942788--3/20/2006--NEOPHARM

related topics

{product, candidate, development}

{property, intellectual, protect}

{product, liability, claim}

{stock, price, share}

{acquisition, growth, future}

{financial, litigation, operation}

{provision, law, control}

{control, financial, internal}

{system, service, information}

{product, market, service}

{personnel, key, retain}

{cost, contract, operation}

{cost, regulation, environmental}

{loan, real, estate}

{cost, operation, labor}

{stock, price, operating}

If we were unable to develop, obtain regulatory approvals for, and then market our drug product candidates, our business would be harmed. We are highly dependent on achieving success in the clinical testing, regulatory approval, and commercialization of our most advanced drug product candidate, cintredekin besudotox, which may never be approved for commercial use. If we are unable to commercialize cintredekin besudotox, our ability to generate revenues would be impaired and our business would be harmed. Because all of our drug product candidates are in clinical development, there is a high risk that further development and testing will demonstrate that our drug product candidates are not approvable or suitable for commercialization, which could cause our business to suffer. Our business is subject to extensive governmental regulation, and failure to comply with those regulations can lead to unanticipated delays in product development and approval and can prevent commercialization. We have a history of operating losses, expect to continue to incur losses for the foreseeable future, and may never be profitable. Budget constraints may force us to delay our efforts to develop certain drug product candidates in favor of developing others, which may prevent us from commercializing all drug product candidates as quickly as possible. Competition in the biopharmaceutical field is intense and subject to rapid technological change. Our principal competitors have substantially greater resources to develop and market products that may be superior to ours. Our stock price has been and is likely to continue to be volatile, and an investment in our common stock could decline in value. We are currently named as a defendant in a number of securities class action lawsuits. The volatility of our stock increases the risk that additional securities class action litigation could be instituted against us in the future. The SEC has initiated an investigation of the Company. We believe that this investigation was initiated as a consequence of our arbitration proceeding, now concluded, involving Pharmacia s development of LEP and LED and the class action lawsuits involving our public statements regarding LEP. We will need to raise additional capital in the future. If additional capital is not available, we may have to curtail or cease operations. We depend on third parties for a variety of functions, including the research and development, manufacturing, clinical testing, and regulatory compliance of our drug product candidates. No assurance can be given that these third parties arrangements will allow us to successfully develop and manufacture and market our drug product candidates. If we, or our suppliers, fail to comply with FDA and other government regulations, our manufacturing operations could be interrupted, and our drug product development, future sales, and profitability would suffer. We do not have sales, marketing, or distribution experience, which means we must either enter into agreements with third parties to market or co-promote our drug product candidates or develop marketing expertise ourselves. Our lack of operating experience may cause us difficulty in managing our growth. We depend on intellectual property rights licensed from third parties. If we fail to meet our obligations under our license agreements, or if technology licensed to us is subject to the rights of others, we could lose our rights of exclusivity of use to key technologies on which our business depends. Because of our dependence on intellectual property rights licensed to us by third parties, any adverse development in our relationship with these licensors, including a dispute regarding our rights under the agreements or the grant of rights by our licensors to others, could materially and adversely affect our right to commercialize the products we are developing or preclude others from commercializing these products. Our inability to adequately protect our proprietary technologies could harm our competitive position and have a material adverse effect on our business. We may be sued for infringing on the intellectual property rights of others. We may in the future be a party to patent litigation, which could be expensive and divert our management s attention. If we lose key management personnel or are unable to attract and retain the talent required for our business, our business could be harmed. The demand for our drug product candidates, if any, may be adversely affected by health care reform and potential limitations on third-party reimbursement. Physicians, patients, payors, or the medical community in general may be unwilling to accept, utilize, or recommend any of our drug products, and the failure to achieve market acceptance will harm our business. Our investments could lose market value and consequently harm our ability to fund continuing operations. We handle hazardous materials and must comply with environmental laws and regulations, which can be expensive and restrict how we do business. We could also be liable for damages, penalties, or other forms of censure if we are involved in a hazardous waste spill or other accident. We may have product liability exposure, and insurance against such claims may not be available to us at reasonable rates or at all. Anti-takeover provisions could make a third party acquisition of us or the removal of our board of directors or management more difficult. The issuance of preferred stock could adversely affect the holders of our common stock. If there are substantial sales of common stock, the market price of our common stock could decline.

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942788--3/20/2006--NEOPHARM_INC