927829--3/2/2006--NITROMED

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{product, candidate, development}

{product, liability, claim}

{property, intellectual, protect}

{provision, law, control}

{stock, price, share}

{customer, product, revenue}

{regulation, government, change}

{financial, litigation, operation}

{control, financial, internal}

{cost, operation, labor}

{cost, contract, operation}

{loss, insurance, financial}

{stock, price, operating}

Risks Relating to our Business Our business is substantially dependent on the commercial success of BiDil, and if sales of BiDil do not increase our business will be materially harmed and our stock price will decline. If we do not successfully market and sell BiDil or our other product candidates, either directly or through third parties, our future revenue will be limited. Physicians, payors and patients may not be receptive to BiDil or our other product candidates, if approved, which could prevent us from achieving and maintaining profitability. We currently market BiDil only in the United States. Key participants in the U.S. pharmaceutical marketplace, such as physicians, payors and patients, may not accept a product intended to improve therapeutic results based on ethnicity. As a result, it may be more difficult for us to convince the medical community, third-party payors and patients to accept and use BiDil. Our business is substantially dependent on market acceptance of BiDil. We will require substantial additional cash to fund our operating plan, including commercializing BiDil, and, if additional capital is not available, we may need to limit, scale back or cease our operations. Poor performance by our contract sales organization or difficulties arising in our planned transition to an internal sales force could prevent us from achieving the significant growth we need to achieve in BiDil revenues. Because we have a history of losses and our future profitability is uncertain, our common stock is a highly speculative investment. The availability of lower priced generic substitutes for BiDil may adversely affect our sales of BiDil and the pricing or reimbursement we are able to obtain for BiDil. We may not have the technology internally to successfully develop BiDil XR and we may not be able to acquire such technology on favorable terms, if at all. 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. The development and commercialization of our product candidates may be terminated or delayed, and the cost of development and commercialization may increase, if third parties on whom we rely to manufacture our products do not fulfill their obligations. We rely on a single source supplier for one of the two active ingredients in BiDil, and the loss of this supplier could prevent us from selling BiDil, which would materially harm our business. If our partners and we do not obtain and maintain the regulatory approvals required to market and sell our product candidates, then our business will be unsuccessful, and the market price of our stock will substantially decline. Even if we obtain regulatory approvals, our marketed products, including BiDil, will be subject to ongoing regulatory review. If we fail to comply with continuing United States and foreign regulations, we could lose our approvals to market our products and our business would be seriously harmed. If we, our third-party manufacturers or our service providers fail to comply with applicable laws and regulations, we or they could be subject to enforcement actions, which could affect our ability to market and sell our products and harm our reputation. The application of our nitric oxide technology is unproven in humans and, as a result, we may not be able to successfully develop and commercialize any products based upon this technology. If our clinical trials for any product candidates we advance into clinical testing are not successful, we may not be able to successfully develop and commercialize these product candidates. Our failure to successfully acquire, develop and market additional drug candidates or approved drugs would impair our ability to grow. The expiration of the research term under our collaboration agreement with Boston Scientific has resulted in the loss of potential royalty-based revenue from the collaboration and may indicate that the development of nitric oxide-enhancing stents is not viable. The termination of our collaboration agreement with Merck, resulting from Merck s decision to withdraw its COX-2 inhibitor, Vioxx, from worldwide markets, has resulted in the loss of potential milestone and royalty-based revenue from the collaboration and may indicate that the development of nitric oxide-enhancing COX-2 inhibitors is not viable. Any future collaborative arrangements that we seek to enter into with third parties may not be scientifically or commercially successful. If the estimates we make and the assumptions on which we rely in preparing our financial statements prove inaccurate, our actual results may vary significantly. Risks Relating to our Intellectual Property Rights Our patent protection for BiDil, which is a combination of two generic drugs, 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 develop and commercialize our product candidates will be harmed, and we may not be able to operate our business profitably. If we become involved in patent litigation or other proceedings to enforce our patent rights, we would incur substantial costs and expenses, substantial liability for damages and/or be required to stop our 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 developing our other product candidates. Risks Relating to our Industry If the government or third-party payors do not reimburse patients for BiDil or any of our product candidates that are approved for marketing, or do not reimburse such products at favorable levels, they might not be used or purchased, and our revenues and profits will be adversely affected. 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, which may result in others discovering, developing or commercializing products before or more successfully than we do. 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 c 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. We may incur significant costs and suffer management distraction and reputational damage from class action litigation and regulatory or government investigations and actions due to trading in our common stock.

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927829--3/2/2006--NITROMED_INC