**Exhibit 99.1**

 

#### **RISK FACTORS**

 

Regulatory Risks

 

*We may not be ableto obtain or maintain marketing approvals for our products.*

 

We are not able to market any of our products in Europe, the UnitedStates or in any other jurisdiction without marketing approval from the EMEA,FDA or equivalent foreign regulatory agency. The regulatory process to obtainmarket approval for a new drug or biologic takes many years and requires theexpenditure of substantial resources. We have had only limited experience inpreparing applications and obtaining regulatory approvals.

 

Replagal was granted marketing authorization in the fifteen countriesof the European Union by the European Commission in August 2001. We have alsoreceived approval to market Replagal in The Czech Republic, Iceland, Israel,New Zealand, Norway, and Switzerland.

 

In the United States, we submitted a BLA to the FDA seeking marketingauthorization for Replagal. In January 2001, the FDA issued a completereview letter regarding the BLA for Replagal. The FDA letter stated that thedata that we had provided was not adequate for approval of the BLA at that timeand requested additional information. In response to this letter, we havediscussed the BLA with the FDA and have submitted additional data. We expect thatafter the FDA has reviewed the data, it will either approve the BLA or declineto approve it. If it declines to approve the BLA, the FDA may requestadditional information, possibly including data from additional clinicaltrials.

 

During 2000, Aventis submitted an MAA to the EMEA seeking marketingauthorization of Dynepo in the European Union for the treatment of anemiaassociated with kidney disease. In March 2002, the EC granted marketingapproval of Dynepo in the European Union.

 

Also during 2000, Aventis submitted a BLA to the FDA seeking marketingauthorization for Dynepo in the United States. The FDA did not accept this BLAfor filing, requesting that Aventis provide additional manufacturing data.  Aventis is currently accumulating these dataand, when complete, we expect that Aventis will submit a new BLA.

 

There can be no assurance as to whether or when any of theseapplications for marketing authorization relating to Replagal and Dynepo, oradditional applications for marketing authorization that we may make in thefuture as to these or other products, will be approved by the relevantregulatory authorities.

 

*If we fail to complywith the extensive regulatory requirements to which our products are subject,we could be subject to adverse consequences and penalties*.

 

The testing, manufacturing, labeling, advertising, promotion, export,and marketing, among other things, of our products are subject to extensiveregulation by governmental authorities in Europe, the United States, andelsewhere throughout the world.

 

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In general, there can be no assurance that submission of materialsrequesting permission to conduct clinical trials will result in authorizationby the EMEA, the FDA or equivalent foreign regulatory agency to commenceclinical trials, or that once clinical trials have begun, testing will becompleted successfully within any specific time period, if at all, with respectto any of our products. Once trials are complete and an application formarketing approval has been submitted to the relevant regulatory agency, theregulatory agency may deny the application if applicable regulatory criteriaare not satisfied, or may require additional testing or information.

 

If regulatory approval of a product is granted, such approval may besubject to limitations on the indicated uses for which the product may bemarketed or contain requirements for costly post-marketing testing andsurveillance to monitor the safety or efficacy of the product. As to anyproduct for which we obtain marketing approval, the product, the facilities atwhich the product is manufactured, any post-approval clinical data and ourpromotional activities will be subject to continual review and periodicinspections by the EMEA, the FDA and other regulatory agencies.

 

Both before and after approval is obtained, violations of regulatoryrequirements may result in various adverse consequences, including theregulatory agency’s delay in approving, or refusal to approve a product,suspension or withdrawal of an approved product from the market, operatingrestrictions, or the imposition of civil or criminal penalties.

 

*We may not be ableto obtain orphan drug exclusivity for our Niche Protein products and if ourcompetitors are able to obtain orphan drug exclusivity before us, we may beprecluded from marketing our Niche Protein products.*

 

Some jurisdictions, including Europe and the United States, maydesignate therapeutics for relatively small patient populations as “orphandrugs”. Generally, if a product which has an orphan drug designationsubsequently receives the first marketing approval for the indication for whichit has such designation, the product is entitled to orphan drug exclusivity.Orphan drug exclusivity means that applications to market the same product forthe same use may not be approved, except in very limited circumstances, for aperiod of up to 10 years in Europe and for a period of seven years in theUnited States. Obtaining orphan drug designations and orphan drug exclusivityfor our Niche Protein products may be critical to our success in this area.Even if we obtain orphan drug exclusivity for any of our potential products, wemay not be able to maintain it. For example, if a competitive product is shownto be clinically superior to our product, any orphan drug exclusivity we haveobtained may not apply to such competitive product. Our competitors may alsoseek and obtain orphan drug exclusivity for products competitive with ourproducts before we obtain marketing approval.

 

Replagal was granted marketing authorization in the fifteen countriesof the European Union by the European Commission in August 2001. A competitiveproduct for the treatment of patients with Fabry disease, marketed by Genzyme,was also granted marketing authorization in the European Union. Both Replagaland Genzyme’s competing product were granted co-exclusive orphan drug status inthe European Union for up to 10 years.

 

In the United States, both TKT and Genzyme have received orphan drugdesignation for their respective products. Whichever product is the first to receive FDA marketing approval

 

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would likely receive orphan drug exclusivity for that product.  Once a product receives orphan drugexclusivity, the FDA may not approve any other applications to market the sameclass of product for Fabry disease for a period of seven years, except inlimited circumstances.

 

*If our clinicaltrials for a product are not successful, we may not be able to commercializethat product.*

 

In order to obtain regulatory approvals for the commercial sale of ourpotential products, we and our collaborators will be required to completeextensive clinical trials in humans to demonstrate the safety and efficacy ofour products. We may not be able to obtain authority from the EMEA, the FDA orother equivalent foreign regulatory agencies to commence or complete theseclinical trials.

 

The results from preclinical testing of a product that is underdevelopment may not be predictive of results that will be obtained in human clinicaltrials. In addition, the results of early human clinical trials may not bepredictive of results that will be obtained in larger scale, advanced stageclinical trials. Furthermore, we, one of our collaborators, or a regulatoryagency with jurisdiction over the trials, may suspend clinical trials at anytime if the subjects or patients participating in such trials are being exposedto unacceptable health risks, or for other reasons.

 

The rate of completion of clinical trials is dependent in part upon therate of enrollment of patients. Patient accrual is a function of many factors,including the size of the patient population, the proximity of patients toclinical sites, the eligibility criteria for the study, the nature of thestudy, the existence of competitive clinical trials, and the availability ofalternative treatments. In particular, the patient populations for some of ourNiche Protein products is small. Delays in planned patient enrollment mayresult in increased costs and prolonged clinical development.

 

We and our collaborators may not be able to successfully complete anyclinical trial of a potential product within any specified time period. In somecases, we may not be able to complete the trial at all. Moreover, clinicaltrials may not show our potential product to be both safe and efficacious.Thus, the EMEA, the FDA and other regulatory authorities may not approve any ofour potential products for any indication.

 

*Because gene therapyis a relatively new technology and gene therapy products have not beenextensively tested in humans, we may face delays and incur increased costs inthe regulatory process related to our gene therapy products.*

 

We are developing gene therapy products. Because gene therapy is arelatively new technology and products for gene therapy have not beenextensively tested in humans, the regulatory requirements governing genetherapy products may be more uncertain than for other types of products. Thisuncertainty may cause delays in the regulatory process relating to our genetherapy products, including delays in our initiating clinical trials of theseproducts. This uncertainty may also increase the cost of obtaining regulatoryapprovals of our gene therapy products.

 

*Ethical and socialissues may cause regulatory authorities to increase the regulation of genetherapy clinical trials.*

 

Due to adverse events that have occurred during some gene therapyclinical trials conducted

 

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by other biotechnology and pharmaceutical companies and institutions,the Federal government, the EMEA, the FDA, industry organizations, andinstitutions conducting gene therapy clinical trials have grown increasinglyconcerned about the safety of these clinical trials. An increased concern over genetherapy trials generally may lead the EMEA, the FDA or other regulatoryagencies to impose further regulation on gene therapy clinical trials. Iffurther regulations are imposed on gene therapy research generally, the delaysand costs involved in complying with such regulations may impair our ability toconduct gene therapy clinical trials in the future.

 

Patent Litigation and Intellectual Property Risks

 

*We are a party tolitigation with Genzyme and Mount Sinai involving Replagal, which couldpreclude us from manufacturing or selling Replagal.*

 

Since July 2000, we have been involved in patent litigation relating toReplagal brought by Genzyme and Mount Sinai in the Delaware District Courtregarding a patent licensed by Genzyme from Mount Sinai. In January 2002,the Delaware District Court dismissed this patent litigation, granting ourmotion for summary judgment of non-infringement and denying Genzyme’s motionfor summary judgment of infringement. In March 2002, Genzyme appealed theruling of the Delaware District Court to the Federal Circuit.  If Genzyme is successful in its appeal, theCompany may be precluded from marketing and selling Replagal.  We can provide no assurance as to theoutcome of this litigation.

 

*We are party tolitigation with Amgen and Kirin–Amgen involving Dynepo, which couldpreclude us from manufacturing or selling Dynepo.*

 

In April 1997,Amgen commenced a patent infringement action against us and Aventis in theMassachusetts District Court.   InJanuary 2001, the Massachusetts District Court concluded that Dynepoinfringed 8 of the 18 claims of patents asserted by Amgen. Amgen did not seekand was not awarded monetary damages. We and Aventis have filed an appeal of the decision with the FederalCircuit. Amgen has also appealed this decision.

 

In addition, in July 1999, we and Aventis commenced legal proceedingsin the U.K. against Kirin-Amgen, seeking a declaration that a U.K. patent heldby Kirin-Amgen will not be infringed by our activities related to Dynepo andthat certain claims of Kirin-Amgen’s U.K. patent are invalid.  In April 2001, the High Court ofJustice in the United Kingdom ruled that Dynepo infringed one of four claims ofa patent asserted by Kirin–Amgen. We and Aventis have filed an appeal ofthis decision. Kirin-Amgen has also appealed this decision.

 

We can provide no assurance as to the outcome of eitherlitigation.  Unless we and Aventis aresuccessful in our appeal, we and Aventis will be precluded from manufacturingand selling Dynepo in the relevant jurisdiction.  In addition, the litigation is costly and we are required toreimburse Aventis, which is paying the litigation expenses, for our share ofthe expenses from future royalties and in certain other circumstances.

 

*We may becomeinvolved in additional and expensive patent litigation or other proceedings.*

 

The biotechnology industry has been characterized by significantlitigation and interference

 

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and other proceedings regarding patents, patent applications, and otherintellectual property rights. We may become a party to additional patentlitigation and other proceedings with respect to our Niche Protein products,Gene-Activated protein products, gene therapy technology, or other technology.Such litigation could result in liability for damages, prevent our developmentand commercialization efforts, or divert management’s attention and resources.

 

An adverse outcome in any patent litigation or other proceedinginvolving patents could subject us to significant liabilities to third partiesand require us to cease using the technology or product that is at issue or tolicense the technology or product from third parties. We may not be able toobtain any required licenses on commercially acceptable terms or at all.

 

The cost to us of any patent litigation or other proceeding, even ifresolved in our favor, could be substantial. Some of our competitors may beable to sustain these costs more effectively than we can because of theirsubstantially greater financial resources. Uncertainties resulting from theinitiation and continuation of patent litigation or other proceedings couldhave a material adverse effect on our ability to develop, manufacture, andmarket products, form strategic alliances, and compete in the marketplace.

 

*If we are unable toobtain patent protection for our discoveries, the value of our technology andproducts may be adversely affected.*

 

Our success will depend in part on our ability to obtain patentprotection for our processes and products in the United States and othercountries. The patent situation in the field of biotechnology generally ishighly uncertain and involves complex legal, scientific and factual questions.To date, no consistent policy has emerged regarding the breadth of claimsallowed in biotechnology patents.  Wemay not be issued patents relating to our technology. Even if issued, patentsmay be challenged, invalidated, or circumvented. Our patents also may notafford us protection against competitors with similar technology. Becausepatent applications in the United States are maintained in secrecy untilpatents issue, third parties may have filed or maintained patent applicationsfor technology used by us or covered by our pending patent applications withoutour being aware of these applications.

 

We may not hold proprietary rights to certain product patents, processpatents, and use patents related to our products or their methods ofmanufacture. In some cases, these patents may be owned or controlled by thirdparties. As a result, we may be required to obtain licenses under third-partypatents to market certain of our potential products. If licenses are notavailable to us on acceptable terms, we may not be able to market theseproducts.

 

*If we are unable toprotect the confidentiality of our proprietary information and know-how, thevalue of our technology and products will be adversely affected.*

 

We rely upon unpatented proprietary technology, processes, andknow-how. We seek to protect this information in part by confidentialityagreements with our employees, consultants, and other third-party contractors.These agreements may be breached, and we may not have adequate remedies for anysuch breach. In addition, our trade secrets may otherwise become known or beindependently developed by competitors.

 

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*If we fail to complywith any of our obligations under any of the agreements under which we licensecommercialization rights to products or technology from third parties, we couldlose license rights that are important to our business.*

 

We are a party to a number of patent licenses that are important to ourbusiness and expect to enter into additional patent licenses in the future.These licenses impose various commercialization, sublicensing, royalty,insurance, and other obligations on us. If we fail to comply with theseobligations, the licensor may have the right to terminate the license and wemay not be able to market products that were covered by the license.

 

Business Risks

 

*OurRevenue From Product Sales Is Dependent on the Commercial Success of Replagal*

During 2001, we received marketing authorizations for our firstproduct.  Replagal was granted marketingauthorization in the European Union in August 2001.  We have also received approval to market Replagal in six othercountries.  We expect that Replagal willaccount for all of our product sales through 2004, at the earliest.  The commercial success of Replagal willdepend on its acceptance by physicians, patients and other key decision-makersfor the treatment of Fabry disease.  IfReplagal does not generate significant product sales, TKT will be required tofund operations with cash resources, interest income, proceeds from equityofferings and debt financings and funding from collaborative agreements.

 

*The market may notbe receptive to our products upon their introduction.*

 

The commercial success of any of our products for which we obtainmarketing approval from the EMEA, the FDA, or other regulatory authorities willdepend upon their acceptance by patients, the medical community and third-partypayors as clinically effective, safe, and cost-effective.  It may be difficult for us to achieve marketacceptance of our products.

 

Other factors that we believe will materially affect market acceptanceof our products include:

 

**•**              the timing of the receipt ofmarketing approvals;

 

**•**              the countries in which suchapprovals are obtained; and

 

**•**              the safety, efficacy, convenience,and cost-effectiveness of the product as compared to competitive products.

 

*We have limitedexperience and resources in manufacturing and will incur significant costs todevelop this experience or rely on third parties to manufacture our products onour behalf.*

 

We have limited manufacturing experience and, in order to continue todevelop products, apply for regulatory approvals, and commercialize ourproducts, we will need to develop, contract for, or otherwise arrange for thenecessary manufacturing capabilities. We currently use, and expect to continue in the future to use, internalmanufacturing and contract manufacturing by third parties to meet ourproduction requirements for preclinical testing, clinical trials, and

 

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commercial supply.

 

To the extent that we are parties to manufacturing arrangements withthird parties, we will be dependent upon these third parties to perform theirobligations in a timely manner and in accordance with applicable governmentregulations. There are a limited number of such third-party manufacturerscapable of manufacturing our protein products with a limited amount ofproduction capacity. As a result, we may experience difficulty in obtainingadequate manufacturing capacity for our needs. If we are unable to obtain ormaintain contract manufacturing of these products, or to do so on commerciallyreasonable terms, we may not be able to complete development of these productsor market them.

 

To the extent that we elect not to or cannot contract for third-partymanufacturing for any of our products, we will need to manufacture theseproducts in our own manufacturing facilities. We have limited manufacturingexperience. We are investing, and may need in the future to invest, substantialadditional funds to build our own manufacturing facilities and need to recruitqualified personnel in order to build or lease and operate any manufacturingfacilities. There can be no assurance that we will be able to successfullybuild or operate our own facilities, that our facilities will comply withapplicable regulations or that our facilities will enable us to manufacture ourproducts at a commercially reasonable cost.

 

*If we fail to obtainan adequate level of reimbursement by third-party payors for our products, wemay not have commercially viable markets for our products.*

 

In certain countries, particularly the countries of the European Union,the pricing of prescription pharmaceuticals and the level of reimbursement aresubject to governmental control. In the United States, the availability ofreimbursement by governmental and other third-party payors affects the marketfor any pharmaceutical product. These third-party payors generally attempt tocontain or reduce the costs of health care by challenging the prices chargedfor medical products and services.

 

We expect that the prices for many of our products, whencommercialized, including in particular, our Niche Protein products, may behigh compared to other pharmaceutical products.   For example, as of March 31, 2002, we have established pricingand reimbursement in substantially all countries in Europe in which Replagalhas been approved. The average price established is approximately $165,000 perpatient per year.  We have notestablished reimbursement for Replagal in all of the countries in which it hasbeen approved and may not establish reimbursement in one or more of thosecountries at adequate levels or at all. The price of our products may make reimbursement more difficult toobtain, if it can be obtained at all.

 

The Centers for Medicare and Medicaid Services of the United StatesDepartment of Health and Human Services has considered proposals from time totime to reduce the reimbursement rate with respect to erythropoietin.  If Dynepo is approved and commercialized,adoption by the Centers for Medicare and Medicaid Services of any such proposalmight have an adverse effect on the pricing of Dynepo.

 

We also may experience pricing pressure with respect to Replagal andother products for which we may obtain marketing approval due to the trendtoward managed health care, the

 

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increasing influence of health maintenance organizations andlegislative proposals. We may not be able to sell our products profitably ifreimbursement is unavailable or limited in scope or amount.

 

*We face significantcompetition, which may result in others discovering, developing orcommercializing products before or more successfully than we do.*

 

The biotechnology industry is highly competitive and characterized byrapid and significant technological change. Our competitors includepharmaceutical companies, biotechnology firms, universities, and other researchinstitutions. Many of these competitors have substantially greater financialand other resources than we do and are conducting extensive research anddevelopment activities on technologies and products similar to or competitivewith ours.

 

We may be unable to develop technologies and products that are moreclinically efficacious or cost-effective than products developed by ourcompetitors. Even if we obtain marketing approval for our product candidates,many of our competitors have more extensive and established sales, marketing,and distribution capabilities than we do. Litigation with third parties, includinglitigation with Amgen and Genzyme, could delay our time to market or precludeus from reaching the market for certain products and enable our competitors tomore quickly and effectively penetrate certain markets.

 

*Niche Protein Products.* For many of thedisease targets of our Niche Protein product platform, there is currently nocure or effective treatment. Treatments generally are focused on the managementof the disease’s symptoms. In general, we believe that these diseases representmarkets too small to attract the resources of larger pharmaceutical companiesbut may provide attractive commercial opportunities to smaller companies.

 

We believe that the primary competition with respect to our NicheProtein product program is from biotechnology and smaller pharmaceuticalcompanies.  Competitors include BioMarinPharmaceutical Inc., Genzyme, Oxford GlycoSciences plc, and SynpacPharmaceuticals, Ltd. The markets for some of the potential Niche Proteinproducts are quite small. As a result, if competitive products exist, we maynot be able to successfully commercialize our products.

 

We believe that our primary competition with respect to Replagal isGenzyme. Replagal was granted marketing authorization in the fifteen countriesof the European Union by the European Commission in August 2001. A competitiveproduct for the treatment of patients with Fabry disease, marketed by Genzyme,was also granted marketing authorization in the European Union.  Both Replagal and Genzyme’s competingproduct were granted co-exclusive orphan drug status in the European Union forup to 10 years.

 

In the United States, both we and Genzyme have received orphan drugdesignation for our respective products. Whichever product is the first to receive FDA marketing approval wouldlikely receive orphan drug exclusivity for that product.  Once a product receives orphan drugexclusivity, the FDA may not approve any other applications to market the sameclass of product for Fabry disease for a period of seven years, except inlimited circumstances.

 

*Gene-Activated Protein Products.*  In our Gene-Activated protein program, weare developing potentially improved versions of proteins that are currentlymarketed and proteins

 

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that have no currently-marketed counterparts. For instance, in the caseof Dynepo, erythropoietin and competing products are marketed by Amgen, Johnson& Johnson, F. Hoffmann-La Roche Ltd. (Boehringer Mannheim GmbH), SankyoCompany Ltd., Chugai Pharmaceutical Co., Ltd., and the pharmaceutical divisionof Kirin Brewery Co., Ltd.

 

Many of the protein products against which our Gene-Activated proteinswould compete have well-known brand names, have been promoted extensively andhave achieved market acceptance by third-party payors, hospitals, physicians,and patients. In addition, many of the companies that produce these proteinproducts have patents covering techniques used to produce these products, whichhave served as effective barriers to entry in the therapeutic proteins market.As with Amgen and its erythropoietin product, these companies may seek to blockour entry into the market by asserting that our Gene-Activated proteinsinfringe their patents. Many of these companies are also seeking to develop andcommercialize new or potentially improved versions of their proteins.

 

*Gene Therapy.* Our gene therapy system will have to compete with other gene therapysystems, as well as with conventional methods of treating the diseases andconditions targeted. Although no gene therapy product is currently marketed inthe United States, a number of companies, including major biotechnology andpharmaceutical companies, as well as development stage companies, are activelyinvolved in this field.

 

*Competition fortechnical, commercial and administrative personnel is intense in our industryand we may not be able to sustain our operations or grow if we are unable toattract and retain key personnel.*

 

Our success is highly dependent on the retention of principal membersof our technical, commercial, and administrative staff. Furthermore, our futuregrowth will require hiring a significant number of qualified technical,commercial and administrative personnel. Accordingly, recruiting and retainingsuch personnel in the future will be critical to our success. There is intensecompetition from other companies and research and academic institutions forqualified personnel in the areas of our activities. If we are not able tocontinue to attract and retain, on acceptable terms, the qualified personnelnecessary for the continued development of our business, we may not be able tosustain or grow our operations.

 

*We have limitedsales and marketing experience and capabilities and will need to develop thisexpertise or depend on third parties to successfully sell and market ourproducts on our behalf.*

 

We have limited sales and marketing experience and capabilities. Inorder to market our products, including Replagal, we will need to develop thisexperience and these capabilities or rely upon third parties, such as ourcollaborators, to perform these functions. If we rely on third parties to sell,market, or distribute our products, our success will be dependent upon theefforts of these third parties in performing these functions. In manyinstances, we may have little or no control over the activities of these thirdparties in selling, marketing, and distributing our products. If we choose toconduct these activities directly, as we plan to do with respect to some of ourpotential products, we may not be able to recruit and maintain an effectivesales force.

 

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*We depend on ourcollaborators to develop, conduct clinical trials, obtain regulatory approvalsfor, and manufacture, market and sell certain products on our behalf and noneof their efforts may be scientifically or commercially successful.*

 

We are parties to collaborative agreements with third parties relatingto certain of our principal products. We are relying on Aventis to develop,conduct clinical trials, obtain regulatory approvals for, and manufacture,market, and sell Dynepo in the United States and Europe; Sumitomo to developand commercialize Replagal for Fabry disease in Japan and other Asiancountries; and GI to co-develop and commercialize Factor VIII gene therapy forhemophilia A in Europe. Our collaborators may not devote the resourcesnecessary or may otherwise be unable or unwilling to complete development andcommercialization of these potential products. Our existing collaborations aresubject to termination without cause on short notice under specifiedcircumstances.

 

Our existing collaborations and any future collaborative arrangementswith third parties may not be scientifically or commercially successful.Factors that may affect the success of our collaborations include thefollowing:

 

**•**              our collaborators may be pursuingalternative technologies or developing alternative products, either on theirown or in collaboration with others, that may be competitive with the productas to which they are collaborating with us or which could affect ourcollaborative partners’ commitment to the collaboration with us;

 

•              reductionsin marketing or sales efforts or a discontinuation of marketing or sales of ourproducts by our collaborators would reduce our revenues, which will be based ona percentage of net sales by the collaborator;

 

•              ourcollaborators may terminate their collaborations with us, which could make itdifficult for us to attract new collaborators or adversely affect theperception of us in the business and financial communities; and

 

•              ourcollaborators may pursue higher priority programs or change the focus of theirdevelopment programs, which could affect the collaborator’s commitment to us.

 

*We may be exposed toproduct liability claims and may not be able to obtain adequate productliability insurance.*

 

Our business exposes us to the risk of product liability claims that isinherent in the manufacturing, testing, and marketing of human therapeuticproducts. Our clinical trial liability insurance and product liabilityinsurance are subject to deductibles and coverage limitations. We may not beable to obtain additional insurance or maintain insurance on acceptable termsor at all. Moreover, any insurance that we do obtain may not provide adequateprotection against potential liabilities. If we are unable to obtain insuranceat acceptable cost or otherwise protect against potential product liabilityclaims, we will be exposed to significant liabilities, which may materially andadversely affect our business and financial position. These liabilities couldprevent or interfere with our product commercialization efforts.

 

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Financing Risks

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*We have not beenprofitable and expect to continue to incur substantial losses.*

 

We have experienced significant operating losses since our inception in1988. We expect that we will continue to incur substantial losses and that,until we have substantial product sales, our cumulative losses will increase asour research and development, sales and marketing, and manufacturing effortsexpand. We expect that the losses that we incur will fluctuate from quarter toquarter and that these fluctuations may be substantial.  We recorded approximately $3.5 million inproduct sales in 2001.

 

*We may needadditional financing, which may be difficult to obtain.*

 

We may require additional funds to conduct research and development,including preclinical testing and clinical trials of our potential products andto manufacture and market any products that are approved for commercial sale.Our future capital requirements will depend on many factors, including thefollowing:

 

•              the timing, receipt, and amount ofproduct sales;

 

•              continued progress in our researchand development programs, as well as the magnitude of these programs;

 

•              the scope and results of ourclinical trials;

 

•              the timing of, and the costsinvolved in, obtaining regulatory approvals;

 

•              the cost of manufacturingactivities;

 

•              the cost of commercializationactivities, including product marketing, sales and distribution;

 

•              the cost of additional facilitiesrequirements;

 

•              the costs involved in preparing,filing, prosecuting, maintaining, and enforcing patent claims and other patent–relatedcosts, including litigation costs and the results of such litigation;

 

•              the cost of obtaining andmaintaining licenses to use patented technologies;

 

•              our ability to establish andmaintain collaborative arrangements;

 

•              the cost of buying out theminority interest in TKT Europe, if applicable;

 

•              the timing, receipt, and amount ofmilestones, royalties and other payments from collaborators; and

 

•              other working capitalrequirements.

 

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We may seek additional funding through collaborative arrangements andpublic or private financings. Additional financing may not be available to uson acceptable terms, if at all.

 

If we raise additional funds by issuing equity securities, furtherdilution to our then existing stockholders will result. In addition, the termsof the financing may adversely affect the holdings or the rights of suchstockholders. If we are unable to obtain funding on a timely basis, we may berequired to significantly curtail one or more of our research or developmentprograms. We also could be required to seek funds through arrangements withcollaborators or others that may require us to relinquish rights to certain ofour technologies, product candidates, or products which we would otherwisepursue on our own.

 

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