872589--2/26/2009--REGENERON_PHARMACEUTICALS

related topics

{product, candidate, development}

{property, intellectual, protect}

{product, liability, claim}

{stock, price, operating}

{control, financial, internal}

{regulation, government, change}

{cost, regulation, environmental}

{stock, price, share}

{cost, operation, labor}

{provision, law, control}

{loan, real, estate}

{personnel, key, retain}

{acquisition, growth, future}

{operation, natural, condition}

{regulation, change, law}

Risks Related to Our Financial Results and Need for Additional Financing We have had a history of operating losses and we may never achieve profitability. If we continue to incur operating losses, we may be unable to continue our operations. We may need additional funding in the future, which may not be available to us, and which may force us to delay, reduce or eliminate our product development programs or commercialization efforts. The value of our investment portfolio, which includes cash, cash equivalents, and marketable securities, is influenced by varying economic and market conditions. A decrease in the value of an asset in our investment portfolio or a default by the issuer may result in our inability to recover the principal we invested and/or a recognition of a loss charged against income. Risks Related to ARCALYST (rilonacept) and the Development of Our Product Candidates Successful development of any of our product candidates is highly uncertain. Clinical trials required for our product candidates are expensive and time-consuming, and their outcome is highly uncertain. If any of our drug trials are delayed or yield unfavorable results, we will have to delay or may be unable to obtain regulatory approval for our product candidates. Serious complications or side effects have occurred, and may continue to occur, in connection with the use of our approved product and in clinical trials of some of our product candidates which could cause our regulatory approval to be revoked or otherwise negatively affected or lead to delay or discontinuation of development of our product candidates which could severely harm our business. (rilonacept) and our product candidates in development are recombinant proteins that could cause an immune response, resulting in the creation of harmful or neutralizing antibodies against the therapeutic protein. We may be unable to formulate or manufacture our product candidates in a way that is suitable for clinical or commercial use. Risks Related to Intellectual Property If we cannot protect the confidentiality of our trade secrets or our patents are insufficient to protect our proprietary rights, our business and competitive position will be harmed. We may be restricted in our development and/or commercialization activities by, and could be subject to damage awards if we are found to have infringed, third party patents or other proprietary rights. If we do not obtain regulatory approval for our product candidates, we will not be able to market or sell them. If the testing or use of our products harms people, we could be subject to costly and damaging product liability claims. If we market and sell ARCALYST (rilonacept) in a way that violates federal or state fraud and abuse laws, we may be subject to civil or criminal penalties. Our operations may involve hazardous materials and are subject to environmental, health, and safety laws and regulations. We may incur substantial liability arising from our activities involving the use of hazardous materials. Changes in the securities laws and regulations have increased, and are likely to continue to increase, our costs. In future years, if we are unable to conclude that our internal control over financial reporting is effective, the market value of our Common Stock could be adversely affected. Changes in laws and regulations affecting the healthcare industry could adversely affect our business. Risks Related to Our Reliance on Third Parties If our antibody collaboration with sanofi-aventis is terminated, our business operations and our ability to discover, develop, manufacture, and commercialize our pipeline of product candidates in the time expected, or at all, would be materially harmed. If our collaboration with sanofi-aventis for aflibercept (VEGF Trap) is terminated, or sanofi-aventis materially breaches its obligations thereunder, our business operations and financial condition, and our ability to develop, manufacture, and commercialize aflibercept in the time expected, or at all, would be materially harmed. If our collaboration with Bayer HealthCare for VEGF Trap-Eye is terminated, or Bayer HealthCare materially breaches its obligations thereunder, our business operations and financial condition, and our ability to develop and commercialize VEGF Trap-Eye in the time expected, or at all, would be materially harmed. Our collaborators and service providers may fail to perform adequately in their efforts to support the development, manufacture, and commercialization of ARCALYST (rilonacept) and our drug candidates. Risks Related to the Manufacture of Our Product Candidates We have limited manufacturing capacity, which could inhibit our ability to successfully develop or commercialize our drugs. If any of our clinical programs are discontinued, we may face costs related to the unused capacity at our manufacturing facilities. Third-party supply failures or a business interruption at our manufacturing facility in Rensselaer, New York could adversely affect our ability to supply our products. Risks Related to Commercialization of Products If we are unable to establish sales, marketing, and distribution capabilities, or enter into agreements with third parties to do so, we will be unable to successfully market and sell future products. There may be too few patients with CAPS to profitably commercialize ARCALYST Even if our product candidates are approved for marketing, their commercial success is highly uncertain because our competitors have received approval for products with a similar mechanism of action, and competitors may get to the marketplace with better or lower cost drugs. The successful commercialization of ARCALYST (rilonacept) and our product candidates will depend on obtaining coverage and reimbursement for use of these products from third-party payers and these payers may not agree to cover or reimburse for use of our products. We are dependent on our key personnel and if we cannot recruit and retain leaders in our research, development, manufacturing, and commercial organizations, our business will be harmed. Our move to new facilities in mid-2009 could lead to disruptions in our business operations. Risks Related to Our Common Stock Our stock price is extremely volatile. Future sales of our Common Stock by our significant shareholders or us may depress our stock price and impair our ability to raise funds in new share offerings. Our existing shareholders may be able to exert significant influence over matters requiring shareholder approval. The anti-takeover effects of provisions of our charter, by-laws, and of New York corporate law and the contractual standstill provisions in our investor agreement with sanofi-aventis, could deter, delay, or prevent an acquisition or other change in control of us and could adversely affect the price of our Common Stock.

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872589--2/26/2009--REGENERON_PHARMACEUTICALS_INC