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                                                                    EXHIBIT 99.2

                            ADDITIONAL RISK FACTORS

                      RISKS RELATING TO OUR CAPITALIZATION

OUR SUBSTANTIAL DEBT COULD ADVERSELY AFFECT OUR CASH FLOW AND PREVENT US FROM
FULFILLING OUR OBLIGATIONS.

     We have a significant amount of debt and we will have more debt in the
future. We have not had this level of debt in the past.

     Our substantial amount of debt could have important consequences to you.
For example, it:

     - will make it more difficult for us to satisfy our obligations under our
       proposed senior credit facilities and senior subordinated notes;

     - will increase our vulnerability to general adverse economic and industry
       conditions and adverse changes in governmental regulations;

     - will require us to dedicate a substantial portion of our cash flow from
       operations to make payments on our debt, reducing the availability of our
       cash flow to fund future capital expenditures, working capital, execution
       of our growth strategy, research and development costs and other general
       corporate requirements;

     - could limit our flexibility in planning for, or reacting to, changes in
       our business and the pharmaceutical industry, which may place us at a
       competitive disadvantage compared with competitors that have less debt;
       and

     - could limit our ability to borrow additional funds, even when necessary
       to maintain adequate liquidity.

     The terms of our proposed senior credit facilities and proposed new senior
subordinated notes will allow us to incur substantial amounts of additional
debt, subject to certain limitations. We might incur additional debt for various
reasons, particularly to pay for the additional product line acquisitions that
we may make for our NeoSan business unit.

TO SERVICE OUR DEBT, WE WILL REQUIRE A SIGNIFICANT AMOUNT OF CASH, WHICH MAY NOT
BE AVAILABLE TO US.

     Our ability to make payments on or refinance our debt will depend largely
upon our future operating performance. Our future operating performance is
subject to general economic, financial, competitive, legislative, regulatory and
other factors that are beyond our control.

     We cannot assure you that our business will generate cash flow from
operations in an amount sufficient to enable us to pay our debt, including the
notes, or to fund our other liquidity needs. For example, in 1999 we had a loss
from operations of $8.8 million and net cash used in operating activities of
$12.7 million. If we are unable to generate sufficient cash flow to meet our
debt service requirements, we may have to renegotiate the terms of our debt. We
cannot assure you that we will be able to repay or refinance any of our debt,
including our proposed new senior credit facilities or proposed senior
subordinated notes, on commercially reasonable terms or at all.

     If we were unable to refinance our debt or obtain new financing under these
circumstances, we would have to consider other options, such as:

     - sales of certain assets to meet our debt service obligations;

     - sales of equity; and

     - negotiations with our lenders to restructure the applicable debt.

     However, these options may not be feasible or prove adequate. Our credit
agreement and the indenture may restrict, or market or business conditions may
limit, our ability to do some of these things.

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THE FINANCING AGREEMENTS GOVERNING OUR DEBT, INCLUDING OUR PROPOSED NEW SENIOR
CREDIT FACILITIES AND SENIOR SUBORDINATED NOTES, CONTAIN VARIOUS COVENANTS THAT
LIMIT OUR DISCRETION IN THE OPERATION OF OUR BUSINESS AND COULD LEAD TO
ACCELERATION OF DEBT.

     Our existing and future financing agreements impose and will impose
operating and financial restrictions on our activities. These restrictions
require us to comply with or maintain certain financial tests and ratios, and
limit or prohibit our ability to, among other things:

     - incur additional debt and issue preferred stock;

     - create liens;

     - redeem and/or prepay certain debt;

     - sell capital stock of subsidiaries or other assets;

     - make certain investments;

     - enter new lines of business;

     - engage in consolidations, mergers and acquisitions;

     - make certain capital expenditures; and

     - pay dividends and make other distributions.

     These restrictions on our ability to operate our business could seriously
harm our business by, among other things, limiting our ability to take advantage
of financing, merger and acquisition and other corporate opportunities.

     Various risks, uncertainties and events beyond our control could affect our
ability to comply with these covenants and maintain the financial tests and
ratios required by some of the instruments governing our financing arrangements.
Failure to comply with any of the covenants in our existing or future financing
agreements could result in a default under those agreements and under other
agreements containing cross-default provisions. A default would permit lenders
to accelerate the maturity of the debt under these agreements and to foreclose
upon any collateral securing that debt. Under these circumstances, we might not
have sufficient funds or other resources to satisfy all of our obligations,
including our obligations under our proposed new senior credit facilities and
senior subordinated notes. In addition, the limitations imposed by financing
agreements on our ability to incur additional debt and to take other actions
might significantly impair our ability to obtain other financing. We may not be
able to obtain future waivers or amendments, if necessary.

                         RISKS RELATING TO OUR BUSINESS

WE HAVE RECENTLY TRANSITIONED OUR COMPANY TO A SPECIALTY PHARMACEUTICAL COMPANY
WITH CHALLENGES AND RISKS THAT WE HAVE NOT HISTORICALLY FACED.

     Our decision to devote significant resources to acquiring, developing and
marketing branded products through NeoSan represents a change in our business
with new challenges. We have only seven months' experience in acquiring,
marketing and promoting branded products. In the past, we generally partnered
with customers in development projects, sharing the risk that the project would
be unsuccessful. We anticipate that the integration of newly acquired products
will require significant management attention and expansion of our contract
sales force. In order to effectively manage our acquisitions, we must maintain
adequate operational, financial and management information systems and motivate
and effectively manage an increasing number of employees. In addition, our
acquired branded products may generate lower-than-expected sales or need to be
reformulated. They may be subject to manufacturing delays, product shortages or
shut-downs due to FDA oversight and regulation, or product liability claims or
recalls. Our business, financial condition and results of operations could be
materially and adversely affected if we are unable to meet these challenges
associated with our new specialty pharmaceutical business.

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WE MAY INCUR SUBSTANTIAL EXPENSE TO DEVELOP PRODUCTS THAT WE NEVER SUCCESSFULLY
COMMERCIALIZE.

     We will incur substantial research and development expenses, and other
expenses, attempting to develop new or improved products or product line
extensions. These expenses will substantially exceed our prior research and
development expenses. The products or line extensions to which we devote
operational and financial resources could be commercial failures. Successful
commercialization of products and product line extensions requires accurate
anticipation of market and customer acceptance of particular products,
customers' needs, and emerging technological trends, among other things.
Additionally, we must complete many complex formulation and analytical testing
requirements and obtain regulatory approvals from the FDA and other regulatory
agencies. When developed, new or reformulated drugs may not exhibit desired
characteristics. Complications can also arise during production scale-up. Our
products and line extensions may encounter unexpected, unresolvable patent
conflicts or not have enforceable intellectual property rights. Delays or
problems also may arise from internal conflicts for resource availability,
personnel errors or equipment failures. If we incur significant expenses for a
product or line extension that we do not successfully commercialize, there could
be a material adverse effect on our business, financial condition and results of
operations.

OUR ACQUISITION STRATEGY COULD HAVE A MATERIAL AND ADVERSE EFFECT ON US; THE
PRODUCT SALES OF DARVON AND DARVOCET HAVE RECENTLY DECREASED.

     We have increased our sales and net income through a series of acquisitions
of branded products, and we intend to seek more acquisition opportunities. The
acquisition prices that we pay for branded products are based upon many factors,
including our analysis of sales history, cost of goods sold, manufacturing and
supply sources, marketing potential, brand strength, competition and product
improvement opportunities. While we carefully analyze the prices that we pay, we
may have overpaid, or may in the future overpay, for a branded product line that
may not produce sufficient cash flow to repay our debt, including indebtedness
incurred in connection with the acquisition or to provide an acceptable rate of
return on our investment.

     When we determine the purchase price for acquired product lines, we rely in
large part on levels of past sales of the products. We do not know, however,
whether past levels of product sales can be sustained, even with our sales
promotion of, and improvements and line extensions to, these acquired product
lines. Sales of an acquired product line may be deteriorating or trending down
as we purchase it, and we may not be able to stop or reverse this trend. Average
monthly net sales of Darvon and Darvocet were $4.1 million in 1999, $4.7 million
in 2000 and $5.2 million in 2001. However, net sales of these products were $3.4
million in January 2002, $3.9 million in December 2001 and $3.1 million in
November 2001. We believe that the levels of net sales in 1999 and 2000 are more
indicative of future sales levels than the elevated sales levels in 2001 or the
reduced sales levels during the three months ended January 31, 2002. Although we
have focused on the longer-term trends in evaluating the acquisition of these
product lines, this decrease in monthly sales may not be temporary and sales
levels may never return to the range existing in 1999 and 2000. If sales
continue at these recent levels, annual product sales of Darvon and Darvocet
will be less than $42 million, or 33.9% less than the amount shown in our
unaudited pro forma consolidated financial statements appearing in our Current
Report on Form 8-K filed with the Securities and Exchange Commission on March
11, 2002 with respect to our pending acquisition of Darvon and Darvocet. Any
prolonged decrease in sales of these products or the failure to return to the
sales levels existing in 1999 and 2000 will have a material adverse effect on
our cash flows provided by operating activities, EBITDA, and fixed charge and
interest coverage ratios and could have a material adverse effect on our ability
to service our debt and our business, results of operations and financial
condition.

     Our growth strategy is dependent upon our continued ability to acquire
branded products that can be promoted through our developing marketing and
distribution channels and to develop line extensions related to or based upon
our acquired branded products. Despite our strong relationships with many large
pharmaceutical companies which are our customers, other companies, including
those with substantially greater financial, marketing and sales resources, are
competing with us for the right to acquire the same products. As a result, we
may not be able to acquire rights to additional products or may pay too much
when we acquire them.

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     Additionally, our acquisitions will be dependent upon our ability to obtain
necessary financing and our proposed new senior credit facilities and senior
subordinated notes will limit our ability to obtain additional debt financing.
Difficulties encountered in developing improvements to acquired products may
delay and increase the cost of a development project, requiring additional
external funding. Events beyond our control, such as terrorist attacks and their
aftermath, may adversely affect capital markets and limit our ability to obtain
the equity or debt financing that we would need to vigorously pursue additional
product line acquisitions for NeoSan. The inability to effect acquisitions of
additional branded products could have a material adverse effect on our future
business, financial condition and results of operations.

WE ARE DEPENDENT ON THIRD PARTIES FOR ESSENTIAL BUSINESS FUNCTIONS AND PROBLEMS
WITH THESE THIRD-PARTY ARRANGEMENTS COULD MATERIALLY ADVERSELY AFFECT OUR
ABILITY TO MANUFACTURE AND SELL PRODUCTS AND OUR BUSINESS, FINANCIAL CONDITION
AND RESULTS OF OPERATIONS.

     We are dependent on third parties for the manufacture of our products.  We
have entered into agreements with third parties for many of our product
manufacturing requirements. Our manufacturing dependence upon third parties may
adversely affect our profit margins and our ability to deliver our products on a
timely and competitive basis. If we are unable to retain or replace third-party
manufacturers on commercially acceptable terms, we may not be able to distribute
our products as planned. If we encounter delays or difficulties with contract
manufacturers in producing or packaging our products, the distribution,
marketing and subsequent sales of such products would be adversely affected, and
we may have to seek alternative sources of supply, lose sales or abandon or
divest a product line on unsatisfactory terms. We may be unable to enter into
alternative supply arrangements at commercially acceptable rates on a timely
basis, if at all. The manufacturers that we utilize may not be able to provide
us with sufficient quantities of our products, and the products supplied to us
may not meet our specifications. Moreover, our contract manufacturers may not
comply with regulatory requirements and keep their facilities validated and in
good working order. Manufacturing at these facilities can be suspended and
halted for lengthy periods of time by the FDA if these manufacturers do not
comply with regulatory requirements. Additionally, modifications, enhancements,
or changes in manufacturing sites of approved products are in many circumstances
subject to FDA approval that we may or may not be able to obtain and that may be
subject to a lengthy application process.

     M.V.I. product line shortages existed in the mid-1990s due to third-party
manufacturing problems, which were resolved in 2000 when AstraZeneca brought
manufacturing of M.V.I.-12 in house. Additionally, in September 2001 after an
FDA inspection of its facilities, our third party supplier of M.V.I.-Pediatric
halted production of M.V.I.-Pediatric at its manufacturing facility as a result
of its discovery of microbial growth in other products manufactured in the
section of the facility used for the production of M.V.I.-Pediatric. This
manufacturer resumed production of M.V.I.-Pediatric in February 2002 and
experienced initial production problems we anticipate that these problems will
be promptly resolved and that new products will be shipped to our customers
beginning early in the second quarter. The shutdown has created temporary
shortages in the marketplace. We believe M.V.I.-Pediatric accounted for a
significant percentage of the net sales of the M.V.I. and Aquasol product lines
in 2000 and in 1999.

     Our M.V.I., Aquasol and Brethine products are subject to, and the Darvon
and Darvocet product lines will be subject to, interim supply agreements, each
with terms generally not exceeding three years. After expiration of these
contracts, our manufacturing costs could be higher and the move of the
manufacturing of any of our products most likely will cause us to incur
significant start-up costs associated with that move. Additionally, any move of
the manufacturing site of any of these products would require FDA approval of
the new manufacturing facility. FDA approval, however, is not within our
control, and we may not receive it for a long time, if at all.

     We are dependent on third parties for the supply of critical raw
materials.  Our operations are dependent on our ability to obtain FDA-approved
supplies of raw materials, including active and inactive pharmaceutical
ingredients and packaging materials, at commercially acceptable prices and
terms, in time to satisfy critical product development, testing, analytical and
manufacturing activities, customer contracts, or our development plans.
Generally, there are limited suppliers, and in most cases only one supplier, of
a critical

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raw material. The FDA must approve the supply source of many ingredients for our
products. Sales of our products are dependent upon our ability to procure active
ingredients and packaging materials from FDA-approved sources. FDA approval of a
new supply source would be required if, for example, active ingredients or
packaging materials were no longer available from the initially approved source.
The qualification of a new supply source could delay the manufacture of the drug
involved. Arrangements with our foreign suppliers are subject to certain
additional risks, including the availability of governmental clearances, export
duties, political instability, currency fluctuations and restrictions on the
transfer of funds. Any constraints on the supply of raw materials could
materially and adversely affect our business, financial condition and results of
operations.

     Novartis, which is manufacturing Brethine products for us under a supply
agreement we entered into when we acquired the Brethine product line, maintains
an inventory of the active ingredient, terbutaline sulfate, used to manufacture
both the oral and injectable forms of the Brethine products. The supplier of
this existing inventory, however, has stopped producing terbutaline sulfate. As
a result, we have identified and are seeking FDA approval of a new supplier and
are responding to FDA requests regarding the new supplier's material. We believe
the current inventory of terbutaline sulfate from the approved supplier is
sufficient to continue to manufacture the oral form of Brethine to supply
anticipated orders until September 2002 for one dosage strengths and several
months later for the other dosage strengths and to manufacture the injectable
form of Brethine to fill anticipated orders for several years. Novartis has
acquired an inventory of terbutaline sulfate from the new supplier, but the
Brethine products it manufactures for us with this material may not be sold
until this new supplier is approved by the FDA. We believe that we will obtain
approval of the new supplier prior to September 2002, but we may not receive
this approval until much later, if at all. If the FDA does not approve the new
supplier, we will not be able to supply one dosage strength of Brethine tablets
to our customers after August 2002 and will not be able to supply the remaining
oral dosage strength within several months after that. Sales of the oral form of
Brethine accounted for approximately 65% of net sales of Brethine in 2001.

     We use, and are dependent on, a contract sales force and a contract
distribution program.  We have contracted with Ventiv Health U.S. Sales, Inc., a
national pharmaceutical sales organization, to provide our sales force and
product distribution support. Additionally, we have contracted with Integrated
Commercialization Solutions, Inc., a national pharmaceutical product
distribution company, to provide warehousing, product distribution, inventory
tracking, customer service and financial administrative assistance related to
our distribution program. The Ventiv agreement may be terminated by either party
with 90 days' written notice, while the Integrated Commercialization Solutions
contract may be terminated by either party with 180 days' written notice. We are
dependent on the capabilities of these third parties to sell and distribute our
products effectively and interact with our customers. We do not have extensive
experience performing these functions ourselves and may suffer significant
disruption if we have to do so or find alternative providers. The failure to
adequately support our sales and distribution efforts or effectively manage our
relationships with customers could have a material adverse effect on our
business, financial condition and results of operations.

WE ENCOUNTER AGGRESSIVE COMPETITION IN ALL AREAS OF OUR BUSINESS.

     The pharmaceutical industry is highly competitive and innovative.  Our
branded products are in competition with branded products marketed by many other
pharmaceutical companies, including large, fully integrated companies with
financial, marketing, legal and product development resources substantially
greater than ours. Additional competitors may emerge to compete directly with us
for acquisitions of branded product lines, any of which could materially
adversely affect our ability to successfully make additional acquisitions of
branded product lines or our ability to sell our products on a successful basis.
We also compete with pharmaceutical companies in developing, marketing and
promoting our own internally developed pharmaceutical products. Because the
sales prices of pharmaceutical products typically decline as competition
increases, this competition could materially adversely affect us.

     Our branded products are subject to generic competition.  There is no
proprietary protection for most of the branded pharmaceutical products that we
sell, and as a result our branded pharmaceutical

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products are or may become subject to competition from generic substitutes.
These generic substitutes for our branded products are sold by competitors at
significantly lower prices than branded products, due to the significantly lower
costs associated with them. These generic products may be precisely identical,
in every respect, to the higher-priced branded drugs we sell. In addition,
governmental and other pressures, including from third-party payers such as
health maintenance organizations, or HMOs, and health insurers to reduce
pharmaceutical costs may result in physicians or pharmacies increasingly using
generic substitutes for our products. Competition from generic products could
cause the revenues from our branded products to decrease significantly and could
have a material and adverse effect on our business, financial condition and
results of operations.

     Newly developed branded products could adversely affect the commercially
valuable life of our products.  The rapid product development and technological
changes occurring in the pharmaceutical industry could render our branded
products obsolete or uneconomical. New drugs to treat the conditions addressed
by our products could emerge. For example, we believe that sales of Darvon and
Darvocet decreased significantly in the early and mid-1990s, due to the
introduction of Oxycontin and the COX-2 class of drugs, which were thought to be
superior to Darvon and Darvocet. In fact, companies that sell or have sold us a
particular product line could be developing a competing product line to replace
the line they are selling or have sold to us. Our competitors also may be able
to complete the product regulatory approval process before us and, therefore,
begin marketing their products in advance of our products. Additionally,
technological advances, which could affect the efficacy, approval, cost,
production or marketing of products, could benefit our competitors without
similarly aiding us. Our business, financial condition and results of operations
could be materially and adversely affected by any one or more of these
developments.

     Our fee-for-service business is subject to increasing competitive
pressures.  We are also subject to the impact of marketplace actions of our
competitors in our fee-for-service business. For example, in the event of
business difficulties or changes in market supply and demand for products, a
competitor may decide to slash its prices or take other pricing or market
actions in order to obtain new business at any price. These actions could
disrupt the entire marketplace, resulting in potential reduced revenues, either
from responsive pricing reductions or a reduction in customer contracts. This
could adversely affect our financial results or business operations.

WE MAY BE UNABLE TO OBTAIN GOVERNMENT APPROVAL FOR OUR PRODUCTS TO COMPLY WITH
GOVERNMENT REGULATIONS RELATING TO OUR BUSINESS.

     The development, manufacture, marketing and sale of pharmaceutical products
are subject to extensive federal, state and local regulation in the United
States and similar foreign regulation. We do not know the extent to which we may
be affected by legislative and other regulatory actions and developments
concerning various aspects of our operations, our products and the health care
field generally. We do not know what effect changes in governmental regulation
and other actions or decisions by governmental agencies may have on our business
in the future. Any changes could require changes to manufacturing methods or
facilities, expanded or different labeling, new approvals, the recall,
replacement or discontinuance of certain products, additional record keeping and
expanded documentation of the properties of certain products and scientific
substantiation. Any regulatory changes could have a material adverse effect on
our business, financial condition and results of operations or our competitive
position.

     The manufacturing, processing, formulation, packaging, labeling,
distribution, importation, pricing, reimbursement and advertising of our
products, and disposal of waste products arising from such activities, are also
subject to regulation by the Drug Enforcement Administration, the Federal Trade
Commission, the Consumer Product Safety Commission, the U.S. Department of
Agriculture, the Occupational Safety and Health Administration, the U.S.
Environmental Protection Agency, the U.S. Customs Service and the Centers for
Medicare and Medicaid Services, as well as state, local and foreign governments.

     We are required to obtain approval from the FDA based upon pre-clinical
testing, clinical trials showing safety and effectiveness, chemistry and
manufacturing control data, and other data and information before marketing most
drug products. The generation of the required data is regulated by the FDA and
can be time-

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consuming and expensive, and the results might not justify approval. Our FDA
filings with respect to our products may not be approved in a timely manner, if
at all, and we may be unable to meet other regulatory requirements for our
products. Pharmaceutical products also must be distributed, sampled, advertised
and promoted in accordance with FDA requirements.

     Even if we are successful in obtaining all required pre-marketing
approvals, post-marketing requirements and our failure to comply with other
regulations could result in suspension or limitation of approvals. The FDA could
also require reformulation of products during the post-marketing stage. For
example, prior to our acquisition of the M.V.I. and Aquasol product lines, the
FDA determined that M.V.I.-12, which is an adult multivitamin infusion product,
must be reformulated (along with other similar adult multivitamin products) to
include higher doses of Vitamins B1, B6, C, and folic acid and to add Vitamin K.
Our formulation development laboratory has been working closely with AstraZeneca
on this reformulation, and we are hopeful that FDA approval of the reformulation
can be obtained by the end of this year or early next year, although this
approval is uncertain and is subject to factors beyond our control.

     All of our drugs must be manufactured in conformity with current Good
Manufacturing Practice regulations, as interpreted and enforced by the FDA, and
drug products subject to an FDA-approved application must be manufactured,
processed, packaged, held and labeled in accordance with information contained
in the application. Additionally, modifications, enhancements, or changes in
manufacturing sites of approved products are, in many circumstances, subject to
FDA approval that we may not be able to obtain and that may be subject to a
lengthy application process. Our facilities, including the facilities used in
our fee-for-service business, and those of our third-party manufacturers are
periodically subject to inspection by the FDA and other governmental agencies,
and operations at these facilities could be interrupted or halted if such
inspections prove unsatisfactory.

     Failure to comply with FDA or other governmental regulations can result in
fines, unanticipated compliance expenditures, recall or seizure of products,
total or partial suspension of production or distribution, suspension of the
FDA's review of our product applications, termination of ongoing research,
disqualification of data for submission to regulatory authorities, enforcement
actions, injunctions and criminal prosecution. Under certain circumstances, the
FDA also has the authority to revoke previously granted drug approvals. Although
we have instituted internal compliance programs, if compliance is deficient in
any significant way, it could have a material adverse effect on us. Most of our
vendors are subject to similar regulations and periodic inspections.

     The federal health care program antikickback statute makes it illegal for
anyone to knowingly and willfully make or receive "kickbacks" in return for any
health care item or service reimbursed under any federally financed healthcare
program. This statute applies to arrangements between pharmaceutical companies
and the persons to whom they market, promote, sell and distribute their
products. Federal false claims laws prohibit any person from knowingly making a
false claim to the federal government for payment. Recently, several
pharmaceutical companies have been prosecuted under these laws, even though they
did not submit claims to government healthcare programs. The prosecutors alleged
that they were inflating drug prices they report to pricing services, which are
in turn used by the government to set Medicare and Medicaid reimbursement rates.
Pharmaceutical companies also have been prosecuted under these laws for
allegedly providing free products to customers with the expectation that the
customers would bill federal programs for the products. Additionally, the
majority of states have laws similar to the federal antikickback law and false
claims laws. Sanctions under these federal and state laws include monetary
penalties, exclusion from reimbursement for products under government programs,
criminal fines and imprisonment. While we have internal policies and practices
requiring and detailing compliance with the health care fraud and abuse laws and
false claims laws, it is possible that some of our business practices could be
subject to challenge under one or more of these laws, which could have a
material adverse effect on our business, financial condition and results of
operations.

     Additionally, our business involves the controlled storage, use and
disposal of hazardous or highly potent materials and biological hazardous
materials. We are subject to numerous environmental laws and regulations in the
jurisdictions in which we operate. Although we believe that our safety
procedures for handling and

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disposing of these hazardous materials comply in all material respects with the
standards prescribed by law and regulation in each of our locations, the risk of
accidental contamination or injury from hazardous materials cannot be completely
eliminated. In the event of an accident, we could be held liable to governmental
authorities or private parties for any damages that result, and the liability
could exceed our resources. In addition, we may be held liable for costs
associated with contamination of our currently or formerly occupied properties,
or at other parties' disposal sites where we disposed of hazardous wastes, even
though this contamination may have been caused by third parties or the disposal
may have complied with the regulatory requirements then in place. Current or
future environmental laws and regulations, or adverse changes in the way current
laws and regulations are interpreted or enforced, may materially adversely
affect our business, financial condition and results of operations. We maintain
liability insurance for some environmental risks that our management believes to
be appropriate and in accordance with industry practice. However, we may incur
liabilities beyond the limits or outside the coverage of our insurance and may
not be able to maintain insurance on acceptable terms.

     In connection with our activities outside the U.S., we also are subject to
foreign regulatory requirements governing the testing, approval, manufacture,
labeling, marketing and sale of pharmaceutical products. These requirements vary
from country to country. Even if FDA approval has been obtained for a product,
approval by comparable regulatory authorities of foreign countries must be
obtained prior to marketing the product in those countries. For example, some of
our foreign operations are subject to regulations by the European Medicines
Evaluations Agency and the U.K. Medicines Control Agency. The approval process
may be more or less rigorous from country to country, and the time required for
approval may be longer or shorter than that required in the U.S. Clinical
studies conducted outside of any particular country may not be accepted by that
country, and the approval of a pharmaceutical product in one country does not
assure that the product will be approved in another country. In addition,
regulatory agency approval of pricing is required in many countries and may be
required for our marketing of any drug in those countries.

WE ARE VULNERABLE TO PRESSURES FROM THIRD-PARTY PAYERS.

     Our commercial success in product sales will depend on patients being
reimbursed by third-party health care payers, such as government and private
health insurers and managed care organizations. Third-party payers are
increasingly challenging the pricing of medical products and services. For
example, third-party payers strenuously discourage use of branded products such
as ours when generic substitutes are available. As a result, reimbursement may
not be available to enable us to maintain price levels sufficient to realize an
appropriate return on our investment in product acquisition and development. If
adequate reimbursement levels are not provided, our business, financial
condition and results of operations could be materially and adversely affected.

     The market for our products may be limited by actions of third-party
payers. For example, many managed health care organizations are now limiting the
pharmaceutical products that are on their lists of approved drugs. The resulting
competition among pharmaceutical companies to place their products on these
formulary lists has created a trend of downward pricing pressure in the
industry. In addition, many managed care organizations are pursuing various ways
to reduce pharmaceutical costs and are considering formulary contracts primarily
with those pharmaceutical companies that can offer a broad line of products for
a given class of therapy or disease, which we cannot do. Our products may not be
included on the approved list of drugs of managed care organizations, and
downward pricing pressures in the industry generally could materially and
adversely impact our operations.

     Additionally, a number of legislative and regulatory proposals aimed at
reducing the costs of medical products and services have been enacted or
proposed. For example, President Bush's administration has recently proposed a
program that would give Medicare beneficiaries the right to purchase a
discount-card for a nominal fee. The discount-card would entitle the purchaser
to receive pre-negotiated discounts on certain prescription drugs. Additionally,
certain state governments have enacted legislation that seeks to reduce the
price paid by Medicaid recipients for prescription drugs. In Florida,
pharmaceutical companies that sell to state Medicaid programs are now required
to offer rebates in addition to the already-discounted prices mandated by
federal law, and a new program in Michigan is designed to force pharmaceutical
companies to

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reduce the prices of their prescription drugs to be placed on the state's
preferred list of drugs eligible for Medicaid reimbursement. Additionally,
several large pharmaceutical companies have recently adopted discount plans for
the elderly. Our business, financial condition and results of operations could
be materially and adversely affected if recently established or future
legislative or regulatory programs that are designed to reduce the costs of
medical products and services are effective or require consumers to use generic
substitutes for our branded products.

OUR SUCCESS IS DEPENDENT UPON A LIMITED NUMBER OF KEY PRODUCT LINES, WHICH MEANS
THAT ANY UNFAVORABLE DEVELOPMENTS WITH RESPECT TO ANY ONE PRODUCT LINE COULD
MATERIALLY AND ADVERSELY AFFECT US.

     Our branded product acquisition strategy requires significant investment in
a limited number of key product lines. Each of our branded product lines, and
particularly Darvon and Darvocet, will represent a significant portion of our
total product sales for the foreseeable future. Accordingly, any factor
adversely affecting sales of any of our branded products could have a material
adverse effect on our business, financial condition and results of operations.
For example, any problems with the safety or efficacy of any of our products
could materially adversely affect the value of our brands, which could have a
material adverse effect on our business, financial condition and results of
operations. In addition, any perceived problems with our products could have a
similar material adverse effect. We are aware of press and consumer advocate
reports challenging the safety of Darvon and Darvocet, alleging that these
products are addictive, not effective and have caused fatalities in the case of
overdoses. Challenges to the safety and efficacy of Darvon and Darvocet could
have a material adverse effect on our business, financial condition and results
of operation.

CONSOLIDATION OF OUR DISTRIBUTION NETWORK FOR PHARMACEUTICAL PRODUCTS COULD
RESULT IN REDUCED PRODUCT PURCHASES AND INCREASED PRODUCT RETURNS BY OUR
CUSTOMERS.

     The distribution network for pharmaceutical products has in recent years
been subject to increasing consolidation. As a result, a few large wholesale
distributors control a significant share of the market. These large,
well-established distributors are NeoSan's primary customers. We anticipate that
as NeoSan's business expands as a result of the addition of our acquired product
lines, some of these wholesalers and distributors may become significant
customers accounting for 10% or more of our consolidated net revenues. Any
negative developments with or financial difficulties of one or more of these
distributors could materially and adversely affect or business, financial
condition or results of operations. We have experienced concentration of
business in our other business units in the past, and in 2001 and 2000 the same
customer and its affiliates accounted for approximately 15% of our net revenues.
Additionally, this consolidation trend could cause our customers to stop
carrying or reduce their inventory levels of our products, return our products
or reduce our product offerings. For example, many pharmacies do not carry
Darvon and Darvocet, instead carrying only generic substitutes. Any of these
factors could have a material adverse effect on our business, financial
condition and results of operations.

PRODUCT LIABILITY CLAIMS OR PRODUCT RECALLS COULD HARM OUR BUSINESS, FINANCIAL
CONDITION AND RESULTS OF OPERATIONS.

     We face an inherent business risk of exposure to product liability claims
in the event that the use of our products is alleged to have resulted in adverse
effects. Such risks will exist even with respect to those products that receive
regulatory approval for commercial sale. While we take what we believe are
appropriate precautions, we may not be able to avoid significant product
liability exposure. We currently have product liability insurance in the amount
of $10 million for aggregate annual claims. This insurance is subject to
significant limitations, including a $100,000 deductible per incident, among
other things. This level of insurance coverage, however, may not be sufficient
to cover all potential claims against us or involving our products. Also,
adequate insurance coverage may not be available in the future at acceptable
costs, if at all. Additionally, if we acquire or develop new products, we cannot
assure you that additional liability insurance coverage for these new products
will be available on acceptable terms, if at all. Although we have yet to face

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a product liability claim, the assertion of this type of claim could have a
material adverse affect on our business, financial condition and results of
operations.

     Product recalls may be issued at our discretion or at the discretion of the
FDA, other government agencies or others having regulatory authority for
pharmaceutical product sales. For example, we initiated a recall of one batch of
M.V.I.-Pediatric manufactured in April 2001, even though we do not believe that
we are legally responsible because we did not own the product when this batch
was manufactured. We believe that none of the recalled product remains in the
market. Any product recall could materially adversely affect our business,
financial condition and results of operations.

WE MAY BE UNABLE TO SECURE OR ENFORCE ADEQUATE INTELLECTUAL PROPERTY RIGHTS TO
PROTECT THE NEW PRODUCTS OR TECHNOLOGIES WE DEVELOP, AND OUR EXISTING
INTELLECTUAL PROPERTY RIGHTS MAY NOT BE ADEQUATE TO PROTECT US OR PROVIDE US
WITH A COMPETITIVE ADVANTAGE.

     Our ability to successfully commercialize new branded products or
technologies is dependent upon our ability to secure and enforce strong
intellectual property rights, generally patents, and we may be unable to do so.
To obtain patent protection we must be able to successfully persuade the U.S.
Patent and Trademark Office and its foreign counterparts to issue patents on a
timely basis and possibly in the face of third party challenges. Even if we are
granted a patent, our rights may later be challenged or circumvented by third
parties. The issuance of a patent is not conclusive as to its validity or
enforceability. In addition, from time to time, we have received notices from
third parties regarding patent claims against us. Any such claims, with or
without merit, could be time-consuming to defend, result in costly litigation,
divert management's attention and resources and cause us to incur significant
expenses. In addition, any potential intellectual property litigation could
require that we stop selling our products, obtain a license from the owner to
sell or use the relevant intellectual property, which we may not be able to
obtain on favorable terms, if at all, or modify our products to avoid using the
relevant intellectual property. In the event of a successful claim of
infringement against us, our business could be materially and adversely
affected.

     Additionally, we also rely on trade secrets and other unprotected
proprietary knowledge, which we generally seek to protect by confidentiality,
non-disclosure and assignment of invention agreements with our employees,
consultants, licensees and other companies. These agreements, however, may be
breached, may not be enforceable, or we may not have adequate remedies for a
breach by the other party. Additionally, our trade secrets may become known by
our competitors. Parties to those agreements may claim rights to intellectual
property arising out of their work. The disclosure or misappropriation of our
intellectual property for any of these reasons could materially and adversely
affect our business, financial condition or results of operations.

WE DEPEND ON KEY PERSONNEL.

     We are highly dependent on key personnel, and the loss of any of them,
particularly Frederick D. Sancilio, Ph.D., our Chairman and Chief Executive
Officer, could impede the achievement of our acquisition and development
objectives and otherwise be disruptive and seriously impede our success.
Although we believe that we are adequately staffed in key positions and that we
will be successful in retaining skilled and experienced management, operational
and scientific personnel, we cannot assure you that we will be able to attract
and retain such personnel on acceptable terms. The loss of the services of key
scientific, technical and management personnel could have a material adverse
effect on us, especially in light of our recent growth. We do not maintain
key-person life insurance on, or have any employment agreements with, any of our
executives other than Dr. Sancilio.

A SIGNIFICANT PORTION OF OUR FACILITIES ARE LOCATED IN AREAS SUSCEPTIBLE TO
HURRICANES AND MAJOR STORM DAMAGE.

     A significant portion of our research and development facilities, our
corporate headquarters, and other critical business operations and some of our
key suppliers are located in geographic areas that have had, and are likely to
continue to have, hurricanes and major storms. Although we maintain business
interruption and other insurance coverage, this coverage is subject to
significant limitations and deductibles and may not be sufficient to offset the
impact to our operations and infrastructure caused by future hurricanes and
storms.

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