parties to conduct, supervise and monitor our clinical trials, and those third parties may not perform satisfactorily, including failing to meet established deadlines for the completion of such trials. Risks Related to Commercialization of Our Product Candidates 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 revenue. If physicians and patients do not accept our future products, we may be unable to generate significant revenue, if any. If the government and third-party payors fail to provide coverage and adequate payment rates for our future products, if any, our revenue and prospects for profitability will be harmed. There is a substantial risk of product liability claims in our business. If we are unable to obtain sufficient insurance, a product liability claim against us could adversely affect our business. Proposed legislation may permit re-importation of drugs from foreign countries into the United States, including foreign countries where the drugs are sold at lower prices than in the United States, which could materially adversely affect our operating results and our overall financial condition. Risks Related to Our Intellectual Property If the combination of patents, trade secrets and contractual provisions that we rely on to protect our intellectual property is inadequate, our ability to successfully commercialize our product candidates will be harmed and we may not be able to operate our business profitably. If third parties successfully assert that we have infringed their patents and proprietary rights or challenge the validity of our patents and proprietary rights, we may become involved in intellectual property disputes and litigation that would be costly, time consuming, and delay or prevent the development or commercialization of our product candidates. If we are unable to protect our trade secrets, we may be unable to protect our interests in proprietary technology, processes and know-how that is not patentable or for which we have elected not to seek patent protection. If we fail to comply with our obligations in the agreements under which we license development or commercialization rights to products or technology from third parties, we could lose license rights that are important to our business or incur financial obligations based on our exercise of such license rights. Risks Related to Our Employees and Growth Our future success depends on our ability to retain our chief executive officer, our chief scientific officer and other key executives and to attract, retain and motivate qualified personnel. We intend to grow our company, and as a result, we may encounter difficulties in managing our growth, which could disrupt our operations. Risks Related to Our Common Stock Our stock price is likely to be volatile. Insiders have substantial control over Altus which could delay or prevent a change in corporate control or result in the entrenchment of management and the board of directors. A significant portion of our total outstanding shares are restricted from resale but may be sold into the market in the near future. This could cause the market price of our common stock to drop significantly, even if our business is doing well. Provisions of our charter, bylaws, and Delaware law may make an acquisition of us or a change in our management more difficult.

Full 10-K form ▸

1340744--3/30/2006--Altus_Pharmaceuticals_Inc.