Exhibit 99
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                              ORPHAN MEDICAL, INC.

                              CAUTIONARY STATEMENTS

         AN INVESTMENT IN OUR COMMON STOCK INVOLVES A NUMBER OF RISKS, INCLUDING
AMONG OTHERS, RISKS ASSOCIATED WITH COMPANIES THAT OPERATE IN THE PHARMACEUTICAL
INDUSTRY. THESE RISKS ARE SUBSTANTIAL AND INHERENT IN OUR OPERATIONS AND
INDUSTRY. YOU SHOULD CAREFULLY CONSIDER THE FOLLOWING INFORMATION ABOUT THESE
RISKS, TOGETHER WITH THE INFORMATION IN THE REST OF THIS PROSPECTUS, BEFORE
BUYING SHARES OF COMMON STOCK.

WE HAVE A HISTORY OF LOSSES, WHICH WE EXPECT TO CONTINUE.

         We have been unprofitable since our inception in January 1993. We
expect operating losses in 1999 because anticipated gross profits from product
revenues will not offset our operating expenses and additional 1999 spending to
advance the development of Xyrem. The amount of these losses may vary
significantly from year-to-year and quarter-to-quarter. Our actual losses will
depend on, among other factors, the timing of product development, regulatory
approval, and market demand for our FDA approved products. We cannot assure you
that we will ever generate sufficient product revenues or achieve profitability.

WE CANNOT BE SURE THAT FUTURE CAPITAL WILL BE AVAILABLE TO MEET OUR EXPECTED
CAPITAL REQUIREMENTS.

         We expect spending for research and development, and sales and
marketing to increase significantly. We estimate our future capital requirements
to be:

         *        $4.0 million of capital durinG 1999 to fully implement our
                  current business plan, including the Xyrem development plan,
                  to meet additional sales and marketing requirements related to
                  Busulfex, which we commenced shipping in February 1999, and to
                  maintain our Nasdaq National Market listing.

         *        $6.5 million during the next two fiscal years in research and
                  development for the products we currently market and to
                  advance the development of Xyrem.

         *        Additional capital would be required if we were to undertake
                  developments of any additional products.

Adequate funds for our operations and continued development, whether from
financial markets or from other sources, may not be available when needed on
acceptable terms, or at all. If we cannot obtain additional capital, we would
have to delay or scale back some or all of our development plans for Xyrem,
reduce personnel and general office support spending, and sell or license one or
more of our approved products.

LIMITATIONS TO SOURCES OF ADDITIONAL CAPITAL - RESTRICTIONS, COVENANTS AND
RIGHTS RELATED TO SENIOR CONVERTIBLE PREFERRED STOCK.

         On July 23, 1998, we completed the sale to UBS Capital of a private
placement of $7.5 million of Senior Convertible Preferred Stock. On August 2,
1999, we completed an additional sale to UBS Capital of a private placement of
$2.95 million of Series B Convertible Preferred Stock. In conjunction with the
issuance of the preferred shares, we agreed to several restrictions and
covenants, and granted certain voting and other rights to the

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                                                                      Exhibit 99
                                                                    Page 2 of 13

holders of the preferred shares. One of the most important of these restrictions
is that we cannot incur additional indebtedness, except for indebtedness secured
solely by our trade receivables, until we have profitable operations, subject to
certain limitations. Another important restriction is that, without the approval
of a majority of the preferred stockholders, we cannot issue additional equity
securities unless the selling price per share exceeds the then conversion price
of the outstanding convertible preferred stock or the sale of equity is
accomplished in a public offering. The present conversion plan is $8.14 per
share for the Senior Convertible Preferred Stock and $6.50 for the Series B
Convertible Preferred Stock. These restrictions could make it more difficult and
more costly for us to obtain additional capital. We cannot assure you that
additional sources of capital will be available to us and, if available, on
terms acceptable to us.

POSSIBLE VOLATILITY OF STOCK PRICE AND REDUCED LIQUIDITY OF THE MARKET FOR THE
STOCK - LOSS OF NASDAQ NATIONAL MARKET LISTING AND FAILURE TO QUALIFY FOR NASDAQ
SMALL CAP MARKET LISTING.

         There is a risk that the market value and the liquidity of the public
float for our common stock could be adversely affected in the event we no longer
meet Nasdaq's requirements for continued listing on the National Market. For
continued listing on the Nasdaq National Market, a company must satisfy a number
of requirements, which in our case includes either: (1) net tangible assets in
excess of $4.0 million as reported on Form 10-Q or Form 10-K or (2) a market
capitalization of at least $50.0 million. At September 30, 1999, our net
tangible assets equaled $4.4 million and our market capitalization was
approximately $44.5 million (based on the last sale price of $6.75 and 6,588,707
registered shares outstanding as of September 30, 1999). Net tangible assets are
defined as total assets less the sum of total liabilities and intangible assets.
Market capitalization is defined as total outstanding shares multiplied by the
last sales price quoted by Nasdaq. Should we fail in the future to satisfy at
least one of the aforementioned Nasdaq listing requirements, our common stock
would no longer qualify for listing on the Nasdaq National Market, but would
qualify for quotation on the Nasdaq Small Cap Market as long as our net tangible
assets exceed $2.0 million. Our ability to raise additional capital and the
market value of our common stock could be adversely affected by failing to meet
Nasdaq's requirements for listing on either the National Market or the Small Cap
Market. The realization of any one or combination of these risks could have a
material adverse effect on our business, our prospects and our shareholders.

POSSIBLE VOLATILITY OF STOCK PRICE.

         There is generally significant volatility in the market prices of
securities of early stage pharmaceutical companies. Contributing to this
volatility are various factors and events:

         *        announcements by us or our competitors of new product
                  developments or clinical testing results;
         *        governmental approvals, regulations or actions;
         *        developments or disputes relating to patents or proprietary
                  rights;
         *        public concern over the safety of therapies;
         *        fluctuations in financial performance from period to period;
                  and
         *        small float or number of shares of our stock available for
                  sale.

         These and other factors and events may have a significant impact on our
business and on the market price of the common stock.

THERE IS A LIMITED MARKET FOR OUR PRODUCTS.

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                                                                      Exhibit 99
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         Most orphan drugs have a potential United States market of less than
$25 million annually and many address annual markets of less than $1 million. We
cannot assure you that sales of our products will be adequate to make Orphan
profitable even if the products are accepted by medical specialists and used by
patients.

WE RELY ON THE LIMITED PROTECTION OF THE ORPHAN DRUG ACT.

         Under the Orphan Drug Act, the FDA may grant orphan drug designation to
drugs intended to treat a "rare disease or condition." The Orphan Drug Act
generally defines "rare disease or condition" as one that affects populations of
fewer than 200,000 people in the United States. The Orphan Drug Act provides us
with certain limited protections for our products.

         The first level of limited protection is orphan drug designation, which
must be requested before submitting a new drug application (referred to in the
industry as an " NDA"). After the FDA grants orphan drug designation, it
publishes the generic identity of the therapeutic agent and the potential orphan
use specified in the request. Orphan drug designation does not constitute FDA
approval. In addition, orphan drug designation does not convey any advantage in,
or shorten the duration of, the regulatory approval process.

         The second level of limited protection is orphan drug status. The
Orphan Drug Act confers orphan drug status upon the first company to receive FDA
approval to market the designated drug for the designated indication. FDA
approval also results in United States marketing exclusivity for a period of
seven years, subject to certain limitations. Although obtaining FDA approval to
market a product with orphan drug status can be advantageous, we cannot assure
you that the scope of protection or the level of marketing exclusivity will
remain in effect in the future. In addition, orphan drug status does not provide
any marketing exclusivity in foreign markets. Although certain foreign countries
provide development and marketing benefits for orphan drugs, we cannot assure
you that such benefits can be obtained or, if obtained, will be of material
value to us. The FDA has granted us orphan drug status for Antizol, Elliotts B
Solution, Cystadane, Sucraid, and Busulfex.

         We have obtained orphan drug designation for Xyrem and plan to submit
an NDA for approval next year. Sodium oxybate is the generic identity of the
therapeutic agent for Xyrem. Despite orphan drug designation for Xyrem, another
pharmaceutical company still may attempt to develop sodium oxybate for the same
designated indication as Xyrem or may seek approval of an NDA for their drug
prior to the approval of an NDA for Xyrem. If the FDA first approves another
sponsor's NDA for sodium oxybate and for the same indication as Xyrem, that
sponsor will be entitled to exclusive marketing rights. In that case, the FDA
would refrain for seven years from approving our application to market Xyrem. We
are aware that the FDA has granted Teva (formerly Biocraft) orphan drug
designation for the use of sodium oxybate to treat the symptoms of narcolepsy,
however, we have obtained the exclusive right to use Teva's data in our NDA
submission. We cannot assure you that the FDA will approve Xyrem first for the
designated indication. We also cannot assure you that the FDA will not grant
orphan drug designation and marketing approval to other competing products prior
to approving our NDA for Xyrem.

         Even if the FDA approves an NDA for a drug with an orphan drug
designation, the FDA may still approve the same drug for a different indication,
or a molecular variation of the same drug for the same indication. We are aware
that the FDA granted to Sparta Pharmaceutical, which has been acquired by
SuperGen Inc., orphan drug designation for an intravenous busulfan for a closely
related indication. If the FDA approves an NDA for Sparta's drug, Sparta could
seek orphan drug status. In addition, the FDA does not restrict doctors from
prescribing an

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                                                                      Exhibit 99
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approved drug for uses not approved by the FDA for that drug. Thus, a doctor
could prescribe another company's drug for indications for which our product has
received FDA approval and orphan drug status. Significant "off label" use, that
is, prescribing approved drugs for unapproved uses, could adversely affect the
marketing potential of any of our products that have received orphan drug status
and NDA approval.

         The possible amendment of the Orphan Drug Act by Congress has been the
subject of frequent discussion. Although Congress has made no significant
changes to the Orphan Drug Act for a number of years, members of Congress have
from time to time proposed legislation that would limit the application of the
Orphan Drug Act. We cannot assure you that the Orphan Drug Act will remain in
effect in its current form. The precise scope of protection that orphan drug
designation and marketing approval may afford in the future is unknown. We
cannot assure you that the current level of exclusivity will remain in effect.

THE FDA AND FOREIGN REGULATORY AUTHORITIES MUST APPROVE OUR PRODUCTS FOR SALE.

         Government regulation in the United States and abroad is a significant
factor in the testing, production and marketing of our current and future
products. Each product must undergo an extensive regulatory approval process
conducted by the United States Food and Drug Administration and by comparable
agencies in other countries. We cannot market any medicine we may develop as a
prescription product in any jurisdiction, including foreign countries, in which
the product does not receive regulatory approval. The approval process can take
many years and requires the expenditure of substantial resources.

         We depend on external laboratories and medical institutions to conduct
our pre-clinical and clinical testing in compliance with clinical and laboratory
practices established by the FDA. The data obtained from pre-clinical and
clinical testing is subject to varying interpretations that could delay, limit
or prevent regulatory approval. In addition, changes in FDA policy for drug
approval during the period of development and in the requirements for regulatory
review of each submitted NDA could result in additional delays or outright
rejection.

         We cannot assure you that the FDA or any foreign regulatory authority
will approve any product we develop in a timely manner, or at all. Generally,
the FDA and foreign regulatory authorities approve only a very small percentage
of newly discovered pharmaceutical compounds that enter pre-clinical
development. Moreover, even if the FDA approves a product, it may place
commercially unacceptable limitations on the uses, or "indications," for which a
product may be marketed. This would result in additional cost and delay for
further studies to provide additional data on safety or effectiveness.

WE MAY BE SUBJECT TO DEA AND STATE REGULATION OF CONTROLLED SUBSTANCES.

         We have petitioned the FDA to make gamma hydroxy butyrate (GHB), the
active ingredient in Xyrem, a controlled substance prior to approval of a
marketing application for Xyrem. We expect the FDA to designate Xyrem as a
controlled substance. If this happens, the Drug Enforcement Agency as well as
the FDA will regulate Xyrem's manufacture and distribution. Orphan Medical
supports government regulation of Xyrem as a controlled substance because abuse
of GHB has occurred in the past.

         Abuse of GHB has occurred from sources other than Orphan Medical
product. We are not aware of any diversion of Xyrem leading to any abuse. We
have put systems into place to minimize the potential of any such diversion.
However, we cannot assure you that diversion will not occur.

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                                                                      Exhibit 99
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         There are five "Schedules" or levels of control that the DEA can assign
to controlled substances. Each schedule relates to a relative level for
potential misuse of a drug. Schedule I is the most restrictive; drugs in this
schedule have very high potential for misuse and no approved medical use.
Heroin, for example, is a Schedule I controlled substance. Schedule II
controlled substances, such as morphine, also have a high potential for misuse
and a high level of potential for physical and chemical dependence. However,
Schedule II drugs have demonstrated and approved medical uses. Drugs in Schedule
IV, such as benzodiazepines or valium, pose less danger of abuse than Schedule
III drugs and have accepted medical value. The DEA imposes more strict measures
on the manufacture and distribution of Schedule III controlled substances than
it does for Schedule IV controlled substances.

         We believe that Xyrem is most appropriately categorized as a Schedule
III controlled substance. This may be more restrictive than what Xyrem would
receive based on scientific information about the drug and on comparisons with
other similar drugs. The requirements of Schedule III, however, may help reduce
the risk that Xyrem could be misused. We believe that we can successfully market
Xyrem under a Schedule III categorization. If the DEA imposes a more restrictive
Schedule on Xyrem, the expense required to complete development and to market
Xyrem could be prohibitively high.

         The United States House of Representatives has approved HR 2130 by a
margin of 423 to 1. HR 2130 would make GHB, and hence Xyrem, a Schedule I
controlled substance with exemptions for products studied under FDA approved
Investigational New Drug applications. Upon approval of an NDA by the FDA, Xyrem
would become a Schedule III controlled substance with Schedule I penalties for
illicit use. A bill with almost identical provisions has been introduced in the
Senate (S 1561). We cannot assure you that the Senate bill will be approved,
that the House and Senate bills will be combined into a final, unified piece of
legislation or that the President will sign a final bill into law.

         In addition, individual states can regulate controlled substances at
the same level as or more restrictively than the DEA. While every effort will be
made to ensure that regulation by the states is consistent with DEA assigned
scheduling, we cannot assure you that state regulation will not impede
development or marketing efforts related to Xyrem.

FDA APPROVAL DOES NOT GUARANTEE FINANCIAL SUCCESS.

         Six of our products have been approved for marketing by regulatory
authorities in the United States or elsewhere. Even if we obtain FDA approval to
market Xyrem, we cannot assure you that Xyrem or our other products will be
commercially successful or achieve the expected financial results. We may
encounter unanticipated problems relating to the development, manufacturing,
distribution and marketing of our products. Some of these problems may be beyond
our financial and technical capacity to solve. The failure to adequately address
any such problems could have a material adverse effect on our business and our
prospects.

         We cannot completely insulate our drug development portfolio from
potential failures. Some products that we have selected for development will not
produce the results expected during clinical trials or receive FDA approval.
Drugs approved by the FDA may fail to generate product sales of an acceptable
level. We have discontinued the development of eleven products from our
portfolio since inception: L-Cycloserine in 1994, Glucaric Acid in 1996, and
nine other products in 1997. We discontinued the nine products in 1997 in order
to focus our development efforts on those products that fit within three
selected strategic therapeutic market segments:

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                                                                      Exhibit 99
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Antidote, Oncology Support, and Sleep Disorders. In December 1998, we sold our
rights to colloidal bismuth subcitrate for $750,000, and are evaluating the
potential value of our rights in other discontinued products. Depending on
available financing, we may continue to develop one or more of the discontinued
products. We cannot assure you that we will continue development on all other
proposed products or that we will continue marketing all FDA approved products.

SIGNIFICANT GOVERNMENT REGULATION CONTINUES ONCE A PRODUCT IS APPROVED FOR SALE.

         The FDA's Division of Drug Marketing, Advertising and Communication
must approve marketing claims, which are the basis for a product's labeling,
advertising and promotion. We cannot be sure that the FDA's division will
approve our proposed marketing claims. The failure of the FDA's division to
approve our proposed marketing claims could have a material adverse effect on
our business and prospects.

         The FDA also requires post-marketing adverse event surveillance
programs to monitor the product's side effects. If the surveillance program
indicates unsafe side effects, the FDA may withdraw marketing approval of the
product.

         The FDA also regulates the manufacturing process for an approved drug.
The FDA may impose restrictions or sanctions upon the subsequent discovery of
previously unknown problems with a product or manufacturer. One possible
sanction is requiring the withdrawal of such product from the market. The FDA
must approve any change in manufacturer and most changes in the manufacturing
process prior to implementation. Obtaining the FDA's approval for a change in
manufacturing procedures or change in manufacturers is a lengthy and costly
process and could cause production delays and loss of sales, which would have a
material adverse effect on our business and our prospects.

         Certain foreign countries regulate the sales price of a product after
marketing approval is granted. We cannot be sure that we can sell our products
at satisfactory prices in foreign markets even if marketing approval is granted
by foreign regulatory authorities.

WE RELY ON OTHERS FOR PRODUCT DEVELOPMENT OPPORTUNITIES.

         We do not engage in research to identify new pharmaceutical compounds.
Instead, we have adopted a license and acquisition strategy to build our product
portfolio. This strategy for growth requires us to identify and acquire
potential pharmaceutical products targeted at niche markets within selected
strategic therapeutic market segments. These products usually require further
development and approval by regulatory bodies before they can be marketed. We
cannot assure you that any such products can be successfully developed, approved
or marketed. We must rely upon the willingness of others to sell or license
pharmaceutical product opportunities to us. Other companies, including those
with substantially greater resources, compete with us to acquire such products.
We cannot assure you that we will be able to acquire rights to additional
products on acceptable terms, if at all. Our failure to acquire or license new
pharmaceutical products within a selected strategic therapeutic market segment
or to promote and market commercially successful products within an existing
strategic therapeutic market segment could have a material adverse effect on our
business and our prospects.

         We have contractual production rights to certain compounds through
various license agreements. Generally, the licensor can terminate these
agreements:

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                                                                      Exhibit 99
                                                                    Page 7 of 13

         *        for cause upon short notice;
         *        if we become insolvent or bankrupt;
         *        if we do not apply specified minimum resources and efforts to
                  develop the compound under license; or
         *        if we do not achieve certain minimum royalty payments.

We cannot assure you we can meet all specified requirements and avoid
termination of any license agreements. We cannot assure you that if any
agreement is terminated, we will be able to enter into similar agreements on
terms as favorable as those contained in our existing license agreements.

WE DEPEND ON OTHERS TO MANUFACTURE AND SUPPLY THE PRODUCTS WE MARKET.

         We do not have and do not intend to establish any internal product
testing, synthesis of bulk drug substance, or manufacturing capability for drug
product. Accordingly, we depend on others to supply and manufacture the
components incorporated into all of our finished drug products. The inability to
contract for these purposes on acceptable terms could adversely affect our
ability to develop and market our products. Failure by parties with whom we
contract to perform adequately their responsibilities may delay the submission
of products for regulatory approval, impair our ability to deliver our products
on a timely basis or otherwise adversely affect our business and our prospects.
The loss of a supply or manufacturing contractor could materially adversely
affect our business and our prospects.

         The loss of either a bulk drug supplier or drug product manufacturer
would require us to obtain regulatory clearance in the form of a "pre approval
submission" and incur validation and other costs associated with the transfer of
the bulk drug or drug product manufacturing process. We believe that it could
take as long as one year for the FDA to approve such a submission. Because our
products are targeted to relatively small markets and our manufacturing
production runs are small by industry standards, we have not incurred the added
costs to certify and maintain secondary sources of supply for bulk drug
substance or backup drug product manufacturers. Should we lose either a bulk
drug supplier or a drug product manufacturer, we could run out of salable
product to meet marketing demands or investigational product for use in clinical
trials, while we wait for the FDA to approve a new bulk drug supplier or drug
product manufacturer. We cannot assure you that the change of a bulk drug
supplier or drug product manufacturer and the transfer of the processes to
another third party will be approved by the FDA, and if approved, in a timely
manner. The loss of or the change of a bulk drug supplier or a drug product
manufacturer could have a material adverse effect on our business and prospects.

BULK DRUG SUPPLY

         Bulk drug substance is the active chemical compound used in the
manufacture of our drug products. We depend substantially on Ash Stevens, Inc.
for the supply of bulk drug substance used in Busulfex, Antizol, and
Antizol-Vet. If we were to lose Ash Stevens as a supplier, we would be required
to identify a new supplier for the bulk drug substance used in products that
provided approximately 90% of 1998 total revenues and are expected to generate
over 90% of 1999 total revenues. We depend substantially on Lonza, Inc. for the
supply of bulk drug substance used in Xyrem. If we were to lose Lonza as a
supplier, we would be required to identify a new supplier before an NDA is
submitted for Xyrem. We also cannot assure you that our bulk drug supply
arrangements with

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                                                                      Exhibit 99
                                                                    Page 8 of 13

Ash Stevens and Lonza might not change in the future. We cannot assure you that
any change would not adversely affect production of Busulfex, Antizol,
Antizol-Vet, or Xyrem.

DRUG PRODUCT MANUFACTURE

         From bulk drug substance, drug product manufacturers formulate a
finished drug product and package the product for sale or for use in clinical
trials. We depend substantially on an affiliate of Boehringer Ingelheim for drug
product manufacturing of Busulfex, Antizol, and Antizol-Vet. If we were to lose
Boehringer as a manufacturer, we would be required to identify a new
manufacturer for drug products that provided approximately 90% of 1998 total
revenues and are expected to generate over 90% of 1999 total revenues. We have
identified GlobalPharm as the drug product manufacturer for Xyrem and expect to
contract with this company. Currently, however, we do not have a contract with
GlobalPharm. If we do not contract with GlobalPharm, we would be required to
identify a new drug product manufacturer before an NDA is submitted for Xyrem.
We cannot assure you that our drug product manufacturing arrangements with
Boehringer and GlobalPharm might not change in the future. We cannot assure you
that any change would not adversely affect production of Busulfex, Antizol,
Antizol-Vet, or Xyrem.

WE CANNOT CONTROL OUR CONTRACTORS' COMPLIANCE WITH APPLICABLE REGULATIONS.

         FDA regulations require good manufacturing practices to which bulk drug
suppliers and manufacturers are subject. Foreign regulatory authorities impose
similar rules and regulations. Our supply and manufacturing contractors must
comply with these regulatory requirements. Failure by our contractors to comply
with the FDA's good manufacturing practices or applicable foreign requirements
could result in significant time delays in or an inability to commercialize or
continue to market a product. Either result could have a material adverse effect
on our business and prospects. Failure to comply with good marketing practices
or other applicable legal requirements can lead to federal seizure of violative
products, injunctive actions brought by the federal government, or potential
criminal and civil liability for our company, our officers, or our employees. We
cannot assure you that we will be able to maintain relationships either
domestically or abroad with contractors whose facilities and procedures comply
or will continue to comply with the FDA's good manufacturing practices or
applicable foreign requirements.

WE DEPEND UPON OTHERS FOR DISTRIBUTION.

         We have an exclusive agreement with Cardinal Health, Inc. to provide a
variety of services to support the effective distribution of our products.
Cardinal will provide integrated distribution and operations services to process
and support transactions between us and our wholesalers, specialty distributors,
and direct customers. Cardinal also will provide reimbursement management,
patient assistance and information hotline services, and specialty distribution
and marketing services to physician practices. Busulfex, Cystadane, Elliotts B
Solution, Antizol, Antizol-Vet, and Sucraid are currently distributed by
Cardinal. Cardinal also will distribute our proposed products should those
products receive marketing clearance from the FDA. We will substantially depend
upon Cardinal's ability to successfully distribute Busulfex, Elliotts B
Solution, Antizol, Antizol-Vet, and Sucraid and all of our proposed products
that receive marketing clearance from the FDA.

         Chronimed Inc. is the principal distributor, on a non-exclusive basis,
in the United States for Cystadane. Chronimed distributes this product directly
to patients through its mail order pharmacy. We substantially depend upon
Chronimed's ability to successfully distribute Cystadane directly to patients in
the United States.

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                                                                      Exhibit 99
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         We cannot assure you that other distribution companies would be
available or continue to be available on commercially acceptable terms. The loss
of a distributor or failure to renew agreements with an existing distributor
would have a material adverse effect on our business and prospects.

WE RELY ON FOREIGN MARKETING ALLIANCES AND HAVE NO ASSURANCE OF FOREIGN
LICENSEES.

         Our strategy to exploit foreign markets is to license foreign marketing
and distribution rights after an NDA is submitted in the United States. We
consider Europe, Japan, and Canada our most attractive foreign markets. Our
current foreign developments are:

         *        EUROPE. We have licensed the marketing and distribution rights
                  for Busulfex, Antizol, Cystadane and Sucraid in Europe. If our
                  licensees are unsuccessful in their distribution efforts, we
                  may find it difficult to contract with other distributors for
                  these products within Europe. Distribution of Busulfex,
                  Cystadane and Sucraid is limited to "named patient" or
                  "emergency use" basis until full regulatory approval is
                  obtained. Antizol was approved in the United Kingdom in June
                  1999. Distribution of Antizol in the other countries in which
                  it is licensed will continue under "named patient" or
                  "emergency use" basis until the mutual recognition approvals
                  are obtained in the other countries of Europe in the year
                  2000. We do not expect such "emergency use" distribution to
                  result in material revenues.

         *        AUSTRALIA AND NEW ZEALAND. We have licensed marketing and
                  distribution rights for Cystadane and Sucraid in Australia and
                  New Zealand, but sales of these products have not been
                  material. We do not expect sales to increase in the near
                  future to the point that they become material.

         *        ISRAEL. We have licensed marketing and distribution rights for
                  Antizol, Busulfex, Cystadane, Elliotts B Solution and Sucraid
                  in Israel. Cystadane and Elliotts B Solution are formally
                  registered. Distribution of Busulfex in Israel is limited to a
                  "named patient" or "emergency use" basis until full regulatory
                  approval is obtained. We do not expect such "emergency use"
                  distribution to result in material revenues. We expect
                  registration, approval and normal distribution of Busulfex to
                  commence later in 1999.

         *        CANADA. We have licensed marketing and distribution rights for
                  Antizol in Canada. Preparations for formal registration are
                  underway.

         *        CENTRAL AMERICA. We have licensed marketing and distribution
                  rights for Elliotts B Solution in Central America, but sales
                  have not been material. We do not expect sales to increase in
                  the near future to the point that they become material.

         We depend on our foreign licensees for the regulatory registration of
our products in foreign countries. We cannot be sure that our licensees can
obtain such registration. In addition, we cannot be sure that we will be able to
negotiate commercially acceptable license agreements for our other products or
in additional foreign countries. Furthermore, we cannot assure you that these
companies will be successful in marketing and selling our products in their
respective territories.

OUR PRODUCTS MIGHT BE RECALLED.

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                                                                      Exhibit 99
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         A product may be recalled at our discretion or at the discretion of the
FDA, the U.S. Federal Trade Commission, or other government agencies having
regulatory authority for product sales. A recall may occur due to disputed
labeling claims, manufacturing issues, quality defects, or other reasons. We
cannot assure you that a product recall will not occur. We do not carry any
insurance to cover the risk of a potential product recall. Any product recall
could have a material adverse effect on our business and prospects.

WE FACE LIMITS ON PRICE FLEXIBILITY AND THIRD-PARTY REIMBURSEMENT.

         The flexibility of prices that we can charge for our products depends
on government regulation, both in the United States and abroad, and on other
third parties. One important factor is the extent to which reimbursement for our
products will be available to patients from government health administration
authorities, private health insurers and other third-party payors. Government
officials and private health insurers are increasingly challenging the price of
medical products and services. We are uncertain as to the pricing flexibility we
will have with respect to, and if we will be reimbursed for, newly approved
health care products.

         In the United States, we expect continuing federal and state proposals
to implement government control of the pricing and profitability of prescription
pharmaceuticals. Cost controls, if mandated by a government agency, could
decrease the price we receive for our products or products we may develop in the
future. We may not be able to recover our development costs, which could be
substantial. We may not be able to realize an appropriate profit margin. This
could have a material adverse effect on our business. Furthermore, federal and
state regulations govern or influence reimbursement of health care providers for
medical treatment of certain patients. We cannot assure you that actions taken
by federal and/or state governments, if any, with regard to health care reform
will not have a material adverse effect on our business and prospects.

         Certain private health insurers and third-party payors may attempt to
control costs further by selecting exclusive providers of pharmaceuticals. If
such arrangements are made with our competitors, these insurers and third-party
payors would not reimburse patients who purchase our competing products. This
would diminish the market for our products and could have a material adverse
effect on our business and prospects.

PATENTS AND OTHER PROPRIETARY RIGHTS ARE SIGNIFICANT FACTORS IN THE
PHARMACEUTICAL INDUSTRY.

         The pharmaceutical industry places considerable importance on obtaining
patent and trade secret protection for new technologies, products and processes.
The patent position of pharmaceutical firms is often highly uncertain and
generally involves complex legal, technical and factual questions. Our success
depends, in part, on our ability:

         *        to enjoy, obtain and enforce protection for our products under
                  United States and foreign patent laws and other intellectual
                  property laws;
         *        to preserve the confidentiality of our trade secrets; and
         *        to operate without infringing the proprietary rights of third
                  parties.

         We evaluate the desirability of seeking patent or other forms of
protection for our products in foreign markets based on the expected costs and
relative benefits of attaining such protection. We cannot assure you that any
patents will be issued from any applications or that any issued patents will
afford us adequate protection or competitive advantage. We cannot assure you
that any issued patents will not be challenged, invalidated, infringed

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                                                                      Exhibit 99
                                                                   Page 11 of 13

or circumvented. Parties not affiliated with us have obtained or may obtain
United States or foreign patents or possess or may possess proprietary rights
relating to our products. We cannot assure you that patents now in existence or
later issued to others will not adversely affect the development or
commercialization of our products.

         We believe that the active ingredients or compounds in our FDA approved
and proposed products, Cystadane, Elliotts B Solution, Antizol, Antizol-Vet,
Xyrem and Sucraid, are in the public domain and presently are not subject to
patent protection in the United States. However, we have filed patent
applications with respect to our Xyrem product. United States patents issued to
the licensor covers our formulation and use of Busulfex. We are pursuing
additional patent applications in foreign countries with respect to Busulfex. We
could, however, incur substantial costs asserting any infringement claims that
we may have against others.

         We seek to protect our proprietary information and technology, in part,
through confidentiality agreements and inventors' rights agreements with our
employees. We cannot assure you that these agreements will not be breached, that
we will have adequate remedies for any breach, or that our trade secrets will
not otherwise be disclosed to or discovered by our competitors.

         We also cannot assure you that our planned activities will not infringe
patents owned by others. We could incur substantial costs in defending
infringement suits brought against us. We also could incur substantial costs in
connection with any suits relating to matters for which we have agreed to
indemnify our licensors or distributors. An adverse outcome in any such
litigation could have a material adverse effect on our business and prospects.
In addition, we often must obtain licenses under patents or other proprietary
rights of third parties. We cannot assure you that we can obtain any such
licenses on acceptable terms, if at all. If we cannot obtain required licenses
on acceptable terms, we could encounter substantial difficulties in developing,
manufacturing or marketing one or more of our products.

WE FACE INTENSE COMPETITION IN OUR INDUSTRY.

         Competition in the pharmaceutical industry is intense. Potential
competitors in the United States are numerous and include pharmaceutical,
chemical and biotechnology companies. Many of these companies have substantially
greater capital resources, marketing experience, research and development staffs
and facilities than we do. We seek to limit potential sources of competition by
developing products that are eligible for orphan drug designation and NDA
approval or other forms of protection. We cannot assure you, however, that our
competitors will not succeed in developing similar technologies and products
more rapidly than we can. Similarly, we cannot assure you that these competing
technologies and products will not be more effective than any of those that we
have developed or are currently developing.

WE EXPECT RAPID TECHNOLOGICAL CHANGE TO BE CONSTANT IN OUR INDUSTRY.

         The pharmaceutical industry has experienced rapid and significant
technological change. We expect that pharmaceutical technology will continue to
develop rapidly, and our future success will depend, in large part, on our
ability to develop and maintain a competitive position. Technological
development by others may result in our products becoming obsolete before they
are marketed or before we recover a significant portion of the development and
commercialization expenses incurred with respect to such products. In addition,
alternative therapies or new medical treatments could alter existing treatment
regimes, and thereby reduce the need for one or more of our products, which
would adversely affect our business and our prospects.

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                                                                      Exhibit 99
                                                                   Page 12 of 13

WE FACE SUBSTANTIAL PRODUCT LIABILITY AND INSURANCE RISKS.

         Testing and selling health care products entails the inherent risk of
product liability claims. The cost of product liability insurance coverage has
increased. Substantial increases in insurance premium costs in many cases have
rendered coverage economically impractical. We currently carry product liability
coverage in the aggregate amount of $10 million for all claims made in any
policy year. Although to date we have not been the subject of any product
liability or other claims, we cannot assure you that we will be able to maintain
product liability insurance on acceptable terms or that our insurance will
provide adequate coverage against potential claims. A successful uninsured
product liability or other claim against us could have a material adverse effect
on our business and prospects.

IMPACT OF YEAR 2000 READINESS ISSUE.

         We have assessed and continue to assess the impact of the so called
"Year 2000 Readiness Issue" on our reporting systems and operations. The Year
2000 Readiness Issue relates to the ability of computer hardware, software, and
firmware products to accurately process date/time data (including calculating,
comparing, and sequencing) from, into, and between the twentieth and
twenty-first centuries, and the years 1999 and 2000 and leap year calculations.
The Year 2000 Readiness Issue also relates to the ability to properly exchange
time/date data between such products. Systems that are not year 2000 compliant
might recognize the year 2000 as the year 1900, or not recognize a year at all.
This inability to recognize or properly treat the year 2000 may cause our
systems, or the systems used by our suppliers, distributors, customers or
regulatory agencies such as the FDA, to process critical financial and
operational information incorrectly, or not at all.

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                                                                      Exhibit 99
                                                                   Page 13 of 13

         Our information technology systems consist of computer hardware systems
and software applications supplied by third parties. Our strategy has been to
replace our information technology systems with current technology, which is
both year 2000 compliant and more efficient. We have also purchased and
implemented financial and operational software upgrades that are year 2000
compliant. For the nine months ended September 30, 1999, our information
technology system purchases have not been material. Our information technology
systems are year 2000 compliant.

         Our assessment of internal systems includes a review of non-information
technology systems. This assessment includes a review of our internal equipment
and facilities. Based upon this review, we believe that our processes and
equipment are year 2000 compliant.

         We have identified third parties, with which we have material
relationships, including suppliers, distributors and other key vendors of
materials and services. These parties or organizations have confirmed that they
have implemented Year 2000 Readiness Programs. We have not developed a
contingency plan to provide for continuity of business operations in the event
material third parties experience a disruption of service due to the Year 2000
Readiness Issue. Potential problems include, but are not limited to, loss of
electricity, loss of communications (data and voice), and loss of transportation
services. However, even if all material third parties confirm that they are or
expect to be year 2000 compliant by December 31, 1999, we cannot state with
certainty that such parties will be compliant. Failure of third party systems on
which we rely could significantly disrupt our ability to transact business with
our customers and suppliers. It is impossible to assess fully the potential
consequences in the event service interruptions from suppliers occur or in the
event that there are disruptions in such infrastructure areas as utilities,
communications, transportation, banking and government.


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