Exhibit 99
                                                                     Page 1 of 9
                              ORPHAN MEDICAL, INC.

                              CAUTIONARY STATEMENTS


The Private Securities Litigation Reform Act of 1995 provides a "safe harbor"
for forward-looking statements to encourage companies to provide prospective
information without fear of litigation so long as statements are identified as
forward-looking and are accompanied by meaningful cautionary statements
identifying important factors that could cause actual results to differ
materially from those projected. The Company desires to take advantage of these
"safe harbor" provisions and is filing this Exhibit 99 in order to do so. The
words or phrases "will likely result", "look for", "may result", "will
continue", "is anticipated", "expect", "project", or similar expressions are
intended to identify forward-looking statements, and are subject to numerous
known and unknown risks and uncertainties. Actual results could differ
materially from those currently anticipated due to a number of factors,
including those identified in this Exhibit 99, and in the Company's other
filings with the Securities and Exchange Commission. The Company undertakes no
obligation to update or publicly announce revisions to any forward-looking
statements to reflect future events or developments.


LACK OF PROFITABLE OPERATIONS - OPERATING LOSSES WILL CONTINUE.
The Company has been unprofitable since its inception in January 1993. The
Company expects operating losses in 1999 because anticipated gross profits from
product revenues will not offset additional 1999 spending to advance the
development of Xyrem, and other operating expenses. The amount of these losses
may vary significantly from year-to-year and quarter-to-quarter and will depend
on, among other factors, the timing of product development, regulatory approval,
and market demand for its FDA approved products. There can be no assurance that
the Company will ever generate sufficient product revenues or achieve
profitability.

FUTURE CAPITAL REQUIREMENTS; NO ASSURANCE FUTURE CAPITAL WILL BE AVAILABLE.
Research and development, and sales and marketing spending are expected to
increase significantly. The Company estimates that it will need to incur at
least an additional $6.5 million during the next two fiscal years in research
and development expense relating to the products it currently markets and to
advance the development of Xyrem. In addition, the Company commenced shipping
Busulfex to customers in February 1999 and, as a result, sales and marketing
spending is expected to increase significantly in subsequent quarters. However,
the Company has estimated that it may need to raise up to an additional $4.0
million of capital during 1999 to fully implement its current business plan,
including the Xyrem development plan, and to maintain its Nasdaq National Market
listing. Adequate funds for the Company's operations, whether from financial
markets or from other sources, may not be available when needed on terms
acceptable to the Company, or at all. Lack of funding would cause the Company to
delay or scale back some or all of its development plans for Xyrem, reduce
personnel and general office support spending, and sell or license of one or
more of its approved products.

DEPENDENCE ON LICENSE AND ACQUISITION STRATEGY.
The Company has adopted a license and acquisition strategy to build its product
portfolio. The Company's strategy for growth is dependent, in part, upon its
continued ability to identify and acquire new pharmaceutical products targeted
at niche markets within selected strategic therapeutic market segments ("STMS").
Because the Company does not engage in proprietary research and development of
new pharmaceutical products, it must rely upon the willingness of others to sell
or license pharmaceutical product opportunities to the Company. Other companies,
including those with substantially greater resources, are competing with the
Company to acquire such products. There can be no assurance that the Company
will be able to acquire rights to additional products on acceptable terms, if at
all. The failure of the Company to acquire or license new pharmaceutical
products within a selected STMS or to promote and market commercially successful
products within an existing STMS could have a material adverse effect on the
Company's business and its prospects.

The Company has contractual production rights to certain compounds through
various license agreements. These agreements are generally terminable by the
licensor for cause upon short notice or in the event the Company is insolvent or
bankrupt, does not apply minimum resources and efforts to develop the compound
under license or


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                                                                      Exhibit 99
                                                                     Page 2 of 9

does not achieve certain minimum royalty payments. There can be no assurance
that the agreements will not be so terminated and, if terminated, that the
Company will be able to enter into similar agreements on terms as favorable to
the Company as those contained in its existing license agreements.

FOREIGN MARKETING ALLIANCES; NO ASSURANCE OF FOREIGN LICENSEES.
The Company's strategy for the exploitation of foreign markets is to license
foreign marketing and distribution rights after an NDA is submitted in the
United States. The Company considers Europe, Japan, and Canada its most
attractive foreign markets. The Company has licensed marketing and distribution
rights for Busulfex, Antizol, Cystadane and Sucraid in Europe; Cystadane and
Sucraid in Australia and New Zealand; Busulfex, Cystadane, Elliotts B Solution
and Sucraid in Israel; Antizol in Canada, and Elliotts B Solution in Central
America. Sales of Cystadane and Sucraid in Australia and New Zealand and
Elliotts B Solution in Central America have not been nor are they expected to be
material. Distribution of Antizol and Busulfex in Europe and Busulfex in Israel
will initially be done on a "named patient" or "emergency use" basis until full
regulatory approval is obtained, and the Company does not expect such "emergency
use" distribution to result in material revenues. Distribution of Antizol in
Europe and Busulfex in Israel through normal or the usual distribution channels
is expected to commence after the first half of 1999. However, there can be no
assurance that the Company will be able to negotiate commercially acceptable
license agreements for its other products or in additional foreign countries, if
at all, or that such arrangements will be successful. The Company will be
substantially dependent upon the companies it has contracted with to date for
the successful distribution of Cystadane, Antizol, Busulfex and Sucraid in
Europe and, if these companies are unsuccessful in their distribution efforts,
it may be difficult for the Company to contract with other distributors for
these products within Europe. The Company is also dependent on its foreign
partners for the regulatory registration of its products in foreign countries.
There can be no assurance that such registration can be obtained in foreign
countries.

GOVERNMENT REGULATION; NEED FOR FDA AND OTHER REGULATORY APPROVALS.
Government regulation in the United States and abroad will be a significant
factor in the production, testing and marketing of the Company's current and
future products. Prior to marketing, each of the Company's products must undergo
an extensive regulatory approval process conducted by the United States Food and
Drug Administration (the "FDA") and by comparable agencies in other countries.
The approval process can take many years and require the expenditure of
substantial resources, and there can be no assurance that any product that the
Company may develop will be approved by the FDA or any foreign regulatory
authority in a timely manner, or at all. Generally, only a very small percentage
of newly discovered pharmaceutical compounds that enter pre-clinical development
are approved for sale. The Company will not be permitted to market any medicine
it may develop as a prescription product in any jurisdiction, including foreign
countries, in which the product does not receive regulatory approval. Once
approved, the Division of Drug Marketing, Advertising and Communication
("DDMAC"), the FDA's marketing surveillance department within the Center for
Drugs, must approve marketing claims, which are the basis for a product's
labeling, advertising and promotion. There can be no assurance that the claims
the Company is seeking will be approved by DDMAC. The failure to obtain
acceptable marketing claims on a product from DDMAC could have a material
adverse effect on the Company and its prospects.

The Company depends on external laboratories and medical institutions to conduct
its 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 are subject to varying interpretations that could delay, limit
or prevent regulatory approval. In addition, delays or rejection may be
encountered based upon changes in FDA policy for drug approval during the period
of development and by the requirements for regulatory review of each submitted
New Drug Application ("NDA"). Moreover, even if the FDA approves a product, such
approval may entail commercially unacceptable limitations on the uses, or
"indications," for which a product may be marketed, and further studies may be
required to provide additional data on safety or effectiveness. The FDA also
requires post-marketing adverse event surveillance programs to monitor the
product's side effects.

An approved FDA product and the product's manufacturer are subject to continual
regulatory review and the subsequent discovery of previously unknown problems
with a product or manufacturer may result in restrictions or sanctions by the
FDA on such products or manufacturer, including the withdrawal of such product
from the market. Most changes in the manufacturing procedures for any of the
Company's approved products and any



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                                                                      Exhibit 99
                                                                     Page 3 of 9

change in manufacturers will require the approval of the FDA prior to their
implementation. Obtaining the FDA's approval for a change in manufacturing
procedures or change in manufacturers could cause production delays and loss of
sales, which would have a material adverse effect on the Company's business and
its prospects.

In certain countries, the sales price of a product must also be approved after
marketing approval is granted. No assurance can be given that satisfactory
prices can be obtained in foreign markets even if marketing approval is granted
by foreign regulatory authorities.

ORPHAN DRUG STATUS.
Under the Orphan Drug Act, the FDA may grant orphan drug designation to drugs
intended to treat a "rare disease or condition," which generally is a disease or
condition that affects populations of fewer than 200,000 people in the United
States. Orphan drug designation must be requested before submitting an NDA, and
after the FDA grants orphan drug designation, the generic identity of the
therapeutic agent and its potential orphan use are publicized by the FDA. Under
current law, orphan drug status is conferred upon the first company to receive
FDA approval to market the designated drug for the designated indication, which
also grants United States marketing exclusivity for a period of seven years
following approval by the NDA, subject to certain limitations. Orphan drug
designation does not convey any advantage in, or shorten the duration of, the
regulatory approval process. Moreover, although obtaining FDA approval to market
a product with orphan drug status can be advantageous, there can be no assurance
that the scope of protection or the level of marketing exclusivity that is
currently afforded by orphan drug status and marketing approval will remain in
effect in the future. In addition, NDA approval of a drug with an orphan drug
designation does not provide any marketing exclusivity in foreign markets.
Certain foreign countries provide development and marketing benefits to orphan
drugs, however, there can be no assurance that such benefits can be obtained or,
if obtained, will be of material value to the Company.

Of the Company's products, Xyrem has orphan drug designation, while Antizol,
Elliotts B Solution, Cystadane, Sucraid, and Busulfex have orphan drug status.
Sodium oxybate is the generic identity of the therapeutic agent for the
Company's proposed product, Xyrem. Orphan drug designation does not prevent
another pharmaceutical company from attempting to develop sodium oxybate for the
same designated indication as Xyrem or from obtaining the approval of an NDA for
their drug prior to the approval of an NDA for Xyrem. The Company is aware that
Teva (formerly Biocraft) has been granted orphan drug designation for the use of
sodium oxybate to treat the symptoms of narcolepsy. If another sponsor's NDA for
the same drug and the same indication is approved first, that sponsor is
entitled to exclusive marketing rights if that sponsor has received orphan drug
designation for its drug. In that case, the FDA would refrain from approving an
application by the Company to market Xyrem for seven years, subject to certain
limitations. There can be no assurance that Xyrem will be the first to be
approved by the FDA for the designated indication and, thereby, obtaining orphan
drug status, nor can there be assurance that other competing products will not
receive orphan drug designations and FDA marketing approval prior to Company's
NDA for Xyrem.

NDA approval of a drug with an orphan drug designation does not prevent the FDA
from approving the same drug for a different indication, or a molecular
variation of the same drug for the same indication. The Company is aware that
Sparta Pharmaceutical, which recently agreed to be acquired by SuperGen Inc.,
was granted orphan drug designation for its intravenous busulfan and could seek
orphan drug status, if an NDA is approved by the FDA, for a closely related
indication. Because doctors are not restricted by the FDA from prescribing an
approved drug for uses not approved by the FDA, it is also possible that another
company's drug could be prescribed for indications for which the Company's
product has received orphan drug status and NDA approval. Such prescribing of
approved drugs for unapproved uses (commonly referred to as "off label" use)
could adversely affect the marketing potential of products that have received
orphan drug status and NDA approval.

The possible amendment of the Orphan Drug Act by the United States Congress has
been the subject of frequent discussion. Although no significant changes to the
Orphan Drug Act have been made 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. There can be no assurance as to the precise scope of protection
that may be afforded by orphan drug designation and marketing approval in the
future or that the current level of exclusivity will remain in effect.





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                                                                      Exhibit 99
                                                                     Page 4 of 9

RELIANCE ON PATENTS AND OTHER PROPRIETARY RIGHTS.
The pharmaceutical industry places considerable importance on obtaining patent
and trade secret protection for new technologies, products and processes. The
Company's success will depend, in part, on its ability to enjoy, obtain and
enforce protection for its products under United States and foreign patent laws
and other intellectual property laws, preserve the confidentiality of its trade
secrets and operate without infringing the proprietary rights of third parties.
The patent position of pharmaceutical firms is often highly uncertain and
generally involves complex legal and factual questions. The Company evaluates
the desirability of seeking patent or other forms of protection for its products
in foreign markets based on the expected costs and relative benefits of
attaining such protection. There can be no assurance that any patents will be
issued from any applications or that any issued patents will afford adequate
protection to the Company. Further, there can be no assurance that any issued
patents will not be challenged, invalidated, infringed or circumvented or that
any rights granted thereunder will provide competitive advantages to the
Company. Parties not affiliated with the Company have obtained or may obtain
United States or foreign patents or possess or may possess proprietary rights
relating to the Company's products. There can be no assurance that patents now
in existence or hereafter issued to others will not adversely affect the
development or commercialization of the Company's products or that the Company's
planned activities will not infringe patents owned by others.

The active ingredients or compounds in the Company's FDA approved and proposed
products: Cystadane, Elliotts B Solution, Antizol, Antizol-Vet, Xyrem and
Sucraid are believed to be in the public domain and not presently subject to
patent protection in the United States. However, the Company has filed a patent
application with respect to its formulation of Xyrem oral solution. Busulfex,
which is licensed by the Company, is the Company's only FDA approved product for
which its formulation and use are covered by United States patents issued to the
licensor.

The Company could incur substantial costs in defending itself in infringement
suits brought against it or any of its licensors or in asserting any
infringement claims that the Company may have against others. The Company could
also incur substantial costs in connection with any suits relating to matters
for which the Company has agreed to indemnify its licensors or distributors. An
adverse outcome in any such litigation could have a material adverse effect on
the Company's business and prospects. In addition, the Company could be required
to obtain licenses under patents or other proprietary rights of third parties.
No assurance can be given that any such licenses would be made available on
terms acceptable to the Company, or at all. If the Company is required to, and
does not obtain any such required licenses, it could be prevented from, or
encounter delays in, developing, manufacturing or marketing one or more of its
products.

The Company also seeks to protect its proprietary information and technology in
part by confidentiality agreements and inventors' rights agreements with its
employees. There can be no assurance that these agreements will not be breached,
that the Company will have adequate remedies for any breach or that the
Company's trade secrets will not otherwise be disclosed to or discovered by its
competitors.

COMPETITION; RAPID TECHNOLOGICAL CHANGE.
Competition in the pharmaceutical industry is intense. Potential competitors in
the United States are numerous and include pharmaceutical, chemical and
biotechnology companies, most of which have substantially greater capital
resources, marketing experience, research and development staffs and facilities
than the Company. Although the Company seeks to limit potential sources of
competition by developing products that are eligible for orphan drug designation
and NDA approval or other forms of protection, there can be no assurance that
the Company's competitors will not succeed in developing similar technologies
and products more rapidly than the Company or that these competing technologies
and products will not be more effective than any of those that are being or will
be developed by the Company.

The pharmaceutical industry has experienced rapid and significant technological
change. The Company expects that pharmaceutical technology will continue to
develop rapidly, and the Company's future success will depend, in large part, on
its ability to develop and maintain a competitive position. Technological
development by others may result in the Company's products becoming obsolete
before they are marketed or before the Company recovers a significant portion of
the development and commercialization expenses incurred with respect to such
products. In




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                                                                      Exhibit 99
                                                                     Page 5 of 9

addition, alternative therapies or new medical treatments could alter existing
treatment regimes, and thereby reduce the need for one or more of the Company's
products, which would adversely affect the Company's business and its prospects.

RISKS OF PRODUCT DEVELOPMENT; MARKET UNCERTAINTY.
Six of the Company's products have been approved for marketing by regulatory
authorities in the United States or elsewhere. Even if the Company obtains FDA
approval for marketing Xyrem, there can be no assurance that the Company's
products will be commercially successful or that the products will obtain the
financial results expected. The Company may encounter unanticipated problems
relating to the development, manufacturing, distribution and marketing of its
products, some of which may be beyond the Company's financial and technical
capacity to solve. The failure to adequately address any such problems could
have a material adverse effect on the Company's business and its prospects.

No drug development portfolio can be completely insulated from potential
failures, and it is likely that some products selected for development by the
Company will not produce the results expected during clinical studies, not
receive FDA approval or fail to generate product sales of an acceptable level.
The Company has discontinued the development of eleven products from its
portfolio since inception: L-Cycloserine in 1994, Glucaric Acid in 1996, and
nine products in 1997. With respect to the nine products discontinued in 1997,
the Company took this action in order to focus its development efforts on those
products that fit within three selected STMS: Antidote, Oncology Support, and
Sleep Disorders. In December 1998, the Company sold its rights to colloidal
bismuth subcitrate for $750,000, and is evaluating the potential value of its
rights to one or more of the other proposed products that were discontinued in
1997. Depending on the availability of financing in subsequent periods, the
Company may continue development of one or more of the proposed products that
were discontinued in 1997. There can be no assurance that the Company won't
discontinue development on any other proposed products or that it won't
discontinue marketing any FDA approved products.

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. There can be
no assurance that the Company's sales of its products will be profitable even if
accepted and used by patients and medical specialists.

DEPENDENCE UPON OTHERS FOR MANUFACTURING AND ON LIMITED SOURCES OF SUPPLY.
The Company does not have and does not intend to establish any internal product
testing, drug or chemical synthesis of bulk drug substance, and manufacturing
capability for drug product. Accordingly, the Company will be required to enter
into arrangements with third parties for the supply and manufacture of the
components incorporated into the Company's finished drug products. Inability by
the Company to retain third parties for these purposes on acceptable terms could
adversely affect the Company's ability to develop and market its products. Any
failures by third parties to adequately perform their responsibilities may delay
the submission of products for regulatory approval, impair the Company's ability
to deliver its products on a timely basis or otherwise impair the Company's
competitive position. In addition, the Company's dependence on third parties for
the manufacture of its products may adversely affect its potential profit
margins and its ability to develop and deliver its products on a timely basis.

The manufacture of drugs can be an expensive, time consuming and complex process
and may require the use of materials with limited availability or a dependence
on sole suppliers. Manufacturers of the Company's products will be subject to
applicable good manufacturing practices ("GMP") prescribed by the FDA or other
rules and regulations prescribed by foreign regulatory authorities. The Company
has entered into bulk drug supply and drug product manufacturing agreements with
third parties for all of its FDA approved products and is dependent on such
third parties for continued compliance with GMP and applicable foreign
standards. Failure by a third party manufacturer or supplier to comply with GMP
or applicable foreign requirements could result in significant time delays or
the inability of the Company to commercialize or continue to market a product
and could have a material adverse effect on the Company and its prospects. In
the United States, failure to comply with GMP or other applicable legal
requirements can lead to federal seizure of violative products, injunctive
actions brought by the federal government, and potential criminal and civil
liability on the part of a company and its officers and employees. There can be
no assurance that the Company will be able to maintain relationships either
domestically




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                                                                      Exhibit 99
                                                                     Page 6 of 9

or abroad with its third party manufacturers and suppliers whose facilities and
procedures comply or will continue to comply with GMP or applicable foreign
requirements.

Bulk drug substance is the active chemical compound used in the manufacture of
the Company's drug products. The Company is substantially dependent on Ash
Stevens, Inc. ("Ash Stevens") for the supply of bulk drug substance used in
Busulfex, Antizol, and Antizol-Vet, and on Lonza, Inc. ("Lonza") for the supply
of bulk drug substance used in Xyrem. If the Company were to lose Ash Stevens as
a supplier, it 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. If the
Company were to lose Lonza as a supplier, it would be required to identify a new
supplier before an NDA is submitted for Xyrem. Moreover, the loss of Ash Stevens
or Lonza as suppliers, or an interruption of drug product manufacturing
services, could have a material adverse effect on the Company and its prospects.
There can be no assurance that the Company's bulk drug supply arrangements with
Ash Stevens and Lonza might not change in the future, and if a change occurred,
no assurance can be given that the change would not adversely affect production
of Busulfex, Antizol, Antizol-Vet, and Xyrem.

Drug product manufacturers are responsible for formulating bulk drug substance
into a finished drug product and packaging the product for sale or for use in
clinical trials. The Company is substantially dependent on an affiliate of
Boehringer Ingelheim ("BI") for drug product manufacturing of Busulfex, Antizol,
and Antizol-Vet, and on GlobalPharm, Inc. ("GlobalPharm") for drug product
manufacturing of Xyrem. Although the Company has identified GlobalPharm as the
drug product manufacturer for Xyrem and expects to contract with this company,
it does not currently have a contract with GlobalPharm for the continuation of
this arrangement. If the Company were to lose BI as a manufacturer, it 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. If the Company were to lose GlobalPharm as a
manufacturer, it would be required to identify a new drug product manufacturer
before an NDA is submitted for Xyrem. Moreover, the loss of BI or GobalPharm as
manufacturers, or an interruption of bulk drug supply to BI or GlobalPharm,
could have a material adverse effect on the Company and its prospects. There can
be no assurance that the Company's drug product manufacturing arrangements with
BI and GlobalPharm might not change in the future, and if a change occurred, no
assurance can be given that the change would not adversely affect production of
Busulfex, Antizol, Antizol-Vet, and Xyrem.

The loss of either a bulk drug supplier or drug product manufacturer would
require the Company 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. The Company
believes that it could take as long as one year for the FDA to approve such a
submission. Because the Company's products are targeted to relatively small
markets and its manufacturing production runs are small by industry standards,
the Company has not incurred the added costs to certify and maintain a secondary
source of supply for bulk drug substance or a backup drug product manufacturer.
Should the Company lose either a bulk drug supplier or a drug product
manufacturer, the Company could run out of salable product to meet marketing
demands or investigational product for use in clinical trials, while it waits
for the FDA to approve a new bulk drug supplier or drug product manufacturer.
There can be no assurance that the change of a bulk drug supplier or drug
product manufacturerand 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 the Company and its prospects.

DEPENDENCE UPON OTHERS FOR DISTRIBUTION.
The Company has an exclusive agreement with Cardinal Health, Inc. ("Cardinal"),
whereby Cardinal, through its affiliates, will provide a variety of services to
support the effective distribution of Orphan Medical's products. Cardinal will
provide integrated distribution and operations services to process and support
transactions between Orphan Medical and wholesalers, specialty distributors, and
direct customers; 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, which also will distribute the
Company's proposed products should those products receive marketing clearance
from the FDA in the future. The Company will be substantially dependent upon
Cardinal's ability to




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                                                                      Exhibit 99
                                                                     Page 7 of 9

successfully distribute Busulfex, Elliotts B Solution, Antizol, Antizol-Vet, and
Sucraid and all of the Company's proposed products that receive marketing
clearance from the FDA.

Cystadane is principally distributed, on a non-exclusive basis in the U.S., by
Chronimed Inc. ("Chronimed"), which distributes this product directly to
patients through its mail order pharmacy. The Company is substantially dependent
upon Chronimed's ability to successfully distribute Cystadane directly to
patients in the U.S.

There can be no assurance that other distribution companies would be available
or continue to be available on commercially acceptable terms, if at all. The
loss of a distributor or failure to renew agreements with an existing
distributor would have a material adverse effect on the Company and its
prospects.

UNCERTAIN EXTENT OF PRICE FLEXIBILITY AND THIRD-PARTY REIMBURSEMENT.
The Company's ability to commercialize its products successfully will depend in
part on the price it may be able to charge for its products and on the extent to
which reimbursement for the cost of such products and related treatment will be
available 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. Significant uncertainty exists as to the pricing flexibility suppliers
will have with respect to, and the reimbursement status of, newly approved
health care products.

In the United States, the Company expects that there will continue to be a
number of federal and state proposals to implement government control of pricing
and profitability of prescription pharmaceuticals. Cost controls, if mandated by
a government agency, could decrease the price the Company receives for its
products or products it may develop in the future and, by preventing the
recovery of development costs, which could be substantial, and an appropriate
profit margin, could have a material adverse effect on the Company. Furthermore,
federal and state regulations govern or influence the reimbursement to health
care providers in connection with medical treatment of certain patients. If any
actions are taken by federal and/or state governments, such actions could
adversely affect the prospects for sales of the Company's products. There can be
no assurance 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 the
Company and its prospects.

Certain third-party payors may attempt to further control costs by selecting
exclusive providers of their pharmaceutical products. If such arrangements were
made with competitors of the Company, such payors would not reimburse patients
for purchases of the Company's competing products. This lack of reimbursement
would diminish the market for the Company's products and could have a material
adverse effect on the Company and its prospects.

RISK OF PRODUCT RECALL
Product recalls may be issued at the discretion of the Company, the FDA, the
U.S. Federal Trade Commission, or other government agencies having regulatory
authority for product sales, and may occur due to disputed labeling claims,
manufacturing issues, quality defects, or other reasons. No assurance can be
given that product recalls will not occur. The Company does not carry any
insurance to cover the risk of a potential product recall. Any product recall
could have a material adverse effect on the Company and its prospects.

PRODUCT LIABILITY AND INSURANCE RISKS.
The testing and sale of human health care products by the Company entails an
inherent risk that product liability claims may be asserted against the Company.
The pharmaceutical industry has experienced increasing difficulty in maintaining
product liability insurance coverage at reasonable levels, and substantial
increases in insurance premium costs in many cases have rendered coverage
economically impractical. The Company currently carries product liability
coverage in the aggregate amount of $10 million for all claims made in any
policy year. Although to date the Company has not been the subject of any
product liability or other claims, there can be no assurance that the Company
will be able to maintain product liability insurance on acceptable terms or that
its insurance will provide adequate coverage against potential claims. The
successful assertion of any uninsured product liability or other claim against
the Company could have a material adverse effect on the Company's business and
prospects.




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                                                                      Exhibit 99
                                                                     Page 8 of 9

IMPACT OF YEAR 2000 READINESS ISSUE
The Company has assessed and continues to assess the impact of the so called
"Year 2000 Readiness Issue" on its 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. When the year 2000 occurs, systems that
are not year 2000 compliant might recognize the year 2000 as the year 1900, or
not at all. This inability to recognize or properly treat the year 2000 may
cause the Company's systems, or the systems used by its suppliers, distributors,
customers or regulatory agencies (i.e., FDA) to process critical financial and
operational information incorrectly, or not at all.

The Company's information technology ("IT") systems consist of computer hardware
systems and software applications supplied by third parties. The Company's
strategy has been to replace its IT systems with current technology, which is
both year 2000 compliant and more efficient. The Company has also purchased and
implemented financial and operational software upgrades that are year 2000
compliant. For the six months ended June 30, 1999, the Company's IT system
purchases have not been material. The Company's IT systems are year 2000
compliant.

The Company's assessment of internal systems includes a review of
non-information technology ("non IT") systems. This assessment includes a review
of the Company's internal equipment and facilities. Based upon this review, the
Company believes that its processes and equipment are year 2000 compliant.

The Company has identified third parties, with which it has material
relationships, including suppliers, distributors and other key vendors of
materials and services. The Company has confirmed with these parties or
organizations that they have implemented Year 2000 Readiness Programs. The
Company has 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, which could include, but not be
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,
it is not possible to state with certainty that such parties will be compliant.
If third party systems on which the Company relies should fail, there could be a
significant disruption of the Company's ability to transact business with its
customers and suppliers. It is impossible to fully assess 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.

LIMITATIONS TO SOURCES OF ADDITIONAL CAPITAL - RESTRICTIONS, COVENANTS AND
RIGHTS RELATED TO SENIOR CONVERTIBLE PREFERRED STOCK
On July 23, 1998, the Company completed the sale to UBS Capital of a private
placement of $7.5 million of Senior Convertible Preferred Stock. On August 2,
1999, the Company completed an additional sale to UBS Capital of a private
placement of $2.95 million of Series B Convertible Preferred Stock (collectively
the "Preferred Shares"). In conjunction with the issuance of Preferred Shares,
the Company agreed to several restrictions and covenants, and granted certain
voting and other rights to the holders of the Preferred Shares. The most
important of these restrictions are: (1) the Company cannot incur additional
indebtedness, except for indebtedness secured solely by the Company's trade
receivables, until it has profitable operations, subject to certain limitations
and (2) the Company cannot, without the approval of a majority of the preferred
stockholders, issue additional equity securities unless the selling price per
share exceeds the then conversion price, presently $8.14 per share for the
Senior Convertible Preferred Stock and $6.50 for the Series B Convertible
Preferred Stock, of the outstanding convertible preferred stock or the sale of
equity is accomplished in a public offering. These restrictions could make it
more difficult and more costly for the Company to obtain additional capital.
However, there can be no assurance that additional sources of capital will be
available to the Company and, if available, on terms acceptable to the Company.

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 risk that the market value and the liquidity of the public float for
the Company's Common Stock could be





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                                                                      Exhibit 99
                                                                     Page 9 of 9

adversely affected in the event the Company no longer meets the 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 the Company's case include 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 June 30, 1999, the Company's net
tangible assets equaled $2.6 million and its market capitalization was
approximately $39.4 million (based on the last sale price of $6.00 and 6,569,207
registered shares outstanding as of June 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. The sale of $2.95 million of the Company's
Series B Convertible Preferred Shares brings the Company into compliance with
Nasdaq's requirements. Should the Company fail to satisfy at least one of the
aforementioned Nasdaq listing requirements, the Company's 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 its net tangible assets
exceed $2.0 million. The Company's ability to raise additional capital and the
market value of the Company's 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 the Company's business, its
prospects and its shareholders.

POSSIBLE VOLATILITY OF STOCK PRICE - GENERAL.
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, such as the announcements by the Company or its
competitors of new product developments, clinical testing results, governmental
approvals, regulations or actions, developments or disputes relating to patents
or proprietary rights, public concern over the safety of therapies and
fluctuations in financial performance from period to period. These and other
factors and events may have a significant impact on the Company's business and
on the market price of the Common Stock.