899460--3/14/2008--MANNKIND

related topics

{product, candidate, development}

{property, intellectual, protect}

{product, liability, claim}

{personnel, key, retain}

{stock, price, share}

{stock, price, operating}

{provision, law, control}

{control, financial, internal}

{condition, economic, financial}

{product, market, service}

{operation, natural, condition}

{cost, regulation, environmental}

We depend heavily on the successful development and commercialization of our lead product candidate, the Technosphere Insulin System, which is in clinical development, and our other product candidates, which are in early clinical or preclinical development. If we do not achieve our projected development goals in the timeframes we announce and expect, our business would be harmed and the market price of our common stock could decline. We face substantial competition in the development of our product candidates and may not be able to compete successfully, and our product candidates may be rendered obsolete by rapid technological change. If we fail to enter into a strategic collaboration with respect to our Technosphere Insulin System, we may not be able to execute on our business model. If we enter into collaborative agreements with respect to our Technosphere Insulin System and if our third-party collaborators do not perform satisfactorily or if our collaborations fail, development or commercialization of our Technosphere Insulin System may be delayed and our business could be harmed. Testing of our Technosphere Insulin System or another product candidate may not yield successful results, and even if it does, we may still be unable to commercialize that product candidate. If we are unable to transition successfully from an early-stage development company to a company that commercializes therapeutics, our operations would suffer. If our suppliers fail to deliver materials and services needed for the production of our Technosphere Insulin System in a timely and sufficient manner, or they fail to comply with applicable regulations, our business and results of operations would be harmed and the market price of our common stock could decline. We have never manufactured our Technosphere Insulin System or any other product candidate in commercial quantities, and if we fail to develop an effective manufacturing capability for our product candidates or to engage third-party manufacturers with this capability, we may be unable to commercialize these products. We deal with hazardous materials and must comply with environmental laws and regulations, which can be expensive and restrict how we do business. If we fail to enter into collaborations with third parties, we would be required to establish our own sales, marketing and distribution capabilities, which could impact the commercialization of our products and harm our business. If any product that we may develop does not become widely accepted by physicians, patients, third-party payers and the healthcare community, we may be unable to generate significant revenue, if any. If third-party payers do not reimburse customers for our products, our products might not be used or purchased, which would adversely affect our revenues. If product liability claims are brought against us, we may incur significant liabilities and suffer damage to our reputation. If we lose any key employees or scientific advisors, our operations and our ability to execute our business strategy could be materially harmed. If our Chief Executive Officer is unable to devote sufficient time and attention to our business, our operations and our ability to execute our business strategy could be materially harmed. Our facilities that are located in Southern California may be affected by man-made or natural disasters. If our internal controls over financial reporting are not considered effective, our business and stock price could be adversely affected. RISKS RELATED TO REGULATORY APPROVALS Our product candidates must undergo rigorous nonclinical and clinical testing and we must obtain regulatory approvals, which could be costly and time-consuming and subject us to unanticipated delays or prevent us from marketing any products. We have only limited experience in filing and pursuing applications necessary to gain regulatory approvals, which may impede our ability to obtain timely approvals from the FDA or foreign regulatory agencies, if at all. If we do not comply with regulatory requirements at any stage, whether before or after marketing approval is obtained, we may be subject to criminal prosecution, fined or forced to remove a product from the market or experience other adverse consequences, including restrictions or delays in obtaining regulatory marketing approval. Even if we obtain regulatory approval for our product candidates, such approval may be limited and we will be subject to stringent, ongoing government regulation. Our insulin supplier does not yet supply human recombinant insulin for an FDA-approved product and will likely be subject to an FDA preapproval inspection before the agency will approve a future marketing application for our Technosphere Insulin System. Reports of side effects or safety concerns in related technology fields or in other companies clinical trials could delay or prevent us from obtaining regulatory approval or negatively impact public perception of our product candidates. RISKS RELATED TO INTELLECTUAL PROPERTY If we are unable to protect our proprietary rights, we may not be able to compete effectively, or operate profitably. If we become involved in lawsuits to protect or enforce our patents or the patents of our collaborators or licensors, we would be required to devote substantial time and resources to prosecute or defend such proceedings. If our technologies conflict with the proprietary rights of others, we may incur substantial costs as a result of litigation or other proceedings and we could face substantial monetary damages and be precluded from commercializing our products, which would materially harm our business. We may not obtain trademark registrations for our potential trade names. RISKS RELATED TO OUR COMMON STOCK Our stock price is volatile. If other biotechnology and biopharmaceutical companies or the securities markets in general encounter problems, the market price of our common stock could be adversely affected. Our Chief Executive Officer and principal stockholder can individually control our direction and policies, and his interests may be adverse to the interests of our other stockholders. After his death, his stock will be left to his funding foundations for distribution to various charities, and we cannot assure you of the manner in which those entities will manage their holdings. The future sale of our common stock or the conversion of our senior convertible notes into common stock could negatively affect our stock price. Anti-takeover provisions in our charter documents and under Delaware law could make an acquisition of us, which may be beneficial to our stockholders, more difficult and may prevent attempts by our stockholders to replace or remove our current management.

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899460--3/14/2008--MANNKIND_CORP