924717--12/14/2010--SURMODICS

related topics

{property, intellectual, protect}

{product, candidate, development}

{acquisition, growth, future}

{customer, product, revenue}

{stock, price, operating}

{product, liability, claim}

{regulation, change, law}

{tax, income, asset}

{cost, regulation, environmental}

{product, market, service}

{personnel, key, retain}

{regulation, government, change}

{cost, contract, operation}

{system, service, information}

Drug delivery and surface modification are competitive markets and carry the risk of technological obsolescence. We could face adverse consequences as a result of the actions of a major stockholder. Failure to identify strategic investment and acquisition opportunities may limit our growth. The acquisitions that we have made, or any future acquisitions that we undertake could be difficult to integrate, disrupt our business, dilute shareholder value, or harm our operating results. Goodwill or other assets on our balance sheet may become impaired, which could have a material adverse effect on our operating results. Research and development costs may adversely affect our operating results. Our failure to expand our management systems and controls to support our business and integrate acquisitions could seriously harm our operating results and business. We recognize revenue in accordance with various complex accounting standards, and changes in circumstances or interpretations may lead to accounting adjustments. RISKS RELATING TO OUR OPERATIONS AND RELIANCE ON THIRD PARTIES We rely on third parties to market, distribute and sell most products incorporating our technologies, and those third parties may not perform or agreements with those parties could be terminated. We have limited or no redundancy in our manufacturing facilities, and we may lose revenue and be unable to maintain our customer relationships if we lose our production capacity or are unable to successfully manage the transition of our BioFX manufacturing operations. We have limited experience manufacturing pharmaceutical products, and we may be subject to adverse consequences if we fail to comply with applicable regulations or contractual obligations. We may face product liability claims related to participation in clinical trials, the use or misuse of our products or the manufacture and supply of pharmaceutical products. Our revenue will be harmed if we cannot purchase sufficient reagent components we use in our manufacture of reagents. We are dependent upon key personnel and may not be able to attract qualified personnel in the future. RISKS RELATING TO OUR INTELLECTUAL PROPERTY If we cannot adequately protect our technologies and proprietary information, we may be unable to sustain a competitive advantage. We may become involved in expensive and unpredictable patent litigation or other intellectual property proceedings which could result in liability for damages, or impair our development and commercialization efforts. If we are unable to keep our trade secrets confidential, our technology and proprietary information may be used by others to compete against us. If we or any of our licensees breach any of the agreements under which we have in-licensed intellectual property from others, we could be deprived of important intellectual property rights and future revenue. RISKS RELATING TO CLINICAL AND REGULATORY MATTERS Healthcare policy changes, including new legislation intended to reform the U.S. healthcare system, may have a material adverse effect on us. Products incorporating our technologies are subject to continuing regulations and extensive approval or clearance processes. If our licensees are unable to obtain or maintain the necessary regulatory approvals or clearances for such products, then our licensees will not be able to commercialize those products on a timely basis, if at all. We may face liability if we mishandle or improperly dispose of the hazardous materials used in some of our research, development and manufacturing processes. RISKS RELATING TO OUR SECURITIES Our stock price has been volatile and may continue to be volatile.

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924717--12/14/2010--SURMODICS_INC