926617--4/2/2007--CIPHERGEN_BIOSYSTEMS

related topics

{product, candidate, development}

{property, intellectual, protect}

{product, liability, claim}

{stock, price, share}

{competitive, industry, competition}

{cost, regulation, environmental}

{product, market, service}

{personnel, key, retain}

{debt, indebtedness, cash}

{provision, law, control}

{operation, international, foreign}

{financial, litigation, operation}

{system, service, information}

We may not succeed in developing diagnostic products and even if we do succeed in developing diagnostic products, they may never achieve significant commercial market acceptance. Our ability to commercialize our potential diagnostic tests is heavily dependent on our strategic alliance with Quest Diagnostics. The commercialization of our diagnostic tests may be adversely impacted by changing FDA regulations. If we fail to continue to develop our technologies, we may not be able to successfully foster adoption of our products and services or develop new product offerings. If we fail to maintain our rights to utilize intellectual property directed to diagnostic biomarkers, we may not be able to offer diagnostic tests using those biomarkers. If the United States Patent and Trademark Office significantly narrows or cancels the claims of United States Patent 6,734,022, which is presently under re-examination, we will not receive a $2,000,000 potential payment and may lose market exclusivity for certain of our potential products. We have drawn funds from the $10 million secured line of credit provided by Quest Diagnostics. If we fail to achieve the loan forgiveness milestones set forth therein, we will be responsible for full repayment of the loan. If a competitor infringes our proprietary rights, we may lose any competitive advantage we may have as a result of diversion of management time, enforcement costs and the loss of the exclusivity of our proprietary rights. If others successfully assert their proprietary rights against us, we may be precluded from making and selling our products or we may be required to obtain licenses to use their technology. If we or our future potential partners fail to comply with FDA requirements, we may not be able to market our products and services and may be subject to stringent penalties; further improvements to our manufacturing operations may be required that would entail additional costs. Because our business is highly dependent on key executives and employees, our inability to recruit and retain these people could hinder our business plans. Our diagnostic efforts may cause us to have significant product liability exposure. Business interruptions could limit our ability to operate our business. Legislative actions resulting in higher compliance costs are likely to adversely impact our future financial position, cash flows and results of operations. Our business is subject to risks from international operations. We are subject to environmental laws and potential exposure to environmental liabilities. Anti-takeover provisions in our charter, bylaws and stockholder rights plan and under Delaware law could make a third party acquisition of us difficult. Because we do not intend to pay dividends, our stockholders will benefit from an investment in our common stock only if it appreciates in value. Substantial leverage and debt service obligations may adversely affect our cash flows. Our stock price has been highly volatile, and an investment in our stock could suffer a decline in value, adversely affecting the value of the notes or the shares into which those notes may be converted.

Full 10-K form ▸

926617--4/2/2007--CIPHERGEN_BIOSYSTEMS_INC