729922--2/27/2009--OSI_PHARMACEUTICALS

related topics

{product, candidate, development}

{property, intellectual, protect}

{product, liability, claim}

{regulation, government, change}

{stock, price, share}

{provision, law, control}

{control, financial, internal}

{operation, international, foreign}

{condition, economic, financial}

{financial, litigation, operation}

If Tarceva were to become the subject of problems related to its efficacy, safety, or otherwise, or if new, more effective treatments were introduced into the market, our revenues from Tarceva could decrease. Our strategy includes expanded use for Tarceva; however, there can be no assurance that the positive results from the SATURN or ATLAS trials will result in Tarceva receiving the required regulatory approvals for expanded use in NSCLC or that data from other clinical trials for additional indications will be positive or sufficient to achieve approval from the FDA and its foreign counterparts to market and sell Tarceva in such additional indications. We depend heavily on our co-development and marketing alliance with Genentech and Roche for Tarceva. If Genentech or Roche terminate these alliances, or are unable to meet their contractual obligations, it could negatively impact our revenues and harm our business until appropriate corrective measures have been taken. If we do not receive timely and accurate financial information from Genentech and Roche regarding the development and sale of Tarceva, we may be unable to accurately report our results of operations. Our business will be increasingly affected by pressures on drug pricing, which may limit or reduce the prices we can charge for Tarceva in the future and the pricing structure available to future products emanating from our pipeline. We are responsible for the manufacture and supply of Tarceva in the United States. Because we have no commercial manufacturing facilities, we are dependent on two suppliers for the API for Tarceva and a single supplier for the tableting of Tarceva in the United States. If any of these third parties fails to meet its obligations, our revenues from Tarceva could be negatively affected. We may not be able to successfully obtain the grant of the Tarceva patent reissue application which could limit our ability to assert the 498 patent to prevent or stop competitors from marketing or selling products similar to Tarceva. If our competitors succeed in developing products and technologies that are more effective than our own, or if scientific developments change our understanding of the potential scope and utility of our products, then our products and technologies may be rendered less competitive. Our revenues from our DPIV patent portfolio licenses are contingent upon the ability of our licensees to successfully develop and commercialize their products which are the subject of these licenses and our ability to protect our intellectual property rights in our DPIV patent estate. Although we have clinical and pre-clinical candidates in the pipeline for oncology and diabetes and obesity that appear to be promising at early stages of development, none of these potential products may reach the commercial market for a number of reasons. Our reliance on third parties, such as clinical research organizations, or CROs, and manufacturers, may result in delays in completing, or a failure to complete, clinical trials if they fail to perform under our agreements with them. Our operating results could be adversely affected by fluctuations in the value of the U.S. dollar against foreign currencies. Global credit and financial market conditions could negatively impact the value of our current portfolio of cash equivalents and investment securities. Risks Relating to Regulatory Matters Starting in November 2008, generic competitors can challenge our U.S. patents by filing an ANDA or a 505(b)(2) NDA for a generic or a modified version of Tarceva and adversely affect our competitive position. If we do not receive adequate third-party reimbursement for the sales of Tarceva, we may see a reduction in the profitability of Tarceva. Foreign government involvement and/or control over pricing of pharmaceutical products can have an effect on the revenues that we receive from Tarceva. The manufacture and packaging of pharmaceutical products, such as Tarceva, are subject to the requirements of the FDA and similar foreign regulatory bodies. If we or our third party manufacturers fail to satisfy these requirements, our or their product development and commercialization efforts may be materially harmed. If government agencies do not grant us or our collaborators required approvals for any of our potential products in a timely manner or at all, we or our collaborators will not be able to distribute or sell our products currently under development. Some of our activities may subject us to risks under federal and state laws prohibiting kickbacks and false or fraudulent claims, which could subject us to potential civil and criminal penalties and exclusion from federal healthcare programs. Future legislative or regulatory reform of the healthcare system may limit the commercial prospects of certain of our products. If Tarceva is imported into the United States, the EU or Japan from countries where the cost of the drug is lower, it will affect our sales and profitability and harm our business. Changes in laws, regulations, accepted clinical procedures or social pressures could restrict our use of animals in testing and therefore adversely affect our R D activities. Risks Related to Intellectual Property and Legal Matters If we cannot successfully protect, exploit or enforce our intellectual property rights, our ability to develop and commercialize our products, and receive revenues from licenses under our intellectual property, will be adversely affected. If we or our collaborators are required to obtain licenses from third parties, our revenues and royalties on any commercialized products could be reduced. If we are unable to protect the confidentiality of our proprietary information and know-how, the value of our technology and products could be negatively impacted. The failure to prevail in litigation and/or the costs of litigation, including patent infringement claims, could harm our financial performance and business operations and could cause delays in product introductions. The use of any of our potential products in clinical trials and the sale of any approved products exposes us to liability claims. Risks Related to Our Common Stock Our stock price remains highly volatile which could make it difficult for our stockholders to resell our common stock at desirable prices. Our governance documents and state law provide certain anti-takeover measures which will discourage a third party from seeking to acquire us and may impede the ability of stockholders to remove and replace our board of directors and, therefore, our management.

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729922--2/27/2009--OSI_PHARMACEUTICALS_INC