707511--3/31/2010--REGENERX_BIOPHARMACEUTICALS

related topics

{product, candidate, development}

{stock, price, share}

{property, intellectual, protect}

{product, liability, claim}

{operation, international, foreign}

{cost, regulation, environmental}

{condition, economic, financial}

{stock, price, operating}

{regulation, government, change}

{personnel, key, retain}

{provision, law, control}

{product, market, service}

The recent downturn in the U.S. economy and the recent pressure on capital markets increase the possibility, and may exacerbate the impact, of any adverse effects on our financial position and business prospects. Continued economic adversity may lead to or accelerate a decrease in the trading price of our common stock and make it more difficult for us to raise capital, enter into collaborations or maintain our compliance with the minimum listing standards of the NYSE Amex stock exchange. We are currently not in compliance with NYSE Amex rules regarding the minimum shareholders equity requirement and are at risk of being delisted from the NYSE Amex stock exchange, which may subject us to the SEC s penny stock rules and decrease the liquidity of our common stock. If our common stock is delisted, this may make capital raising efforts more difficult. In addition to our current operational requirements, we will need substantial additional capital to develop our product candidates and for our future operations. If we are unable to obtain such funds when needed, we may have to delay, scale back or terminate our product development efforts or our business. Risks Related to Our Business and Operations Our business prospects are difficult to evaluate because we are developing complex and novel medical product candidates. We may not successfully establish and maintain development and testing relationships with third party service providers and collaborators, which could adversely affect our ability to develop our product candidates. We are subject to intense government regulation and we may not receive regulatory approvals for our new drug candidates. Mauro Bove, a member of our Board, is also a director and officer of Sigma-Tau Group, a relationship which could give rise to a conflict of interest involving Mr. Bove. We are heavily reliant on our license from the National Institutes of Health for the rights to T 4, and any loss of these rights would adversely affect our business. All of our drug candidates are based on a single compound that has yet to be proven effective in human subjects. We have no manufacturing or formulation capabilities and are dependent upon third-party suppliers to provide us with our product candidates. If these suppliers do not manufacture our product candidates in sufficient quantities, at acceptable quality levels and at acceptable cost, or if we are unable to identify suitable replacement suppliers if needed, our clinical development efforts could be delayed, prevented or impaired. If any of our key employees discontinue their services with us, our efforts to develop our business may be delayed. We are subject to intense competition from companies with greater resources and more mature products, which may result in our competitors developing or commercializing products before or more successfully than we do. We face the risk of product liability claims, which could adversely affect our business and financial condition. Governmental and third-party payers may subject any product candidates we develop to sales and pharmaceutical pricing controls that could limit our product revenues and delay profitability. Clinical trials could be delayed or fail to show efficacy, resulting in additional cost or failure to commercialize our technology platform. We have no marketing experience, sales force or distribution capabilities. If our product candidates are approved, and we are unable to recruit key personnel to perform these functions, we may not be able to commercialize them successfully. Even if approved for marketing, our technologies and product candidates are unproven and they may fail to gain market acceptance. Our technologies and product candidates may have unacceptable side effects that could delay or prevent product approval. Our suppliers may use hazardous and biological materials in their businesses. Any claims relating to improper handling, storage or disposal of these materials could be time-consuming and costly to us, and we are not insured against such claims. If we enter markets outside the United States our business will be subject to political, economic, legal and social risks in those markets, which could adversely affect our business. Risks Related To Our Intellectual Property If we are not able to maintain adequate patent protection for our product candidates, we may be unable to prevent our competitors from using our technology or technology that we license. Changes to U.S. patent laws could materially reduce any value our patent portfolio may have. We may not have adequate protection for our unpatented proprietary information, which could adversely affect our competitive position. We may be subject to claims that we or our employees have wrongfully used or disclosed alleged trade secrets of former employers. Risks Related To Our Common Stock Our common stock price is volatile, our stock is highly illiquid, and any investment in our stock could decline substantially in value. We have never paid dividends on our common stock. Our principal stockholders have significant voting power and may take actions that may not be in the best interests of our other stockholders. Our rights to repurchase certain shares of stock held by Sigma-Tau Group expire over time, and we may never be able or elect to exercise these rights. A sale of a substantial number of shares of our common stock, or the perception that such sales will occur, may cause the price of our common stock to decline. The exercise of options and warrants and other issuances of shares of common stock or securities convertible into common stock will dilute your interest. Our certificate of incorporation, our stockholder rights plan and Delaware law contain provisions that could discourage or prevent a takeover or other change in control, even if such a transaction would be beneficial to our stockholders, which could affect our stock price adversely and prevent attempts by our stockholders to replace or remove our current management.

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707511--3/31/2010--REGENERX_BIOPHARMACEUTICALS_INC