ACHN » Topics » Risks Related to Our Business

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

Risks Related to Our Business

STYLE="margin-top:18px;margin-bottom:0px">We have a limited operating history and have incurred a cumulative loss since inception. If we do not generate significant revenues, we will not be profitable.

We have incurred significant losses since our inception in August 1998. At December 31, 2007, our accumulated deficit was
approximately $152 million. We have not generated any revenue from the sale of drug candidates to date. We expect that our annual operating losses will increase substantially over the next several years as we expand our research, development and
commercialization efforts, including:

 







  

completing the open label extension periods for phase II clinical trials for elvucitabine and, if we are successful in forming a licensing arrangement with a
potential collaboration partner, moving into pivotal phase III clinical trials; and

 







  

advancing ACH-1095 through preclinical testing and completion of proof-of-concept; and

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advancing our HCV protease inhibitor series into preclinical testing and completion of proof-of-concept; and

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advancing ACH-702 through preclinical testing and completion of proof-of-concept; and

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continuing to advance our other research and discovery programs in HIV and HCV, and identifying other infectious disease drug candidates.

To become profitable, we must successfully develop and obtain regulatory approval for our drug candidates and
effectively manufacture, market and sell any drug candidates we develop. Accordingly, we may never generate significant revenues and, even if we do generate significant revenues, we may never achieve profitability.

STYLE="margin-top:18px;margin-bottom:0px">We will need substantial additional capital to fund our operations, including drug candidate development, manufacturing and commercialization. If we do not have or
cannot raise additional capital when needed, we will be unable to develop and commercialize our drug candidates successfully, and our ability to operate as a going concern may be adversely affected.

STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%">We believe that our existing cash and cash equivalents will be sufficient to support our current operating plan through at least the next twelve months.
However, our operating plan may change as a result of many factors, including:

 







  

the costs involved in the preclinical and clinical development, manufacturing and formulation of elvucitabine, our HCV protease inhibitors and ACH-702;

 







  

the costs involved in the preclinical and clinical development of ACH-1095 and other NS4A antagonists, certain portions of which we share with Gilead Sciences;

 







  

our ability to enter into corporate collaborations and the terms and success of these collaborations;

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the costs involved in obtaining regulatory approvals for our drug candidates;

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the scope, prioritization and number of programs we pursue;

 







  

the costs involved in preparing, filing, prosecuting, maintaining, enforcing and defending patent and other intellectual property claims;

 







  

our ability to enter into corporate collaborations and the terms and success of these collaborations;

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our ability to raise incremental debt or equity capital new technologies and drug candidates; and

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our acquisition and development of new technologies and drug candidates; and

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competing technological and market developments currently unknown to us.

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If our operating plan changes, we may need additional funds sooner than planned. Such additional
financing may not be available when we need it or may not be available on terms that are favorable to us. In addition, we may seek additional capital due to favorable market conditions or strategic considerations, even if we believe we have
sufficient funds for our current or future operating plans. If adequate funds are not available to us on a timely basis, or at all, we may be required to:

 







  

terminate or delay preclinical studies, clinical trials or other development activities for one or more of our drug candidates; or

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delay our establishment of sales and marketing capabilities or other activities that may be necessary to commercialize our drug candidates, if approved for sale.

We may seek additional financing through a combination of private and public equity offerings, debt financings and
collaboration, strategic alliance and licensing arrangements. To the extent that we raise additional capital through the sale of equity or convertible debt securities, your ownership interest will be diluted, and the terms may include adverse
liquidation or other preferences that adversely affect your rights as a stockholder. Debt financing, if available, may involve agreements that include covenants limiting or restricting our ability to take specific actions such as incurring
additional debt, making capital expenditures or declaring dividends. If we raise additional funds through collaboration, strategic alliance and licensing arrangements with third parties, we may have to relinquish valuable rights to our technologies
or drug candidates, or grant licenses on terms that are not favorable to us.

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