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EXHIBIT 99.1
RISK FACTORS
Certain statements made in this Quarterly Report on Form 10-Q are
forward-looking statements based on our current expectations, assumptions,
estimates and projections about our business and our industry. These
forward-looking statements involve risks and uncertainties. Our business,
financial condition and results of operations could differ materially from those
anticipated in these forward-looking statements as a result of certain factors,
as more fully described below and elsewhere in this Form 10-Q. You should
consider carefully the risks and uncertainties described below, which are not
the only ones facing our company. Additional risks and uncertainties also may
impair our business operations.
RISKS RELATED TO OUR BUSINESS
THE LOSS OF ONE OF OUR MAJOR CUSTOMERS COULD REDUCE OUR REVENUES SIGNIFICANTLY.
Revenues from AstraZeneca, N.V. Organon and Novartis together represented
approximately 85% of our total revenues for the year ended December 31, 1999 and
for the nine months ended September 30, 2000. The loss of any one of these
customers could cause our revenues to decrease significantly, resulting in
losses from our operations. If we cannot broaden our customer base, we will
continue to depend on a few customers for the majority of our revenues. We may
be unable to negotiate favorable business terms with customers that represent a
significant portion of our revenues. If we cannot, our revenues and gross
profits may not grow as expected and may be insufficient to allow us to achieve
sustained profitability.
WE RELY ON THIRD PARTIES TO MARKET, DISTRIBUTE AND SELL THE PRODUCTS
INCORPORATING OUR DRUG DELIVERY TECHNOLOGIES AND THOSE THIRD PARTIES MAY NOT
PERFORM.
Our pharmaceutical company partners market and sell the products we develop
and manufacture. If one or more of our pharmaceutical company partners fails to
pursue the marketing of our products as planned, our revenues and gross profits
may not reach our expectations, or may decline. We often cannot control the
timing and other aspects of the development of products incorporating our
technologies because our pharmaceutical company partners may have priorities
that differ from ours. Therefore, our commercialization of products under
development may be delayed unexpectedly. Because we incorporate our drug
delivery technologies into the oral dosage forms of products marketed and sold
by our pharmaceutical company partners, we do not have a direct marketing
channel to consumers for our drug delivery technologies. The marketing
organizations of our pharmaceutical company partners may be unsuccessful, or
they may assign a low level of priority to the marketing of our products that is
different from our priorities. Further, they may discontinue marketing the
products that incorporate our drug delivery technologies. If marketing efforts
for our products are not successful, our revenues may fail to grow as expected
or may decline.
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EXHIBIT 99.1
IF WE DO NOT ENTER INTO ADDITIONAL COLLABORATIVE AGREEMENTS WITH
PHARMACEUTICAL COMPANIES, WE MAY NOT BE ABLE TO ACHIEVE SUSTAINED PROFITABILITY.
We depend upon collaborative agreements with pharmaceutical companies to
develop, test and obtain regulatory approval for, and commercialize oral dosage
forms of, active pharmaceutical ingredients using our drug delivery
technologies. The number of products that we successfully develop under these
collaborative agreements will affect our revenues. If we do not enter into
additional agreements in the future, or if our current or future agreements do
not result in successful marketing of our products, our revenues and gross
profits may be insufficient to allow us to achieve sustained profitability. We
currently have collaborative agreements with American Home Products,
AstraZeneca, Bristol-Myers Squibb, N.V. Organon, Novartis and Schwarz Pharma.
We face additional risks related to our collaborative agreements, including
the risks that:
* any existing or future collaborative agreements may not result in
additional commercial products;
* additional commercial products that we may develop may not be successful;
* we may not be able to meet the milestones established in our current or
future collaborative agreements; and
* we may not be able to successfully develop new drug delivery technologies
that will be attractive in the future to potential pharmaceutical company
partners.
IF WE CANNOT INCREASE OUR PRODUCTION CAPACITY, WE MAY BE UNABLE TO MEET
EXPECTED DEMAND FOR OUR PRODUCTS AND WE MAY LOSE REVENUES.
We must increase our production capacity to meet expected demand for our
products. We currently have one production line and a second line is being
developed. If we are unable to increase our production capacity as scheduled, we
may be unable to meet expected demand for our products, we may lose revenues and
we may not be able to maintain our relationships with our pharmaceutical company
partners. Production lines in the pharmaceutical industry generally take 16 to
24 months to complete due to the long lead times required for precision
production equipment to be manufactured and installed, as well as the required
testing and validation process that must be completed once the equipment is
installed. We expect our second production line to be operational in the second
half of 2001, although we may experience difficulties that could delay our
ability to increase our manufacturing capacity. We may not be able to increase
our production capacity quickly enough to meet the requirements of our
pharmaceutical company partners with whom we are developing our drug delivery
technologies.
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EXHIBIT 99.1
IF WE DO NOT PROPERLY MANAGE OUR GROWTH, WE MAY BE UNABLE TO SUSTAIN THE
LEVEL OF REVENUES WE HAVE ATTAINED OR EFFECTIVELY PURSUE ADDITIONAL BUSINESS
OPPORTUNITIES.
Our revenues increased 82% from the nine months ended September 30, 1999 to
the nine months ended September 30, 2000, placing significant strain on our
management, administrative and operational resources. If we do not properly
manage the growth we have recently experienced and expect in the future, our
revenues may decline or we may be unable to pursue sources of additional
revenues. To properly manage our growth, we must, among other things, implement
additional and improve existing administrative, financial and operational
systems, procedures and controls on a timely basis. We will also need to expand
our finance, administrative and operations staff. We may not be able to complete
the improvements to our systems, procedures and controls necessary to support
our future operations in a timely manner. We may not be able to hire, train,
integrate, retain, motivate and manage required personnel and may not be able to
successfully identify, manage and pursue existing and potential market
opportunities. Improving our systems and increasing our staff will increase our
operating expenses. If we fail to generate additional revenue in excess of
increased operating expenses in any fiscal period we may incur losses, or our
losses may increase in that period.
IF WE CANNOT ATTRACT AND RETAIN KEY PERSONNEL ON WHICH WE DEPEND, WE MAY
NOT BE ABLE TO EXECUTE OUR BUSINESS PLAN AS ANTICIPATED.
During our operating history, we have assigned many key responsibilities
within our company to a relatively small number of individuals. If we lose the
services of John Siebert, our Chief Executive Officer, or John Hontz, our Chief
Operating Officer, we may have difficulty executing our business plan in the
manner we currently anticipate. The competition for qualified personnel is
intense and the loss of services of key personnel could adversely affect our
business. We have an employment agreement that runs to January 1, 2004 with Dr.
Siebert and an employment agreement that runs to September 1, 2004 with Dr.
Hontz. We do not maintain key person life insurance for any of our key
personnel.
WE MAY EXPERIENCE SIGNIFICANT DELAYS IN EXPECTED PRODUCT RELEASES WHILE OUR
PHARMACEUTICAL COMPANY PARTNERS SEEK REGULATORY APPROVALS FOR THE PRODUCTS WE
DEVELOP AND, IF THEY ARE NOT SUCCESSFUL IN OBTAINING THE APPROVALS, WE MAY BE
UNABLE TO ACHIEVE OUR ANTICIPATED REVENUES AND PROFITS.
The federal government, principally the U.S. Food and Drug Administration,
and state and local government agencies regulate all new pharmaceutical
products, including our existing products and those under development. Our
pharmaceutical company partners may experience significant delays in expected
product releases while attempting to obtain regulatory approval for the products
we develop. If they are not successful, our revenues and profitability may
decline. We cannot control, and our pharmaceutical company partners cannot
control, the timing of regulatory approval for the products we develop.
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EXHIBIT 99.1
Applicants for FDA approval often must submit extensive clinical data and
supporting information to the FDA. Varying interpretations of the data obtained
from pre-clinical and clinical testing could delay, limit or prevent regulatory
approval of a drug product. Changes in FDA approval policy during the
development period, or changes in regulatory review for each submitted new drug
application, also may cause delays or rejection of an approval. Even if the FDA
approves a product, the approval may limit the uses or "indications" for which a
product may be marketed, or may require further studies. The FDA also can
withdraw product clearances and approvals for failure to comply with regulatory
requirements or if unforeseen problems follow initial marketing.
Manufacturers of drugs also must comply with applicable good manufacturing
practices requirements. If we cannot comply with applicable good manufacturing
practices, we may be required to suspend the production and sale of our
products, which would reduce our revenues and gross profits. We may not be able
to comply with the applicable good manufacturing practices and other FDA
regulatory requirements for manufacturing as we expand our manufacturing
operations.
If our products are marketed in foreign jurisdictions, we, and the
pharmaceutical company partners with whom we are developing our technologies,
must obtain required regulatory approvals from foreign regulatory agencies and
comply with extensive regulations regarding safety and quality. If approvals to
market our products are delayed, if we fail to receive these approvals, or if we
lose previously received approvals, our revenues would be reduced. We may be
required to incur significant costs in obtaining or maintaining foreign
regulatory approvals.
OUR COMMERCIAL PRODUCTS ARE SUBJECT TO CONTINUING REGULATION AND WE MAY BE
SUBJECT TO ADVERSE CONSEQUENCES IF WE FAIL TO COMPLY WITH APPLICABLE
REGULATIONS.
Even if our products receive regulatory approval, either in the U.S. or
internationally, we will continue to be subject to extensive regulatory
requirements. These regulations are wide-ranging and govern, among other things:
* adverse drug experience reporting regulations;
* product promotion;
* product manufacturing, including good manufacturing practice
requirements; and
* product changes or modifications.
If we fail to comply or maintain compliance with these laws and
regulations, we may be fined or barred from selling our products. If the FDA
determines that we are not complying with the law, it can:
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EXHIBIT 99.1
* issue warning letters;
* impose fines;
* seize products or order recalls;
* issue injunctions to stop future sales of products;
* refuse to permit products to be imported into, or exported out of, the
U.S.;
* totally or partially suspend our production;
* withdraw previously approved marketing applications; and
* initiate criminal prosecutions.
WE HAVE A SINGLE MANUFACTURING FACILITY AND WE MAY LOSE REVENUES AND BE
UNABLE TO MAINTAIN OUR RELATIONSHIPS WITH OUR PHARMACEUTICAL COMPANY PARTNERS IF
WE LOSE ITS PRODUCTION CAPACITY.
We manufacture all of the products that we produce on our existing
production line in our Eden Prairie facility. If our existing production line or
facility becomes incapable of manufacturing products for any reason, we may be
unable to meet production requirements, we may lose revenues and we may not be
able to maintain our relationships with our pharmaceutical company partners.
Without our existing production line, we would have no other means of
manufacturing products incorporating our drug delivery technologies until we
were able to restore the manufacturing capability at our facility or develop an
alternative manufacturing facility. Although we carry business interruption
insurance to cover lost revenues and profits in an amount we consider adequate,
this insurance does not cover all possible situations. In addition, our business
interruption insurance would not compensate us for the loss of opportunity and
potential adverse impact on relations with our existing pharmaceutical company
partners resulting from our inability to produce products for them. Although we
currently plan to build a second manufacturing facility to reduce this risk, we
may encounter unforeseen difficulties or delays in doing so.
WE RELY ON SINGLE SOURCES FOR SOME OF OUR RAW MATERIALS AND WE MAY LOSE
REVENUES AND BE UNABLE TO MAINTAIN OUR RELATIONSHIPS WITH OUR PHARMACEUTICAL
COMPANY PARTNERS IF THOSE MATERIALS WERE NOT AVAILABLE FROM THEIR CURRENT
SOURCE.
We rely on single suppliers for some of our raw materials and packaging
supplies. If these raw materials or packaging supplies were no longer available
we may be unable to meet production requirements, we may lose revenues and we
may not be able to maintain our relationships with our pharmaceutical company
partners. Without adequate supplies of raw
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EXHIBIT 99.1
materials or packaging supplies, our manufacturing operations may be
interrupted until another supplier could be identified, its products validated
and trading terms with it negotiated. We may not be able to identify an
alternative supplier in a timely manner, or at all. Furthermore, we may not be
able to negotiate favorable terms with an alternative supplier. Any disruptions
in our manufacturing operations from the loss of a supplier could potentially
damage our relations with our pharmaceutical company partners.
IF WE CANNOT DEVELOP ADDITIONAL PRODUCTS, OUR ABILITY TO INCREASE OUR
REVENUES WOULD BE LIMITED.
We intend to continue to enhance our current technologies and pursue
additional proprietary drug delivery technologies. If we are unable to do so, we
may be unable to achieve our objectives of revenue growth and sustained
profitability. Even if enhanced or additional technologies appear promising
during various stages of development, we may not be able to develop commercial
applications for them because:
* the potential technologies may fail clinical studies;
* we may not find a pharmaceutical company to adopt the technologies;
* it may be difficult to apply the technologies on a commercial scale; or
* the technologies may be uneconomical to market.
IF WE CANNOT KEEP PACE WITH THE RAPID TECHNOLOGICAL CHANGE AND MEET THE
INTENSE COMPETITION IN OUR INDUSTRY, WE MAY LOSE BUSINESS.
Our success depends, in part, on maintaining a competitive position in the
development of products and technologies in a rapidly evolving field. If we
cannot maintain competitive products and technologies, our current and potential
pharmaceutical company partners may choose to adopt the drug delivery
technologies of our competitors. Fast dissolve tablet technologies that compete
with our OraSolv and DuraSolv technologies include the Zydis technology
developed by R.P. Scherer Corporation, a wholly-owned subsidiary of Cardinal
Health, Inc., the WOWTab technology developed by Yamanouchi Shaklee
Pharmaceuticals, the Flashtab technology developed by Laboratories Prographarm
and the FlashDose technology developed by Fuisz Technologies Ltd., a
wholly-owned subsidiary of Biovail Corporation. We also compete generally with
other drug delivery, biotechnology and pharmaceutical companies engaged in the
development of alternative drug delivery technologies or new drug research and
testing. Many of these competitors have substantially greater financial,
technological, manufacturing, marketing, managerial and research and development
resources and experience than we do and represent significant competition for
us.
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EXHIBIT 99.1
Our competitors may succeed in developing competing technologies or
obtaining governmental approval for products before us. The products of our
competitors may gain market acceptance more rapidly than our products.
Developments by competitors may render our products, or potential products,
noncompetitive or obsolete.
IF WE CANNOT ADEQUATELY PROTECT OUR TECHNOLOGY AND PROPRIETARY INFORMATION,
WE MAY BE UNABLE TO SUSTAIN A COMPETITIVE ADVANTAGE.
Our success depends, in part, on our ability to obtain and enforce patents
for our products, processes and technologies and to preserve our trade secrets
and other proprietary information. If we cannot do so, our competitors may
exploit our innovations and deprive us of the ability to realize revenues and
profits from our developments. We have been granted seven patents on our drug
delivery systems in the U.S., which will expire beginning in 2010.
Any patent applications we may have made or may make relating to our
potential products, processes and technologies may not result in patents being
issued. Our current patents may not be valid or enforceable. They may not
protect us against competitors that challenge our patents, obtain patents that
may have an adverse effect on our ability to conduct business or are able to
circumvent our patents. Further, we may not have the necessary financial
resources to enforce our patents.
To protect our trade secrets and proprietary technologies and processes, we
rely, in part, on confidentiality agreements with our employees, consultants and
advisors. These agreements may not provide adequate protection for our trade
secrets and other proprietary information in the event of any unauthorized use
or disclosure, or if others lawfully develop the information.
THIRD PARTIES MAY CLAIM THAT OUR TECHNOLOGIES, OR THE PRODUCTS IN WHICH
THEY ARE USED, INFRINGE ON THEIR PROPRIETARY RIGHTS AND WE MAY INCUR SIGNIFICANT
COSTS RESOLVING THESE CLAIMS.
Third parties may claim that the manufacture, the use or the sale of our
drug delivery technologies infringe on their patent rights. If such claims are
asserted, we may have to seek licenses, defend infringement actions or challenge
the validity of those patents in court. If we cannot obtain required licenses,
are found liable for infringement or are not able to have these patents declared
invalid, we may be liable for significant monetary damages, encounter
significant delays in bringing products to market or be precluded from
participating in the manufacture, use or sale of products or methods of drug
delivery covered by the patents of others. We may not have identified, or be
able to identify in the future, U.S. and foreign patents that pose a risk of
potential infringement claims.
We enter into collaborative agreements with pharmaceutical companies to
apply our drug delivery technologies to drugs developed by others. Ultimately,
we receive license revenues and product development fees, as well as revenues
from the sale of products incorporating our technology and royalties. The drugs
to which our drug delivery technologies are applied are
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EXHIBIT 99.1
generally the property of the pharmaceutical companies. Those drugs may
be the subject of patents or patent applications and other forms of protection
owned by the pharmaceutical companies or third parties. If those patents or
other forms of protection expire, are challenged or become ineffective, sales of
the drugs by the collaborating pharmaceutical company may be restricted or may
cease.
BECAUSE WE HAVE A LIMITED OPERATING HISTORY, POTENTIAL INVESTORS IN OUR
STOCK MAY HAVE DIFFICULTY EVALUATING OUR PROSPECTS.
We recorded the first commercial sales of products using our fast dissolve
technologies in early 1997. Accordingly, we have only a limited operating
history, which may make it difficult for you and other potential investors to
evaluate our prospects. The difficulty investors may have in evaluating our
prospects may cause volatile fluctuations, including decreases, in the market
price of our common stock as investors react to information about our prospects.
Since 1997, we have generated revenues from product development fees and
licensing arrangements, sales of products using our fast dissolve technologies
and royalties. We are currently making the transition from research and product
development operations with limited production to commercial operations with
expanding production capabilities in addition to research and product
development activities. Our business and prospects, therefore, must be evaluated
in light of the risks and uncertainties of a company with a limited operating
history and, in particular, one in the pharmaceutical industry.
IF WE ARE NOT PROFITABLE IN THE FUTURE, THE VALUE OF YOUR INVESTMENT IN OUR
STOCK MAY FALL.
We have accumulated aggregate net losses from inception through September
30, 2000, of approximately $45.2 million. If we are not profitable in the
future, the market price of our stock may fall. The costs for research and
product development of our drug delivery technologies and general and
administrative expenses have been the principal causes of our losses. Our
ability to achieve sustained profitable operations depends on a number of
factors, many of which are beyond our direct control. These factors include:
* the demand for our products;
* our ability to manufacture our products efficiently and with the required
quality;
* our ability to increase our manufacturing capacity;
* the level of product and price competition;
* our ability to develop additional commercial applications for our
products;
* our ability to control our costs; and
* general economic conditions.
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EXHIBIT 99.1
WE MAY REQUIRE ADDITIONAL FINANCING, WHICH MAY NOT BE AVAILABLE ON
FAVORABLE TERMS OR AT ALL AND WHICH MAY RESULT IN DILUTION OF YOUR EQUITY
INTEREST.
We may require additional financing to fund the development and possible
acquisition of new drug delivery technologies and to increase our production
capacity beyond what is currently anticipated. If we cannot obtain financing
when needed, or obtain it on favorable terms, we may be required to curtail our
plans to develop and possibly to acquire new drug delivery technologies or limit
the expansion of our manufacturing capacity. We believe our cash and cash
equivalents, and expected revenues from operations will be sufficient to meet
our anticipated capital requirements for the foreseeable future. However, we may
elect to pursue additional financing at any time to more aggressively pursue
development of new drug delivery technologies and expand manufacturing capacity
beyond that currently planned.
Other factors that will affect future capital requirements and may require
us to seek additional financing include:
* the level of expenditures necessary to develop and, or, acquire new
products or technologies;
* the progress of our research and product development programs;
* the need to construct a larger than currently anticipated manufacturing
facility, or additional manufacturing facilities, to meet demand for our
products;
* results of our collaborative efforts with current and potential
pharmaceutical company partners; and
* the timing of, and amounts received from, future product sales, product
development fees and licensing revenue and royalties.
DEMAND FOR SOME OF OUR PRODUCTS IS SEASONAL, AND OUR SALES AND PROFITS MAY
SUFFER DURING PERIODS WHEN DEMAND IS LIGHT.
Certain non-prescription products that we manufacture for our
pharmaceutical company partners treat seasonal ailments such as colds, coughs
and allergies. Our pharmaceutical company partners may choose to not market
those products in off-seasons and our sales and profits may decline in those
periods as a result. In 1999, revenues from Novartis, which included revenues
related to Triaminic, a seasonal cold, cough and allergy product, represented
42% of our total revenues. We may not be successful in developing a mix of
products to reduce these seasonal variations.
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EXHIBIT 99.1
IF THE MARKETING CLAIMS ASSERTED ABOUT OUR PRODUCTS ARE NOT APPROVED, OUR
REVENUES MAY BE LIMITED.
Once a drug product incorporating our technologies is approved by the FDA,
the Division of Drug Marketing, Advertising and Communication, the FDA's
marketing surveillance department within the Center for Drug Evaluation and
Research, must approve marketing claims asserted about it by our pharmaceutical
company partners. If our pharmaceutical company partners fail to obtain from the
Division of Drug Marketing acceptable marketing claims for a product
incorporating our drug technology, our revenues from that product may be
limited. Marketing claims are the basis for a product's labeling, advertising
and promotion. The claims our pharmaceutical company partners are asserting
about our drug delivery technology, or the drug product itself, may not be
approved by the Division of Drug Marketing.
WE MAY FACE PRODUCT LIABILITY CLAIMS RELATED TO PARTICIPATION IN CLINICAL
TRIALS OR THE USE OR MISUSE OF OUR PRODUCTS.
The testing, manufacturing and marketing of products using our drug
delivery technologies may expose us to potential product liability and other
claims resulting from their use. If any such claims against us are successful,
we may be required to make significant compensation payments. Any
indemnification that we have obtained, or may obtain, from contract research
organizations or pharmaceutical companies conducting human clinical trials on
our behalf may not protect us from product liability claims or from the costs of
related litigation. Similarly, any indemnification we have obtained, or may
obtain, from pharmaceutical companies with whom we are developing our drug
delivery technologies may not protect us from product liability claims from the
consumers of those products or from the costs of related litigation. If we are
subject to a product liability claim, our product liability insurance may not
reimburse us, or be sufficient to reimburse us, for any expenses or losses we
may suffer. A successful product liability claim against us, if not covered by,
or if in excess of, our product liability insurance, may require us to make
significant compensation payments, which would be reflected as expenses on our
statement of operations and reduce our earnings.
RISKS RELATED TO OUR COMMON STOCK
ANTI-TAKEOVER PROVISIONS OF OUR CORPORATE CHARTER DOCUMENTS, DELAWARE LAW
AND OUR STOCKHOLDERS' RIGHTS PLAN MAY AFFECT THE PRICE OF OUR COMMON STOCK.
Our corporate charter documents, Delaware law and our stockholders' rights
plan include provisions that may discourage or prevent parties from attempting
to acquire us. These provisions may have the effect of depriving our
stockholders of the opportunity to sell their stock at a price in excess of
prevailing market prices in an acquisition of us by another company. Our board
of directors has the authority to issue up to 5,000,000 shares of preferred
stock and to determine the rights, preferences and privileges of those shares
without any further vote or action by our stockholders. The rights of holders of
our common stock may be adversely affected by the rights of the holders of any
preferred stock that may be issued in the future. Additional provisions of our
certificate of incorporation and bylaws could have the effect of making it more
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EXHIBIT 99.1
difficult for a third party to acquire a majority of our outstanding voting
common stock. These include provisions that limit the ability of stockholders to
call special meetings or remove a director for cause.
We are subject to the provisions of Section 203 of the Delaware General
Corporation Law, which prohibits a publicly-held Delaware corporation from
engaging in a "business combination" with an "interested stockholder" for a
period of three years after the date of the transaction in which the person
became an interested stockholder, unless the business combination is approved in
a prescribed manner. For purposes of Section 203, a "business combination"
includes a merger, asset sale or other transaction resulting in a financial
benefit to the interested stockholder, and an "interested stockholder" is a
person who, either alone or together with affiliates and associates, owns (or
within the past three years, did own) 15% or more of the corporation's voting
stock.
We also have a stockholders' rights plan, commonly referred to as a poison
pill, which makes it difficult, if not impossible, for a person to acquire
control of us without the consent of our board of directors.
OUR STOCK PRICE HAS BEEN AND MAY CONTINUE TO BE VOLATILE.
The trading price of our common stock has been, and is likely to continue
to be, highly volatile. The market value of your investment in our common stock
may fall sharply at any time due to this volatility. In the nine months ended
September 30, 2000, the closing sale price for our common stock ranged from
$12.13 to $52.06. In the year ended December 31, 1999, the closing sale price of
our common stock ranged from $2.53 to $13.50. The market prices for securities
of drug delivery, biotechnology and pharmaceutical companies historically have
been highly volatile. Factors that could adversely affect our stock price
include:
* fluctuations in our operating results;
* announcements of technological collaborations, innovations or new
products by us or our competitors;
* governmental regulations;
* developments in patent or other proprietary rights owned by us or others;
* public concern as to the safety of drugs developed by us or others;
* the results of pre-clinical testing and clinical studies or trials by us
or our competitors;
* litigation;
* decisions by our pharmaceutical company partners relating to the products
incorporating our technologies;
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* actions by the FDA in connection with submissions related to the products
incorporating our technologies; and
* general market conditions.
OUR OPERATING RESULTS MAY FLUCTUATE, CAUSING OUR STOCK PRICE TO FALL.
Fluctuations in our operating results may lead to fluctuations, including
declines, in our stock price. Our operating results may fluctuate from quarter
to quarter and from year to year depending on:
* demand by consumers for the products we produce;
* new product introductions;
* the seasonal nature of the products we produce to treat seasonal
ailments;
* pharmaceutical company ordering patterns;
* our production schedules;
* the number of new collaborative agreements that we enter into;
* the number and timing of product development milestones that we achieve
under collaborative agreements; and
* the level of our development activity conducted for, and at the direction
of, pharmaceutical companies under collaborative agreements.
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