874663--5/28/2009--ALKERMES

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{stock, price, operating}

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{loan, real, estate}

{stock, price, share}

{acquisition, growth, future}

{property, intellectual, protect}

{customer, product, revenue}

{personnel, key, retain}

{financial, litigation, operation}

{operation, international, foreign}

{condition, economic, financial}

{provision, law, control}

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We are substantially dependent on revenues from our principal product. We are subject to risks related to the manufacture of our products. VIVITROL may not be successfully marketed and sold by Alkermes and may not generate significant revenues. Sales of our products are dependent, in part, on the availability of reimbursement from third-party payors such as federal and state government agencies under programs such as Medicare and Medicaid, and private insurance plans and a reduction in payment rate or reimbursement could result in decreased use or sales of our products. Our customer base who purchase VIVITROL directly from us is highly concentrated. There are risks in the manufacturing and distribution of our products and product candidates. The manufacture of our products is subject to government regulation. Our business involves environmental risks. We rely heavily on collaborative partners. We have very little sales and marketing experience and limited sales capabilities, which may make commercializing our products difficult. Our delivery technologies or product development efforts may not produce safe, efficacious or commercially viable products. Clinical trials for our product candidates are expensive and their outcome is uncertain. We depend on third parties in the conduct of our clinical trials for our product candidates and any failure of those parties to fulfill their obligations could adversely affect our development and commercialization plans. We may not become profitable on a sustained basis. We may require additional funds to complete our programs and such funding may not be available on commercially favorable terms and may cause dilution to our existing shareholders. The FDA or foreign regulatory agencies may not approve our product candidates. Our business is subject to extensive governmental regulation and oversight and changes in laws could adversely affect our revenues and profitability. Failure to comply with government regulations regarding our products could harm our business. If and when approved, the commercial use of our products may cause unintended side effects or adverse reactions or incidence of misuse may occur. Patent protection for our products is important and uncertain. Uncertainty over intellectual property in the biotechnology industry has been the source of litigation, which is inherently costly and unpredictable. We may be exposed to product liability claims and recalls. We may not be successful in the development of products for our own account. If we are not able to develop new products, our business may suffer. Foreign currency exchange rates may affect revenue. We face competition in the biotechnology and pharmaceutical industries, and others. RISPERDAL CONSTA revenues may not be sufficient to repay RC Royalty Sub, LLC s obligations for the non-recourse RISPERDAL CONSTA secured 7% notes (the 7% Notes ). We may not be able to retain our key personnel. Future transactions may harm our business or the market price of our stock. If we issue additional common stock, shareholders will suffer dilution of their investment and the stock price may decline. The current credit and financial market conditions may exacerbate certain risks affecting our business. Our investment portfolio may become impaired by further deterioration of the capital markets. Our common stock price is highly volatile. We may undertake additional strategic acquisitions in the future, and difficulties integrating such acquisitions could damage our ability to sustain profitability. Anti-takeover provisions may not benefit shareholders. Our business could be negatively affected as a result of the actions of activist shareholders. Litigation and/or arbitration may result in financial losses or harm our reputation and may divert management resources. We may incur financial and operational risk in connection with the move of our headquarters from Cambridge, Massachusetts to Waltham, Massachusetts.

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874663--5/28/2009--ALKERMES_INC