934473--3/15/2006--GENVEC

related topics

{product, candidate, development}

{property, intellectual, protect}

{product, liability, claim}

{customer, product, revenue}

{cost, regulation, environmental}

{acquisition, growth, future}

{competitive, industry, competition}

We will have no product revenues in the near term and may need to raise additional capital to operate our business. Our ability to develop, obtain regulatory approval of and commercialize our potential products depends, in part, on collaborations with other companies. If we are unable to find collaborators, we may not be able to develop, test and commercialize our products. We have experienced, and may continue to experience, delays in conducting our clinical trials. We cannot be sure that our collaborators will perform as expected, and collaborations might produce conflicts that could delay or prevent the development or commercialization of our potential product candidates and negatively impact our business and financial condition. Our collaboration agreements may prohibit us from conducting research in areas that may compete with our collaboration products, while our collaborators may not be limited to the same extent. This could negatively affect our ability to develop products and, ultimately, prevent us from achieving a continuing source of revenues. We are an early stage company deploying unproven technologies, and we may never be able to develop, get regulatory approval of, or market any of our product candidates. If we fail to adequately show the safety and efficacy of our product candidates, we will not be able to obtain FDA approval of our product candidates. Because we or our collaborators must obtain regulatory approval to market our products in the United States and in non-U.S. jurisdictions, we cannot predict whether or when we will be permitted to commercialize our products; failure to comply with applicable regulations can also harm our business and operations. If we or our collaborators are unable to manufacture our products in sufficient quantities or are unable to obtain regulatory approvals for a manufacturing facility for our products, we may experience delays, and be unable to meet demand, and may lose potential revenues. If successful large-scale manufacturing of gene-based medicines is not possible, we may be unable to manufacture enough of our product candidates to achieve regulatory approval or market our products. We may experience difficulties or delays in product manufacturing, which are beyond our control and could harm our business, because we rely on third-party manufacturers. We rely on a limited number of suppliers for some of our manufacturing materials. Any problems experienced by any of these suppliers could negatively affect our operations. We have limited marketing capabilities, and if we are unable to enter into collaborations with marketing partners or develop our own sales and marketing capability, we may not be successful in commercializing our products. We face substantial competition from other companies and research institutions that are developing products to treat the same diseases that our product candidate s target, and we may not be able to compete successfully. RISKS RELATED TO OUR INDUSTRY If we are unable to adequately protect our intellectual property rights, our competitors may be able to take advantage of our research and development efforts to compete with us. If our potential products conflict with intellectual property rights of competitors, universities or others, then we may be prevented from developing those product candidates. If our right to use intellectual property we license from others is affected, our ability to develop and commercialize our product candidates may be harmed. Adverse events in the field of gene therapy may negatively affect regulatory approval or public perception of our products or product candidates. We may be sued for product liability, which could damage our reputation and expose us to unanticipated costs. We use hazardous chemicals and radioactive and biological materials in our business; any liability or disputes relating to improper handling, storage or disposal of these materials could be time consuming and costly. If reforms in the health care industry make reimbursement for our potential products less likely, the market for our potential products will be reduced, and we will lose potential sources of revenue.

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934473--3/15/2006--GENVEC_INC