Our manufacturing capacity may not be adequate to meet the demands of our business. for ABBOTT MEDICAL OPTICS INC (EYE)

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Advanced Medical Optics (EYE)

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EYE » Topics » Our manufacturing capacity may not be adequate to meet the demands of our business.

These excerpts taken from the EYE 10-K filed Mar 3, 2008.

Our manufacturing capacity may not be adequate to meet the demands of our business.

If our sales increase substantially, we may need to increase our production capacity. We cannot assure you that if we choose to scale-up our manufacturing operations, we will be able to obtain regulatory approvals in a timely fashion, which could affect our ability to meet product demand or result in additional costs.

Our manufacturing capacity may not be
adequate to meet the demands of our business.

If our sales increase substantially, we may need to increase our production capacity.
We cannot assure you that if we choose to scale-up our manufacturing operations, we will be able to obtain regulatory approvals in a timely fashion, which could affect our ability to meet product demand or result in additional costs.

STYLE="margin-top:12px;margin-bottom:0px">We generally manufacture our cataract/implant and laser vision correction products at single sites, creating a potential for a material business interruption
should any of these sites be affected by a natural disaster or plant shutdown.

We manufacture phacoemulsification and excimer laser
systems in Santa Clara, California (moving to Milpitas, California in 2008). We manufacture femtosecond laser systems in Irvine, California (also moving to Milpitas, California in

2008). We manufacture our IOLs in Aňasco, Puerto Rico and our viscoelastics in Uppsala, Sweden. If any of these facilities were affected by a natural
disaster or plant shutdown, or if our transition to the Milpitas facility is delayed, our supply of products could be interrupted. We may not be able to identify and validate alternative sources for the affected products in a timely manner, given
the substantial regulatory requirements required for such validations. Any prolonged disruption in the operation of our manufacturing facilities or those of our third-party manufacturers could materially harm our business.

STYLE="margin-top:12px;margin-bottom:0px">We face intense competition, and our failure to compete effectively could have a material adverse effect on our profitability and results of operations.

We face intense competition in the markets for our ophthalmic surgical and eye care products and these markets are subject to rapid and
significant technological change. We have numerous competitors in the United States and abroad, including, among others, large companies such as Alcon, Inc., a publicly traded subsidiary of Nestle S.A.; Bausch & Lomb; CIBA Vision
Corporation, a unit of Novartis, and Zeiss-Meditech, among others. Many of our competitors have substantially more resources and a greater marketing scale than we do. We may not be able to sustain our current levels of profitability and growth as
competitive pressures, including pricing pressure from competitors, increase. In addition, if we are unable to develop and produce or market our products to effectively compete against our competitors, our operating results will materially suffer.
We also compete against a large number of providers of alternative vision correction solutions, some of which may have greater financial resources than us. New or different methods of vision correction are continually being introduced. Any of these
competitive pressures could result in significantly decreased demand for our products.

Because of our leading market position in the laser
vision correction business, all of our competitors target our market share in order to grow their own revenues. We can give no assurance that we will be able to maintain or grow our existing market share and we may be required to incur considerable
expenditures in order to maintain or increase that market share. Should our procedure market share decline, it would have a material adverse effect on our business, financial position, and results of operations.

STYLE="margin-top:12px;margin-bottom:0px">Trends in the contact lens care market may negatively impact our eye care business.

STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%">Our eye care business is impacted by trends in the contact lens care market such as more simplified disinfection systems and technological and medical
advances in surgical techniques for the correction of vision impairment. Less expensive one-bottle chemical disinfection systems have gained popularity among soft contact lens wearers instead of peroxide-based lens care products. Also, the growing
use and acceptance of daily, frequent replacement and extended wear contact lenses and laser correction procedures, along with the other factors above, could have the effect of continuing to reduce demand for lens care products generally. Our
marketing and sales plans may not be appropriate or sufficient to mitigate the effect of these trends on our eye care business and, as a result, our eye care business may suffer.

FACE="Times New Roman" SIZE="2">If we are unable to protect our intellectual property rights, our business and prospects may be harmed.

FACE="Times New Roman" SIZE="2">Our ability to compete effectively is dependent upon our ability to protect and preserve the proprietary aspects of the designs, processes, technologies and materials owned by, used by or licensed to us. We have
numerous U.S. patents and corresponding foreign patents that are expected to expire by their own terms at various dates and have additional patent applications pending that may not result in issued patents. Our failure to secure these patents may
limit our ability to protect the intellectual property rights that these applications were intended to cover. Although we have attempted to protect our proprietary property, technologies and processes both in the United States and in foreign
countries through a combination of patent law, trade secrets and non-disclosure agreements, these may be insufficient. Competitors may be able to design around our patents to compete effectively with our products. We also may not be able to prevent
third parties from using our technology without our authorization, breaching any non-disclosure agreements with us, or independently developing technology that is similar to ours. The use of our technology or similar technology by others could
reduce or eliminate any competitive advantage we have developed, cause us to lose sales or otherwise harm our business. If it became necessary for us to resort to litigation to protect these rights, any proceedings could be costly and we may not
prevail. Further, we may not be able to obtain patents or other protections on our future innovations. In addition, because of the differences in foreign patent and other laws concerning proprietary rights, our products may not receive the same
degree of protection in foreign countries as they would in the United States. We cannot assure you that:

•

pending patent applications will result in issued patents;

•

patents issued to or licensed by us will not be challenged by third parties; or

SIZE="1">

•

our patents will be found to be valid or sufficiently broad to protect our technology or provide us with a competitive advantage.

STYLE="margin-top:12px;margin-bottom:0px">We may be subject to intellectual property litigation and infringement claims, which could cause us to incur significant expenses or prevent us from selling our
products.

There is a substantial amount of litigation over patent and other intellectual property rights in the ophthalmic
industry. The fact that we have patents issued to us for our products does not mean that we will always be able to successfully defend our patents and proprietary rights against challenges or claims of infringement by our competitors. A successful
claim of patent or other intellectual property infringement or misappropriation against us could adversely affect our growth and profitability, in some cases materially. We cannot assure you that our products do not and will not infringe issued
patents or other intellectual property rights of third parties. From time to time, in the ordinary course of business, we receive notices from third parties alleging infringement or misappropriation of the patent, trademark and other intellectual
property rights of third parties by us or our consumers in connection with the use of our products. We may be unaware of intellectual property rights of others that may cover some of our technology. If someone claims that our products infringe their
intellectual property rights, whether or not such claims are meritorious, any resulting litigation could be costly and time consuming and would divert the attention of our management and personnel from other business issues. The complexity of the
technology involved and the uncertainty of intellectual property litigation increase these risks. Claims of intellectual property infringement also might require us to enter into costly royalty or license agreements (if available on acceptable terms
or at all). We also may be subject to significant damages or an injunction preventing us from manufacturing, selling or using some or some aspect of our products. We may also need to redesign some of our products or processes to avoid future
infringement liability. Any of these adverse consequences could have a material adverse effect on our business and profitability.

This excerpt taken from the EYE 10-K filed Mar 1, 2007.

Our manufacturing capacity may not be adequate to meet the demands of our business.

If our sales increase substantially, we may need to increase our production capacity. Any prolonged disruption in the operation of our manufacturing facilities or those of our third-party manufacturers could materially harm our business. We cannot assure you that if we choose to scale-up our manufacturing operations, we will be able to obtain regulatory approvals in a timely fashion, which could affect our ability to meet product demand or result in additional costs.

This excerpt taken from the EYE 10-K filed Mar 14, 2006.

Our manufacturing capacity may not be adequate to meet the demands of our business.

EXCERPTS ON THIS PAGE:

10-K (2 sections)	Mar 3, 2008

10-K	Mar 1, 2007

10-K	Mar 14, 2006

Advanced Medical Optics (EYE)

EYE » Topics » Our manufacturing capacity may not be adequate to meet the demands of our business.

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