932352--9/28/2006--VALENTIS

related topics

{product, candidate, development}

{property, intellectual, protect}

{stock, price, share}

{financial, litigation, operation}

{control, financial, internal}

{acquisition, growth, future}

{provision, law, control}

{product, market, service}

{cost, operation, labor}

{interest, director, officer}

{operation, natural, condition}

{investment, property, distribution}

{stock, price, operating}

Our business to date has been largely dependent on the success of VLTS 934. In July 2006, we announced that our Phase IIb clinical trial of VLTS 934 failed to meet any of its primary or secondary endpoints and that we had no further plans for the development of VLTS 934. We have undertaken restructuring activities since our announcement, but we may be unable to successfully manage our remaining resources, including available cash, which would adversely affect our business and may require us to seek bankruptcy protection. We have received a going concern opinion from our independent registered public accounting firm, which may negatively impact our business. We may engage in strategic alternatives, which could materially adversely affect our business. If we are unsuccessful in consummating a suitable strategic alternative, we may be required to seek bankruptcy protection. Our remaining potential products and technologies are in early stages of development. We have no current plans to continue the development of any of these potential products or technologies and any efforts to develop and commercialize these potential products or technologies would be subject to a high risk of failure. In addition, we do not have sufficient resources to pursue the development of any of these potential products or technologies. We have a history of losses and may never be profitable. We announced a significant reduction in our workforce in August 2006 and we anticipate further substantial reductions in our workforce will occur. As a result of our financial condition and actual and anticipated workforce reductions, we may not be successful in retaining key employees or in attracting additional qualified personnel, which could adversely affect our efforts to effectively manage our remaining resources and explore or consummate any strategic opportunities that may be available to us. There are no assurances that we can maintain our listing on The Nasdaq Capital Market, and the failure to maintain this listing could adversely affect the liquidity and price of our common stock. Our stock price has been and may continue to be volatile, and an investment in our common stock could suffer a decline in value. We may engage in strategic alternatives, which could result in changes to our management and Board of Directors, which could result in material changes to our business operations, strategies and focus moving forward. Certain of our collaboration, contract research, license and other agreements may be affected as a result of our current business focus on strategic alternatives. The parties to such agreements may be able to terminate such agreements if we are unable to perform our obligations under such agreements or if we pursue certain types of strategic alternatives, which could prevent or delay us from consummating certain strategic alternatives and reduce the value of our remaining potential products and technologies. Our stock price could be adversely affected by dispositions of our shares pursuant to registration statements currently in effect. We must be able to continue to secure additional financing in order to continue our operations, which might not be available or which, if available, may be on terms that are not favorable to us. We may become involved in securities class action litigation that could divert management s attention and harm our business. Due to our financial condition, we may be unable to attract and retain corporate or academic partners to develop, introduce and market our remaining potential products and technologies. Our potential products are subject to extensive regulatory approval by the FDA and others, including with regard to completion of clinical trials, which is expensive, time consuming and uncertain. We cannot assure you that any of our remaining potential products or technologies will be approved. We face strong competition in the markets we have targeted from other companies with substantially greater experience, financial resources and name recognition than us, and competition from alternative treatments in the biopharmaceuticals market. If our potential products and technologies do not remain competitive, their value may be materially diminished. Adverse events in the field of cardiovascular therapies may negatively impact regulatory approval or public perception of our potential products and technologies. If we are unable to obtain rights to required technologies including poloxamer, proprietary gene sequences, proteins or other technologies, we will be unable to operate our business. We rely on patents and other proprietary rights to protect our intellectual property and any inability to protect our intellectual property rights would adversely impact our business. We could become subject to litigation regarding our intellectual property rights, which could seriously harm our business. We may experience delays in the commercial introduction, manufacture or regulatory approval of our potential products as a result of failure to comply with FDA manufacturing practices and requirements. If we are unable to complete our assessment as to the adequacy of our internal control over financial reporting within the required time periods as required by Section 404 of the Sarbanes-Oxley Act of 2002, or in the course of such assessments identify and report material weaknesses in our controls, investors could lose confidence in the reliability of our financial statements, which could result in a decrease in the value of our common stock. Our certificate of incorporation and by-laws include anti-takeover provisions that may enable our management to resist an unwelcome takeover attempt by a third party. The concentration of ownership among our executive officers, directors and their affiliates may delay or prevent a change in our corporate control. If our facilities were to experience an earthquake or other catastrophic loss, our operations would be seriously harmed.

Full 10-K form ▸

932352--9/28/2006--VALENTIS_INC