<PAGE>


EXHIBIT 99.1

CERTAIN FACTORS THAT MAY AFFECT FUTURE RESULTS

     The following important factors, among others, could cause actual results
to differ from those indicated by forward-looking statements made in this Annual
Report on Form 10-K for the year ended December 31, 1999 and presented elsewhere
by management from time to time.

     WE ARE A PARTY TO LITIGATION WITH AMGEN AND KIRIN-AMGEN INVOLVING
GA-EPO-TM-

     We and Aventis, our collaborator, are defendants in a civil patent
infringement lawsuit brought by Amgen Inc. in the U.S. District Court for the
District of Massachusetts. Amgen's complaint, which was filed in April 1997,
alleged that GA-EPO and the processes for producing GA-EPO infringe certain of
Amgen's U.S. patents. Amgen's complaint requested that we and Aventis be
enjoined from making, using, or selling GA-EPO and that the District Court award
Amgen monetary damages.

     In April 1998, the District Court granted our and Aventis' Motion for
Summary Judgment of Non-Infringement in this case. The District Court based this
decision on the fact that all of our and Aventis' GA-EPO related activities
through that date had been conducted solely for uses reasonably related to the
production of information for submission to the FDA as part of seeking
regulatory approval to market GA-EPO. The District Court stated that, under the
Waxman-Hatch Act, these activities are not acts of patent infringement. The
District Court did not otherwise address the issue of whether our and Aventis'
activities that were challenged by Amgen would infringe Amgen's patents in the
future. The District Court ordered Amgen's remaining claim for Declaratory
Judgment of Future Infringement administratively closed, subject to being
reopened upon motion by either party for good cause shown.

     In June 1999, we and Aventis filed a motion to reopen the case in the
District Court. The District Court granted this motion and scheduled the trial
for April, 2000.

     In addition, in July 1999, we commenced legal proceedings in the U.K.
against Kirin-Amgen Inc. seeking a declaration that a U.K. patent held by
Kirin-Amgen will not be infringed by the sale of GA-EPO and that numerous claims
of the U.K. patent are invalid. The trial is expected to be held in 2001.

     We can provide no assurance as to the outcome of either the U.S. or U.K.
proceedings. A court decision in Amgen's or Kirin-Amgen's favor, including the
issuance of an injunction against the making, using, or selling of GA-EPO by us
and Aventis in the U.S. or the U.K., or any other conclusion of either
litigation in a manner adverse to us and Aventis, would have a material adverse
effect on our business, financial condition, and results of operations.
Moreover, GA-EPO may be the subject of additional litigation.

         Pursuant to our agreements with Aventis, Aventis has assumed the cost
of the Amgen and


<PAGE>

Kirin-Amgen litigations. We are required to reimburse Aventis for our share of
litigation expenses from future royalties, if any, payable by Aventis from the
sale of GA-EPO and in certain other circumstances.

     WE MAY BE SUBJECT TO ADDITIONAL LITIGATION RELATING TO OUR INTELLECTUAL
PROPERTY RIGHTS

     The biotechnology industry has been characterized by significant litigation
and interference and other proceedings regarding patents, patent applications,
and other intellectual property rights. In addition to the Amgen patent
litigation described under "--We are a party to litigation with Amgen and
Kirin-Amgen involving GA-EPO-TM-" and the patent interference described under
"--We are involved and may become involved in patent litigation or other
intellectual property proceedings relating to our Transkaryotic Therapy-TM-
technology which could result in liability for damages or stop our development
and commercialization efforts," we may become a party to additional patent
litigation and other proceedings in the future.

     Certain of our competitors have filed patent applications and have been
issued patents relating to certain methods of producing therapeutic proteins. We
believe that the risk of our becoming involved in patent litigation is
significant with respect to the therapeutic proteins that we anticipate
producing.

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

     The cost to us of any patent litigation or other proceeding, even if
resolved in our favor, could be substantial. Some of our competitors may be able
to sustain these costs more effectively than we can because of their
substantially greater financial resources. Uncertainties resulting from the
initiation and continuation of patent litigation or other proceedings could have
a material adverse effect on our ability to compete in the marketplace.

     In addition, hearings have been held by Congress with respect to the
Waxman-Hatch Act. Under the safe harbor provisions of the Waxman-Hatch Act,
activities conducted solely for uses reasonably related to the production of
information for submission to the FDA as part of seeking regulatory approval to
market a product are not acts of patent infringement. If legislation changing
the safe harbor provisions of the Waxman-Hatch Act were introduced in Congress
and enacted, competitors of ours that desire to bring U.S. patent infringement
actions against us might be able to do so at an earlier time than under the
existing law.

     WE HAVE NOT GENERATED REVENUES FROM THE SALE OF PRODUCTS

     We are at an early stage of development. We have not generated revenues
from the sale of products. We do not expect to derive any revenues from product
sales until late 2000, at the earliest. Each of our three product platforms
involves new and rapidly evolving technologies. All


<PAGE>

of our potential products are in research, preclinical testing, or clinical
development. We will need to conduct additional development efforts for all of
these products prior to seeking regulatory approval. Preclinical and clinical
data on the safety and efficacy of our potential products are limited. Our
potential products may not be efficacious or may prove to have undesirable or
unintended side effects, toxicities, or other characteristics that may prevent
or limit commercial use.

     IF OUR CLINICAL TRIALS ARE NOT SUCCESSFUL, WE WILL NOT BE ABLE TO DEVELOP
AND COMMERCIALIZE ANY RELATED PRODUCTS

     In order to obtain regulatory approvals for the commercial sale of our
potential products, we and our collaborators will be required to complete
extensive clinical trials in humans to demonstrate the safety and efficacy of
the products. We may not be able to obtain authority from the FDA or other
regulatory agencies to commence or complete these clinical trials.

     The results from preclinical testing of a product that is under development
may not be predictive of results that will be obtained in human clinical trials.
In addition, the results of early human clinical trials may not be predictive of
results that will be obtained in larger scale, advanced stage clinical trials.
Furthermore, we, one of our collaborators, or the FDA may suspend clinical
trials at any time if the subjects or patients participating in such trials are
being exposed to unacceptable health risks, or for other reasons.

     The rate of completion of clinical trials is dependent in part upon the
rate of enrollment of patients. Patient accrual is a function of many factors,
including the size of the patient population, the proximity of patients to
clinical sites, the eligibility criteria for the study, and the existence of
competitive clinical trials. In particular, the patient population for some of
our Niche Protein products is small. Delays in planned patient enrollment may
result in increased costs and program delays.

     We and our collaborators may not be able successfully to complete any
clinical trial of a potential product within any specified time period. In some
cases, we may not be able to complete the trial at all. Moreover, clinical
trials may not show any potential product to be safe or efficacious. Thus, the
FDA and other regulatory authorities may not approve any of our potential
products for any indication.

     Our business, financial condition, or results of operations could be
materially adversely affected if:

     - we or our collaborators are unable to complete a clinical trial of one of
our potential products;

     - the results of any clinical trial are unfavorable; or

     - the time or cost of completing the trial exceeds our expectations.


<PAGE>

     GENE THERAPY CLINICAL TRIALS HAVE BEEN SUSPENDED AND REGULATORY AUTHORITIES
ARE REVIEWING THE NEED FOR INCREASED REGULATION OF GENE THERAPY CLINICAL TRIALS

     Due to recent adverse events that have occurred during gene therapy
clinical trials, conducted by other biotechnology and pharmaceutical companies
and institutions, the federal government, the FDA, industry organizations, and
institutions conducting gene therapy clinical trials have grown increasingly
concerned about the safety of gene therapy clinical trials. As a result, a
number of gene therapy clinical trials have been terminated or suspended. In
February 2000, Beth Israel placed a temporary moratorium on all gene therapy
clinical trials being conducted at its facility, including our clinical trial
for hemophilia A, due to national public policy concerns relating to gene
therapy trials. There had been no adverse events associated with our trial. Upon
review of our hemophilia A clinical trial safety data, Beth Israel resumed our
gene therapy clinical trial to treat hemophilia A two weeks after its initial
suspension. There can be no assurance that increased concern over gene therapy
trials generally will not lead the FDA or other regulatory agencies to impose
further regulation on gene therapy clinical trials. If greater regulations are
imposed on gene therapy research generally, the delays and costs involved in
complying with such greater regulation may impair our ability to complete
clinical trials already in progress and to conduct gene therapy clinical trials
in the future.

     WE MAY NOT OBTAIN GOVERNMENT APPROVALS; THE APPROVALS PROCESS IS COSTLY AND
LENGTHY

     The testing, manufacturing, labeling, advertising, promotion, export, and
marketing, among other things, of our products are subject to extensive
regulation by governmental authorities in the U.S. and other countries. The
regulatory approval process to obtain market approval for a new drug or biologic
takes many years and requires the expenditure of substantial resources. We have
had only limited experience in preparing applications and obtaining regulatory
approvals.

     There can be no assurance that submission of an Investigational New Drug
Application will result in FDA authorization to commence clinical trials, or
that once clinical trials have begun, testing will be completed successfully
within any specific time period, if at all, with respect to any of our products.
Furthermore, we or the FDA may suspend clinical trials at any time on various
grounds, including a finding that the subjects or patients are being exposed to
unacceptable health risks. Once trials are complete and an application has been
submitted, the FDA may deny a BLA if applicable regulatory criteria are not
satisfied, may require additional testing or information, and/or may require
postmarketing testing and surveillance to monitor the safety or efficacy of a
product. The testing and approval process requires substantial time, effort, and
financial resources. We can provide no assurance that any approval will be
granted on a timely basis, if at all.

     Because gene therapy is a relatively new technology and products for gene
therapy have not been extensively tested in humans, the regulatory requirements
governing gene therapy products may be more uncertain than for other types of
products. This uncertainty may cause delays in the regulatory process relating
to our gene therapy products, including delays in our


<PAGE>

initiating clinical trials of these products. This uncertainty may also increase
the cost of obtaining regulatory approvals of our gene therapy products.

     Both before and after approval is obtained, violations of regulatory
requirements may result in various adverse consequences, including the FDA's
delay in approving or refusal to approve a product, withdrawal of an approved
product from the market, and/or the imposition of criminal penalties against the
manufacturer and/or the BLA holder.

     We will also be subject to a variety of foreign regulations governing
clinical trials and the sale of its products. Whether or not we have obtained
FDA approval, the comparable regulatory authorities of foreign countries must
also approve a product prior to the commencement of marketing of the product in
those countries. The approval process varies from country to country and the
time may be longer or shorter than that required for FDA approval.

     WE FACE SIGNIFICANT COMPETITION, WHICH MAY RESULT IN OTHERS DISCOVERING,
DEVELOPING, OR COMMERCIALIZING PRODUCTS BEFORE OR MORE SUCCESSFULLY THAN WE DO

     The biotechnology industry is highly competitive and characterized by rapid
and significant technological change. Our competitors include pharmaceutical
companies, biotechnology firms, universities, and other research institutions.
Many of these competitors have substantially greater financial and other
resources than we do and are conducting extensive research and development
activities on technologies and products similar to or competitive with ours.

     We may be unable to develop technologies and products that are more
clinically efficacious or cost-effective than products developed by our
competitors. 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,
including our present litigation with Amgen, could delay our time to market for
certain products and enable our competitors to more quickly and effectively
penetrate certain markets.

     Under our Gene-Activated protein program, we are developing fully human
versions of proteins that are currently-marketed. For instance, in the case of
GA-EPO, erythropoietin is marketed by Amgen and Johnson & Johnson in the U.S.;
F. Hoffmann-La Roche Ltd. (Boehringer Mannheim GmbH) and J&J (Janssen-Cilag) in
Europe; and Sankyo Company Ltd., Chugai Pharmaceutical Co., Ltd., and Kirin in
Japan.

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


<PAGE>

of their proteins.

     We believe that the primary competition with respect to our Niche Protein
product program is from biotechnology and smaller pharmaceutical companies. In
particular, we believe that our major competition with respect to Fabry disease
and Gaucher disease is Genzyme Corporation. Genzyme is conducting late stage
clinical trials of a protein product for the treatment of Fabry disease and has
marketed a product for the treatment of Gaucher disease since 1991. Genzyme owns
or controls issued patents related to the production of protein products to
treat Fabry disease and Gaucher disease. The markets for some of our potential
Niche Protein products are quite small. As a result, if competitive products
exist, we may not be able successfully to commercialize our products.

     Our gene therapy system will have to compete with other gene therapy
systems, as well as with conventional methods of treating targeted diseases and
conditions. In addition, new non-gene therapy treatments may be developed in the
future. A number of companies, including major biotechnology and pharmaceutical
companies, as well as development stage companies, are actively involved in this
field.

     COMPETITORS PRODUCTS MAY RECEIVE ORPHAN DRUG EXCLUSIVITY AND THEREBY
PRECLUDE US FROM MARKETING OUR NICHE PROTEIN-TM- PRODUCTS AND WE MAY NOT BE ABLE
TO OBTAIN ORPHAN DRUG EXCLUSIVITY FOR OUR NICHE PROTEIN PRODUCTS

     If a product which has an orphan drug designation from the FDA subsequently
receives the first marketing approval for the indication for which it has such
designation, the product is entitled to orphan drug exclusivity, i.e., the FDA
may not approve any other applications to market the same product for the same
indication, except in limited circumstances, for a period of seven years.
Obtaining orphan drug designations and orphan drug exclusivity for our Niche
Protein products may be critical to our success in this area. We may not be able
to obtain orphan drug designation or exclusivity for any of our potential
products or be able to maintain such designation or exclusivity for any of these
products. For example, if a competitive product is shown to be clinically
superior to our product, any orphan drug exclusivity we have obtained will not
apply to our product.

     Our competitors may also seek orphan drug designations and obtain orphan
drug exclusivity for products competitive with our products before we obtain
marketing approval. We are aware that Genzyme is conducting late stage clinical
trials of a protein product for the treatment of Fabry disease for which it has
an orphan drug designation. If Genzyme's Fabry disease product receives
marketing approval before our Fabry disease product, it is likely that we would
not be permitted to market our product in the U.S. unless our product is shown
to be clinically superior to their product.


     WE ARE DEPENDENT ON AVENTIS AND OTHER CORPORATE COLLABORATORS TO DEVELOP,
CONDUCT CLINICAL TRIALS, OBTAIN


<PAGE>

REGULATORY APPROVALS FOR, AND, MANUFACTURE, MARKET, AND SELL OUR PRINCIPAL
PRODUCTS

     We are parties to collaborative agreements with third parties relating to
certain of our principal products. We are relying on Aventis to develop, conduct
clinical trials, obtain regulatory approvals for, and manufacture, market, and
sell GA-EPO and GA-II; Sumitomo to develop and commercialize Replagal for Fabry
disease in Japan and other Asian countries; and GI to develop and commercialize
Factor VIII gene therapy for hemophilia A in Europe. Our collaborators may not
devote the resources necessary or may otherwise be unable to complete
development and commercialization of these potential products. Our existing
collaborations are subject to termination without cause on short notice under
certain circumstances.

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

     - our collaborators may be pursuing alternative technologies or developing
alternative products, either on their own or in collaboration with others, that
may be competitive with the product as to which they are collaborating with us,
which could affect our collaborative partners' commitment to the collaboration
with us;

     - reductions in marketing or sales efforts or a discontinuation of
marketing or sales of our products by our collaborators would reduce our
revenues, which will be based on a percentage of net sales by the collaborator;

     - our collaborators may terminate their collaborations with us, which could
make it difficult for us to attract new collaborators or adversely affect the
perception of us in the business and financial communities; and

     - our collaborators may pursue higher priority programs or change the focus
of their development programs, which could affect the collaborator's commitment
to us. Pharmaceutical companies have historically re-evaluated their development
priorities following mergers and consolidations. This could occur following the
closing of the merger between Hoechst Marion Roussel, Inc. and Rhone-Poulenc SA
into Aventis S.A., which was completed in late 1999.

     WE MAY NOT BE ABLE TO OBTAIN PATENT PROTECTION FOR OUR DISCOVERIES

     Our success will depend in large part on our ability to obtain patent
protection for our processes and products in the U.S. and other countries. The
patent situation in the field of biotechnology generally is highly uncertain and
involves complex legal and scientific questions. We may not be issued patents
relating to our technology. Even if issued, patents may be challenged,
invalidated, or circumvented. Our patents also may not afford us protection
against competitors with similar technology. Because patent applications in the
U.S. are maintained in secrecy until patents issue, third parties may have filed
or maintained patent applications for


<PAGE>

technology used by us or covered by our pending patent applications without our
being aware of these applications.

     We may not hold proprietary rights to certain product patents, process
patents, and use patents related to our products or their methods of
manufacture. In some cases, these patents may be owned or controlled by third
parties. As a result, we may be required to obtain licenses under third party
patents to market certain of our potential products. If licenses are not
available to us on acceptable terms, we will not be able to market these
products.

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

     WE MAY LOSE IMPORTANT LICENSE RIGHTS IN SOME CIRCUMSTANCES

     We are a party to a number of patent licenses that are important to our
business 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 these
obligations, the licensor will have the right to terminate the license.

     WE ARE INVOLVED AND MAY BECOME INVOLVED IN PATENT LITIGATION OR OTHER
INTELLECTUAL PROPERTY PROCEEDINGS RELATED TO OUR TRANSKARYOTIC THERAPY -TM-
TECHNOLOGY WHICH COULD RESULT IN LIABILITY FOR DAMAGES OR STOP OUR DEVELOPMENT
AND COMMERCIALIZATION EFFORTS

     We are a party to a proceeding before the U.S. Patent and Trademark Office
to determine the patentability of our Gene Therapy technology. The participants
in the interference are TKT, Genetic Therapy, Inc., which is a wholly-owned
subsidiary of Novartis AG, Syntex (U.S.A.), which is a wholly-owned subsidiary
of Roche Holdings, Inc., and Somatix Therapy Corporation, which has been merged
into Cell Genesys, Inc. This proceeding will also determine which of the parties
first developed this technology. If the technology is patentable, the party that
first developed the technology will be awarded the U.S. patent rights.

     The process to resolve an interference can take many years. We may not
prevail in this interference. Even if we do prevail, the decision in this
proceeding may not enable us meaningfully to protect our proprietary position in
the field of EX VIVO gene therapy.

     If we do not prevail in this proceeding, a consent order issued by the
Federal Trade Commission in March 1997 may be relevant to us. The Federal Trade
Commission entered this consent order to resolve anti-competitive concerns
raised by the merger of Ciba-Geigy Limited and Sandoz Limited into Novartis AG.
As part of the consent order, the constituent entities of Novartis are required
to provide all gene therapy researchers and developers with nonexclusive,


<PAGE>

royalty-bearing licenses to the Novartis patent which is involved in the
interference proceeding described above. In addition, we have entered into an
agreement with Cell Genesys under which we would be permitted to market our
non-viral gene therapy products pursuant to a royalty-free license agreement if
Cell Genesys wins the interference. Thus, we believe that we may only be
materially adversely affected if Syntex prevails in this proceeding.

     EVEN IF WE OBTAIN MARKETING APPROVAL, OUR PRODUCTS WILL BE SUBJECT TO
ONGOING REGULATORY REVIEW

     If regulatory approval of a product is granted, such approval may be
subject to limitations on the indicated uses for which the product may be
marketed or contain requirements for costly post-marketing studies. As to
products for which we obtain marketing approval, we, the manufacturer of the
product if other than us, and the manufacturing facilities will be subject to
continual review and periodic inspections by the FDA and other regulatory
authorities. The subsequent discovery of previously unknown problems with the
product, manufacturer, or facility may result in restrictions on the product or
manufacturer, including withdrawal of the product from the market.

     If we fail to comply with applicable regulatory requirements, we may be
subject to fines, suspension or withdrawal of regulatory approvals, product
recalls, seizure of products, operating restrictions, and criminal prosecution.

     THE MARKET MAY NOT BE RECEPTIVE TO OUR PRODUCTS UPON THEIR INTRODUCTION

     The commercial success of our products that are approved for marketing by
the FDA and other regulatory authorities will depend upon their acceptance by
the medical community and third party payors as clinically useful,
cost-effective, and safe. Each of our technology programs is new. As a result,
it may be difficult for us to achieve market acceptance of our products,
particularly for the first products for which we obtain marketing approval.

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

     - the timing of the receipt of marketing approvals and the countries in
which such approvals are obtained;

     - the safety and efficacy of the product as compared to competitive
products; and

     - the cost-effectiveness of the product and the ability to receive third
party reimbursement.



     WE HAVE NOT BEEN PROFITABLE AND MAY REQUIRE ADDITIONAL FUNDING


<PAGE>

     We have experienced significant operating losses since our inception in
1988. At, December 31, 1999, we had an accumulated deficit of approximately
$114.4 million. We expect that we will continue to incur substantial losses into
2001 and that our cumulative losses will increase until then as our research and
development, sales and marketing, and manufacturing efforts expand. We expect
that the losses that we incur will fluctuate from quarter to quarter and that
these fluctuations may be substantial. To date, we have not received revenues
from the sale of products.

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

     - continued progress in our research and development programs, as well as
the magnitude of these programs;

     - the scope and results of our clinical trials;

     - the time and costs involved in obtaining regulatory approvals;

     - the cost of manufacturing activities;

     - the cost of commercialization activities;

     - the cost of our additional facilities requirements;

     - our ability to establish and maintain collaborative arrangements;

     - the timing, receipt, and amount of milestone and other payments from
collaborators;

     - the timing, receipt, and amount of sales and royalties from our potential
products in the market;

     - the costs involved in preparing, filing, prosecuting, maintaining, and
enforcing patent claims and other patent-related costs, including litigation
costs and the costs of obtaining any required licenses to technologies; and

     - the cost of obtaining and maintaining licenses to use patented
technologies.

     We may seek additional funding through collaborative arrangements and
public or private financings. Additional financing may not be available to us on
acceptable terms or at all.

     If we raise additional funds by issuing equity securities, further dilution
to our then existing stockholders will result. In addition, the terms of the
financing may adversely affect the holdings


<PAGE>

or the rights of such stockholders. If we are unable to obtain funding on a
timely basis, we may be required to significantly curtail one or more of our
research or development programs. We also could be required to seek funds
through arrangements with collaborators or others that may require us to
relinquish rights to certain of our technologies, product candidates, or
products which we would otherwise pursue on our own.

     WE HAVE LIMITED MANUFACTURING CAPABILITIES AND WILL DEPEND ON THIRD PARTY
MANUFACTURERS

     We have limited manufacturing experience and no commercial scale
manufacturing capabilities. In order to continue to develop products, apply for
regulatory approvals, and, ultimately, commercialize any products, we will need
to develop, contract for, or otherwise arrange for the necessary manufacturing
capabilities.

     We expect to manufacture certain of our products in our own manufacturing
facilities. We will require substantial additional funds and need to recruit
qualified personnel in order to build or lease and operate any manufacturing
facilities.

     We currently rely upon third parties to produce material for preclinical
testing and clinical trial purposes. We expect to continue to do so in the
future. We also expect to rely upon third parties for the commercial production
of certain of our products if we succeed in obtaining necessary regulatory
approvals. There are a limited number of such third party manufacturers capable
of manufacturing for us. If we are unable to obtain or maintain contract
manufacturing of these products, or to do so on commercially reasonable terms,
we may not be able to complete development of these products or market them. To
the extent that we enter into manufacturing arrangements with third parties, we
are dependent upon these third parties to perform their obligations in a timely
manner and in accordance with applicable government regulations.

     WE HAVE LIMITED SALES AND MARKETING EXPERIENCE AND CAPABILITIES

     We have limited sales and marketing experience and capabilities. In order
to market our products, we will need to develop this experience and these
capabilities or rely upon third parties, such as our corporate collaborators, to
perform these functions. If we rely on third parties to sell, market, or
distribute our products, our success will be dependent upon the efforts of these
third parties in performing these functions. In many instances, we may have
little or no control over the activities of these third parties in selling,
marketing, and distributing our products. If we choose to conduct these
activities directly, as we plan to do with respect to some of our potential
products, we may not be able to recruit and maintain an effective sales force.


     OUR SUCCESS IS DEPENDENT UPON THE RETENTION AND HIRING OF KEY PERSONNEL

     Our success is highly dependent on the retention of principal members of
our scientific


<PAGE>

and administrative staff. Furthermore, our future growth will require hiring a
significant number of qualified scientific and administrative personnel.
Accordingly, recruiting and retaining such personnel in the future will be
critical to our success. There is intense competition from other companies and
research and academic institutions for qualified personnel in the areas of our
activities, and there can be no assurance that we will be able to continue to
attract and retain, on acceptable terms, the qualified personnel necessary for
the continued development of our business.

     WE MAY BE EXPOSED TO PRODUCT LIABILITY CLAIMS AND MAY NOT BE ABLE TO OBTAIN
ADEQUATE PRODUCT LIABILITY INSURANCE

     Our business exposes us to the risk of product liability claims that is
inherent in the testing, manufacturing, and marketing of human therapeutic
products. Although we have clinical trial liability insurance, we do not
currently have any product liability insurance. We may not be able to obtain or
maintain such insurance on acceptable terms or at all. Moreover, any insurance
that we do obtain may not provide adequate protection against potential
liabilities. If we are unable to obtain insurance at acceptable cost or
otherwise protect against potential product liability claims, we will be exposed
to significant liabilities, which may materially and adversely affect our
business and financial condition. These liabilities could prevent or interfere
with our product commercialization efforts.

     IF WE FAIL TO OBTAIN AN ADEQUATE LEVEL OF REIMBURSEMENT BY THIRD PARTY
PAYORS FOR OUR FUTURE PRODUCTS, WE MAY NOT BE ABLE TO SUCCESSFULLY COMMERCIALIZE
OUR PRODUCTS IN CERTAIN MARKETS

     The availability of reimbursement by governmental and other third party
payors affects the market for any pharmaceutical product. These third party
payors continually attempt to contain or reduce the costs of health care by
challenging the prices charged for medical products and services. In certain
foreign countries, particularly the countries of the European Union, the pricing
of prescription pharmaceuticals is subject to governmental control.

     Proposals have been considered periodically by the Health Care Financing
Administration of the United States Department of Health and Human Services to
reduce the reimbursement rate with respect to erythropoietin. Adoption by the
Health Care Financing Administration of any such proposal might have an adverse
effect on the pricing of GA-EPO.

     In both the U.S. and certain foreign jurisdictions, there have been a
number of legislative and regulatory proposals to change the health care system.
Further proposals are likely. The potential for adoption of these proposals may
affect our ability to raise capital, obtain additional collaborative partners,
and market our products.

     If we or our collaborators obtain marketing approvals for our products, we
expect to experience pricing pressure due to the trend toward managed health
care, the increasing influence of health maintenance organizations, and
additional legislative proposals. We may not be able to sell our products
profitably if reimbursement is unavailable or limited in scope or amount.