737207--3/15/2006--NASTECH_PHARMACEUTICAL_CO

related topics

{product, candidate, development}

{product, liability, claim}

{property, intellectual, protect}

{stock, price, share}

{control, financial, internal}

{personnel, key, retain}

{provision, law, control}

{stock, price, operating}

{cost, regulation, environmental}

{competitive, industry, competition}

{cost, operation, labor}

We have not been profitable on an annual basis for nine years, and we may never become profitable. We are dependent on our collaborative arrangements with third parties for a substantial portion of our revenue, and our development and commercialization activities may be delayed or reduced if we fail to negotiate or maintain successful collaborative arrangements. Our success depends to a significant degree upon the commercial success of products manufactured by us pursuant to supply agreements or marketed by our collaboration partners. Even if we are successful in commercializing a product candidate, it is possible that the commercial opportunity for intranasally-administered products will be limited. Our revenues and profits from any particular generic pharmaceutical products decline as our competitors introduce their own generic equivalents. Clinical trials of our product candidates are expensive and time-consuming, and the results of these trials are uncertain. We are subject to extensive government regulation including the requirement of approval before our products may be manufactured or marketed. Our patent applications may be inadequate in terms of priority, scope or commercial value. Our ability to commercialize our products after FDA approval is subject to exclusivity periods provided by law. Our operating results are subject to significant fluctuations and uncertainties, and our failure to meet expectations of public market analysts or investors regarding operating results may cause our stock price to decline. If we are unable to adequately protect our proprietary technology from legal challenges, infringement or alternative technologies, this inability will hurt our competitive position and negatively impact our operating results. Because intellectual property rights are of limited duration, expiration of intellectual property rights and licenses will negatively impact our operating results. Our product development efforts may not result in commercial products. We have limited experience in marketing or selling our products, and we may need to rely on marketing partners or contract sales companies. Coverage and reimbursement status of newly approved drugs is uncertain and the failure to obtain adequate reimbursement coverage could limit our ability to generate revenue. We may be required to defend lawsuits or pay damages for product liability claims. We may be unable to compete successfully against our current and future competitors. If we have a problem with our manufacturing facilities, we may not be able to market our products or conduct clinical trials. We use hazardous chemicals and radioactive and biological materials in our business. Any disputes relating to improper use, handling, storage or disposal of these materials could be time-consuming and costly. Reforms in the healthcare industry and the uncertainty associated with pharmaceutical pricing, reimbursement and related matters could adversely affect the marketing, pricing and demand for our products. If we lose our key personnel, or if we are unable to attract and retain additional personnel, then we may be unable to successfully develop our business. We may encounter difficulties managing our growth, which could adversely affect our business. We cannot assure you that our stock price will not decline. A significant number of shares of our common stock are subject to options and warrants, and we expect to sell additional shares of our common stock in the future. Sales of these shares will dilute the interests of other security holders and may depress the price of our common stock. We have never paid cash or stock dividends on our common stock and we do not anticipate paying dividends in the foreseeable future. The anti-takeover provisions of our stockholder rights plan may entrench management, may delay or prevent beneficial takeover bids by third parties and may prevent or frustrate any stockholder attempt to replace or remove the current management even if the stockholders consider it beneficial to do so. An interruption in the supply of our raw and bulk materials needed to make our products could cause our product development and commercialization to be slowed or stopped. Failure of the Company s internal control over financial reporting could harm its business and financial results.

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737207--3/15/2006--NASTECH_PHARMACEUTICAL_CO_INC