901219--2/26/2008--HUMAN_GENOME_SCIENCES

related topics

{product, candidate, development}

{property, intellectual, protect}

{acquisition, growth, future}

{debt, indebtedness, cash}

{loss, insurance, financial}

{personnel, key, retain}

{provision, law, control}

{cost, regulation, environmental}

{stock, price, operating}

{product, liability, claim}

Because we have limited experience in developing and commercializing products, we may be unsuccessful in our efforts to do so. Because clinical trials for our products are expensive and protracted and their outcome is uncertain, we must invest substantial amounts of time and money that may not yield viable products. We face risks in connection with our ABthrax product in addition to risks generally associated with drug development. Because neither we nor any of our collaboration partners have received marketing approval for any product candidate resulting from our research and development efforts, and because we may never be able to obtain any such approval, it is possible that we may not be able to generate any product revenue. RISK FROM COLLABORATION RELATIONSHIPS AND STRATEGIC ACQUISITIONS Our plan to use collaborations to leverage our capabilities and to grow in part through the strategic acquisition of other companies and technologies may not be successful if we are unable to integrate our partners capabilities or the acquired companies with our operations or if our partners capabilities do not meet our expectations. Although GSK has agreed to be our partner in the development and commercialization of HGS-ETR1, we may be unable to negotiate an appropriate co-development and co-marketing agreement. Our ability to receive revenues from the assets licensed in connection with our CoGenesys transaction will depend on CoGenesys ability to develop and commercialize those assets. Because we depend on our collaboration partners for revenue, we may not become profitable if we cannot increase the revenue from our collaboration partners or other sources. If one of our collaborators pursues a product that competes with our products, there could be a conflict of interest and we may not receive milestone or royalty payments. Reimbursement payments from our collaborators to fund our late-phase clinical trials will pay for approximately half of our late-phase clinical trial expenses and our ability to develop and commercialize products may be impaired if payments from our collaborators are delayed. Because of our substantial indebtedness, we may be unable to adjust our strategy to meet changing conditions in the future. To pursue our current business strategy and continue developing our products, we may need additional funding in the future. If we do not obtain this funding on acceptable terms, we may not be able to continue to grow our business and generate enough revenue to recover our investment in our product development effort. Some of our operating leases contain financial covenants, which may require us to accelerate payment under those agreements or increase the amount of our security deposits. Our insurance policies are expensive and protect us only from some business risks, which will leave us exposed to significant, uninsured liabilities. If patent laws or the interpretation of patent laws change, our competitors may be able to develop and commercialize our discoveries. If our patent applications do not result in issued patents, our competitors may obtain rights to and commercialize the discoveries we attempted to patent. If others file patent applications or obtain patents similar to ours, then the Patent and Trademark Office may deny our patent applications, or others may restrict the use of our discoveries. Because issued patents may not fully protect our discoveries, our competitors may be able to commercialize products similar to those covered by our issued patents. We rely on our collaboration partners to seek patent protection for the products they develop based on our research. If we are unable to protect our trade secrets, others may be able to use our secrets to compete more effectively. Because we are subject to extensive changing government regulatory requirements, we may be unable to obtain government approval of our products in a timely manner. Because we are subject to environmental, health and safety laws, we may be unable to conduct our business in the most advantageous manner. OTHER RISKS RELATED TO OUR BUSINESS Many of our competitors have substantially greater capabilities and resources and may be able to develop and commercialize products before we do. If we lose or are unable to attract key management or other personnel, we may experience delays in product development. If the health care system or reimbursement policies change, the prices of our potential products may be lower than expected and our potential sales may decline. We may be unable to successfully establish a manufacturing capability and may be unable to obtain required quantities of our products economically. Because we currently have only a limited marketing capability, we may be unable to sell any of our products effectively. Because we depend on third parties to conduct many of our human studies, we may encounter delays in or lose some control over our efforts to develop products. Our certificate of incorporation, bylaws and stockholder rights plan could discourage acquisition proposals, delay a change in control or prevent transactions that are in your best interests. Because our stock price has been and will likely continue to be volatile, the market price of our common stock may be lower or more volatile than you expected.

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901219--2/26/2008--HUMAN_GENOME_SCIENCES_INC