902482--3/15/2007--ADEZA_BIOMEDICAL

related topics

{product, candidate, development}

{property, intellectual, protect}

{product, liability, claim}

{acquisition, growth, future}

{stock, price, share}

{stock, price, operating}

{regulation, change, law}

{provision, law, control}

{control, financial, internal}

{operation, natural, condition}

{operation, international, foreign}

{personnel, key, retain}

{cost, regulation, environmental}

{customer, product, revenue}

If our products do not achieve and sustain market acceptance, we may fail to generate sufficient revenue to maintain our business. Our quarterly revenues and operating results are subject to significant fluctuations, and our stock price may decline if we do not meet the expectations of investors and analysts. If third-party payors do not adequately reimburse our customers, market acceptance of our products may be impaired, which may adversely affect our revenues and our operating results. If we fail to properly manage our anticipated growth in the US or abroad, we may incur significant additional costs and expenses and our operating results may suffer. We will need to devote considerable resources to comply with federal, state and foreign regulations and, if we are unable to fully comply, we could face substantial penalties. If we are unable to maintain our existing regulatory approvals and clearances for our existing diagnostic products, or obtain new regulatory approvals and clearances for our diagnostic product candidates, our ability to commercially distribute our products and our business may be significantly harmed. If we are unable to obtain or maintain regulatory approval for Gestiva, we will be limited in our ability to commercialize Gestiva, and our business will be harmed. In addition, if pre-marketing or post-marketing approval requirements are too expensive or too time-consuming and could adversely affect our financial condition, we may elect to not commercialize, or not continue commercializing, Gestiva. If we modify our marketed diagnostic products, we may be required to obtain new 510(k) clearances or PMAs, or we may be required to cease marketing or recall the modified products until clearances are obtained. Even if we receive approval for the marketing and sale of Gestiva for the prevention of preterm birth in women who have a history of preterm delivery, it may never be accepted as a treatment for preterm birth in women who have a history of preterm delivery. We have no experience marketing pharmaceutical products, and will need to develop pharmaceutical sales and marketing capabilities to successfully commercialize Gestiva. If we experience delays in the development of new products or delays in planned improvements to our products, our commercial opportunities will be reduced and our future competitive position may be adversely affected. If other companies develop and market technologies or products faster than we do, or if those products are more cost effective or useful than our products, our commercial opportunities will be reduced or eliminated. If we or any of our third-party manufacturers for our diagnostic do not operate in accordance with Quality System Regulations, we could be subject to FDA enforcement actions, including the seizure of our products and the halt of our production. We rely on a limited number of suppliers, and if these suppliers fail or are unable to perform in a timely and satisfactory manner, we may be unable to manufacture our products or satisfy product demand in a timely manner, which could delay the production or sale of our products. We have no manufacturing capabilities for Gestiva and we may depend on third parties who are single source suppliers to manufacture Gestiva. If these suppliers are unable to continue manufacturing Gestiva and we are unable to obtain supply from alternative sources, our business will be harmed. If our third party manufacturers of Gestiva fail to comply with FDA regulations or otherwise fail to meet our requirements, our product development and commercialization efforts may be delayed. We depend on distributors to market and sell our products in overseas markets, and if our foreign distributors fail in their efforts or are unwilling or unable to devote sufficient resources to market and sell our products, our ability to effectively market our products and our business will be harmed. The regulatory approval process outside the United States varies depending on foreign regulatory requirements and may limit our ability to develop, manufacture and sell our products internationally. If our products do not perform as expected, we may experience reduced revenue, delayed or reduced market acceptance of our products, increased costs and damage to our reputation. If product liability suits or other claims and product field actions are initiated against us, we may be required to engage in expensive and time-consuming litigation, pay substantial damages, face increased insurance rates and sustain damage to our reputation, which would significantly impair our financial condition. If we or others identify side effects after our therapeutic products are on the market, we may be required to perform lengthy additional clinical trials, change the labeling of our products or withdraw our products from the market, any of which would hinder or preclude our ability to generate revenues. We depend on the services of key personnel to implement our strategy, and if we lose key management or scientific personnel, scientific collaborators or other advisors or are unable to attract and retain other qualified personnel, we may be unable to execute our business plan and our operations and business would suffer. Most of our operations are currently conducted at a single location that may be at risk from earthquakes and other natural or unforeseen disasters. If we use biological and hazardous materials in a manner that causes injury, we could be liable for damages. Potential business combinations could require significant management attention and prove difficult to integrate with our business, which could distract our management, disrupt our business, dilute stockholder value and adversely affect our operating results. If we fail to obtain necessary funds for our operations, we will be unable to continue to develop and commercialize new products and technologies and we may need to downsize or halt our operations. Changes to existing accounting pronouncements, including SFAS 123R, or taxation rules or practices, including FIN 48, may adversely affect our reported results of operations or how we conduct our business. RISKS RELATING TO OUR INTELLECTUAL PROPERTY If we are unable to protect our proprietary rights, we may not be able to compete effectively. Our rights to use technologies and patents licensed to us by third parties are not within our control, and we may not be able to commercialize our products without these technologies. If the use of our technologies conflicts with the intellectual property rights of third parties, we may incur substantial liabilities, and we may be unable to commercialize products based on these technologies in a profitable manner, if at all. If we are involved in intellectual property claims and litigation, the proceedings may divert our resources and subject us to significant liability for damages, substantial litigation expense and the loss of our proprietary rights. The market for Gestiva may be very competitive because we have no patent protection for Gestiva, and we may not obtain regulatory exclusivity for Gestiva. We may be subject to damages resulting from claims that we or our employees have wrongfully used or disclosed alleged trade secrets of their former employers. If we cannot obtain additional licenses to intellectual property owned by third parties that we desire to incorporate into new products we plan to develop, we may not be able to develop or commercialize these future products. RISKS RELATING TO OUR COMMON STOCK If we are unable to timely satisfy regulatory requirements relating to internal controls, our stock price could suffer. If our principal stockholders, executive officers and directors choose to act together, they may be able to control our management and operations, which may prevent us from taking actions that may be favorable to our stockholders. The future sale of our securities could dilute our common stockholders investments and negatively affect our stock price. The price and volume of our common stock experience fluctuations, which could lead to costly litigation for us. Anti-takeover provisions in our certificate of incorporation and bylaws and under Delaware law may inhibit a change in control or a change in management that our stockholders consider favorable. We do not expect to pay dividends in the foreseeable future. As a result, our stockholders must rely on stock appreciation for any return on their investment in our common stock. RISKS RELATING TO THE PROPOSED MERGER WITH CYTYC Our proposed merger with Cytyc will be subject to business uncertainties; integration of the two businesses may be difficult to achieve, which may adversely affect operations. Failure to complete the merger could negatively impact our stock prices, future business and operations.

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902482--3/15/2007--ADEZA_BIOMEDICAL_CORP