POTP Point Therapeutics (MM)

RISK FACTORS

In determining whether to vote for approval of the issuance of shares of Point common stock to DARA stockholders as contemplated by the merger agreement (and the related Point proposals described in this joint proxy statement/prospectus), in the case of Point stockholders, or for approval and adoption of the merger agreement and the merger or whether to exercise dissenters’ rights in connection with the merger, in the case of DARA stockholders, you should consider carefully the matters described below and the other information included in this joint proxy statement/prospectus.

Risks Relating to Point

There is no guarantee that the proposed merger with DARA will be completed.

The proposed merger with DARA is subject to a number of conditions, including approval by both the Point and the DARA stockholders. There is no assurance that the merger will be approved, and there is no assurance that the other conditions to the completion of the merger will be satisfied. If Point is unable to complete the proposed merger with DARA, Point will either need to complete another strategic transaction or file for bankruptcy protection. In addition, if Point fails to complete the proposed merger with DARA, Point may be required to repay DARA any amounts borrowed from it under the Loan and Security Agreement.

Point may be forced to completely wind-down its operations and cease to exist as an operating company.

At September 30, 2007, Point had unrestricted cash of approximately $2.3 million. This unrestricted cash balance is projected to only allow Point to maintain its current and planned operations into the first quarter of 2008. Point’s current position, combined with the cash Point would potentially receive were Point to liquidate all of its assets, after taking into account all anticipated sources and uses of cash, may not be sufficient to pay all of its obligations when such amounts are required to be paid. This condition raises substantial doubt about Point’s ability to continue as a going concern. The audit report prepared by Point’s independent registered public accounting firm in connection with its financial statements for the year ended December 31, 2006 included an explanatory paragraph expressing substantial doubt about Point’s ability to continue as a going concern.

In addition, in May 2007, Point’s Independent Data Monitoring Committee recommended stopping its two Phase 3 talabostat studies in patients with advanced non-small cell lung cancer (“NSCLC”) due to neither the primary endpoint of median progression-free survival nor the secondary endpoint of overall survival demonstrating improvement over the placebo groups. Also, in the talabostat combination trial with docetaxal (Taxotere ^® : sanofi-aventis), the talabostat arm of the study demonstrated significantly lower overall survival than the placebo arm. As a result of these interim results, the U.S. Food and Drug Administration (the “FDA”) has put the talabostat clinical program on hold. Point’s failure to achieve favorable results precludes it from continuing its talabostat clinical program at this point in time. Point has ceased funding its research and development efforts for talabostat, and will not likely seek to raise future capital for operating purposes.

Point has drastically reduced the scope and size of its facility and staff, and its efforts to complete the proposed merger with DARA or to find another buyer or partner for its technology and related intellectual property and assets, in bankruptcy or otherwise, may be unsuccessful.

Effective July 25, 2007, Point terminated all but two of its employees. Point plans to continue to utilize some or all of the terminated employees as part of a more variable-cost consulting team to assist it in completing the proposed merger with DARA, or, if the merger fails, to seek another buyer or partner for its technology and related intellectual property and other assets, in bankruptcy or otherwise. In addition, on July 31, 2007, Point terminated its lease at 155 Federal Street in Boston, Massachusetts for a substantially smaller temporary location

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at 70 Walnut Street in Wellesley Hills, Massachusetts. Given Point’s lack of staff and resources, together with the FDA placing a clinical hold on its lead pharmaceutical product candidate, talabostat, Point may be unable to successfully locate a buyer or partner for the purposes of effectuating a strategic transaction. Although Point currently retains control over its intellectual property portfolio, Point cannot make any assurances that these assets have or will continue to have any value. This uncertainty as to the value of Point’s intellectual property portfolio and other assets may prevent it from successfully locating a buyer or partner for the purposes of enacting a strategic transaction if the proposed merger with DARA fails.

If the merger with DARA fails, and attempts to find another buyer or partner for Point’s technology and related intellectual property and assets fail, and if no other strategic transaction can be completed, Point will likely file for federal bankruptcy protection under Chapter 11 of the Bankruptcy Code.

If Point cannot complete the merger with DARA and attempts to find another buyer or partner for its technology and related intellectual property and assets fail and if no other strategic transaction can be effectuated, Point will likely file for federal bankruptcy protection under Chapter 11 of the Bankruptcy Code. In the event Point files for Chapter 11 protection, Point will most likely not be able to raise any type of funding from any source. Upon filing for Chapter 11 protection, Point would not meet the minimum standards required for remaining listed on the NASDAQ Capital Market. If Point is delisted, its stock would no longer be tradable on the NASDAQ Capital Market.

Although Point has entered into an agreement to merge with DARA and has previously been engaged in discussions with additional potential purchasers or strategic partners, Point cannot guarantee that a transaction will occur within the time frame necessary to avoid having to file for Chapter 11 bankruptcy protection.

Provisions of the merger agreement may deter alternative strategic transactions.

The merger agreement prohibits Point from soliciting, initiating, encouraging or facilitating certain alternative acquisition proposals with any third party, subject to exceptions set forth in the merger agreement. These provisions limit Point’s ability to pursue offers from third parties that could result in greater value to its stockholders. If the merger agreement is terminated and Point seeks another business combination, Point cannot assure stockholders that Point will be able to negotiate a transaction with another company on terms comparable to the terms of the merger with DARA, or that Point will avoid incurrence of any fees associated with the termination of the merger agreement. If the proposed merger with DARA is not completed, Point will have incurred substantial costs that may adversely affect its financial results and operations and the market price of Point’s common stock.

If the merger with DARA is not completed, the price of Point’s common stock may decline to the extent that the current market price of Point’s common stock reflects a market assumption that the merger will be completed. In addition, Point has incurred and will incur substantial costs in connection with the proposed merger. These costs are primarily associated with the fees of attorneys, accountants and consultants. If the merger with DARA is not completed, Point will have incurred significant costs for which Point will have received little or no benefit. Each of these factors may adversely affect the trading price of Point’s common stock and its financial results and operations.

Even if Point does not file for Chapter 11 bankruptcy, Point do not currently comply with certain of NASDAQ’s Marketplace Rules and Point’s stock may be delisted from the NASDAQ Capital market.

Even if Point does not file for bankruptcy, Point is not currently in compliance with certain requirements for continued listing on the NASDAQ Capital Market. On March 8, 2007, Point was notified by the Listing Qualification Department of the NASDAQ Stock Market that Point had failed to comply with the minimum bid price requirement for continued listing on the NASDAQ Capital Market set forth in Marketplace Rule 4310(c)(4) because its common stock had closed below the minimum $1.00 per share requirement for 30 consecutive

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business days and was given until September 4, 2007, to regain compliance. On September 12, 2007, Point received a staff determination letter from the Listing Qualifications Department notifying it that Point had failed to regain compliance with the applicable rule and that trading of Point’s common stock on the NASDAQ Capital Market would be suspended at the opening of business on September 21, 2007 unless Point requested an appeal of the determination. Within the September letter, the NASDAQ staff also indicted its belief that Point constituted a public shell and that such determination served as an additional basis to delist its securities from the NASDAQ Capital Market. Point participated in a hearing before a NASDAQ Listing Qualifications Panel on November 1, 2007, at which it requested continued listing of its common stock pending the completion of the merger. On November 13, 2007, Point received an additional notice from NASDAQ indicating that it was not in compliance with the minimum stockholders’ equity requirement for continued listing and citing that as a further basis for delisting Point’s common stock, and Point responded in writing to that additional notice. On December 12, 2007, the Listing Qualifications Panel granted Point’s request for continued listing subject to completion of the merger on or before January 30, 2008 and approval of the NASDAQ initial listing application filed by Point and DARA described below.

In addition, according to the NASDAQ rules, Point’s merger with DARA will constitute a change of control transaction, or “reverse merger,” requiring the combined company to meet NASDAQ’s initial listing requirements at the time of closing of the merger. On October 26, 2007, DARA filed an initial listing application with the NASDAQ Capital Market, which if approved, will take effect the first trading day following the consummation of the merger. The NASDAQ initial listing requirements include, among other things, that the combined company’s stockholders’ equity immediately after the merger exceeds $5.0 million, that the combined company’s common stock satisfies a $4.00 per share minimum bid price immediately after closing of the merger and that the combined company has a public float of common stock of at least $15.0 million. In order to meet the minimum bid price requirement, Point will need to implement a reverse stock split prior to the completion of the merger. There can be no assurance that Point’s common stock will not be delisted prior to the merger.

If the merger is not consummated by January 30, 2008 or, notwithstanding the implementation of the reverse stock split, the combined company fails to meet the minimum bid price, or otherwise fails to satisfy all other initial listing requirements, Point or the combined company, as applicable, will be subject to delisting. If Point or the combined company, as applicable, is unable to maintain a listing on the NASDAQ Capital Market, Point or the combined company may seek to have its stock quoted on the NASD’s OTC Bulletin Board, which is an inter-dealer, over-the-counter market that provides significantly less liquidity than the NASDAQ Capital Market, or in a non-NASDAQ over-the-counter market, such as the “pink sheets.” Quotes for stocks included on the OTC Bulletin Board/pink sheets are not as widely listed in the financial sections of newspapers as are those for the NASDAQ Capital Market. Therefore, prices for securities traded solely on the OTC Bulletin Board may be more difficult to obtain and holders of the combined company’s common stock may be less able to resell their securities at or near the latest posted bid prices.

Point’s stock price could be volatile and its trading volume may fluctuate substantially.

The price of Point’s common stock has been and may in the future continue to be extremely volatile, with the sale price fluctuating from a low of $0.03 to a high of $3.70 in the two-year period ended December 14, 2007. Many factors could have a significant impact on the future price of its common stock, including:

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If Tufts University School of Medicine terminates Point’s license, Point’s intellectual property portfolio would have diminished value which could prevent it from successfully locating a buyer or partner for the purposes of effectuating a strategic transaction.

Point licenses key technology, including the rights to talabostat, from Tufts. The underlying license for this technology terminates on the later of the expiration date of the last-to-expire patents, or 20 years from the date of initial commercial sale of the licensed product. Pursuant to the terms of the license, Tufts has the right to terminate the license prior to expiration of the term upon a material breach of the license by Point, its ceasing to do business or becoming insolvent, or its failure to sell a licensed product in the U.S. market by May 2011. If Point does not meet certain clinical development, regulatory and commercialization milestones prior to May 2011, it is possible that Tufts could seek to terminate or modify the terms of the license, in which case, its intellectual property portfolio would have diminished value which could prevent Point from successfully locating a buyer or partner for the purposes of effectuating a strategic transaction. Point also has no assurance that it would be able to license substitute technology in the future. Point’s inability to do so could impair its ability to conduct its business because Point may lack the technology, the necessary rights to such technology, or the finances required, in each case, to develop and commercialize potential products.

Point may be sued for product or operational liability.

Point may be held liable if any of its products or operations cause injury or death or are found otherwise unsuitable during product testing, manufacturing, marketing or sale. Point currently maintains a $2 million general liability policy and a $5 million per occurrence and annual aggregate product liability insurance policy related to its clinical trials consistent with industry standards. When necessary for its products, Point intends to obtain additional product liability insurance. Insurance coverage may be prohibitively expensive, may not fully cover its potential liabilities or may not be available in the future. Inability to obtain sufficient insurance coverage at an acceptable cost or otherwise to protect against potential product liability claims could prevent or inhibit the commercialization of Point’s products. If Point is sued for any injury caused by its products, the litigation could consume substantial time and attention of its management, and its liability could exceed its total assets.

Point has contingent liabilities relating to its historical discontinued operations that could give rise to liability risks in the future.

Prior to the sale of substantially all of its non-cash assets to Whatman Bioscience, Inc. (“Whatman”) in May of 2001, Point was engaged in the business of developing and supplying blood filtration devices. Although Whatman contractually assumed and agreed to indemnify Point and hold it harmless from and against most liabilities and obligations arising out of the conduct of its blood filtration business, Point retained certain known and unknown risks that were not contractually assumed by Whatman including without limitation, (i) any of its liabilities under any benefit plan, (ii) tax liabilities incurred which relate to periods prior to the closing of the Whatman transaction, (iii) accounts payable arising prior to the closing of the Whatman transaction, (iv) any of its liabilities which were owed to its security holders in their capacity as such, and (v) its liabilities which were owed to Sepracor, Inc. arising or resulting from its respective contractual relationships with Point. If for any reason Whatman, or its successors, is not able to satisfy any of the assumed liabilities, such outcome could have a material and adverse effect on its financial condition. Accordingly, there can be no assurances that claims arising out of its historical business and operations would not be asserted against Point in the future and, if asserted, there can be no assurances that Point would prevail.

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Point may be subject to future litigation which could be costly and time-consuming to defend.

In light of disclosures about its current financial and clinical difficulties, including the termination of its clinical programs, including its Phase 3 trial in NSCLC and its early termination of its Phase 2 trial in pancreatic cancer, Point may be the subject of litigation by one or more parties, including its stockholders and recent investors. Any claim or series of claims brought against Point could significantly harm its business by, among other things, injuring its reputation and leading to costly litigation. Any judgment against Point that is in excess of its insurance policy limits would have to be paid from its limited cash reserves, which would further reduce its capital resources. If Point is sued, Point may not have sufficient capital resources to defend the suit or to pay a judgment. If Point does not have sufficient capital resources to pay a judgment, its creditors could levy against its assets, including its intellectual property.

Risks Relating to the Merger

Point and DARA may not achieve the benefits they expect from the merger, which may have a material adverse effect on the combined company’s business, financial, and operating results.

Point and DARA entered into the merger agreement with the expectation that the merger will result in benefits to the combined company. Post-merger challenges include the following:

If the combined company is not successful in addressing these and other challenges, then the benefits of the merger may not be realized and, as a result, the combined company’s operating results and the market price of Point’s common stock may be adversely affected.

Point’s common stock is subject to delisting, and the combined company may not be able to obtain or maintain a listing.

Point’s common stock is currently traded on the NASDAQ Capital Market. On March 8, 2007, Point received a letter from the NASDAQ Stock Market stating that Point did not meet the $1 minimum share price requirement for continued listing set forth in Marketplace Rule 4310(c)(4). On September 12, 2007, Point received an additional notice from NASDAQ indicating that it was still not in compliance with the minimum bid price requirement for continued listing and citing as a further basis for de-listing Point’s cessation of its clinical and research operations, rendering Point, in the view of the staff of NASDAQ, a “public shell,” or non-operating company, under Marketplace Rule 4300. Point requested an appeal and appeared at a NASDAQ delisting hearing on November 1, 2007. Point participated in a hearing before a NASDAQ Listing Qualifications Panel on November 1, 2007, at which it requested continued listing of its common stock pending the completion of the merger. On November 13, 2007, Point received an additional notice from NASDAQ indicating that it was not in compliance with the minimum stockholders’ equity requirement for continued listing and citing that as a further basis for delisting Point’s common stock, and Point responded in writing to that additional notice. On December 12, 2007, the Listing Qualifications Panel granted Point’s request for continued listing subject to completion of the merger on or before January 30, 2008 and approval of the NASDAQ initial listing application filed by Point and DARA described below.

In addition, according to the NASDAQ rules, Point’s merger with DARA will constitute a change of control transaction, or “reverse merger,” requiring the combined company to meet NASDAQ’s initial listing requirements at the time of closing of the merger. On October 26, 2007, Point and DARA filed an initial listing application with

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the NASDAQ Capital Market, which if approved, will take effect the first trading day following the consummation of the merger. The NASDAQ initial listing requirements include, among other things, that the combined company’s stockholders’ equity immediately after the merger exceeds $5.0 million, that the combined company’s common stock satisfies a $4.00 per share minimum bid price immediately after closing of the merger and that the combined company has a public float of common stock of at least $15.0 million. In order to meet the minimum bid price requirement, Point will need to implement a reverse stock split prior to the completion of the merger.

Even if Point’s common stock meets the minimum bid price as a result of the reverse stock split, Point may not meet all other initial listing requirements. If the combined company is unable to obtain a new listing on the NASDAQ Capital Market, the combined company may seek to have its stock quoted on the NASD’s OTC Bulletin Board, which is an inter-dealer, over-the-counter market that provides significantly less liquidity than the NASDAQ Capital Market, or in a non-NASDAQ over-the-counter market, such as the “pink sheets.” Quotes for stocks included on the OTC Bulletin Board/pink sheets are not as widely listed in the financial sections of newspapers as are those for the NASDAQ Capital Market. Therefore, prices for securities traded solely on the OTC Bulletin Board may be more difficult to obtain and holders of the combined company’s common stock may be less able to resell their securities at or near the latest posted bid prices.

The issuance of shares of Point’s common stock to DARA’s stockholders in the merger will substantially dilute the percentage ownership interests of current Point stockholders.

If the merger is completed, the former DARA stockholders, together with the holders of the converted DARA options and DARA warrants, will receive Point shares, warrants and options, representing in the aggregate 96.4% of Point’s common stock on a fully diluted basis immediately following the merger. As a result, Point’s current stockholders and warrant and option holders will collectively own 3.6% of the outstanding shares of Point common stock, on a fully diluted basis, following the merger. The issuance of Point common stock to DARA stockholders will cause a significant reduction in the relative percentage interest of current Point stockholders in Point’s earnings, if any, voting power, liquidation value and market capitalization.

If Point and DARA proceed with the merger, the number of shares of Point common stock that DARA stockholders receive in the merger will not change as a result of changes in the market value of Point common stock.

In connection with the merger, each share of DARA common stock, DARA Series A Preferred Stock and DARA Series B Preferred Stock will be converted into shares of Point common stock. The number of Point shares received by the DARA stockholders in the merger will not change based on changes in the market value of Point common stock. The trading price of the shares of Point common stock received in the merger may vary because of factors such as:

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If the costs associated with the merger exceed the benefits, the combined company may experience adverse financial results, including increased losses.

DARA and Point will incur significant transaction costs as a result of the merger, including legal and accounting fees that may exceed their current estimates. In addition, DARA and Point expect that the combined company will incur consolidation and integration expenses, which cannot be precisely estimated at this time. Actual transaction costs may substantially exceed the current estimates of DARA and Point and may affect the combined company’s financial condition and operating results negatively. If the benefits of the merger do not exceed the costs associated with the merger, including any dilution to Point’s stockholders resulting from the issuance of shares in connection with the merger, the combined company’s financial results could be adversely affected, resulting in, among other things, increased losses, and decreased trading prices for the combined company’s common stock.

The analysis contained in the valuation report prepared by DARA’s independent financial advisor and the projections and assumptions on which the analysis is based may, when viewed in hindsight, not prove accurate and complete in all respects.

DARA engaged ZTR Enterprises, LLC (“ZTR”) to provide a valuation analysis of the common equity, on a minority, marketable basis, of DARA and Point to assist in the determination of the pro-forma ownership of the combined entity. The report, however, did not address the relative advantages and disadvantages of the transaction or opine on the fairness of the consideration to be received by the DARA stockholders in the merger or opine on the fairness of the merger to the Point stockholders.

The DARA board of directors relied on this valuation analysis in part in making its recommendations to the DARA stockholders. In addition, the Point board of directors reviewed the valuation analysis that was performed by ZTR.

ZTR’s analysis and conclusions are based on certain projections and assumptions described in its report. There can be no assurance that, when viewed in retrospect, the valuation analysis or the projections and assumptions on which the analysis is based, will prove to be accurate and complete in all respects.

The market price of Point’s common stock may decline as a result of the merger.

DARA stockholders, option and warrant holders will receive Point shares, options and warrants such that they will collectively own 96.4% of the Point common stock, on a fully diluted basis, following the closing of the merger.

The market price of Point’s common stock may decline as a result of the merger for a number of reasons, including if:

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If sales of a substantial number of shares of Point common stock within a short period of time cause Point’s stock price to fall, such price decline could impair the combined company’s ability to raise capital through sales of equity securities.

Failure to complete the merger could negatively impact DARA and Point, including the market price of Point’s common stock.

The obligations of Point and DARA to complete the merger are subject to the satisfaction or waiver of certain conditions. See “The Merger Agreement—Conditions to the Consummation of the Merger” beginning on page 56 of this joint proxy statement/prospectus for a discussion of these conditions. If these conditions are not satisfied or waived, the merger may not be completed. If the merger is not completed for any reason, both Point and DARA may be subject to other material risks, including:

Point’s officers and directors have interests different from yours that may influence them to support or approve the merger.

The terms of the merger agreement and the agreements contemplated thereby affect the directors and officers of Point in ways that may create interests for them in the merger that are different from, or in addition to, yours. These interests include:

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DARA’s officers and directors have interests different from yours that may influence them to support or approve the merger.

The terms of the merger agreement and the agreements contemplated thereby affect the directors and officers of DARA in ways that may create interests for them in the merger that are different from, or in addition to, yours. These interests include:

The merger may fail to qualify as a tax-free reorganization for federal income tax purposes, resulting in your recognition of taxable gain or loss in respect of your DARA shares.

The merger is intended to qualify as a tax-free reorganization under Section 368(a) of the Internal Revenue Code of 1986, as amended. Alternatively, the merger may qualify as an exchange under Section 351 of the Internal Revenue Code. The Internal Revenue Service will not provide a ruling on the matter, nor will DARA obtain an opinion from its legal counsel that the merger will constitute a tax-free reorganization for federal income tax purposes. No assurance can be given that the Internal Revenue Service or the courts will agree that the merger qualifies as a tax-free reorganization under Section 368(a) (or, alternatively, an exchange under Section 351(a)). The merger agreement provides that neither Point nor DARA will take any action that would prevent the merger from qualifying as a tax-free reorganization. No assurance can be provided that Point or DARA will in fact not take any such action (or any action to disqualify the transaction from qualifying under Section 351(a) of the Code); for example by violating the continuity of interest or continuity of business enterprise requirements (or by liquidating DARA after the acquisition). If the merger fails to qualify as a reorganization or an exchange under Section 351(a), DARA stockholders generally would recognize gain or loss on each share of DARA stock surrendered in an amount equal to the difference between the sum of the amount of cash and/or the fair market value of Point common stock received for each such share of DARA and the adjusted tax basis in such share. “See Material United States Federal Income Tax Consequences.”

Provisions of the Merger Agreement may deter alternative business combinations.

Restrictions in the merger agreement on solicitation generally prohibit Point from soliciting any acquisition proposal or offer for a merger or business combination with any other party, including a proposal that might be advantageous to the stockholders of Point when compared to the terms and conditions of the merger described in this joint proxy statement/ prospectus, and further prohibit Point from entering into discussions regarding unsolicited proposals unless certain requirements are met. In addition, if the merger is not completed under certain circumstances specified in the merger agreement, Point may be required to repay to DARA any funds loaned to Point pursuant to the loan and security agreement entered into in connection with the merger agreement. These provisions may deter third parties from proposing or pursuing alternative business combinations that might result in greater value to Point stockholders than the merger.

Risks Relating to the Business and Operations of DARA, as the Combined Company, Following the Merger

DARA’s limited operating history may make it difficult to evaluate its business to date and the combined company’s future viability.

DARA is in the early stage of operations and development, and has only a limited operating history on which to base an evaluation of its business and prospects, having just commenced operations in 2002. In addition, DARA’s operations and development are subject to all of the risks inherent in the growth of an early

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stage company. DARA will be subject to the risks inherent in the ownership and operation of a company with a limited operating history such as regulatory setbacks and delays, fluctuations in expenses, competition, the general strength of regional and national economies, and governmental regulation. Any failure to successfully address these risks and uncertainties could seriously harm DARA’s business and prospects. The combined company may not succeed given the technological, marketing, strategic and competitive challenges it will face. The likelihood of DARA’s success must be considered in light of the expenses, difficulties, complications, problems and delays frequently encountered in connection with the growth of a new business, the continuing development of new drug development technology, and the competitive and regulatory environment in which DARA operates or may choose to operate in the future.

DARA is unable to predict whether its research and development activities will result in any commercially viable products or procedures.

The product candidates DARA has in-licensed have had only limited research in the fields of use that DARA is presently intending to commercialize. DARA will have to go through extensive research and testing to determine the safety and effectiveness of their proposed uses. All of DARA’s product candidates will require testing and regulatory clearances. Accordingly, the products DARA is developing are not presently commercially ready for sale, nor may they ever ready for sale. The successful development of any products is subject to the risks of failure inherent in the development of products or therapeutic procedures based on innovative technologies. These risks include the possibilities that any or all of these proposed products or procedures are found to be ineffective or toxic, or otherwise fail to receive necessary regulatory clearances; that the proposed products or procedures are uneconomical to market or do not achieve broad market acceptance; that third parties hold proprietary rights that preclude DARA from marketing them; or third parties market a superior or equivalent product. DARA is unable to predict whether its research and development activities will result in any commercially viable products or procedures. Further, due to the extended testing and regulatory review process required before marketing clearances can be obtained, the time frames for commercialization of any products or procedures are long and uncertain.

DARA expects to continue to incur losses.

DARA has incurred losses since inception and expects to continue to incur losses for the foreseeable future. DARA’s losses are likely to be primarily attributable to personnel costs, working capital costs, research and development costs, brand development costs and marketing and promotion costs. DARA may never achieve sustained profitability.

DARA’s business depends on collaborative arrangements.

DARA’s strategy will require it to enter into licenses or other alliances, and also to make dispositions of products that have reached a certain level of clinical development. DARA may be unable to identify profitable applications for its product candidates or demonstrate the potential benefits and is unable to predict whether its product candidates will be accepted. DARA may not be able to continue licensing or other partnering arrangements, and any such arrangements, even if completed successfully, may not be on terms favorable to DARA, may not perform as expected, may result in unexpected liabilities and may never contribute significant revenues or cash flow. DARA will depend to a significant extent on the expertise and dedication of sufficient resources by its licensors, licensees, research and development, or corporate partners to develop and commercialize products. Each individual licensor, licensee or corporate partner will control the amount and timing of resources devoted by it to these activities. Moreover, the success of any such licenses or other alliance will depend in part upon such partners’ own competitive, marketing and strategic considerations, including the relative advantages of alternative products and technologies being developed or marketed by such partners. Corporate partners may pursue alternative technologies or develop products that are competitive with DARA’s. If any such partners are unsuccessful in developing or commercializing DARA’s product candidates, its business, financial condition and results of operations would be materially and adversely affected. Disputes may arise

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between DARA and one or more of its collaborative partners regarding their respective rights and obligations under collaborative arrangements. In such an event, DARA may be required to initiate or defend expensive litigation or arbitration proceedings or to seek and attempt to reach agreement with another collaborative partner. DARA may not be able to resolve successfully a dispute with a collaborative partner or to enter into a satisfactory arrangement with a replacement collaborative partner.

DARA’s success will depend on its ability to retain its managerial personnel and to attract additional personnel.

DARA’s success will depend largely on its ability to attract and retain managerial personnel. Competition for desirable personnel is intense, and there can be no assurance that it will be able to attract and retain the necessary staff. DARA currently has only nine full-time and one part-time employee. The loss of members of managerial, sales or scientific staff could have a material adverse effect on its future operations and on successful development of products for its target markets. The failure to maintain management, particularly the Chairman and Chief Executive Officer and Chief Scientific Officer, and to attract additional key personnel could materially adversely affect DARA’s business, financial condition and results of operations.

Competition from other pharmaceutical companies, biotechnology companies and other research and academic institutions is intense and expected to increase.

Competition from other pharmaceutical companies, biotechnology companies and other research and academic institutions is intense and expected to increase. Many of these companies have substantially greater financial and other resources and development capabilities than DARA has and have substantially greater experience in undertaking pre-clinical and clinical testing of products. In addition to competing with universities and other research institutions in the development of products, technologies and processes, DARA competes with other companies in acquiring rights to products or technologies from universities and other research institutions. There can be no assurance that DARA can develop products that are more effective or achieve greater market acceptance than competitive products, or that its competitors will not succeed in developing products and technologies that are more effective than those being developed by it that would render its products and technologies less competitive or obsolete.

The success of DARA’s business will depend on its ability to develop and protect its intellectual property rights, which could be expensive.

DARA’s success will depend to a significant extent on its ability to obtain patent protection on technologies and products and preserve trade secrets and to operate without infringing the proprietary rights of others. There can be no assurance that any patent applications or patents that the combined company is able to license will afford any competitive advantages or will not be challenged or circumvented by third parties. Furthermore, there can be no assurance that others will not independently develop similar technologies or duplicate any technology developed by DARA. Because of the extensive time required for development, testing and regulatory review of a potential product, it is possible that before any of DARA’s potential products can be commercialized, any related patent may expire, or remain in existence for only a short period following commercialization, thus reducing any advantage of the patent.

DARA also relies on trademarks, copyrights, trade secrets and know-how to develop, maintain and strengthen its competitive positions. While DARA takes steps to protect its proprietary rights to the extent possible, there can be no assurance that third parties will not know, discover or develop independently equivalent proprietary information or techniques, that they will not gain access to DARA’s trade secrets or disclose its trade secrets to the public. Therefore, DARA cannot guarantee that it can maintain and protect unpatented proprietary information and trade secrets. Misappropriation of DARA’s intellectual property would have an adverse effect on its competitive position and may cause it to incur substantial litigation costs.

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DARA may be subject to claims that it infringes the intellectual property rights of others, and unfavorable outcomes could harm its business.

DARA’s future operations may be subject to claims, and potential litigation, arising from its alleged infringement of patents, trade secrets or copyrights owned by other third parties. DARA intends to fully comply with the law in avoiding such infringements. However, within the drug development industry, established companies have actively pursued such infringements, and have initiated such claims and litigation, which has made the entry of competitive products more difficult. DARA may experience such claims or litigation initiated by existing, better-funded competitors. Court-ordered injunctions may prevent it from bringing new products to market, and the outcome of litigation and any resulting loss of revenues and expenses of litigation may substantially affect its ability to meet its expenses and continue operations.

DARA may be unable to manage growth effectively.

DARA’s failure to manage growth effectively could have a material and adverse effect on its business, results of operations and financial condition. DARA anticipates that a period of significant expansion will be required to address potential growth to handle licensing and research and development activities. This expansion will place a significant strain on its management, operational and financial resources. To manage the expected growth of its operations and personnel, DARA must both improve its existing operational and financial systems, procedures and controls and implement new systems, procedures and controls. DARA must also expand its finance, administrative and operations staff. DARA’s current personnel, systems, procedures and controls may not adequately support its future operations. DARA’s management may be unable to hire, train, retain, motivate and manage necessary personnel or identify, manage and exploit existing and potential strategic relationships and market opportunities.

DARA’s operating results may fluctuate significantly as a result of a variety of factors, many of which are outside of its control.

DARA is subject to the following factors that may negatively affect its operating results:

As a result of DARA’s limited operating history and the emerging nature of the markets in which DARA competes, it is difficult for DARA to forecast its revenues or earnings accurately. DARA has based its current and future expense levels largely on its investment plans and estimates of future events although certain of its expense levels are, to a large extent, fixed. DARA may be unable to adjust spending in a timely manner to compensate for any unexpected revenue shortfall. Accordingly, any significant shortfall in revenues relative to its planned expenditures would have an immediate adverse effect on DARA’s business, results of operations and financial condition. Further, as a strategic response to changes in the competitive environment, DARA may from time to time make certain pricing, service or marketing decisions that could have a material and adverse effect on its business, results of operations and financial condition. Due to the foregoing factors, DARA’s quarterly revenues and operating results are difficult to forecast and may be volatile, which could cause the trading price for the common stock of the combined company to be volatile.

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DARA needs to develop its financial and reporting processes, procedures and controls to support DARA’s anticipated growth.

To comply with its public reporting requirements, and manage the anticipated growth of its operations and personnel, DARA will be required to improve existing or implement new operational and financial systems, processes and procedures, and to expand, train and manage its employee base. DARA’s current and planned systems, procedures and controls may not be adequate to support its future operations.

The laws and regulations affecting public companies, including the provisions of the Sarbanes-Oxley Act of 2002 and rules adopted or proposed by the Securities and Exchange Commission, will result in increased costs to DARA as it evaluates the implications of any new rules and responds to their requirements. New rules could make it more difficult or more costly for DARA to obtain certain types of insurance, including director and officer liability insurance, and DARA may be forced to accept reduced policy limits and coverage or incur substantially higher costs to obtain the same or similar coverage. DARA cannot predict or estimate the amount of the additional costs it may incur or the timing of such costs to comply with any new rules and regulations, or if compliance can be achieved.

Government regulation of DARA’s business is extensive and drug approvals are uncertain, expensive and time-consuming.

DARA’s research, development, pre-clinical and clinical trials, manufacturing and marketing of most of its intended products are subject to an extensive regulatory approval process by the FDA and other regulatory agencies in the U.S. and abroad. The process of obtaining FDA and other required regulatory approvals for drug and biological products, including required pre-clinical and clinical testing, is lengthy, expensive and uncertain. There can be no assurance that, even after such time and expenditures, the combined company will be able to obtain necessary regulatory approvals for clinical testing or for the manufacturing or marketing of any products. Even if regulatory clearance is obtained, a marketed product is subject to continual review, and later discovery of previously unknown products or failure to comply with the applicable regulatory requirements may result in restrictions on a product’s marketing or withdrawal of the product from the market as well as possible criminal sanctions.

DARA’s business will always be strictly regulated by the federal and other governments, and there can be no assurance that DARA will remain in compliance with all applicable regulation.

Clinical testing, manufacture, promotion and sale of DARA’s proposed products are subject to extensive regulation by numerous governmental authorities in the U.S., principally the FDA, and corresponding foreign regulatory agencies. Changes in existing regulations or adoption of new regulations or policies could prevent DARA from obtaining, or affect the timing of, future regulatory approvals or clearances. DARA cannot assure you that it will be able to obtain necessary regulatory clearances or approvals on a timely basis, or at all, or that DARA will not be required to incur significant costs in obtaining or maintaining such regulatory approvals. Delays in receipt of, or failure to receive, such approvals or clearances, the loss of previously obtained approvals or clearances or the failure to comply with existing or future regulatory requirements could have a material adverse effect on its business, financial condition and results of operations.

Any enforcement action by regulatory authorities with respect to past or future regulatory noncompliance could have a material adverse effect on DARA’s business, financial condition and results of operations. Noncompliance with applicable requirements can result in fines, injunctions, civil penalties, recall or seizure of products, total or partial suspension of production, refusal to authorize the marketing of new products and criminal prosecution.

Even if its proposed products are approved for market, DARA will be subject to continuing regulation. DARA will continuously be subject to routine inspection by the FDA and will have to comply with the host of regulatory requirements that usually apply to pharmaceutical products marketed in the U.S. including labeling

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regulations, GMP requirements, adverse drug experience regulation and the FDA’s regulations regarding promoting products for unapproved or “off-label” uses. DARA’s failure to comply with applicable regulatory requirements could result in enforcement action by the FDA, which could have a material adverse effect on its business, financial condition and results of operations.

DARA has never paid cash dividends and does not intend to do so.

DARA has never declared or paid cash dividends on its common stock. DARA currently plans to retain any earnings to finance the growth of its business rather than to pay cash dividends. Payments of any cash dividends in the future will depend on its financial condition, results of operations and capital requirements, as well as other factors deemed relevant by its board of directors.

DARA will need additional financing.

DARA will need additional financing to maintain and expand its business, and such financing may not be available on favorable terms, if at all. DARA intends to finance the combined business, in part, through the private placement and public offering of equity and debt securities. DARA has historically financed its operations through working capital and from equity investments. In the event that DARA issues any additional equity securities, investors’ interests in the company will be diluted and investors may suffer dilution in their net book value per share depending on the price at which such securities are sold. If DARA issues any such additional equity securities, such issuances also will cause a reduction in the proportionate ownership and voting power of all other stockholders. Further, any such issuance may result in a change in control.

If DARA needs additional financing, DARA cannot assure you that it will be available on favorable terms, if at all. If DARA needs funds and cannot raise them on acceptable terms, DARA may not be able to:

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POINT ANNUAL MEETING

Point is sending this joint proxy statement/prospectus to the stockholders of Point to provide important information in connection with the solicitation of proxies by the Point board of directors for use at the 2008 annual meeting of Point stockholders and at any adjournment or postponement of the annual meeting. This joint proxy statement/prospectus is being mailed to Point stockholders on or about December 31, 2007.

Date, Time and Place of Point Annual Meeting

The annual meeting will be held at 10:00 a.m., local time, on Tuesday, January 29, 2008, at the offices of Ropes & Gray LLP, One International Place, 36 ^th Floor, Boston, Massachusetts 02110.

Purpose of the Annual Meeting

At the annual meeting, Point stockholders will be asked to consider and vote upon the following:

Record Date

The Point board has fixed the close of business on December 26, 2007 as the record date for determining the Point stockholders entitled to vote at the annual meeting. Only holders of record of Point common stock as of the close of business on that date are entitled to vote at the annual meeting.

Point has authority to issue 75,000,000 shares of common stock, par value $0.01 per share, and 1,000,000 shares of Preferred Stock, par value $0.01 per share. As of the record date, there were 39,311,585 shares of Point common stock issued and outstanding, constituting all of Point’s outstanding voting stock, and no shares of Point Preferred Stock issued and outstanding. Each share of Point common stock issued and outstanding as of the record date entitles its holder to cast one vote at the annual meeting.

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Stock Ownership Table

The following table sets forth, as of December 14, 2007, certain information concerning beneficial ownership of Point’s stock (as determined under the rules of the SEC) by (1) each person known by Point to be the beneficial owner of more than five percent (5%) of Point’s common stock, (2) each of Point’s directors, (3) each of Point’s named executive officers, and (4) all directors and executive officers as a group.

Except as otherwise indicated, the stockholders listed in the table have sole voting and investment powers with respect to the shares indicated.

Except as otherwise indicated, the address for each person is to the care of Point Therapeutics, Inc., 70 Walnut Street, Wellesley Hills, Massachusetts 02481.

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Admission to the Annual Meeting

Only Point stockholders of record on the record date, their designated proxies and guests of Point may attend the Point annual meeting. Stockholders attending the meeting will be given a ballot at the meeting.

Quorum

To conduct business at the annual meeting, a quorum must be present. The holders of a majority of the shares of Point common stock issued and outstanding and entitled to vote at the annual meeting constitute a quorum. Holders of shares of common stock present in person or represented by proxy (including holders of shares who abstain or do not vote with respect to one or more of the matters presented for stockholder approval) will be counted for purposes of determining whether a quorum exists at the annual meeting, but shares represented by a proxy from a broker or nominee indicating that such person has not received instructions from the beneficial owner or other person entitled to vote the shares, which are referred to as “broker non-votes,” will not be counted as shares present. If a quorum is not present at the annual meeting, the annual meeting may be adjourned or postponed to solicit additional proxies.

Vote Required

Provided a quorum is present, the affirmative vote of the holders of a majority of the issued and outstanding shares of Point common stock represented and entitled to vote at the Point annual meeting is required to approve Point proposals 1, 5, 6 and 7 (relating to the approval of the issuance of Point common stock in connection with the merger agreement and the merger contemplated therein, the adoption of the DARA BioSciences, Inc. 2008 Employee, Director and Consultant Stock Plan, the ratification of the selection of the independent registered public accounting firm and the grant of discretionary authority to the Point board to postpone or adjourn the annual meeting, if necessary). The affirmative vote of the holders of a majority of the outstanding shares of Point common stock entitled to vote at the Point annual meeting is required to approve Point proposals 2 and 3 (relating to the amendment to Point’s certificate of incorporation to effect the reverse stock split and the Point name change). The consummation of the merger is contingent upon approval of Point proposals 1, 2 and 3. In the election of directors, the director nominees receiving the most affirmative votes of the shares of Point common stock represented and entitled to vote at the Point annual meeting will be elected as directors.

Voting of Shares

Shares may be voted at the annual meeting by voting in person at the annual meeting or by submitting a proxy in the manner described below. To vote by proxy, Point stockholders must complete and mail to Point the enclosed proxy card in the enclosed envelope or, if the option is available to you, by granting your proxy electronically over the Internet or by telephone. If your shares are held in “street name” you must instruct your broker in order to vote. Shares represented by a properly executed and dated proxy will be voted at the annual meeting in accordance with the instructions indicated on the proxy. Proxies that are properly executed and dated but which do not contain voting instructions will be voted “FOR” each of the proposals. The proxy holder may vote the proxy in its discretion as to any other matter which may properly come before the meeting.

Voting Agreements

In connection with the execution of the merger agreement, the Point directors and officers, entered into voting agreements with Point and DARA under which they agreed, subject to certain limited exceptions, to vote all of their shares of Point common stock in favor of the issuance of Point common stock in the merger, the reverse stock split, the corporate name change and any other actions contemplated by the merger agreement. Collectively, the parties to these voting agreements currently own Point shares representing approximately 2.2% of the shares entitled to vote at the annual meeting.

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Pursuant to these voting agreements, Messrs. Barberich, Benjamin, Claflin, Duffy, Jones, Kiepert, Pickering, Roble and Small also agreed not to sell or transfer any outstanding shares of Point owned by them, from the date of the voting agreements through the completion of the merger, except to a person who is a party to an agreement with DARA and Point in the form of the voting agreement. Each of Messrs. Barberich, Benjamin, Claflin, Duffy, Jones, Kiepert, Pickering, Roble and Small further agreed that he would not offer, sell or otherwise transfer or dispose of any shares of Point common stock for a period of six months following the closing date of the merger and an additional six months thereafter, provided that, during such second six-month period, the transfer restrictions do not apply to an aggregate amount of Point common stock that does not exceed the volume limitations of Rule 144 promulgated under the Securities Act in any three-month period.

How to Change a Vote or Revoke a Proxy

Point stockholders can change their votes at any time before their proxy is voted at the annual meeting. A stockholder can do this using any of the following methods:

Solicitation of Proxies and Expenses Associated Therewith

Point is soliciting proxies for the Point annual meeting from the holders of Point common stock as of the record date. Point will bear the entire cost of soliciting proxies from Point stockholders, except that Point and DARA have each agreed to share equally all expenses incurred in connection with the filing with the SEC of the registration statement of which this joint proxy statement/prospectus forms a part and the printing and mailing of this joint proxy statement/prospectus and related proxy materials. In addition, Point will reimburse street name holders for reasonable expenses they will incur in forwarding proxy materials to beneficial owners of Point common stock held in street name. Certain officers, regular employees and consultants of Point, who will not be compensated outside of their current compensation arrangements, may use their personal efforts to solicit proxies from Point stockholders, by telephone or otherwise, to obtain proxies. Although it has not yet done so, Point may engage one or more proxy solicitation firms to assist it in the delivery of proxy materials and solicitation of proxies, in which case Point will pay customary fees and expenses for such services.

Recommendation of Point Board of Directors

The Point Board of Directors recommends a vote “FOR” each of the proposals.

Assistance

If a Point stockholder needs assistance in completing his, her or its proxy card or has questions regarding Point’s annual meeting, please call Michael P. Duffy, Secretary, at (781) 239-7502 or write to Point Therapeutics, Inc. at 70 Walnut Street, Wellesley Hills, Massachusetts 02481.

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DARA SPECIAL MEETING

DARA is sending this joint proxy statement/prospectus to the stockholders of DARA to provide important information in connection with the solicitation of proxies by the DARA board of directors for use at the special meeting of DARA stockholders and at any adjournment or postponement of the special meeting. This joint proxy statement/prospectus is being mailed to DARA stockholders on or about December 31, 2007.

Date, Time and Place of DARA Special Meeting

The special meeting will be held at 10:00 a.m., local time, on Monday, January 28, 2008, at 4505 Falls of Neuse Road, Raleigh, North Carolina 27609.

Purpose of the Special Meeting

At the special meeting, DARA stockholders will be asked to consider and vote upon the following:

Record Date

The DARA board has fixed the close of business on December 21, 2007 as the record date for determining the DARA stockholders entitled to vote at the special meeting. Only holders of record of DARA common stock and preferred stock as of the close of business on that date are entitled to vote at the special meeting.

DARA has one class of common stock outstanding, par value $0.001 per share, and two classes of preferred stock outstanding, which include DARA Series A Convertible Preferred Stock, par value $0.001 per share (“DARA Series A Preferred Stock”), and DARA Series B Convertible Preferred Stock, par value $0.001 per share (“DARA Series B Preferred Stock”). As of the record date, there were 14,087,824 shares of DARA common stock issued and outstanding, 5,000,000 shares of DARA Series A Preferred Stock and 6,350,333 shares of DARA Series B Preferred Stock, constituting all of DARA’s outstanding voting stock. Each share of DARA common stock, DARA Series A Preferred Stock and DARA Series B Preferred Stock issued and outstanding as of the record date entitles its holder to cast one vote at the special meeting.

Stock Ownership Table

The following table sets forth, as of December 14, 2007, certain information concerning beneficial ownership of DARA’s stock (as determined under the rules of the SEC) by (1) each person known by DARA to be the beneficial owner of more than five percent (5%) of DARA’s common stock, (2) each of DARA’s directors, (3) each of DARA’s executive officers, and (4) all directors and executive officers as a group.

Except as otherwise indicated, the stockholders listed in the table have sole voting and investment powers with respect to the shares indicated.

Except as otherwise indicated, the address for each person is to the care of DARA BioSciences, Inc., 4505 Falls of Neuse Road, Suite 125, Raleigh, North Carolina 27609.

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