357097--4/15/2009--ISOLAGEN

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{product, market, service}

{customer, product, revenue}

{property, intellectual, protect}

{personnel, key, retain}

{stock, price, operating}

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{operation, natural, condition}

{acquisition, growth, future}

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{cost, regulation, environmental}

We submitted our Biologics License Application for the treatment of wrinkles/nasolabial folds to the FDA in March 2009, and the FDA may deem this Biologics License Application to be unacceptable. Obtaining FDA and other regulatory approvals is complex, time consuming and expensive, and the outcomes are uncertain. Protocol deviations may release the FDA from its binding acceptance of our Special Protocol Assessment ( SPA ) study design, which may result in the delay, or non-approval, by the FDA of the Isolagen Therapy. Clinical trials may fail to demonstrate the safety or efficacy of our product candidates, which could prevent or significantly delay regulatory approval and prevent us from raising additional financing. We are not in compliance with the American Stock Exchange s continued listing standards and, as a result, our common stock may be delisted from the American Stock Exchange. We may issue additional equity securities and thereby materially and adversely affect the price of our common stock. We have yet to be profitable, losses may continue to increase from current levels and we will continue to experience significant negative cash flow as we expand our operations, which may limit or delay our ability to become profitable. We may be unable to successfully commercialize any of our product candidates currently under development. We have not generated significant revenue from commercial sales of our products to date, and we do not know whether we will ever generate significant revenue. Our ability to effectively commercialize our product candidates depends on our ability to improve our manufacturing process and validate such future improvements. We may not be successful in our efforts to develop commercial-scale manufacturing technology and methods. We depend on a third-party manufacturer for our Agera product line, the loss or unavailability of which would require us to find a substitute manufacturer, if available, resulting in delays in production and additional expenses. The large majority of our revenue, which relates to the Agera business segment, is to one, international customer. If our Isolagen Therapy is found to be unsafe or ineffective, or if our Isolagen Therapy is perceived to be unsafe or ineffective, our business would be materially harmed. If physicians do not follow our established protocols, the efficacy and safety of our product candidates may be adversely affected. Our business, which depends on one facility, is vulnerable to natural disasters, telecommunication and information systems failures, terrorism and similar problems, and we are not fully insured for losses caused by all of these incidents. As a result of our limited operating history, we may not be able to correctly estimate our future operating expenses, which could lead to cash shortfalls. Our operating results may fluctuate significantly in the future, which may cause our results to fall below the expectations of securities analysts, stockholders and investors. We may be liable for product liability claims not covered by insurance, and we have been publicly threatened with claims related to our product in the United Kingdom. Our failure to comply with extensive governmental regulation may significantly affect our operating results. Legislative or regulatory reform of the healthcare system may affect our ability to sell our future products profitably. Any future products that we develop may not be commercially successful. Our competitors in the pharmaceutical, medical device and biotechnology industries may have superior products, manufacturing capabilities, financial resources or marketing position. We are dependent on our key scientific and other management personnel, and the loss of any of these individuals could harm our business. We may need to attract, train and retain additional highly qualified senior executives and technical and managerial personnel in the future. If we are unable to effectively promote our brands and establish a competitive position in the marketplace, our business may fail. If we are unable to adequately protect our intellectual property and proprietary technology, the value of our technology and future products will be adversely affected, and if we are unable to enforce our intellectual property against unauthorized use by third parties our business may be materially harmed. Our business may be harmed and we may incur substantial costs as a result of litigation or other proceedings relating to patent and other intellectual property rights. If we are unable to keep up with rapid technological changes, our future products may become obsolete or unmarketable. Our acquisitions of companies or technologies may result in disruptions in business and diversion of management attention. We have not declared any dividends on our common stock to date, and we have no intention of declaring dividends in the foreseeable future. Provisions in our charter documents could prevent or delay stockholders attempts to replace or remove current management. Provisions in our bylaws provide for indemnification of officers and directors, which could require us to direct funds away from our business and future products. Future sales of our common stock may depress our stock price. There is a limited public trading market for our common stock. Lack of effectiveness of internal controls over financial reporting could adversely affect the value of our securities. Our debt obligations expose us to risks that could adversely affect our business, operating results and financial condition, and prevent us from fulfilling our obligations under the notes.

Full 10-K form ▸

357097--4/15/2009--ISOLAGEN_INC