356830--3/25/2009--OSCIENT_PHARMACEUTICALS

related topics

{product, candidate, development}

{product, liability, claim}

{stock, price, share}

{property, intellectual, protect}

{debt, indebtedness, cash}

{stock, price, operating}

{regulation, government, change}

{personnel, key, retain}

{system, service, information}

{control, financial, internal}

{cost, regulation, environmental}

RISKS RELATED TO OUR BUSINESS We will need to monitor our expenses and raise additional funds in the near future or refinance our existing debt due in December 2009 to fund our operations, repay our debt and support sales and marketing activities and if sufficient funds are not available or we are unable to refinance our debt, it will have a material affect on our business. We have a history of significant operating losses and expect losses to continue for some time. Failure to regain compliance with The NASDAQ Global Market continued listing requirements may result in our common stock being delisted from The NASDAQ Global Market. Our business is very dependent on the commercial success of ANTARA and FACTIVE. Lupin Limited s and Orchid Healthcare s Paragraph IV certifications under the Hatch-Waxman Act related to ANTARA and FACTIVE respectively could have a material adverse effect on our financial condition and results of operations, as it could result in the introduction of a generic products prior to the expiration of the patents covering ANTARA and FACTIVE, as well as in significant legal expenses and diversion of management s time. 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. Future fundraising could adversely affect the value of the conversion right of our convertible securities and dilute the ownership interests of our shareholders. 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 negatively affect our business. 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 inventory for the 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, repay the outstanding principal and interest on the note 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, repay the note or any foreclosure by Paul Capital would 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 S.A., 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, and even possibly ANTARA 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. 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. 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 AND OUR 12.50% NOTES The price of our common stock and our 12.50% Notes is highly volatile. Any investment in our 12.50% Notes is subject to a very high degree of risk. Conversion of our convertible notes will dilute the ownership interests of existing stockholders. Multiple factors beyond our control may cause fluctuations in our operating results and may cause our stock price or the price of our 12.50% Notes to fall.

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356830--3/25/2009--OSCIENT_PHARMACEUTICALS_CORP