901219--2/26/2009--HUMAN_GENOME_SCIENCES

related topics

{product, candidate, development}

{property, intellectual, protect}

{debt, indebtedness, cash}

{acquisition, growth, future}

{loss, insurance, financial}

{personnel, key, retain}

{provision, law, control}

{cost, regulation, environmental}

{stock, price, operating}

{product, liability, claim}

{loan, real, estate}

We are continually evaluating our business strategy, and may modify this strategy in light of developments in our business and other factors. 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 other than with respect to ABthrax. 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. We reacquired rights to HGS-ETR1 from GSK, as well as all rights to other TRAIL Receptor 1 and 2 antibodies. We may be unsuccessful in developing and commercializing products from these antibodies without a collaborative partner. Our ability to receive revenues from the assets licensed in connection with our CoGenesys transaction will now depend on Teva s ability to develop and commercialize those assets. Because we currently depend on our collaboration partners for substantial 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. Since reimbursement payments from our collaborators will pay for approximately half of our late-phase clinical trial expenses, 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. We may not have adequate resources available to repay our convertible subordinated debt when it becomes due. To become a successful biopharmaceutical company, we are likely to need additional funding in the future. If we do not obtain this funding on acceptable terms, we may not be able to generate sufficient revenue to repay our convertible debt, to launch and market successfully our products and to continue our biopharmaceutical discovery and development efforts. Our short-term investments, marketable securities and restricted investments are subject to certain risks which could materially adversely affect our overall financial position. 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 could leave us exposed to significant, uninsured liabilities. If our patent applications do not result in issued patents or if patent laws or the interpretation of patent laws change, our competitors may be able to obtain rights to and commercialize our discoveries. If others file patent applications or obtain patents similar to ours, then the United States 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 Phase 3 and earlier development molecules economically. We may be unable to fulfill the terms of our agreement with Hospira, Inc. and other agreements, if any, with potential customers for manufacturing process development and supply of selected biopharmaceutical products. 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 and bylaws 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--2/26/2009--HUMAN_GENOME_SCIENCES_INC