356830--2/6/2008--OSCIENT_PHARMACEUTICALS

related topics

{product, candidate, development}

{product, liability, claim}

{property, intellectual, protect}

{stock, price, share}

{stock, price, operating}

{debt, indebtedness, cash}

{personnel, key, retain}

{regulation, government, change}

{system, service, information}

{control, financial, internal}

{cost, regulation, environmental}

{acquisition, growth, future}

RISKS RELATED TO OUR BUSINESS We have a history of significant operating losses and expect losses to continue for some time. Our business is very dependent on the commercial success of ANTARA and FACTIVE. If third parties challenge the validity of the patents or proprietary rights of our marketed products or assert that we have infringed their patents or proprietary rights, we may become involved in intellectual property disputes and litigation that would be costly, time consuming, and prevent the commercialization of ANTARA, FACTIVE and/or any other products that we acquire. Our debt obligations expose us to risks that could adversely affect our business, operating results and financial condition. We may need to raise additional funds in the future. Future fundraising could dilute the ownership interests of our shareholders. We need to continue to develop marketing and sales capabilities to successfully commercialize ANTARA capsules, FACTIVE tablets and our other product candidates. Our products and product candidates face significant competition in the marketplace. Our failure to in-license, co-promote or acquire and develop additional product candidates or approved products will impair our ability to grow. We, as well as our partners, are subject to numerous complex regulatory requirements and failure to comply with these regulations, or the cost of compliance with these regulations, may harm our business. New legal and regulatory requirements could make it more difficult for us to obtain expanded or new product approvals, and could limit or make more burdensome our ability to commercialize our approved products. If we market or distribute products in a manner that violates federal or state healthcare fraud and abuse, marketing disclosure or drug pedigree laws, we may be subject to civil or criminal penalties. We depend on third parties to manufacture and distribute our products and product candidates. We depend on third parties to assist in the management and execution of our product supply chain for ANTARA capsules and FACTIVE tablets. Wholesalers, pharmacies and hospitals may not maintain adequate distribution for our products. Under our financing arrangement with Paul Capital, upon the occurrence of certain events, Paul Capital may require us to repurchase the right to receive revenues that we assigned to it or may foreclose on certain assets that secure our obligations to Paul Capital. Any exercise by Paul Capital of its right to cause us to repurchase the assigned right or any foreclosure by Paul Capital could adversely affect our results of operations and our financial condition. The development and commercialization of our products may be terminated or delayed, and the costs of development and commercialization may increase, if third parties upon whom we rely to support the development and commercialization of our products do not fulfill their obligations. We bear substantial responsibilities under our license agreements for ANTARA and FACTIVE and our sublicense agreements to Pfizer, S.A. de C.V., Abbott Laboratories, Ltd. and Menarini International Operation Luxembourg SA, and there can be no assurance that we will successfully fulfill our responsibilities. Our intellectual property protection and other protections may be inadequate to protect our products. International patent protection is uncertain. Our proprietary position may depend on our ability to protect our proprietary confidential information and trade secrets. Seasonal fluctuations in demand for FACTIVE may cause our operating results to vary significantly from quarter to quarter. Clinical trials are costly, time consuming and unpredictable, and we have limited experience conducting and managing necessary preclinical and clinical trials for product candidates. We could experience delays in clinical development which could delay anticipated product launches. We depend on key personnel, including members of our direct sales force, in a highly competitive market for such skilled personnel. Changes in the expensing of stock-based compensation have resulted and will continue to result in unfavorable accounting charges and may require us to change our compensation practices. Any change in our compensation practices may adversely affect our ability to attract and retain qualified scientific, technical and business personnel. Failure to obtain or maintain regulatory approvals in foreign jurisdictions will prevent us from marketing FACTIVE abroad. We rely on operational data obtained from third party vendors which could be inaccurate. RISKS RELATED TO OUR INDUSTRY Health care insurers, the government and other payers may not pay for our products or may impose limits on reimbursement. Wholesalers, pharmacies and hospitals may not provide adequate distribution for our products. If a successful product liability claim or series of claims is brought against us for uninsured liabilities or in excess of insured liabilities, we could be forced to pay substantial damage awards. RISKS RELATED TO THE SECURITIES MARKET Our stock price is highly volatile. Our common stock is subject to delisting from The NASDAQ Global Market and there can be no assurance that we will complete our plan for compliance or that The NASDAQ will consider our compliance satisfactory, and that we will retain our listing. Multiple factors beyond our control may cause fluctuations in our operating results and may cause our business to suffer.

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356830--2/6/2008--OSCIENT_PHARMACEUTICALS_CORP