927829--3/19/2009--NITROMED

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Risks Relating to Our Proposed Merger with Deerfield Management Our proposed merger with Deerfield Management may be delayed, enjoined by a court or not occur at all for a variety of reasons, including the possibility that the merger agreement is terminated prior to the completion of the merger. Even if our proposed merger with Deerfield Management is completed, our stockholders may receive less consideration than $0.80 for each share of our common stock, depending on our net cash balance at the closing of the merger. During the pendency of the merger with Deerfield Management, we may not be able to enter into a business combination with another party because of restrictions in the merger agreement. Class action litigation could require us to incur significant costs and suffer management distraction, as well as delay and/or enjoin our potential merger with Deerfield Management. Risks Relating to Our Business, Strategy and Financial Condition We have discontinued active promotional activities related to our only commercially-available product, BiDil, which is likely to significantly adversely affect our future revenue and our ability to continue to fund our operations, including supporting continued sales of BiDil and development of BiDil XR. We have a history of operating losses and, if we are not able to complete the merger with Deerfield Management, we will require substantial additional amounts of cash to fund our operating plan, including our plans to support any continued sales of BiDil and seek to develop and commercialize BiDil XR. If additional capital is not available, we may be required to cease operations. Commercialization risks and other factors may adversely affect our ability to maintain sales of BiDil and, if successfully developed, BiDil XR. If the third-party manufacturer of BiDil encounters delays or difficulties in production, we may not be able to meet demand for the product and we may lose potential revenue, which would adversely affect our financial results and our ability to execute our business plan. We rely on a single supplier for one of the two active ingredients in BiDil, and the loss of this supplier could prevent or interrupt the sale of BiDil, which would materially harm our business. BiDil is subject to ongoing regulatory review and oversight. If we fail to comply with continuing United States regulations, we could lose our approval to market BiDil and our business would be seriously harmed. Clinical testing of BiDil XR may not be successful, in which case we may be unable to commercialize BiDil XR and the value of our business will substantially decline. If we are not able to obtain required regulatory approvals, we will not be able to commercialize BiDil XR and our ability to generate revenue will be materially impaired. The development and future commercialization of BiDil XR may be terminated or delayed, and the cost of development and future commercialization may increase, if third parties on whom we rely to manufacture BiDil XR do not fulfill their obligations. Risks Relating to Our Intellectual Property Rights Our patent protection for BiDil, the individual components of which are available in generic form, is limited, and we may be subject to generic substitution or competition and resulting pricing pressure. If we are not able to obtain and enforce patent protection for our discoveries, our ability to divest our product candidates and technologies will be harmed. If we become involved in patent litigation or other proceedings to enforce our patent rights, we would incur substantial costs and expenses, could incur substantial liability for damages and could be required to stop product development and commercialization efforts. We in-license a significant portion of our principal proprietary technologies, and if we fail to comply with our obligations under any of the related agreements, we could lose license rights that are necessary to commercializing BiDil and out-licensing our other product candidates. Risks Relating to Our Industry We could be negatively impacted by the application or enforcement of federal and state fraud and abuse laws, including anti-kickback laws and other federal and state anti-referral laws. We face significant competition and our ability to successfully compete has been significantly adversely affected by our discontinuation of promotional activities for BiDil, which may result in others commercializing competitive products more successfully . We may be exposed to product liability claims and may not be able to obtain or maintain adequate product liability insurance. Risks Relating to Our Common Stock The price of our common stock is likely to continue to be volatile in the future. Insiders have substantial control over us and could delay or prevent a change in corporate control. Provisions in our charter documents and under Delaware law may prevent or frustrate attempts by stockholders to change current management and hinder efforts to acquire a controlling interest in our company. Substantially all of our outstanding common stock may be sold into the market at any time. This could cause the market price of our common stock to drop significantly.

Full 10-K form ▸

927829--3/19/2009--NITROMED_INC