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                                                                    EXHIBIT 99.1

             IMPORTANT FACTORS REGARDING FORWARD-LOOKING STATEMENTS

         From time to time, Cambridge NeuroScience through its management may
make forward-looking public statements, such as statements concerning then
expected future revenues or earnings or concerning projected plans, performance,
product development and commercialization, as well as other estimates relating
to future operations. There are certain key factors that could cause future
results to differ materially from those anticipated by management, including,
but not limited to, the following:

UNCERTAINTIES RELATED TO CLINICAL TRIALS

     Before obtaining regulatory approvals for the commercial sale of any of its
products under development, the Company must demonstrate through preclinical
studies and clinical trials that the product is safe and effective for use in
each target indication. The results from preclinical studies and early clinical
trials may not be predictive of results that will be obtained in large-scale
clinical trials, and there can be no assurance that clinical trials of the
Company's product candidates will demonstrate sufficient safety and efficacy to
obtain the requisite regulatory approvals or will result in marketable products.
Clinical trials are often conducted with patients that are critically ill.
During the course of treatment, these patients can die or suffer other adverse
medical effects for reasons that may not be related to the pharmaceutical agent
being tested but which can nevertheless affect clinical trial results. A number
of companies in the pharmaceutical industry have suffered significant setbacks
in advanced clinical trials, even after promising results in earlier trials. If
the Company's lead compound, CERESTAT(1), is not shown to be safe and effective
in clinical trials (including current Phase III clinical trials), the resulting
delays in developing other compounds and conducting related preclinical testing
and clinical trials would have a material adverse effect on the Company's
business, financial condition and results of operations.

     The completion of clinical trials of the Company's product candidates may
be delayed by many factors and there can be no assurance that delays or
terminations will not occur. One such factor is the rate of enrollment of
patients, which generally varies throughout the course of a clinical trial and
which depends on the size of the patient population, the number of clinical
trial sites, the proximity of patients to clinical trial sites, the eligibility
criteria for the trial and the existence of competitive clinical trials. The
Company cannot control the rate at which patients present themselves for
enrollment, and there can be no assurance that the rate of patient enrollment
will be consistent with the Company's expectations or be sufficient to enable
clinical trials of the Company's product candidates to be completed in a timely
manner. The Company is aware of several other companies that are currently
conducting or preparing to conduct advanced clinical trials of products for the
treatment of TBI and stroke. To date, the Company has experienced delays in the
planned patient enrollment for its Phase III clinical trials of CERESTAT due, in
part, to the existence of these competing trials. Any continued delays in
patient enrollment may result in increased costs or regulatory filing delays, or
both. Any significant delays in, or termination of, clinical trials of the
Company's product candidates would have a material adverse effect on the
Company's business, financial condition and results of operations.

     CERESTAT, is being tested in Phase III clinical trials for the treatment of
Traumatic Brain Injury ("TBI") and stroke. Currently, there are no NMDA
ion-channel blockers approved by the United States Food and Drug Administration
("FDA") for these indications. Several large pharmaceutical companies have
suspended or terminated clinical trials of drug candidates, including NMDA
antagonists, for stroke and TBI indications due to lack of efficacy. The Company
expects that it will be required to conduct an additional Phase III clinical
trial for stroke in addition to the one this is currently underway. There can be
no assurance that additional Phase III clinical trials will not be required for
TBI or stroke. In addition, rhGGF2 is a glial growth factor, and there are no
FDA-approved glial growth factors for the treatment of multiple sclerosis
("MS"). There can be no assurance that significant effects on the outcome
measures

(1) CERESTAT is a registered trademark of Boehringer Ingelheim International,
    GmbH.

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being used by the Company in clinical trials for CERESTAT or any of the
Company's other product candidates will be acceptable to regulatory authorities,
including the FDA, as the basis for marketing approval. In addition, clinical
trials may be terminated at any time for safety reasons or if little or no
efficacy is demonstrated on an interim basis.

     There can be no assurance that regulatory authorities will permit
additional clinical trials for CERESTAT or clinical trials for the Company's
other product candidates. Additional animal studies could be required to obtain
additional safety data prior to commencing clinical trials of NMDA ion-channel
blockers for indications that are less life-threatening than TBI or stroke. If
trials are conducted, there can be no assurance that any of the Company's
product candidates will prove to be safe and efficacious or will receive
regulatory approvals.

UNCERTAINTIES RELATED TO EARLY STAGE OF DEVELOPMENT; TECHNOLOGICAL UNCERTAINTIES

     All of the Company's product candidates are in the research or development
stage, and all revenues to date have been generated from collaborative research
agreements, government grants and financing activities, or from interest income
earned on these funds. No revenues have been generated from product sales. There
can be no assurance that product revenues can be realized on a timely basis, if
ever.

     Cambridge NeuroScience has not yet requested or received regulatory
approval for any product from the FDA or any other regulatory authority. There
can be no assurance that Cambridge NeuroScience or its strategic partners will
succeed in the development and marketing of any therapeutic product. To achieve
profitable operations, the Company must, alone or with others, successfully
identify, develop, introduce and market proprietary products. If potential
products are identified, they will require significant additional investment,
development, preclinical testing and clinical trials prior to potential
regulatory approval and commercialization. The Company is devoting its efforts
to the research and development of potential products based on NMDA ion-channel
blockers and other technology platforms. Neither the Company, not to its
knowledge any other company, has successfully obtained marketing approval for a
product based on NMDA ion-channel blockers to treat either TBI or stroke.

     The development of new pharmaceutical products is highly uncertain and
subject to a number of significant risks. Potential products that appear to be
promising at early stages of development may not reach the market for a number
of reasons. Potential products may be found to be ineffective or cause harmful
side effects during preclinical testing or clinical trials, fail to receive
necessary regulatory approvals, be difficult to manufacture on a large scale, be
uneconomical, fail to achieve market acceptance or be precluded from
commercialization by proprietary rights of third parties. CERESTAT has not been
proven safe and effective in humans. There can be no assurance that the
Company's product development efforts will be successfully completed, that
required regulatory approvals can be obtained or that any products, if
introduced, will be successfully marketed or achieve customer acceptance.
Commercial availability of any Cambridge NeuroScience products, including
CERESTAT, is not expected for a number of years, if at all.

HISTORY OF LOSSES; UNCERTAINTY OF FUTURE PROFITABILITY

     As of December 31, 1996, the Company had an accumulated deficit of $89.6
million. The Company anticipates that it will incur substantial losses in the
future, potentially greater than losses incurred in prior years. There can be no
assurance that the Company's product candidates will be successfully developed
or that its products, if successfully developed, will generate revenues
sufficient to enable the Company to earn a profit. Cambridge NeuroScience
expects to incur substantial additional operating expenses over the next several
years as its research, development and clinical trial activities increase. To
the extent that the Company is unable to obtain additional third-party funding
for expenses, the Company expects that increased expenses will result in
increased losses from operations. The Company's ability to achieve profitability
depends in part on the ability of the Company to enter into agreements for the
development and commercialization of the Company's products. There can be no
assurance that 


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Cambridge NeuroScience or its strategic partners will obtain required 
regulatory approvals and successfully identify, test, manufacture and market
any product candidates, or that the Company will ever achieve product revenues
or profitability. Cambridge NeuroScience does not expect to generate revenues
from the sale of products, if any, for several years.

DEPENDENCE ON STRATEGIC ALLIANCES; POTENTIAL CONFLICTS OF INTEREST

     The Company's strategy for research, development and commercialization of
its product candidates includes the establishment of various corporate
collaborations, licensing agreements and other arrangements. In some cases, the
Company will be dependent upon these outside parties to conduct preclinical
testing and clinical trials and to provide adequate funding for the Company's
development programs. The Company has entered into collaborative arrangements
with Boehringer Ingelheim International GmbH ("BI") for the development and
commercialization of CERESTAT and with Allergan for the development of NMDA
ion-channel blockers, sodium ion-channel blockers and combination ion-channel
blockers for the treatment of ophthalmic diseases, including glaucoma. A
substantial portion of the payments to be received by the Company from BI and
Allergan are dependent on the Company achieving certain program development
milestones. There can be no assurance that such milestones will be achieved on a
timely basis, if ever. There can be no assurance that the Company will be able
to maintain existing collaboration agreements, negotiate collaborative
arrangements in the future on acceptable terms, if at all, or that any such
collaborative arrangements will be successful. To the extent that the Company is
not able to maintain or establish such arrangements, the Company would be
required to undertake product development and commercialization activities at
its own expense, which would increase the Company's capital requirements or
require the Company to limit the scope of its development and commercialization
activities. In addition, the Company may encounter significant delays in
introducing its products into certain markets or find that the development,
manufacture or sale of its products in such markets is adversely affected by the
absence of such collaborative agreements. While the Company believes that BI,
Allergan and other potential strategic partners will have an economic motivation
to succeed in performing their obligations under collaboration arrangements with
the Company, the amount and timing of funds and other resources to be devoted
under such arrangements will be controlled by such other parties and would be
subject to financial or other difficulties that may befall such other parties.

     The Company cannot control the amount and timing of resources which its
strategic partners devote to the Company's programs or potential products, which
may vary because of factors unrelated to the potential products. If any of the
Company's strategic partners breach or terminate their agreements with the
Company or otherwise fail to conduct their collaborative activities in a timely
manner, the preclinical or clinical development or commercialization of product
candidates or research programs may be delayed, and the Company will be required
to devote additional resources to product development and commercialization or
terminate certain development programs. Under the Company's collaboration
agreement with BI, BI has certain termination rights including the right in its
sole discretion to terminate its agreement upon 90 days written notice. Allergan
may also terminate its agreement with the Company for breach and under certain
other circumstances upon six months notice. The termination of the BI or
Allergan agreement or of other collaborative arrangements which the Company may
in the future enter into would have a material adverse effect on the Company's
business, financial condition and results of operations. There can be no
assurance that disputes will not arise in the future with respect to the
ownership of rights to any technology developed with third parties. These and
other possible disagreements between collaborators and the Company could lead to
delays in the collaborative research, development or commercialization of
certain product candidates or could require or result in litigation or
arbitration, which would be time-consuming and expensive, and would have a
material adverse effect on the Company's business, financial condition and
results of operations.

     Cambridge NeuroScience's strategic partners may develop, either alone or
with others, products that compete with the development and marketing of the
Company's products. For example, the Company is aware that BI is engaged in
advanced clinical trials of products for the treatment of stroke, including


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enlimomab and tPA, the latter in conjunction with Genentech, Inc. Competing
products, either developed by the strategic partners or to which the strategic
partners have rights, may result in the Company's partners withdrawing research,
development or marketing support with respect to all or a portion of the
Company's technology, which would have a material adverse effect on the
Company's business, financial condition and results of operation.

NEED FOR FUTURE FUNDING; UNCERTAINTY OF ACCESS TO CAPITAL

     Cambridge NeuroScience will require substantial additional funding in order
to continue research, product development, preclinical testing and clinical
trials of its product candidates. The Company will also require additional
funding for operating expenses, the pursuit of regulatory approvals for its
product candidates and to establish marketing and sales capabilities. The
Company's future capital requirements will depend on many factors, including
continued scientific progress in its research and development programs, the size
and complexity of these programs, progress with preclinical testing and clinical
trials, the time and costs involved in obtaining regulatory approvals, the costs
involved in filing, prosecuting and enforcing patent claims, competing
technological and market developments, the establishment of additional
collaborative arrangements, the cost of manufacturing arrangements,
commercialization activities and the cost of product in-licensing and strategic
acquisitions, if any. There can be no assurance that the Company's cash reserves
and other liquid assets and funding that may be received from the Company's
strategic partners and interest income earned thereon, will be adequate to
satisfy its capital and operating requirements.

     Cambridge NeuroScience intends to seek additional funding through
arrangements with strategic collaborators and through public or private sales of
the Company's securities, including equity securities. There can be no
assurance, however, that additional funding will be available on reasonable
terms, if at all. Any additional equity financings would be dilutive to the
Company's stockholders. If adequate funds are not available, Cambridge
NeuroScience may be required to curtail significantly or terminate one or more
of its research and development programs and/or obtain funds through
arrangements with collaborative partners or others that may require Cambridge
NeuroScience to relinquish rights to certain of its technologies or product
candidates.

INTENSE COMPETITION AND RISK OF TECHNOLOGICAL CHANGE

     The fields in which Cambridge NeuroScience is involved are characterized by
rapid technological progress. New developments are expected to continue at a
rapid pace in both industry and academia. There are many companies, both public
and private, including large pharmaceutical companies, chemical companies and
specialized genetic engineering companies, engaged in developing products
competitive with products under development by the Company. Many of these
companies have greater capital, human resources and research and development,
manufacturing and marketing experience than Cambridge NeuroScience. Such
companies may succeed in developing products that are more effective or less
costly than any that may be developed by Cambridge NeuroScience and may also
prove to be more successful than Cambridge NeuroScience in production and
marketing. Competition may increase further as a result of potential advances in
the commercial applicability of biotechnology and greater availability of
capital for investment in these fields. In addition, academic, government and
industry-based research is intense, resulting in considerable competition in
obtaining qualified research personnel, submitting patent filings for protection
of intellectual property rights and establishing corporate strategic alliances.
There can be no assurance that research, discoveries and commercial developments
by others will not render any of the Company's programs or potential products
noncompetitive.

     In July 1996, the FDA approved the use of tissue plasminogen activator
("tPA") for the treatment of patients who had suffered a stroke within the
preceding three hours and for whom a CT scan showed no evidence of hemorrhage.
In addition, a number of companies are developing drugs to treat TBI and/or
stroke. Competition for CERESTAT will come from other inhibitors of responses
mediated via specific ion channels. In particular, Sandoz AG is prepared to
conduct a Phase III clinical trial of D-CPPene, 


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which is being developed for TBI only. A Phase III trial of D-CPPene has been
running in Europe. Lubeluzole (Janssen Pharmaceutica, N.V., a subsidiary of
Johnson & Johnson), currently in Phase III clinical trials, is being developed
for stroke. Fosphenytoin (Warner-Lambert Company), currently in Phase III
clinical trials and SNX-111 (Neurex Corporation), planned for Phase III clinical
trials, are being developed for TBI. Citicoline[R] (Interneuron Pharmaceuticals,
Inc.), currently in a Phase III clinical trial, and enlimomab (Boehringer
Ingelheim), currently in a Phase III clinical trial, are being developed for
stroke. The Company is aware of three therapeutics currently being marketed to
treat MS, which are Betaseron[R] (Chiron Corporation/Schering AG), Avonex[R]
(Biogen, Inc.) and Copaxone[R] (Teva Pharmaceutical Industries Ltd./Hoechst
Marion Roussel Ltd.). There can be no assurance that the introduction of these
or other products that the Company is unaware of will not have a material
adverse effect on the Company's business, financial condition and results of
operations.

     The Company will, for the foreseeable future, rely on its strategic
partners for certain preclinical evaluation and clinical development of its
product candidates and manufacturing and marketing f any products. In addition,
the Company relies on its strategic partners, in part, for support in its drug
discovery operations. Generally, the Company's agreements with its strategic
partners do not prohibit the strategic partners from engaging in competitive
activities with the Company. The pharmaceutical companies with which the Company
has collaborations are in some cases attempting to develop other products to
treat diseases within the fields of the collaborations with the Company. Any
product candidate of the Company, therefore, may be subject to competition with
a potential product under development by the pharmaceutical company with which
the Company is collaborating in connection with such product candidate.

     Biotechnology and related pharmaceutical technology have undergone rapid
and significant change. The Company expects the technology associated with the
Company's research and development will continue to develop rapidly, and the
Company's future success will depend in large part on its ability to maintain a
competitive position with respect to this technology. Rapid technological
development by the Company or others may result in compounds, products or
processes becoming obsolete before the Company recovers any expenses it incurs
in connection with developing such products.

PATENT AND LICENSE UNCERTAINTIES

     Proprietary rights relating to the Company's products will be protected
from unauthorized use by third parties only to the extent that they are covered
by valid and enforceable patents or are maintained as trade secrets, and to the
extent that the Company diligently enforces its rights against infringement of
its patent rights and against misappropriation of its trade secrets and
proprietary information. The biotechnology and pharmaceutical industries place
considerable importance on obtaining patent and trade secret protection for new
technologies, products and processes, and the Company's success will depend, in
part, on its ability to obtain patent protection for its products and
manufacturing processes, preserve its trade secrets and operate without
infringing the proprietary rights of third parties. Some of the technology that
may be used in the Company's products may not covered by any patent or patent
application. In instances where the Company's products are not covered by valid
and enforceable patents, there can be no assurance that third parties will not
be able to market similar or related products, nor can there be any assurance
that patent or other proprietary rights held by the Company with respect to
these products will afford commercially significant protection. In addition,
there can be no assurance that confidentiality arrangements to which the Company
is a party will be effective in protecting the Company's confidential
information or trade secrets.

     There can be no assurance that any patent applications relating to the
Company's products will be filed in the future or that any currently pending
applications will issue on a timely basis, if ever. Since patent applications in
the United States are maintained in secrecy until patents issue and since
publication of discoveries in the scientific or patent literature often lag
behind actual discoveries, the Company cannot be certain that it was the first
to make the inventions covered by each of its pending patent 


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applications or that it was the first to file patent applications for such
inventions. Even if patents are issued, the degree of protection afforded by
such patents will depend upon the scope, validity, enforceability of the claims
obtained in such patents and the Company's willingness and financial ability to
enforce and/or defend them. The patent position of biotechnology and
pharmaceutical firms is often highly uncertain and usually involves complex
legal and factual questions. Moreover, no consistent policy has emerged in the
United States and in many other countries regarding the breadth of claims
allowed in biotechnology patents. The Company could incur substantial costs in
defending itself in suits brought against it by others or in suits in which the
Company may assert its patents against others. If the outcome of any such
litigation is adverse to the Company, the Company's business, financial
condition and results of operations could be adversely affected. If competitors
of the Company prepare and file patent applications in the United States that
claim technology also claimed by the Company, the Company may be required to
participate in interference proceedings declared by the United States Patent and
Trademark Office to determine priority of invention, which could result in
substantial cost to the Company. Patents granted to the Company in certain
foreign countries may be subject to opposition proceedings brought by third
parties. The Company may incur substantial costs defending such proceedings.
There can be no assurance that the Company would prevail in any such proceedings
or that such proceedings would not result in a material adverse effect on the
Company's business, financial condition or results of operations. In addition,
patents blocking the Company's manufacture, use or sale of its products could be
issued to third parties in the United States or foreign countries. The issuance
of blocking patents or an adverse outcome in an interference or opposition
proceeding could subject the Company to significant liabilities to third parties
and require the Company to license disputed rights from third parties or cease
using the technology. There can be no assurance that such license would be
available on commercially acceptable terms, if at all.

     There are patents held by third parties that relate to the manufacture,
development and use of the Company's product candidates for which the Company
has licenses. There can be no assurance that the Company will not in the future
require licenses to additional patents, that such licenses will be available on
commercially reasonable terms, if at all, that existing or future licenses will
not be terminated or that any such termination or failure to obtain a license
will not have a material adverse effect on the Company's business, financial
condition or results of operations.

     The Company is also aware of third-party patent and pending patent
applications in the United States and corresponding patent applications pending
in some foreign countries that, if issued and valid, may be construed to cover
aspects of the Company's rhGGF2 product candidates. There can be no assurance
that the claims of the issued U.S. patents are not infringed, and that the
claims of future patents issuing from the patent applications, if any, will not
be infringed by the Company's proposed manufacture, use or sale of products
based on the rhGGF2 technology. Furthermore, there can be no assurance that
Cambridge NeuroScience would prevail in any legal action seeking damages or
injunctive relief for infringement of the existing patent or any patent that
might issue from such applications or that any license required under any such
patent would be available or, if available, would be available on commercially
reasonable terms. Failure to obtain a required license or to successfully
establish non-infringement of, or the invalidity or unenforceability of, such
third-party patents could preclude the manufacture, marketing, sale and use of
the Company's products based on such rhGGF2 technology.

NO MANUFACTURING EXPERIENCE; RELIANCE ON THIRD-PARTY MANUFACTURING

     The Company has no experience in manufacturing products for commercial
purposes and does not have manufacturing facilities. Consequently, the Company
is dependent on contract manufacturers for the production of products for
development and commercial purposes. In the event that the Company is unable to
obtain or retain third-party manufacturing arrangements, it will not be able to
commercialize its products as planned which would have a material adverse effect
on the Company's business, financial condition and results of operations. The
manufacture of the Company's products for clinical trials and commercial
purposes is subject to current Good Manufacturing Practices ("GMP") regulations
promulgated by the FDA. There can be no assurance that the Company will be able
to enter into 


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agreements for the manufacture of future products with manufacturers whose
facilities and procedures comply with GMP and other regulatory requirements. The
Company does not intend to develop or acquire facilities for the manufacture of
drug products for clinical trials or commercial purposes, and has been, and will
remain, dependent on its strategic partners or third parties for the manufacture
of product candidates for preclinical, clinical and commercial purposes.

     Under the terms of its collaboration agreement for CERESTAT with BI, the
Company has retained worldwide manufacturing rights, subject to BI's option to
acquire such rights in exchange for increased royalty payments. Although the
Company has an agreement with a third-party manufacturer to provide quantities
of CERESTAT sufficient to complete the development program for this product, the
Company currently has no agreement for the manufacture of CERESTAT for
commercial purposes. The Company's current dependence upon others for the
manufacture of its products may adversely affect its profit margin, if any, on
the sale of future products and the Company's ability to develop and deliver
products on a timely and competitive basis.

UNCERTAINTIES RELATED TO MARKETING AND SALES

     Under its collaboration agreement for CERESTAT with BI, the Company has
granted exclusive marketing rights to BI in Europe and other geographic regions
in return for royalties on product sales. If BI terminates the agreement or
fails to market CERESTAT successfully, the Company's business, financial
condition and results of operations will be adversely affected.

     Under its agreement with BI, Cambridge NeuroScience has an option to
co-promote CERESTAT in the United States. The Company has notified BI of its
intent to exercise this option. Co-promotion of CERESTAT would require the
Company to develop its own sales force to promote CERESTAT or make arrangements
with a third party to do so. Cambridge NeuroScience currently has no experience
in marketing or selling pharmaceutical products. In order to achieve commercial
success for any approved product, Cambridge NeuroScience must either develop a
marketing and sales force or, where appropriate or permissible, enter into
arrangements with third parties to market and sell its products. There can be no
assurance that Cambridge NeuroScience will successfully develop marketing and
sales experience or that it will be able to enter into marketing and sales
agreements with others on acceptable terms, if at all. If the Company develops
its own marketing and sales capability, it will compete with other companies
that currently have experienced and well funded marketing and sales operations.
To the extent that the Company enters into co-promotion or other sales and
marketing arrangements with other companies, any revenues to be received by
Cambridge NeuroScience will be dependent on the efforts of others and there can
be no assurance that their efforts will be successful.

GOVERNMENT REGULATION; NO ASSURANCE OF REGULATORY APPROVAL

     Prior to marketing, any product developed by the Company must undergo an
extensive regulatory approval process. This regulatory process, which includes
preclinical testing and clinical trials, and may include post-marketing
surveillance, of each compound to establish its safety and efficacy can take
many years and require the expenditure of substantial resources. Data obtained
from preclinical and clinical activities are susceptible to varying
interpretations which could delay, limit or prevent regulatory approval. In
addition, delays or rejections may be encountered based upon changes in FDA
policy for drug approval during the period of product development and FDA
regulatory review of each submitted new drug application ("NDA"). Similar delays
may also be encountered in foreign countries. There can be no assurance that
regulatory approval will be obtained for any products developed by the Company.

     Moreover, regulatory approval may entail limitations on the indicated uses
of the drug. Further, even if regulatory approval is obtained, a marketed
product and its manufacturer are subject to continuing review. Discovery of
previously unknown problems with a product or manufacturer may have a material
adverse effect on the Company's business, financial condition and results of
operations, including withdrawal of the product from the market. Violations of
regulatory requirements at any stage of the 


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regulatory process may result in various adverse consequences, including the
FDA's delay in approving or its refusal to approve a product, withdrawal of an
approved product from the market and the imposition of criminal penalties
against the manufacturer and NDA-holder. The Company has not had any product
approved for commercialization in the United States or elsewhere. No assurance
can be given that the Company will be able to obtain FDA approval for any
products. Failure to obtain requisite regulatory approvals or failure to obtain
approvals of the scope requested will delay or preclude the Company or its
licensees or strategic partners from marketing the Company's products or limit
the commercial use of the products and will have a material adverse effect on
the Company's business, financial condition and results of operations.

UNCERTAINTY OF PHARMACEUTICAL PRICING AND REIMBURSEMENT

     The Company's successful commercialization of its pharmaceutical products
will depend in part on the extent to which reimbursement for the costs of such
products and related treatments will be available from government health
administration authorities, private health insurers and other third-party
payors. Significant uncertainty exists as to the reimbursement status of newly
approved health care products, and third-party payors are increasingly
challenging the prices charged for medical products and services. There can be
no assurance that any third-party insurance coverage will be available to
patients for any products developed by the Company. Government and other
third-party payors are increasingly attempting to contain health care costs by
limiting both coverage and the level of reimbursement for new therapeutic
products, and by refusing, in some cases, to provide coverage for uses of
approved products for disease indications for which the FDA has not granted
marketing approval. In particular, the Company anticipates that a large
percentage of patients who receive CERESTAT for the treatment of stroke will be
covered by Medicare and be subject to limitations on reimbursement. If adequate
coverage and reimbursement levels are not provided by government and third-party
payors for the Company's products, the market acceptance of these products would
be adversely affected, which would have a material adverse effect on the
Company's business, financial condition and results of operations.

     The Company's business may be materially adversely affected by the
continuing efforts of governmental and third-party payors to contain or reduce
the costs of health care through various means. For example, in certain foreign
markets, pricing or profitability of prescription pharmaceuticals is subject to
government control. In the United States, there have been, and the Company
expects that there will continue to be, a number of federal and state proposals
to implement similar government control. In addition, an increasing emphasis on
managed care in the United States has and will continue to put pressure on
pharmaceutical pricing. Such initiatives and proposals, if adopted, could
decrease the price that the Company receives for any products it may develop and
sell in the future and thereby have a material adverse effect on the Company's
business, financial condition and results of operations. Further, to the extent
that such proposals or initiatives have a material adverse effect on other
pharmaceutical companies that are collaborators or prospective collaborators for
certain of the Company's potential products, the Company's ability to
commercialize its potential products may be adversely affected.

POTENTIAL PRODUCT LIABILITY; UNCERTAINTIES RELATED TO INSURANCE

     The use of any of the Company's potential products in clinical trials and
the sale of any approved products, including the testing and commercialization
of CERESTAT, may expose the Company to liability claims resulting from the use
of products or product candidates. These claims might be made directly by
consumers, pharmaceutical companies or others. The Company maintains product
liability insurance coverage for claims arising from the use of its products in
clinical trials in the amount of $5.0 million per occurrence and $5.0 million in
aggregate. However, coverage is becoming increasingly expensive, and no
assurance can be given that the Company will be able to maintain insurance at a
reasonable cost or in sufficient amounts to protect the Company against losses
due to liability that could have a material adverse effect on the Company's
business, financial condition and results of operations. There can be no
assurance that the Company will be able to obtain commercially reasonable
product liability insurance for any product approved for marketing in the future
or that insurance coverage and 


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the resources of the Company would be sufficient to satisfy any liability
resulting from product liability claims. A successful product liability claim or
series of claims brought against the Company would have a material adverse
effect on its business, financial condition and results of operations.

VOLATILITY OF COMMON STOCK PRICE

     The market prices for securities of biotechnology and pharmaceutical
companies, including Cambridge NeuroScience, have historically been highly
volatile, and the market has from time to time experienced significant price and
volume fluctuations that are unrelated to the operating performance of
particular companies. Factors such as fluctuations in the Company's operating
results, announcements of technological innovations or new therapeutic products
by the Company or others, clinical trial results, developments concerning
agreements with collaborators, governmental regulation, developments in patent
or other proprietary rights, public concern as to the safety of products
developed by the Company or others, future sales of substantial amounts of
Common Stock by existing stockholders and general market conditions can have an
adverse effect on the market price of the Common Stock. The realization of any
of the risks described in these "Risk Factors" could have a dramatic and adverse
impact on market price.

CONCENTRATION OF OWNERSHIP

     Directors, officers and stockholders affiliated with members of the Board
of Directors of the Company beneficially own approximately 35% of the
outstanding Common Stock. These stockholders effectively would be able to 
significantly influence the election of the Company's Board of Directors and 
other corporate actions.

DEPENDENCE ON QUALIFIED PERSONNEL

     Because of the specialized scientific nature of the Company's business,
Cambridge NeuroScience is highly dependent upon its ability to continue to
attract and retain qualified scientific and technical personnel. There is
intense competition for qualified personnel in the areas of the Company's
activities and there can be no assurance that Cambridge NeuroScience will be
able to continue to attract and retain the qualified personnel necessary for the
development of its business. Loss of the services of, or failure to recruit, key
scientific and technical personnel would be significantly detrimental to the
Company's product development programs, and could have a material adverse effect
on the Company's business, financial condition and results of operations.

ANTITAKEOVER PROVISIONS

     The Company's Restated Certificate of Incorporation authorizes the Board of
Directors to issue, without stockholder approval, up to 10,000,000 shares of
preferred stock with voting, conversion and other rights and preferences that
could adversely affect the voting power or other rights of the holders of Common
Stock. The issuance of preferred stock or rights to purchase preferred stock
could be used to discourage an unsolicited acquisition proposal. In addition,
the possible issuance of preferred stock could discourage a proxy contest, make
more difficult the acquisition of a substantial block of the Company's Common
Stock or limit the price that investors might be willing to pay for shares and
the Company's Common Stock. In addition, certain provisions of the Delaware
corporate law may have the effect of deterring hostile takeovers or delaying or
preventing changes in the control or management of the Company, including
transactions in which stockholders might otherwise receive a premium for their
shares over the then current market prices.


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ABSENCE OF DIVIDENDS

The Company has never declared nor paid cash dividends on any of its capital
stock. The Company currently intends to retain its earnings for future growth
and therefore does not anticipate paying cash dividends in the foreseeable
future.