886163--3/31/2006--LIGAND_PHARMACEUTICALS

related topics

{product, candidate, development}

{acquisition, growth, future}

{regulation, government, change}

{customer, product, revenue}

{property, intellectual, protect}

{system, service, information}

{stock, price, share}

{competitive, industry, competition}

Our revenue recognition policy has changed to the sell-through method which is currently not used by most companies in the pharmaceutical industry which will make it more difficult to compare our results to the results of our competitors. Our new revenue recognition models under the sell-through method are extremely complex and depend upon the accuracy and consistency of third party data as well as dependence upon key finance and accounting personnel to maintain and implement the controls surrounding such models. Our common stock was delisted from the NASDAQ National Market which may reduce the price of our common stock and the levels of liquidity available to our stockholders and cause confusion among investors. Our strategic alternatives exploration process is subject to a number of uncertainties and may or may not result in any expected transaction(s). Our small number of products and our dependence on partners and other third parties means our results are vulnerable to setbacks with respect to any one product. Our product development and commercialization involve a number of uncertainties, and we may never generate sufficient revenues from the sale of products to become profitable. Third-party reimbursement and health care reform policies may reduce our future sales. We are building marketing and sales capabilities in the United States and Europe which is an expensive and time-consuming process and may increase our operating losses. The cash flows from our product shipments may significantly fluctuate each period based on the nature of our products. Our drug development programs will require substantial additional future funding which could hurt our operational and financial condition. We may require additional money to run our business and may be required to raise this money on terms which are not favorable or which reduce our stock price. Our products face significant regulatory hurdles prior to marketing which could delay or prevent sales. We face substantial competition which may limit our revenues. We rely heavily on collaborative relationships and termination of any of these programs could reduce the financial resources available to us, including research funding and milestone payments. Some of our key technologies have not been used to produce marketed products and may not be capable of producing such products. Challenges to or failure to secure patents and other proprietary rights may significantly hurt our business. Reliance on third-party manufacturers to supply our products risks supply interruption or contamination and difficulty controlling costs.

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886163--3/31/2006--LIGAND_PHARMACEUTICALS_INC