1347178--3/15/2010--Vanda_Pharmaceuticals

related topics

{product, candidate, development}

{product, liability, claim}

{stock, price, operating}

{property, intellectual, protect}

{stock, price, share}

{cost, regulation, environmental}

{provision, law, control}

{control, financial, internal}

{personnel, key, retain}

{acquisition, growth, future}

{regulation, government, change}

Risks related to our business and industry Novartis began selling, marketing and distributing our first approved product, Fanapt tm , in the U.S. in the first quarter of 2010 and we will depend heavily on the success of this product in the marketplace. If our compounds are determined to be unsafe or ineffective in humans, whether commercially or in clinical trials, our business will be materially harmed. Clinical trials for our compounds are expensive and their outcomes are uncertain. Any failure or delay in completing clinical trials for our compounds could severely harm our business. We and our partners face heavy government regulation. FDA regulatory approval of our compounds is uncertain and we and our partners are continually at risk of the FDA requiring us or them to discontinue marketing any compounds that have obtained, or in the future may obtain, regulatory approval. We intend to seek regulatory approvals for our compounds in foreign jurisdictions, but we may not obtain any such approvals. Our compounds may cause undesirable side effects or have other properties that could delay or prevent their regulatory approval or limit their marketability. Even after we or our partners obtain regulatory approvals of a product, acceptance of such compound in the marketplace is uncertain and failure to achieve market acceptance will prevent or delay our ability to generate revenues. If we fail to obtain the capital necessary to fund our research and development activities and commercialization efforts, we may be unable to continue operations or we may be forced to share our rights to commercialize our products and product candidates with third parties on terms that may not be attractive to us. We have a history of operating losses, anticipate future losses and may never become profitable on a sustained basis. If our contract research organizations do not successfully carry out their duties or if we lose our relationships with contract research organizations, our drug development efforts could be delayed. We rely on a limited number of third party manufacturers to formulate and manufacture our products and product candidates and our business will be seriously harmed if these manufacturers are not able to satisfy our demand and alternative sources are not available. Materials necessary to manufacture our compounds may not be available on commercially reasonable terms, or at all, which may delay the development, regulatory approval and commercialization of our compounds. We face substantial competition which may result in others developing or commercializing products before or more successfully than we do. We have no experience selling, marketing or distributing products and no internal capability to do so, which may make commercializing our products and product candidates difficult. If we cannot identify, or enter into licensing arrangements for, new products or product candidates, our ability to develop a diverse product portfolio will be limited. We may not be successful in the development of products for our own account. If we lose key scientists or management personnel, or if we fail to recruit additional highly skilled personnel, it will impair our ability to identify, develop and commercialize products. Product liability lawsuits could divert our resources, result in substantial liabilities and reduce the commercial potential of our compounds. Legislative or regulatory reform of the healthcare system in the U.S. and foreign jurisdictions may affect our or our partners ability to sell our products or partnered products profitably. Our business is subject to extensive governmental regulation and oversight and changes in laws could adversely affect our revenues and profitability. Failure to comply with government regulations regarding the sale and marketing of our products or partnered products could harm our business. Future transactions may harm our business or the market price of our stock. We may undertake strategic acquisitions in the future, and difficulties integrating such acquisitions could damage our ability to achieve or sustain profitability. Our quarterly operating results may fluctuate significantly. Risks related to intellectual property and other legal matters Our rights to develop and commercialize our product and, product candidates are subject in part to the terms and conditions of licenses or sublicenses granted to us by other pharmaceutical companies. With respect to tasimelteon, these terms and conditions include an option in favor of the licensor to reacquire rights to commercialize and develop this product in certain circumstances. If our efforts to protect the proprietary nature of the intellectual property related to our compounds are not adequate, we may not be able to compete effectively in our markets. If we do not obtain protection under the Hatch-Waxman Act and similar foreign legislation to extend our patents and to obtain market exclusivity for our products and partnered products, our business will be materially harmed. Litigation or third-party claims of intellectual property infringement could require us to divert resources and may prevent or delay our drug discovery and development efforts. If we use hazardous and biological materials in a manner that causes injury or violates applicable law, we may be liable for damages. Risks related to our common stock Our stock price has been highly volatile and may be volatile in the future, and purchasers of our common stock could incur substantial losses. If there are substantial sales of our common stock, our stock price could decline. If securities or industry analysts do not publish research or reports or publish unfavorable research about our business, our stock price and trading volume could decline. Our business could be negatively affected as a result of the actions of activist stockholders. Anti-takeover provisions in our charter and bylaws, and in Delaware law, and our rights plan could prevent or delay a change in control of our company.

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1347178--3/15/2010--Vanda_Pharmaceuticals_Inc.