ACAD » Topics » Risks Related to Our Business

This excerpt taken from the ACAD 10-K filed Mar 5, 2008.

Risks Related to Our Business

SIZE="2">We expect our net losses to continue for at least several years and are unable to predict the extent of future losses or when we will become profitable, if ever.

STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%">We have experienced significant net losses since our inception. As of December 31, 2007, we had an accumulated deficit of approximately $229.9
million. We expect our annual net losses to increase over the next several years as we expand our research and development activities, incur significant preclinical and clinical development costs, and enhance our infrastructure.

STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%">We have not received, and do not expect to receive for at least the next several years, any revenues from the commercialization of our drug candidates.
Substantially all of our revenues for the year ended December 31, 2007 were from our collaborations with Allergan and Sepracor as well as our agreements with other parties. We anticipate that collaborations with pharmaceutical companies, which
provide us with research funding and potential milestone payments and royalties, will continue to be our primary source of revenues for the next several years. We cannot be certain that the milestones required to trigger payments under our existing
collaborations will be reached or that we will secure additional collaboration agreements. To obtain revenues from our drug candidates, we must succeed, either alone or with others, in developing, obtaining regulatory approval for, and manufacturing
and marketing drugs with significant market potential. We may never succeed in these activities, and may never generate revenues that are significant enough to achieve profitability.

FACE="Times New Roman" SIZE="2">Our most advanced drug candidates are in clinical trials, which are long, expensive and unpredictable, and there is a high risk of failure.

STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%">Preclinical testing and clinical trials are long, expensive and unpredictable processes that can be subject to delays. It may take several years to
complete the preclinical testing and clinical development necessary to commercialize a drug, and delays or failure can occur at any stage. Interim results of clinical trials do not necessarily predict final results, and success in preclinical
testing and early clinical trials does not ensure that later clinical trials will be successful. A number of companies in the pharmaceutical and biotechnology industries have suffered significant setbacks in advanced clinical trials even after
promising results in earlier trials.

Our drug development programs are at various stages of development and the historical rate of
failures for drug candidates is extremely high. Our four proprietary clinical programs are pimavanserin for the treatment of Parkinson’s disease psychosis, pimavanserin as a co-therapy for schizophrenia, ACP-104 for the treatment of
schizophrenia, and pimavanserin for the treatment of sleep maintenance insomnia. We also have neuropathic pain and glaucoma clinical programs in collaboration with Allergan.

STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%">In connection with clinical trials, we face risks that:



a drug candidate may not prove to be efficacious;



patients may die or suffer other adverse effects for reasons that may or may not be related to the drug candidate being tested;



the results may not confirm the positive results of earlier trials; and



the results may not meet the level of statistical significance required by the U.S. Food and Drug Administration (the “FDA”) or other regulatory agencies.

If we do not successfully complete preclinical and clinical development, we will be unable to market and sell products
derived from our drug candidates and to generate product revenues. Even if we do successfully complete clinical trials, those results are not necessarily predictive of results of additional trials that may be needed before a new drug application
(“NDA”) may be submitted to the FDA. Of the large number of drugs in development, only a small percentage result in the submission of an NDA to the FDA and even fewer are approved for commercialization.



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