919015--3/27/2007--BIOSPHERE_MEDICAL

related topics

{product, liability, claim}

{product, candidate, development}

{product, market, service}

{stock, price, operating}

{property, intellectual, protect}

{operation, international, foreign}

{acquisition, growth, future}

{customer, product, revenue}

{stock, price, share}

{control, financial, internal}

{personnel, key, retain}

{regulation, government, change}

{financial, litigation, operation}

Risks Relating to Our Future Profitability, Our Financial Results and Need For Financing Because we have a history of losses and our future profitability is uncertain, our common stock is a speculative investment. We will continue to need additional funds, and if additional capital is not available, we may have to limit or scale back our operations. If operating results fluctuate significantly from quarter to quarter, then our stock price may decline. Risks Relating to Our Industry, Business and Strategy If we do not achieve widespread market acceptance of our microsphere products, our business prospects will be seriously harmed. If our microsphere products are not properly used or if the market concludes that our products are not safe or effective, our business could be adversely affected. If we do not successfully market and promote our Embosphere Microspheres for use in uterine fibroid embolization, our product revenues will not increase. If we do not maintain our relationships with the healthcare community, our growth will be limited and our business could be harmed. If gynecologists, obstetricians, interventional radiologists and other healthcare providers do not recommend and endorse our products, our sales may decline or we may be unable to increase our sales and profits. If we experience delays, difficulties or unanticipated costs in establishing the sales, distribution and marketing capabilities necessary to successfully commercialize our products, we will have difficulty maintaining and increasing our sales. We will be required to expend significant resources for research, development, testing and regulatory approval of our products under development, and these products may not be developed successfully. We may be unable to grow revenues for certain of our products, and if we do not develop and introduce new products, we may not achieve additional revenue opportunities. We may be exposed to product liability claims, and if we are unable to obtain or maintain adequate product liability insurance, then we may have to pay significant monetary damages in a successful product liability claim against us. We instituted a voluntary recall of our HepaSphere Microspheres product in the European Union and Japan, which may result in decreased market acceptance of this product and reputational harm, as well as hindering our ability to generate revenue from sales of the product. If we are not able to compete effectively, we may experience decreased demand for our products, which may result in price reductions. If we fail to maintain, or in some instances obtain, an adequate level of reimbursement for our products by third-party payers, there may be no commercially viable markets for our products. If we do not recruit and retain senior management and other key employees we may not be able to successfully implement our business strategy. If we make any acquisitions, we will incur a variety of costs and may never successfully integrate the acquired business into ours. Because key stockholders beneficially own a significant amount of our common stock, they may be able to exert control over us. The holders of shares of our series A preferred stock have rights that could adversely affect an investment in our common stock. Risks Relating to Regulatory Matters If we do not obtain and maintain the regulatory approvals or clearances required to market and sell our products, then our business may be unsuccessful and the market price of our stock may decline. If the FDA or other regulatory agencies place restrictions on, or impose additional approval requirements with respect to, products we are then marketing, we may incur substantial additional costs and experience delays or difficulties in continuing to market and sell these products. Even if we obtain the necessary FDA clearances or approvals, if we or our suppliers fail to comply with ongoing regulatory requirements our products could be subject to corrections, removals or recalls from the market or other enforcement action. We may be subject, directly or indirectly, to federal and state healthcare fraud and abuse laws and regulations and, if we are unable to fully comply with such laws, could face substantial penalties. Risks Relating to Our Intellectual Property If we are unable to obtain patent protection for our products, their competitive value could decline. If we become involved in expensive patent litigation or other proceedings to enforce or defend our patent rights, we could incur substantial costs and expenses or substantial liability for damages or be required to stop our product development and commercialization efforts. If any of our licenses to use third-party technologies in our products are terminated, we may be unable to develop, market or sell our products. Risks Relating to the Production and Supply of Our Products If we experience manufacturing delays or interruptions in production, then we may experience customer dissatisfaction and our reputation could suffer. Because we rely on a limited number of suppliers, we may experience difficulty in meeting our customers demands for our products in a timely manner or within budget. Risks Relating to Our Foreign Operations If we are unable to meet the operational, legal and financial challenges that we encounter in our international operations, we may not be able to grow our business. Because we translate foreign currency from international sales into U.S. dollars and are required to make foreign currency payments, we may incur losses due to fluctuations in foreign currency exchange rates. Risk Relating to Our Stock Price Because the market price of our stock is highly volatile, investments in our stock could rapidly lose their value and we may incur significant costs from class action litigation.

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919015--3/27/2007--BIOSPHERE_MEDICAL_INC