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                                                                  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, 1998 and
presented elsewhere by management from time to time.

         PATENT LITIGATION. The biotechnology industry has been characterized by
significant litigation and interference proceedings regarding patents, patent
applications and other intellectual property rights, and many companies in the
biotechnology industry have attempted to employ intellectual property litigation
to gain or preserve a competitive advantage. For example, there has been
substantial intellectual property litigation between suppliers of erythropoietin
throughout the world.

         In April 1997, Amgen Inc. filed a civil action in the U.S. District
Court in Massachusetts against the Company and Hoechst Marion Roussel, Inc.
("HMRI"), the Company's collaborative partner. The complaint in the action
alleged that the Company's Gene Activated product development program for the
production of GA-EPO and processes for producing GA-EPO infringe on Amgen's U.S.
Patent Numbers 5,547,933, 5,618,698, and 5,621,080 and requests that TKT and
HMRI be enjoined from making, using, or selling GA-EPO and that the court award
Amgen monetary damages.

         In November 1997, TKT and HMRI filed a Motion for Summary Judgment of
Non-Infringement. On the same date, Amgen filed a Motion for Summary Judgment of
Infringement. TKT and HMRI opposed that motion, stating that there had been no
infringement.

         In April 1998, the U.S. District Court granted TKT and HMRI's Motion
for Summary Judgment of Non-Infringement and denied Amgen's Motion for Summary
Judgment of Infringement on the ground that all of TKT and HMRI's 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 for
regulatory approval. According to the Court, under the Waxman-Hatch Act, such
activities are not acts of patent infringement. The Court ordered Amgen's
remaining claim for declaratory judgment of future infringement administratively
closed, to be reopened upon motion of either party for good cause shown. The
Court did not address the issue of whether TKT and HMRI's activities that were
challenged by Amgen infringed Amgen's patents. The Court ordered Amgen's
remaining claim for declaratory judgment of future infringement administratively
closed, to be reopened upon motion of either party for good cause shown.

         In June 1999, the Company requested, and the Court agreed, that the
declaratory judgment aspect of the case be reopened. In July 1999, the Company
commenced legal proceedings against Kirin-Amgen, Inc., a joint venture of Amgen
and Kirin Brewery Co., Ltd., in the U.K. seeking a declaration that a U.K.
patent held by Kirin-Amgen will not be infringed by the sale of GA-EPO and that
the numerous claims of Kirin-Amgen's U.K. patent are invalid.


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         The Company can provide no assurance as to the outcome of either the
U.S. or U.K. proceedings. A decision by the court against TKT and HMRI,
including the issuance of an injunction against the making, using or selling of
GA-EPO by the Company and HMRI in the U.S., U.K., or any other significant
industrial country, as the case may be, or any other conclusion of other
litigation in a manner adverse to the Company and HMRI, would have a material
adverse effect on the Company's business, financial condition, and results of
operations.

         Pursuant to the Amended and Restated License Agreement, dated March
1995, by and between HMRI and the Company, HMRI assumed the cost of defense of
the Amgen and Kirin-Amgen litigations. The Company is required to reimburse HMRI
for its share of litigation expenses, as defined, from future royalties, if any,
otherwise payable by HMRI as to the sale of GA-EPO and in certain other
circumstances.

         There can be no assurance that the Company will not in the future
become subject, in the United States or any other country, to additional patent
infringement claims, interferences and other litigation involving patents, or
any patents that may issue on any pending patent applications, including Amgen
patent applications.

         The defense and prosecution of intellectual property suits and related
legal and administrative proceedings can be both costly and time consuming.
Litigation and interference proceedings could result in substantial expense to
the Company or its corporate partner and significant diversion of effort by the
Company's technical and management personnel. An adverse determination in
litigation to which the Company may become a party could subject the Company to
significant liabilities to third parties or require the Company to seek licenses
from third parties. Although a number of patent and intellectual property
disputes in the biotechnology area have been settled through licensing or
similar arrangements, costs associated with any such arrangement may be
substantial and could include ongoing royalties. Furthermore, there can be no
assurance that necessary licenses would be available to the Company or its
corporate partner or would be available on acceptable terms. Adverse
determinations in a judicial or administrative proceeding or failure to obtain
necessary licenses could prevent the Company or its corporate partner from
manufacturing and selling some or all of its products, which would have a
material adverse effect on the Company's business, financial condition and
results of operations.

         With respect to gene therapy technology, the Company requested, and the
U.S. Patent and Trademark Office (the "PTO"), declared in January 1996, an
interference regarding a third party's issued patent with broad claims to ex
vivo gene therapy. The participants in the interference are TKT, Genetic
Therapy, Inc. (a wholly-owned subsidiary of Novartis AG), Syntex (U.S.A.) (a
wholly-owned subsidiary of Roche Holdings, Inc.), and Somatix. Somatix
subsequently merged into Cell Genesys, Inc. With the possible exception of the
patent involved in the interference, the Company believes its Transkaryotic
Therapy technology does not infringe on patents issued to date. The PTO
proceeding will determine the patentability of the subject matter of the
interference and which of the parties first developed this subject matter. The
process to resolve the interference can take many years. The outcome of
interferences can



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be quite variable: for example, none of the four parties may receive the desired
claims, one party may prevail, or a settlement involving two or more of the
parties may be reached. There can be no assurance that TKT will prevail in this
interference or that, even if it does prevail, that the Company can meaningfully
protect its proprietary position. In the event TKT does not prevail in the
interference, a January 1997 Federal Trade Commission (the "FTC") decision may
then be relevant. The FTC entered a consent order to resolve anticompetitive
concerns raised by the merger of Ciba-Geigy Limited and Sandoz Limited into the
newly formed Novartis AG. As part of the consent order, the constituent entities
of Novartis will be required to provide all gene therapy researchers and
developers with non-exclusive licenses to the patent upon which Novartis is
involved in the interference. The Company has entered into an agreement with
Somatix under which the Company's ability to market its non-viral gene therapy
products will not be affected should Somatix win the interference.

         Should any of its competitors have filed additional patent applications
in the U.S. that claim technology also invented by the Company, the Company may
have to participate in additional interference proceedings declared by the PTO,
all of which could result in substantial cost to the Company to determine its
rights or potential loss of rights.

         COMPETITION. The biotechnology industry is characterized by rapid and
significant technological change. There can be no assurance that TKT will
succeed in developing and marketing technologies and products that are more
clinically efficacious and cost-effective than existing established treatments
or new approaches and products developed and marketed by its competitors. The
development by others of alternative or superior treatment methods could render
the Company's products obsolete or noncompetitive. In addition, treatment
methods not clearly superior to the Company's could achieve greater market
penetration through competitors' superior sales, marketing or distribution
capabilities.

         The Company's products and technologies will be subject to substantial
competition from companies engaged in the commercialization of therapeutic
proteins and gene therapy as well as from companies which have other forms of
treatment for the diseases targeted by the Company. Many of these competitors
have substantially greater financial and other resources than the Company,
including larger research and development staffs and more experience and
capabilities in conducting research and development activities, testing products
in clinical trials, obtaining regulatory approvals and manufacturing, marketing
and distributing products. Smaller companies may obtain access to such skills
and resources through collaborative arrangements with pharmaceutical companies
or academic institutions.

         The Company is initially focusing its Gene Activated product efforts on
established products with proven safety and efficacy. The Company anticipates
that companies selling such products will compete vigorously against any Gene
Activated products offered by the Company or its collaborators. There can be no
assurance that the Company's Gene Activated products will be accepted by medical
centers, hospitals, physicians or patients in lieu of existing products, or as
to the effect of such competition on the market prices of the Company's
products.

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         The Company's Niche Protein products are targeted at patients suffering
from rare genetic diseases. The Company anticipates that the market for such
products in some instances may be quite small, and that competition in the form
of competitive products could place significant pressure on TKT's ability to
successfully commercialize its products.

         The Company's competitive position also depends on its ability to
attract and retain qualified personnel, obtain patent protection, secure
licenses of necessary genes and technology from third parties, or otherwise
develop proprietary products or processes and secure sufficient capital
resources for the typically substantial expenditures and period of time prior to
commercial sales of each product. There can be no assurance that the Company
will be successful in achieving these goals.

         DEPENDENCE ON COLLABORATIVE PARTNERS. The Company has entered into
arrangements with HMRI on two of its Gene Activation development programs, with
Sumitomo on one of its Niche Protein products, and with GI on a gene therapy
development program. Each agreement with HMRI is subject to termination without
cause on short notice under certain circumstances, and there is no assurance
that in the future either partner will not exercise its termination rights. The
Company is relying on HMRI to develop, conduct clinical trials, obtain
regulatory approval for the sale of, manufacture and market worldwide GA-EPO and
GA-II. There can be no assurance that these collaborative partners will devote
the resources necessary to complete development of and commercialize these
potential products. Should these collaborative partners fail to develop and
commercialize these two potential products, the Company's business would be
materially adversely affected.

         The Company's strategy for the research, development and
commercialization of certain of its potential products includes the possibility
that it will enter into various additional arrangements with corporate partners,
licensors, licensees and others. There can be no assurance that any further
arrangements will be effected in the future. Although the Company believes
parties to any existing and future arrangements, if entered into, would have
economic and other motivations to perform their contractual responsibilities in
full, the amount and timing of resources which they would devote to these
activities would not be within the control of the Company. There can be no
assurance that such parties would perform their obligations as expected or that
any revenue would be derived by the Company from such arrangements.

         PATENTS AND PROPRIETARY RIGHTS. The Company's success may depend in
large part on its ability to obtain patent protection for its processes and
potential products in the U.S. and other countries and to obtain the right to
use in its potential products genes or other technology that have been or may be
patented by others. At December 31, 1998, the Company had six issued U.S.
patents and 28 pending patent applications in the U.S. to protect its
proprietary methods and processes; it has also filed foreign patent applications
corresponding to certain of these U.S. patent applications. In addition, the
Company has entered into several agreements to license proprietary rights from
other parties. However, the patent situation in the field of biotechnology
generally is highly uncertain and involves complex legal, scientific and factual
questions. To date there has emerged no consistent policy regarding the breadth
of claims allowed in biotechnology patents. Accordingly, there can be no
assurance that patent applications relating to the


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technology used by the Company will result in patents being issued or that, if
issued, the patents will not be challenged, invalidated or circumvented or will
afford protection against competitors with similar technology.

         Many biotechnology and pharmaceutical companies, universities and
research institutions, including competitors with substantial resources, have
filed patent applications and have been issued patents potentially relating to
the Company's technologies. In addition, certain competitors have filed patent
applications and have been issued patents relating to certain methods of
producing therapeutic proteins that the Company anticipates producing using its
Gene Activation technology. The Company's technologies and potential products
may be found to conflict or be alleged to conflict with patents which have been
or may be granted to competitors, universities or others. There are a
substantial number of biotechnology patent applications under review at the PTO.
Because patent applications in the U.S. are maintained in secrecy until patents
issue, the Company cannot be certain that others have not filed or maintained
patent applications for technology used by the Company or covered by the
Company's pending patent applications or that the Company was the first to file
patent applications for such technology. Competitors may have filed applications
for, or may have received patents and may obtain additional patents and
proprietary rights relating to, compositions of matter or processes that block
or compete with those of the Company. Furthermore, as is the case with any
pending patent application, competitors may attempt to amend existing
applications to claim rights to compositions of matter or processes that may
block the Company. No assurance can be given that the Company's products or
processes do not infringe patents that may issue under pending patent
applications.

         Although the Company has licensed proprietary rights to certain genes
(for example, for Factor VIII and Factor IX) to be used in its gene therapy
products and to certain patents (for example, for certain pending and issued
patents related to mucopolysaccharidoses), the Company presently has no
proprietary rights to certain other genes that it may later seek to use in its
products and which may be the subject of issued third party patents or pending
patent applications. As a result, the Company may be required to obtain licenses
under third party patents in order to market certain of its products. If such
licenses are not made available to the Company on acceptable terms, the Company
will not be able to market such products. In addition, under the Company's
license and sublicense agreements, the licensors and sublicensors may terminate
these agreements upon the Company's failure to meet certain specified
milestones. Any such termination of an existing license or sublicense by any
such licensor or sublicensor, or any inability by the Company to obtain any
required license, could have a material adverse effect on the Company's
business.

         The Company also relies upon unpatented proprietary technology,
processes and know-how, which the Company protects in part by confidentiality
agreements with its employees, consultants and certain contractors. 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 become known or be independently developed by competitors.

         POSSIBILITY OF ORPHAN DRUG STATUS. The Company believes that many of
the potential


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products in its Niche Protein platform may qualify as Orphan Drugs. TKT intends
to pursue this designation aggressively, where appropriate, with respect to its
Niche Protein products intended for patient populations in the United States of
less than 200,000. A drug that receives Orphan Drug designation by the FDA and
is the first product to receive FDA marketing approval for its stated product
claim is entitled to a seven-year exclusive marketing period in the United
States for that product claim. A drug that is considered by the FDA to be
different than a particular Orphan Drug is not barred from sale in the United
States during such seven-year exclusive marketing period. Furthermore, Orphan
Drug exclusivity can be terminated for a variety of reasons, including that the
manufacturer of an Orphan Drug cannot provide an adequate supply of the product.
There can be no assurance that Orphan Drug status will be afforded to any of the
Company's potential products, or, if afforded, that such designations will be
maintained. In addition, the Company could incur substantial costs in asserting
any rights to prevent such uses it may have under the Orphan Drug Act.

         Legislation has in the past been introduced to limit the marketing
exclusivity provided for certain Orphan Drugs. Although the outcome of that
legislation, if reintroduced, is uncertain, there remains a possibility that
future legislation will limit the incentives currently afforded to the
developers of Orphan Drugs.

         There can be no assurance that other companies will not seek such
designation and obtain FDA marketing approval before the Company obtains such
approval. If another company obtains Orphan Drug marketing approval and receives
seven-year marketing exclusivity, it is possible that the Company would not be
permitted by the FDA to market a similar product in the United States during the
exclusivity period.

         EARLY STAGE OF DEVELOPMENT; COMMERCIAL UNCERTAINTY. TKT is at an early
stage of development. All of the Company's potential products are in research,
preclinical development or clinical development. No revenues have been generated
from product sales, and no such revenues are expected until 2000 at the
earliest.

         The Gene Activation products currently under development by the Company
will require significant additional development efforts, including extensive
preclinical and clinical testing and regulatory approval, prior to commercial
use. There can be no assurance that any Gene Activation products will ultimately
be developed by the Company and its corporate partners, or that, even if
developed, these products will receive regulatory approval. If approved, these
products may compete with established products of proven safety and efficacy,
the manufacturers of which can be expected to employ intellectual property
challenges to commercialization of these products. There can be no assurance
that the Company's Gene Activation products, if any, will be able to be
commercialized or, if commercialized, that they will be accepted by medical
centers, hospitals, physicians or patients in lieu of existing treatments.
Accordingly, there can be no assurance that these products can be successfully
manufactured and marketed at prices that would permit the Company and its
corporate partners to operate profitably.

         The Company's potential gene therapy products may be even further from
commercial


<PAGE>


introduction. Due to the early stage of development of the Company's potential
gene therapy products and the extensive research, development, preclinical and
clinical testing, and regulatory review process required before marketing
approval can be obtained, the Company cannot predict with certainty when it will
be able to commercialize any of its potential gene therapy products, if at all.

         All of TKT's potential Niche Protein products are in research,
preclinical development or clinical development. No revenues have been generated
from product sales, and the Company believes no such revenues will be realized
until at least 2000. Extensive research, development, preclinical and clinical
testing and the regulatory review process will be required before marketing
approval can be obtained. The Company cannot predict with certainty when it will
be able to commercialize any of its potential Niche Protein products, if at all.

         TECHNOLOGICAL UNCERTAINTY. Each of the Company's three product
platforms involves new and rapidly evolving technologies. All of the Company's
potential products are in pre-clinical or clinical stages of development and
will require substantial additional development efforts and regulatory approvals
prior to market introduction.

         The Company's Gene Activated and Niche Protein products are either in
clinical development or have not yet been tested in humans. While certain of the
Company's potential gene therapy products are in clinical development, the
Company believes that its product candidates in this area are even further from
commercial introduction. Existing preclinical and clinical data on the safety
and efficacy of the Company's potential products are limited.

         For any given indication, the Company's potential products may not be
efficacious or may prove to have undesirable and unintended side effects,
toxicities or other characteristics that may prevent or limit commercial use.
There can be no assurance that any of the Company's products will obtain
approval from the FDA or equivalent foreign regulatory authorities for any
indication.

         UNCERTAINTY ASSOCIATED WITH CLINICAL TRIALS. The Company's potential
products are in various stages of research or preclinical or clinical
development. Subject to compliance with FDA regulations, TKT and its corporate
partners plan to undertake extensive clinical testing in humans to evaluate the
safety and efficacy of its products in development.

         The rate of completion of clinical trials is dependent upon, among
other factors, the 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. Delays in planned patient enrollment in the
anticipated Gene Activation clinical trials may result in program delays, which
could have a material adverse effect on TKT. Even if clinical trials are
completed, there can be no assurance that the Company or its partners will be
able to submit a license application to the FDA or comparable regulatory
agencies in foreign countries on the schedule anticipated or that such
applications will be reviewed and approved by such regulatory agencies in a
timely manner.

<PAGE>


         Of the gene therapy products under development at the Company, one, for
the treatment of cachexia, and a second, for the treatment of hemophilia A, are
in Phase I clinical trials. There can be no assurance that the Company will be
able to obtain authorization from the FDA for additional human clinical testing
for any of its other gene therapy products currently in research or preclinical
development.

         There can be no assurance that any authorized clinical testing will be
completed successfully within any specified time period, if at all, with respect
to any potential product. There also can be no assurance that such testing will
show any potential product to be safe or efficacious or that any such product
will be approved by the FDA for any indication. Furthermore, the Company 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.
There can be no assurance that the Company will not encounter problems in
clinical trials which will cause the Company or the FDA to delay or suspend
clinical trials.

         UNCERTAINTY OF GOVERNMENT REGULATORY REQUIREMENTS; LENGTHY APPROVAL
PROCESS. The Company's research and development, preclinical testing, clinical
trials, facilities and manufacturing and marketing of its products will be
subject to extensive regulation by numerous governmental authorities in the U.S.
and other countries. The regulatory process for new therapeutic products, which
includes preclinical and clinical testing of each product to establish its
safety and efficacy, can take many years and require the expenditure of
substantial resources. Data obtained from preclinical and clinical activities
are susceptible to varying interpretations which could delay, limit or prevent
FDA regulatory approval. In addition, delays or rejections may be encountered
based upon changes in FDA policy during the period of product development and
FDA regulatory review of each submitted license application. Similar delays may
also be encountered and substantial resources expended in foreign countries.

         There can be no assurance that even after such time and expenditures,
regulatory approval will be obtained for any Gene Activated or gene therapy
products developed by the Company. Moreover, if regulatory approval of a product
is granted, such approval may entail limitations on the indicated uses for which
it may be marketed and contain requirements for post-marketing follow-up
studies. 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 subject to substantial
additional review by various regulatory authorities in the U.S. and abroad.
These requirements may result in extensive delays in initiating clinical trials
of gene therapy products and in the regulatory approval process in general.

         Any of the foregoing effects of government regulation, as well as of
comparable foreign regulation, could delay the marketing of the Company's
products for a considerable or indefinite period of time, materially increase
the cost involved in developing, manufacturing and marketing the Company's
products, diminish or eliminate any competitive advantage the Company may enjoy,
or otherwise adversely affect the Company's ability to conduct its business.
Compliance with applicable government regulations governing each of the
Company's potential products will require a significant commitment of time,
money and effort by the Company and its corporate partners with no assurances
that any approval will ultimately be granted on a timely basis, if at


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all.

         HISTORY OF OPERATING LOSSES; FUTURE CAPITAL NEEDS; UNCERTAINTY OF
ADDITIONAL FUNDING. The Company has experienced significant operating losses
since its inception in 1988. As of June 30, 1999, the Company had an accumulated
deficit of $91,927,000. The Company expects that it will continue to incur
substantial losses until at least 2000 and expects cumulative losses to increase
until then as the Company's research and development efforts expand. The Company
expects that such losses will fluctuate from quarter to quarter and that such
fluctuations may be substantial. There can be no assurance that the Company will
ever achieve sales or profitability. To date, the Company has not received any
revenues from product sales.

         The Company will require substantial funds to conduct research and
development (including preclinical and clinical testing) of its potential
products and to manufacture and market any products that are approved for
commercial sale. Based on its current operating plan, the Company believes that
its available cash will be adequate to satisfy its capital needs into 2001. The
Company's future capital requirements will depend on many factors, including
continued progress in its research and development programs, the magnitude of
these programs, the scope and results of clinical trials, the timing and receipt
of milestone payments, the time and costs involved in obtaining regulatory
approvals, the costs involved in preparing, filing, prosecuting, maintaining and
enforcing patent claims and other patent-related costs, competing technological
and market developments, the ability of the Company to establish and maintain
collaborative arrangements, and the cost of manufacturing and commercialization
activities. The Company also will require capital to fund the costs of its
additional facilities requirements. The Company intends to seek additional
funding through collaborative arrangements and/or through public or private
financings. There can be no assurance that additional financing will be
available on acceptable terms, if at all.

         NO MANUFACTURING OR DISTRIBUTION OR MARKETING CAPABILITIES; DEPENDENCE
ON THIRD PARTY MANUFACTURERS. Although the Company has pilot gene therapy and
protein manufacturing facilities, it has only limited manufacturing experience
and no commercial scale manufacturing capabilities. The Company will need to
develop, contract for or otherwise arrange for such capabilities, for example,
through collaborative partners, to commercialize any of its products. If the
Company is delayed in establishing suitable manufacturing capabilities, the
Company's ability to conduct human clinical testing may be adversely affected,
resulting in the delay of submission of potential products for regulatory
approval and initiation of new development programs. In addition, there can be
no assurance that the Company will be able to manufacture products at a
reasonable cost, that the Company will be able to price products competitively
or, if priced competitively, that the Company will be able to achieve margins
sufficient to allow it to achieve profitability.

         The Company plans to provide its gene therapy products through central
manufacturing facilities. The establishment of these facilities will require
substantial additional funds and personnel and will require compliance with
extensive regulations applicable to such facilities. There can be no assurance
that such funds and personnel will be available on acceptable terms, if at all,
or that the Company will be able to comply with such regulations at acceptable
cost, if at



<PAGE>


all. In addition, in managing this expansion the Company may encounter
unforeseen regulatory, logistical or management problems or incur unexpected
operating costs. Failure or delays in establishing these facilities, or the
incurrence of unexpected operating costs, could adversely affect the ability of
the Company to manufacture and market its gene therapy products.

         To the extent that the Company contracts with third parties for the
manufacture of its products, the Company will be dependent on such third parties
to comply with the terms of the contracts and to manufacture for the Company on
a timely basis and in accordance with applicable regulations. Any failures by
third parties to person their contract obligations satisfactorily may delay
clinical trial development or the submission of products for regulatory
approval, impair the Company's ability to commercialize its products as planned
and deliver products on a timely basis or otherwise adversely affect the
Company's competitive position.

         The Company has no product sales, marketing or distribution
capabilities or experience. In order to market any of its products, the Company
must develop sales, marketing and distribution capabilities, either on its own
or in conjunction with others. There can be no assurance that the Company will
be able to enter into any arrangements for the sale, marketing and distribution
of its products, that such arrangements will be successful or that the Company
will be able to obtain additional capital and expertise to conduct such
activities independently. In addition, if the Company chooses to conduct such
activities directly, there can be no assurance that the Company will be able to
recruit and maintain a sales force or that a sales force will be able to
successfully access the markets for the Company's products.

         DEPENDENCE ON KEY PERSONNEL. The Company's success is highly dependent
on the retention of principal members of its scientific and management staff.
Furthermore, the Company's future growth will require the hiring of significant
numbers of qualified scientific and management personnel. Accordingly,
recruiting and retaining such personnel in the future will be critical to the
Company's success. There is intense competition from other companies and
research and academic institutions for qualified personnel in the areas of the
Company's activities, and there can be no assurance that the Company will be
able to continue to attract and retain on acceptable terms the qualified
personnel necessary for the development of its business.

         PRODUCT LIABILITY AND INSURANCE. The Company's business will in the
future expose it to potential product liability risks which are inherent in the
testing, manufacturing and marketing of human therapeutic products. Although the
Company has clinical trial liability insurance for trials conducted in the U.S.,
the Company does not currently have any product liability insurance, and there
can be no assurance that it will be able to obtain or maintain such insurance on
acceptable terms, if at all, or that any insurance obtained will provide
adequate protection against potential liabilities. An inability to obtain
insurance at acceptable cost or otherwise protect against potential product
liability claims, in addition to exposing the Company to significant
liabilities, could prevent or inhibit the commercialization of products
developed by the Company.

         UNCERTAINTY OF PHARMACEUTICAL PRICING AND REIMBURSEMENT. The business
and financial condition of pharmaceutical and biotechnology companies will
continue to be affected by the efforts of government and third-party payors to
contain or reduce the cost of health care through


<PAGE>


various means. For example, in certain foreign markets, pricing and
profitability of prescription pharmaceuticals is subject to government control.
In particular, individual pricing negotiations are often required in each
country of the European Community, even if approval to market the drug is
obtained.

         In the U.S. there have been, and the Company expects that there will
continue to be, a number of federal and state proposals to implement similar
government control. In addition, an increasing emphasis on managed care in the
U.S. has and will continue to increase the pressure on pharmaceutical pricing.
While the Company cannot predict whether any such legislative or regulatory
proposals will be adopted or the effect such proposals or managed care efforts
may have on its business, the announcement of such proposals or efforts could
have a material adverse effect on the Company's ability to raise capital, and
the adoption of such proposals or efforts could have a material adverse effect
on the Company's business, financial condition and results of operations.
Further, to the extent that such proposals or efforts have a material adverse
effect on other pharmaceutical companies that are prospective corporate partners
for the Company, the Company's ability to establish corporate collaborations may
be adversely affected.

         In addition, in both domestic and foreign markets, sales of the
Company's products, if any, will be dependent in part on the availability of
reimbursement from third party payors, such as government and private insurance
plans. Third party payors are increasingly challenging the prices charged for
medical products and services. If the Company succeeds in commercializing
products, there can be no assurance that these products will be considered cost
effective, that reimbursement will be available, or if available, that the
payor's reimbursement policies will be adequate to permit the Company to realize
a reasonable return.