743884--3/17/2008--MACROCHEM

related topics

{product, candidate, development}

{stock, price, share}

{product, liability, claim}

{property, intellectual, protect}

{control, financial, internal}

{stock, price, operating}

{competitive, industry, competition}

{regulation, government, change}

{gas, price, oil}

{personnel, key, retain}

Risks Related to Our Business We have a history of operating losses, expect to continue to incur losses and rely extensively on external financing to maintain our operations. If we are unable to obtain external financing, we would be required to further limit, scale back or cease our operations entirely. Our product candidates are in the early stages of development and are subject to the risk of failure inherent in the development of innovative technologies. Even if we succeed with pre-clinical and clinical trials, our product candidates must undergo a rigorous regulatory approval process, which includes extensive review of pre-clinical and clinical testing, to demonstrate safety and efficacy before we can market them. If the results of our pre-clinical and clinical testing indicate that our product candidates are not safe or effective, our business will suffer. Our product candidates are subject to significant FDA supervision and may not successfully complete the extensive regulatory approval process required prior to the marketing of any pharmaceutical product. Because the regulatory approval process is complex, we cannot accurately predict the regulatory approval timeline for our product candidates. Federal regulatory reforms may create additional burdens that would cause us to incur additional costs and may adversely affect our ability to commercialize our products. If our product candidates are not accepted by physicians and patients, we may never generate profits from operations. If physicians or patients perceive that testosterone replacement therapies create health risks, the viability of Opterone may be questioned, and our business and the price of our stock may be negatively affected. We depend on patents to protect our technologies and if our current patents are ineffective or we are unable to secure and maintain adequate patent protection, our ability to compete with other pharmaceutical companies may be negatively affected. If we are not able to protect the confidentiality of our proprietary information and know-how, the value of our technologies may be adversely affected. If we are not able to retain our key personnel and/or recruit additional key personnel in the future, our business may suffer. Our failure to identify pharmaceuticals that are compatible with our drug delivery technologies or additional product candidates or technologies would impair our ability to grow. We do not have any laboratory facilities or scientific personnel and depend on third parties to conduct research and development activities for our technologies and product candidates. We do not have any manufacturing facilities and depend on third parties to manufacture our product candidates. We face the risk of product liability claims, and we may not have sufficient product liability insurance to cover such claims. It may be expensive and difficult to obtain adequate insurance coverage. We rely on a third-party supplier for a non-active ingredient in some of our product candidates and, in the event the supplier is unable to supply us with adequate product, our business may be negatively affected if we are not able to timely obtain a substitute ingredient. Risks Related to Our Industry Our industry is highly competitive and our competitors have or may have significantly more resources than we have. Government and private initiatives to reduce health care costs could have a material adverse effect on pharmaceutical pricing and on our operations. Risks Related to the Securities Market Our stock price has been, and likely will continue to be, highly volatile, and as a result, an investment in our stock is subject to substantial risk. On November 22, 2005, our common stock was delisted from the Nasdaq Capital Market for failure to meet its listing standards. Our common stock currently is quoted on the OTC Bulletin Board, which investors may perceive as less desirable and which could negatively affect the liquidity of an investment in our common stock. Together, certain of our shareholders own a majority of our stock and could ultimately control decisions regarding us. Certain of our shareholders own large blocks of our common stock and securities exercisable into shares of our common stock, and any exercises, or sales by these shareholders could substantially lower the market price of our common stock. We are contractually obligated to issue shares in the future, diluting your interest in us. If material weaknesses are identified and reported as to the adequacy of our internal controls over financial reporting as of December 31, 2008, as required by Section 404 of the Sarbanes-Oxley Act of 2002, investors could lose confidence in the reliability of our financial statements, which could result in a decrease in the value of your investment.

Full 10-K form ▸

743884--3/17/2008--MACROCHEM_CORP