887247--3/31/2006--CELLEGY_PHARMACEUTICALS

related topics

{product, candidate, development}

{product, liability, claim}

{stock, price, share}

{regulation, change, law}

{personnel, key, retain}

{interest, director, officer}

{financial, litigation, operation}

{control, financial, internal}

{competitive, industry, competition}

We have a history of losses, and we expect losses to continue for at least several years. We have received a going concern opinion from our independent registered public accounting firm, which may negatively impact our business. Our prospects for obtaining additional financing are uncertain and failure to obtain needed financing could affect our ability to develop or market products or to continue operations. We could be forced into bankruptcy. The outcome of the lawsuit with PDI is uncertain. An unfavorable outcome will have a material adverse affect on our financial position and stock price. are subject to regulation by regulatory authorities including the FDA, which could delay or prevent marketing of our products. Unexpected regulatory outcomes could adversely affect our business and stock price. Our clinical trial results are very difficult to predict in advance, and the clinical trial process is subject to delays. Failure of one or more clinical trials or delays in trial completion could adversely affect our business and our stock price. Adverse events in our clinical trials may force us to stop development of our product candidates or prevent regulatory approval of our product candidates, which could materially harm our business. Due to our reliance on contract research organizations or other third-parties to assist us in conducting clinical trials, we are unable to directly control all aspects of our clinical trials. The type and scope of patent coverage we have may limit the commercial success of our products. Our product sales strategy involving corporate partners is highly uncertain. We do not have any history of manufacturing products on a large scale, and we have a limited number of critical suppliers. We have limited sales and marketing experience. If medical doctors do not prescribe our products or the medical profession does not accept our products, our product sales and business would be adversely affected. If testosterone replacement therapies are perceived to create health risks, our testosterone gel product candidates may be jeopardized. We have very limited staffing and will continue to be dependent upon key personnel. Our corporate compliance programs cannot guarantee that we are in compliance with all potentially applicable regulations. Risks Relating to Our Industry We face intense competition from larger companies, and in the future Cellegy may not have the resources required to develop innovative products. Cellegy s products are subject to competition from existing products. We are subject to the risk of clinical trial and product liability lawsuits. Our stock price could be volatile. The Kingsbridge Structured Secondary Offering ( Kingsbridge SSO ) financing arrangement may have a dilutive impact on our stockholders. The SSO arrangement imposes certain limitations on our ability to issue equity or equity-linked securities. Future sales of shares of our common stock may negatively affect our stock price. Changes in the expensing of stock options could result in unfavorable accounting charges or require us to change our compensation practices.

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887247--3/31/2006--CELLEGY_PHARMACEUTICALS_INC