873364--2/12/2010--CEPHALON

related topics

{product, liability, claim}

{product, candidate, development}

{acquisition, growth, future}

{debt, indebtedness, cash}

{gas, price, oil}

{customer, product, revenue}

{condition, economic, financial}

{financial, litigation, operation}

{operation, international, foreign}

{cost, regulation, environmental}

{personnel, key, retain}

{property, intellectual, protect}

{stock, price, operating}

{stock, price, share}

{control, financial, internal}

{provision, law, control}

A significant portion of our revenue is derived from five products, and our future success will depend on the aggregate growth of NUVIGIL and PROVIGIL, the continued acceptance of FENTORA, and the growth of AMRIX and TREANDA. We may be unsuccessful in our efforts to obtain regulatory approval for new products or for new formulations or expanded indications of our existing products, which would significantly hamper future sales and earnings growth. We may not be able to maintain adequate protection for our intellectual property or market exclusivity for our key products and, therefore, competitors may develop competing products, which could result in a decrease in sales and market share, cause us to reduce prices to compete successfully and limit our commercial success. Our activities and products are subject to significant government regulations and approvals, which are often costly and could result in adverse consequences to our business if we fail to comply. Manufacturing, supply and distribution problems may create supply disruptions that could result in a reduction of product sales revenue and an increase in costs of sales, and damage commercial prospects for our products. As our products are used commercially, unintended side effects, adverse reactions or incidents of misuse may occur that could result in additional regulatory controls, changes to product labeling, adverse publicity and reduced sales of our products. We face significant product liability risks, which may have a negative effect on our financial performance. Our product sales and related financial results will fluctuate, and these fluctuations may cause our stock price to fall, especially if investors do not anticipate them. We may be unable to repay our substantial indebtedness and other obligations. The restrictive covenants contained in our credit agreement may limit our activities. Our research and development and marketing efforts are often dependent on corporate collaborators and other third parties who may not devote sufficient time, resources and attention to our programs, which may limit our efforts to develop and market potential products. The efforts of government entities and third party payers to contain or reduce the costs of health care may adversely affect our sales and limit the commercial success of our products. We experience intense competition in our fields of interest, which may adversely affect our business. We plan to consider and, as appropriate, make acquisitions of technologies, products and businesses, which may subject us to a number of risks and/or result in us experiencing significant charges to earnings that may adversely affect our stock price, operating results and financial condition. We may be unable to successfully consolidate and integrate the operations of businesses we acquire, which may adversely affect our stock price, operating results and financial condition. The results and timing of our research and development activities, including future clinical trials, are difficult to predict, subject to potential future setbacks and, ultimately, may not result in viable pharmaceutical products, which may adversely affect our business. The price of our common stock has been and may continue to be highly volatile, which may make it difficult for stockholders to sell our common stock when desired or at attractive prices. Our internal controls over financial reporting may not be considered effective, which could result in possible regulatory sanctions and a decline in our stock price. A portion of our revenues and expenses is subject to exchange rate fluctuations in the normal course of business, which could adversely affect our reported results of operations. Our customer base is highly concentrated. We are involved, or may become involved in the future, in legal proceedings that, if adversely adjudicated or settled, could materially impact our financial condition. Unfavorable general economic conditions could adversely affect our business. Our dependence on key executives and scientists could impact the development and management of our business. We may be required to incur significant costs to comply with environmental laws and regulations, and our related compliance may limit any future profitability. Anti-takeover provisions may delay or prevent changes in control of our management or deter a third party from acquiring us, limiting our stockholders' ability to profit from such a transaction.

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873364--2/12/2010--CEPHALON_INC