930553--3/16/2007--ISTA_PHARMACEUTICALS

related topics

{product, liability, claim}

{stock, price, share}

{product, candidate, development}

{product, market, service}

{provision, law, control}

{stock, price, operating}

{acquisition, growth, future}

{personnel, key, retain}

{debt, indebtedness, cash}

{property, intellectual, protect}

{loss, insurance, financial}

{control, financial, internal}

Risks Related to Our Business If we do not receive and maintain regulatory approvals for our products or product candidates, we will not be able to commercialize our products, which would substantially impair our ability to generate revenues and materially harm our business and financial condition. If our products do not gain market acceptance, our business will suffer because we might not be able to fund future operations. If we fail to properly manage our anticipated growth, our business could suffer. We have a history of net losses and negative cash flow, and we may need to raise additional working capital. If we default under our indebtedness, we could be required to immediately repay all outstanding borrowings, which could negatively impact our financial position. If actual future payments for allowances, discounts, returns, rebates and chargebacks exceed the estimates we made at the time of the sale of our products, our financial position, results of operations and cash flows may be materially and negatively impacted. Our quarterly results may fluctuate significantly and could fall below the expectations of securities analysts and investors, resulting in a decline in our stock price. If we have problems with our contract manufacturers, our product development and commercialization efforts could be delayed or stopped. Our collaborative partners may terminate, or fail to perform their duties under, our collaboration agreements, in which case our ability to commercialize our products may be significantly impaired. If we have problems with our sole source suppliers, our product development and commercialization efforts for our product candidates could be delayed or stopped. Our dependence upon key personnel to operate our business puts us at risk of a loss of expertise if key personnel were to leave us. Risks Related to Our Industry Compliance with extensive government regulations to which we are subject is expensive and time consuming, and may result in the delay, cessation or cancellation of product sales, introductions or modifications. We may be required to initiate or defend against legal proceedings related to intellectual property rights, which may result in substantial expense, delay and/or cessation of our development and commercialization of our products. If third-party reimbursement is not available at satisfactory levels or at all, our products may not be accepted in the market. Sales of our products may continue to be adversely affected by the continuing consolidation of our distribution network and the concentration of our customer base. The rising cost of healthcare and related pharmaceutical product pricing has lead to cost-containment pressures that could cause us to sell our products at lower prices, resulting in less revenue to us. We face intense competition and rapid technological change that could result in the development of products by others that are superior to the products we are developing. In addition, we face competition from manufacturers of generic drugs which may have an adverse impact on our product revenues. We are exposed to product liability claims, and insurance against these claims may not be available to us on reasonable terms, or at all. Risks Related to Our Stock Our stock price is subject to significant volatility. Trading in our stock over the last 12 months has been limited, so investors may not be able to sell as much stock as they want at prevailing prices. Substantial future sales of our common stock in the public market may depress our stock price and make it difficult for you to recover the full value of your investment in our shares. Concentration of ownership and contractual board rights could delay or prevent a change in control or otherwise influence or control most matters submitted to our stockholders and could enable certain shareholders to exert control over us and our significant corporate decisions. Our stockholder rights plan, provisions in our charter documents, and Delaware law may inhibit a takeover of us, which could limit the price investors might be willing to pay in the future for our common stock, and could entrench management. We do not anticipate declaring any cash dividends on our common stock.

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930553--3/16/2007--ISTA_PHARMACEUTICALS_INC