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What changed in Lipocine Inc.'s 10-K — 2022 vs 2023

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Paragraph-level year-over-year comparison of Lipocine Inc.'s 2022 and 2023 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2023 report.

+399 added−443 removedSource: 10-K (2024-03-07) vs 10-K (2023-03-10)

Top changes in Lipocine Inc.'s 2023 10-K

399 paragraphs added · 443 removed · 325 edited across 6 sections

Item 1. Business

Business — how the company describes what it does

90 edited+34 added−46 removed153 unchanged
Biggest changeUnder the Pediatric Research Equity Act (“PREA”), since TLANDO received full FDA approval, under the Antares Licensing Agreement Antares will need to address the PREA requirement to assess the safety and effectiveness of TLANDO in pediatric patients. The FDA may also require certain post-marketing studies to be conducted which will also be the responsibility of our licensee, Antares.
Biggest changeDuring the years ended December 31, 2023 and December 31, 2022, we incurred royalty expense of approximately $34,000 and $12,000, respectively, resulting from net sales of TLANDO. 10 Under the Pediatric Research Equity Act (“PREA”), since TLANDO received full FDA approval, under the Verity Licensing Agreement, Verity will need to address the PREA requirement to assess the safety and effectiveness of TLANDO in pediatric patients.
No assurance can be given that any license agreement will be completed, or, if an agreement is completed, that such an agreement would be on terms favorable to us.
No assurance can be given that any license agreement will be completed, or, if an agreement is completed, that such an agreement would be on terms favorable to us.
CDER issued AMAG Pharmaceuticals, the NDA holder at the time, a Notice of Opportunity for Hearing (“NOOH”) to withdraw approval of Makena, for which AMAG Pharmaceuticals responded by requesting a hearing and providing detail on the company’s position, recognizing clinicians’ decade-long use of treatment with Makena and the public health implications of withdrawing approval.
The CDER issued AMAG Pharmaceuticals, the NDA holder at the time, a Notice of Opportunity for Hearing (“NOOH”) to withdraw approval of Makena, for which AMAG Pharmaceuticals responded by requesting a hearing and providing detail on the company’s position, recognizing clinicians’ decade-long use of treatment with Makena and the public health implications of withdrawing approval.
In July 2014, FDA granted the AB rating to Perrigo’s 1% testosterone gel drug product (NDA 203098) approved in January 2013, and a BX rating to Teva’s 1% gel drug product (NDA 202763) approved in February 2012. Each are versions of AbbVie’s AndroGel 1.0% and employed 505(b)(2) submissions citing AndroGel as their reference listed drugs.
In July 2014, the FDA granted the AB rating to Perrigo’s 1% testosterone gel drug product (NDA 203098) approved in January 2013, and a BX rating to Teva’s 1% gel drug product (NDA 202763) approved in February 2012. Each are versions of AbbVie’s AndroGel 1.0% and employed 505(b)(2) submissions citing AndroGel as their reference listed drugs.
This sweeping legislation makes significant changes to the way that FDA approves new drugs and medical devices. Among other things, the legislation calls on FDA to consider new types of data, such as patient experience data, in its drug approval process.
This sweeping legislation makes significant changes to the way that FDA approves new drugs and medical devices. Among other things, the legislation calls on the FDA to consider new types of data, such as patient experience data, in its drug approval process.
Acrux also confirmed the availability of an authorized generic version of Axiron in the United States, through a marketing and distribution agreement between Lilly and Company and a leading authorized generics company Other TRT Therapies in Development Recently there has been increased interest in developing oral TRT’s as well as testosterone therapies which are not considered testosterone replacement and as such will need to achieve efficacy endpoints in addition to endpoints related to serum testosterone levels that are required for testosterone replacement therapies.
Acrux also confirmed the availability of an authorized generic version of Axiron in the United States, through a marketing and distribution agreement between Lilly and Company and a leading authorized generics company. 15 Other TRT Therapies in Development Recently there has been increased interest in developing oral TRT’s as well as testosterone therapies which are not considered testosterone replacement and as such will need to achieve efficacy endpoints in addition to endpoints related to serum testosterone levels that are required for testosterone replacement therapies.
Each year about half of the approximately 17,000 people in U.S. on the LT waitlist undergo transplant, while nearly 3,000 patients either die or are removed from the list because they were “too sick to transplant.” 9 Liver cirrhosis is defined as the histological development of regenerative nodules surrounded by fibrous bands.
Each year about half of the approximately 17,000 people in U.S. on the LT waitlist undergo transplant, while nearly 3,000 patients either die or are removed from the list because they were “too sick to transplant.” Liver cirrhosis is defined as the histological development of regenerative nodules surrounded by fibrous bands.
Other important endpoints included the following: change in liver injury markers, anthropomorphic measurements, lipids, insulin resistance and inflammatory/fibrosis markers; as well as patient reported outcomes. 11 Treatments with LPCN 1144 post 12 weeks of treatment in the LiFT study resulted in robust liver fat reduction, assessed by MRI-PDFF, and showed improvement of liver injury markers with no observed tolerability issues.
Other important endpoints included the following: change in liver injury markers, anthropomorphic measurements, lipids, insulin resistance and inflammatory/fibrosis markers; as well as patient reported outcomes. Treatments with LPCN 1144 post 12 weeks of treatment in the LiFT study resulted in robust liver fat reduction, assessed by MRI-PDFF, and showed improvement of liver injury markers with no observed tolerability issues.
The lengthy process of seeking required approvals and the continuing need for compliance with applicable statutes and regulations require the expenditure of substantial resources and FDA approval is inherently uncertain. Preclinical Studies : Prior to preclinical studies, a research phase takes place which involves demonstration of target and function, design, screening and synthesis of agonists or antagonists.
The lengthy process of seeking required approvals and the continuing need for compliance with applicable statutes and regulations require the expenditure of substantial resources and FDA approval is inherently uncertain. 17 Preclinical Studies : Prior to preclinical studies, a research phase takes place which involves demonstration of target and function, design, screening and synthesis of agonists or antagonists.
Anxiety, depression, lack of adherence to ASM, and/or contraception failure may be experienced by women who are worried about unplanned pregnancy or are late in confirming pregnancy, planned or unplanned. ASMs can reduce the efficacy of oral contraceptives, compounding this problem. Complex, multidirectional interactions between female hormones, seizures, and ASMs exist.
Anxiety, depression, lack of adherence to ASM, and/or contraception failure may be experienced by women who are worried about unplanned pregnancy or are late in confirming pregnancy, planned or unplanned. ASMs can reduce the efficacy of oral contraceptives, compounding this problem. 8 Complex, multidirectional interactions between female hormones, seizures, and ASMs exist.
The key components of our strategy are to: 5 Advance LPCN 1154 and other CNS product candidates. We intend to focus on the development of endogenous neuroactive steroids (“NAS”) which have broad applicability in treating various CNS conditions where we can leverage our technology platform to develop highly differentiated oral therapeutics.
The key components of our strategy are to: Advance LPCN 1154 and other CNS product candidates. We intend to focus on the development of endogenous neuroactive steroids (“NAS”) which have broad applicability in treating various CNS conditions where we can leverage our technology platform to develop highly differentiated oral therapeutics.
This abnormal liver fat contributes to the progression to NASH, a liver necro-inflammatory state that can lead to scarring, also known as fibrosis, and, for some, can progress to cirrhosis and liver failure. Current Status We have recently completed the LiFT Phase 2 clinical study in biopsy-confirmed non-cirrhotic NASH subjects.
This abnormal liver fat contributes to the progression to NASH, a liver necro-inflammatory state that can lead to scarring, also known as fibrosis, and, for some, can progress to cirrhosis and liver failure. Current Status We have completed the LiFT Phase 2 clinical study in biopsy-confirmed non-cirrhotic NASH subjects.
Also, unlike the injectable HPC, steady state exposure was achieved for all 3 LPCN 1107 doses within 7 days. A traditional PK/PD based Phase 2 clinical study in the intended patient population is not expected to be required prior to entering into Phase 3.
Also, unlike the injectable HPC, steady state exposure was achieved for all 3 LPCN 1107 doses within 7 days. 13 A traditional PK/PD based Phase 2 clinical study in the intended patient population is not expected to be required prior to entering into Phase 3.
Whether the 21 st Century Cures Act realizes these goals will depend on the adoption of new FDA regulations, policy guidance and FDA approval practices, many of which the agency has not yet proposed or issued. 20 Other Healthcare Laws and Compliance Requirements In the United States, our activities are potentially subject to regulation by various federal, state and local authorities in addition to the FDA, including, but not limited, to the Centers for Medicare and Medicaid Services and other divisions of the United States government, including the U.S.
Whether the 21 st Century Cures Act realizes these goals will depend on the adoption of new FDA regulations, policy guidance and FDA approval practices, many of which the agency has not yet proposed or issued. 19 Other Healthcare Laws and Compliance Requirements In the United States, our activities are potentially subject to regulation by various federal, state and local authorities in addition to the FDA, including, but not limited, to the Centers for Medicare and Medicaid Services and other divisions of the United States government, including the U.S.
We have completed a food effect study to characterize the dosing regimen for the pivotal study. We plan to submit a pivotal clinical study protocol to the FDA. 13 The FDA has granted orphan drug designation to LPCN 1107 based on a major contribution to patient care.
We have completed a food effect study to characterize the dosing regimen for the pivotal study. We plan to submit a pivotal clinical study protocol to the FDA. The FDA has granted orphan drug designation to LPCN 1107 based on a major contribution to patient care.
The FDA recently agreed with our proposal for establishing the efficacy of LPCN 1154 through a pivotal PK bridge to an approved IV infusion brexanolone via a 505(b)(2) NDA filing.
The FDA agreed with our proposal for establishing the efficacy of LPCN 1154 through a pivotal PK bridge to an approved IV infusion brexanolone via a 505(b)(2) NDA filing.
Additionally, appropriate packaging must be selected and tested, and stability studies must be conducted to demonstrate that the pharmaceutical product candidate does not undergo unacceptable deterioration over its shelf life. 19 U.S.
Additionally, appropriate packaging must be selected and tested, and stability studies must be conducted to demonstrate that the pharmaceutical product candidate does not undergo unacceptable deterioration over its shelf life. U.S.
The SEC maintains an internet website that contains reports, proxy and information statements, and other information that we file electronically, which can be found at http://www.sec.gov. 22
The SEC maintains an internet website that contains reports, proxy and information statements, and other information that we file electronically, which can be found at http://www.sec.gov .
We are also exploring the possibility of licensing LPCN 1021 (known as TLANDO in the United States) to third parties outside the United States, although no licensing agreement has been entered into by the Company.
We are also exploring the possibility of licensing LPCN 1021 (known as TLANDO in the United States) to third parties outside the United States and Canada, although no licensing agreement has been entered into by the Company.
Our Development Pipeline Product Candidates Our pipeline of clinical development candidates includes LPCN 1154 for postpartum depression (“PPD”), LPCN 2101 for epilepsy, and LPCN 1148, an androgen therapy for the management of cirrhosis. We will continue to explore other product development candidates targeting CNS indications with a significant unmet need.
Our Development Pipeline Product Candidates Our pipeline of clinical development candidates includes LPCN 1154 for postpartum depression (“PPD”), LPCN 2101 for epilepsy, LPCN 1148, an androgen therapy for the management of cirrhosis and LPCN 2203 for essential tremor. We will continue to explore other product development candidates targeting CNS indications with a significant unmet need.
Additional clinical development pipeline candidates include: LPCN 1154 for postpartum depression (“PPD”); LPCN 2101 for epilepsy; and LPCN 1148 comprising a novel prodrug of testosterone, testosterone laurate (“TL”), for the management of decompensated cirrhosis.
Additional clinical development pipeline candidates include: LPCN 1154 for postpartum depression (“PPD”); LPCN 2101 for epilepsy; LPCN 2203 for essential tremor; and LPCN 1148 comprising a novel prodrug of testosterone, testosterone laurate (“TL”), for the management of decompensated cirrhosis.
Additionally, we have 12 U.S. patents that we plan to list in the FDA Orange Book for TLANDO that are expected to expire in 2029 and 2030.
Additionally, we have 12 U.S. patents that we plan to list in the FDA Orange Book for TLANDO that are expected to expire between 2029 and 2041.
ITEM 1. BUSINESS General Lipocine Inc. (“Lipocine” or the “Company”) was originally incorporated on June 19, 1997, under the laws of the State of Delaware. We are a biopharmaceutical company focused on leveraging our proprietary Lip’ral platform to develop differentiated products through the oral delivery of previously difficult to deliver molecules, focused on treating Central Nervous System (“CNS”) disorders.
ITEM 1. BUSINESS General Lipocine Inc. (“Lipocine” or the “Company”) is incorporated under the laws of the State of Delaware. We are a biopharmaceutical company focused on leveraging our proprietary Lip’ral platform to develop differentiated products through the oral delivery of previously difficult to deliver molecules, focused on treating Central Nervous System (“CNS”) disorders.
Additional pharmaceutical and biotechnology companies with product candidates in development for the treatment of NASH include AstraZeneca plc, Boehringer Ingelheim GmbH, Bristol-Myers Squibb Company, Conatus Pharmaceuticals Inc., CymaBay Therapeutics, Inc., Durect Corporation, Galectin Therapeutics Inc., Galmed Pharmaceuticals Ltd., Immuron Ltd., Intercept Pharmaceutcials, Inc., Ionis Pharmaceuticals, Inc., Islet Sciences, Inc., Madrigal Pharmaceuticals, Inc., MediciNova, Inc., MiNA Therapeutics, NGM Biopharmaceuticals, Inc., Novo Nordisk A/S, NuSirt Sciences Inc., Viking Therapeutics, Inc. and Zydus Pharmaceuticals (USA) Inc.
Additional pharmaceutical and biotechnology companies with product candidates in development for the treatment of NASH include, Boehringer Ingelheim GmbH, Bristol-Myers Squibb Company, Durect Corporation, Galectin Therapeutics Inc., Galmed Pharmaceuticals Ltd., Immuron Ltd., Ionis Pharmaceuticals, Inc., Islet Sciences, Inc., MediciNova, Inc., MiNA Therapeutics, NGM Biopharmaceuticals, Inc., Novo Nordisk A/S, NuSirt Sciences Inc., Viking Therapeutics, Inc. and Zydus Pharmaceuticals (USA) Inc.
Possible outcomes of interest from the Phase 2 study include clinical outcomes such as overall survival and new decompensation events (including HE and/or ascites occurrences), rates of survival to transplant, rates of hospitalizations, infections, etc., muscle changes such as muscle mass, body composition, myosteatosis (muscle fat), functional capacity changes such as liver frailty index (“LFI”), patient reported outcomes (“PROs”), and biochemical markers including hematocrit for anemia status, albumin, creatinine/kidney function, etc.
Possible outcomes of interest from the Phase 2 study include continuation and/or extension of clinical outcomes observed after 24 weeks such as overall survival and new decompensation events (including HE and/or ascites occurrences), rates of survival to transplant, rates of hospitalizations, infections, etc., muscle changes such as muscle mass, body composition, myosteatosis (muscle fat), functional capacity changes such as liver frailty index (“LFI”), PROs, and biochemical markers including hematocrit for anemia status, albumin, creatinine/kidney function, etc.
In July 2022 our IND was accepted by the FDA for LPCN 2101 for adults with epilepsy and we plan to initiate a Phase 2 IND opening proof-of-concept study to evaluate the safety, tolerability, and efficacy of LPCN 2101 in 2023 subject to the availability of additional resources.
In July 2022 our IND was accepted by the FDA for LPCN 2101 for adults with epilepsy and we plan to initiate a Phase 2 IND opening proof-of-concept study to evaluate the safety, tolerability, and efficacy of LPCN 2101 in 2024 subject to resource prioritization.
We will also continue efforts to enter into partnership arrangements for the continued development and/or marketing of LPCN 1144, LPCN 1148, LPCN 1111, LPCN 1107 and TLANDO outside of the United States. Our products are based on our proprietary Lip’ral drug delivery technology platform. Lip’ral-based TLANDO was approved in March 2022.
We will also continue efforts to enter into partnership arrangements for the continued development and/or marketing of LPCN 1144, LPCN 1148, and LPCN 1107 and for TRT assets (TLANDO and LPCN 1111) outside of the United States and Canada. Our products are based on our proprietary Lip’ral drug delivery technology platform.
These non-core assets include LPCN 1148 which we intend to explore partnering once completion of the Phase 2 study is complete, LPCN 1144, an oral prodrug of androgen receptor modulator for the treatment of non-cirrhotic non-alcoholic steatohepatitis (“NASH”) which has completed Phase 2 testing; LPCN 1111, a next generation oral TRT product comprised of testosterone tridecanoate (“TT”) with the potential for once daily dosing which has completed Phase 2 testing; and LPCN 1107, potentially the first oral hydroxy progesterone caproate (“HPC”) product indicated for the prevention of recurrent preterm birth (“PTB”), which has completed a dose finding clinical study in pregnant women and has been granted orphan drug designation by the FDA. 4 The following charts summarize the status of our product candidate development programs: Corporate Strategy Our goal is to become a leading biopharmaceutical company focused on leveraging our proprietary Lip’ral drug delivery technology platform to develop differentiated products through oral delivery of previously difficult to deliver molecules for CNS disorders.
These non-core assets include TLANDO for territories outside of North America, LPCN 1148 which we intend to explore partnering upon completion of the Phase 2 study, LPCN 1144, an oral prodrug of androgen receptor modulator for the treatment of non-cirrhotic non-alcoholic steatohepatitis (“NASH”) which has completed Phase 2 testing; and LPCN 1107, potentially the first oral hydroxy progesterone caproate (“HPC”) product indicated for the prevention of recurrent preterm birth (“PTB”), which has completed a dose finding clinical study in pregnant women and has been granted orphan drug designation by the FDA. 4 The following charts summarize the status of our product candidate development programs: 5 Corporate Strategy Our goal is to become a leading biopharmaceutical company focused on leveraging our proprietary Lip’ral drug delivery technology platform to develop differentiated products through oral delivery of previously difficult to deliver molecules for CNS disorders.
In addition to our CNS product candidates, we have non-core assets for which we expect to seek partnerships to enable further development which we do not plan to devote significant resources to developing in the future without a partnership or out licensing agreement.
In addition to our CNS product candidates, we have non-core assets for which we expect to seek partnerships to enable further development for which we do not plan to devote significant resources to developing in the future.
We are also eligible to receive milestone payments of up to $160.0 million in the aggregate, depending on the achievement of certain sales milestones in a single calendar year with respect to products licensed by Antares under the Antares License Agreement.
We are also eligible to receive milestone payments of up to $259 million in the aggregate, depending on the achievement of certain sales milestones in a single calendar year and/or development milestones with respect to products licensed by Verity under the Verity License Agreement.
Lip’ral technology is a patented technology based on lipidic compositions which form an optimal dispersed phase in the gastrointestinal environment for improved absorption of insoluble drugs.
Lip’ral-based TLANDO was approved by the FDA in March 2022. Lip’ral technology is a patented technology based on lipidic compositions which form an optimal dispersed phase in the gastrointestinal environment for improved absorption of insoluble drugs.
We have conducted Phase 1 pharmacokinetic (“PK”) studies for each of our two lead NAS candidates which have demonstrated promising PK results, safety, and tolerability and we are evaluating additional undisclosed CNS-focused candidates.
We have conducted Phase 1 pharmacokinetic (“PK”) studies for each of our three lead NAS candidates which have demonstrated promising PK results, safety, and tolerability, and we will continue to evaluate additional undisclosed CNS-focused candidates.
There are several product candidates in Phase 3 or earlier clinical or preclinical development for the treatment of NASH, including FGF21 stimulants such as BIO89-100 (89bio), Efruxifermin (EFX; Akero Therapeutics), Pegbelfermin (Bristol Myers Squibb/Ambrx Inc.); FGF19 Analog:Aldafermin (NGM Biopharmaceuticals); FXR Agonists: Tropifexor (Novartis), EDP-305 (Enata Pharmaceuticals), PXL007/EYP001 (Poxel/Enyo Pharma:) Glucagon-like Peptide-1 (GLP-1) Agonist: Semaglutide (Novo Nordisk); Peroxisome Proliferator-activated Receptor (PPAR) Regulator: Lanifibranor (Inventiva) ; THR-β Agonis:t VK2809 (Viking Therapeutics), and Resmetirom (Madrigal Pharmaceuticals).
There are several product candidates in Phase 3 or earlier clinical or preclinical development for the treatment of NASH, including FGF21 stimulants such as BIO89-100 (89bio), Efruxifermin (EFX; Akero Therapeutics), FGF19 Analog:Aldafermin (NGM Biopharmaceuticals); FXR Agonists: PXL065 (Pxel) ;Vonafexor (EYP001) (Enyo Pharma:) Glucagon-like Peptide-1 (GLP-1) Agonist: Peroxisome Proliferator-activated Receptor (PPAR) Regulator: Lanifibranor (Inventiva) ; THR-β Agonis:t VK2809 (Viking Therapeutics), and Resmetirom (Madrigal Pharmaceuticals).
If we or our licensee are marketing the TLANDO product at the time the patents expire and have no other issued U.S. patents covering the product, then we will lose certain advantages that come with FDA Orange Book listing of patents and will no longer be able to prevent others in the U.S. from practicing the inventions claimed by the 12 patents. 17 We expect to file new patent applications in the future in an attempt to further cover various aspects of our products and product development.
If we or our Licensee are marketing the TLANDO product at the time the patents expire and have no other issued U.S. patents covering the product, then we will lose certain advantages that come with FDA Orange Book listing of patents and will no longer be able to prevent others in the U.S. from practicing the inventions claimed by the 12 patents.
We are currently conducting a Phase 2 proof of concept (“POC”) study (NCT04874350) in male cirrhotic subjects to evaluate the therapeutic potential of LPCN 1148 for the management of sarcopenia. The ongoing Phase 2 POC study is a prospective, multi-center, randomized, placebo-controlled study in male sarcopenic cirrhotic patients. Subjects will be randomized 1:1 to 1 of 2 arms.
We recently completed a Phase 2 proof of concept (“POC”) study (NCT04874350) in male cirrhotic subjects to evaluate the therapeutic potential of LPCN 1148 for the management of sarcopenia. The Phase 2 POC study was a prospective, multi-center, randomized, placebo-controlled study in male sarcopenic cirrhotic patients. Subjects were initially randomized 1:1 to 1 of 2 arms.
Disease Overview – Cirrhosis There are over 2 million cases of cirrhosis worldwide, with over 500,000 people living with decompensated cirrhosis in the U.S. and nonalcoholic fatty liver disease is the most rapidly increasing indication for liver transplant. 62% of those on the liver transplant (“LT”) waitlist are male and the economic burden (approximately $812,500/transplant) is high and continues to increase.
We plan to request a Type C meeting with the FDA to discuss the clinical development plan for LPCN 1148 in mid-2024. 9 Disease Overview – Cirrhosis There are over 2 million cases of cirrhosis worldwide, with over 500,000 people living with decompensated cirrhosis in the U.S. and nonalcoholic fatty liver disease is the most rapidly increasing indication for liver transplant. 62% of those on the liver transplant (“LT”) waitlist are male and the economic burden (approximately $812,500/transplant) is high and continues to increase.
GB 1211 (by Galecto), an oral galectin-3 inhibitor for advanced liver cirrhosis targeted for directly addressing fibrosis, is in Phase 2 development being assessed in patients with moderate-to-severe cirrhosis (Child-Pugh classes B and C) and is anticipated to read out in the second half of 2022.
GB 1211 (by Galecto), an oral galectin-3 inhibitor for advanced liver cirrhosis targeted for directly addressing fibrosis, targeted for initiation of a long-term cirrhosis trial in the first half of 2024, is in development being assessed in patients with moderate-to-severe cirrhosis (Child-Pugh classes B and C).
Higuchi is a member of our Board of Directors and Gordhan Patel and Dr. Higuchi, former Board members, were each members of our Board of Directors at the date the license and agreements were entered into.
Higuchi, and their affiliates. Mahesh V. Patel is our President and Chief Executive Officer. Mr. Higuchi is a member of our Board of Directors and Gordhan Patel and Dr. Higuchi, former Board members, were each members of our Board of Directors at the date the license and agreements were entered into.
While gels are also a widely used form of TRT, there is a risk of transference; additionally, the gels are messy to apply and have significant compliance issues leading to high rates of discontinuance among patients.
Currently, intramuscular injections have the highest market share in the testosterone replacement market in terms of annual prescriptions. While gels are also a widely used form of TRT, there is a risk of transference; additionally, the gels are messy to apply and have significant compliance issues leading to high rates of discontinuance among patients.
The primary objectives of the Phase 2b clinical study were to determine the starting Phase 3 dose of LPCN 1111 along with safety and tolerability of LPCN 1111 and its metabolites following oral administration of single and multiple doses in hypogonadal men. Good dose-response relationship was observed over the tested dose range in the Phase 2b study.
We completed a Phase 2b dose finding study in hypogonadal men in the third quarter of 2016. The primary objectives of the Phase 2b clinical study were to determine the starting Phase 3 dose of LPCN 1111 along with safety and tolerability of LPCN 1111 and its metabolites following oral administration of single and multiple doses in hypogonadal men.
Currently, there are no FDA approved drugs to treat secondary sarcopenia in decompensated cirrhosis beyond treatment of the underlying conditions. Lipocine is a leader in pursuing treatment for subjects with decompensated cirrhosis with sarcopenia, however there are candidates known to be under development for cirrhosis related indication(s).
Lipocine is a leader in pursuing treatment for subjects with decompensated cirrhosis with sarcopenia, however, there are candidates known to be under development for cirrhosis related indication(s).
In such a case, the IND sponsor and the FDA must resolve any outstanding concerns before the clinical trial can begin. The FDA may also impose clinical holds on a pharmaceutical product candidate at any time before or during clinical trials due to safety concerns or non-compliance.
The FDA may also impose clinical holds on a pharmaceutical product candidate at any time before or during clinical trials due to safety concerns or non-compliance.
As the burden of chronic liver disease and cirrhosis is increasing, the frequency of HE is also increasing. Our Partnership Pipeline Product Candidates We continue to pursue opportunities for partnering arrangements for the continued development and/or marketing of LPCN 1144, LPCN 1148, LPCN 1111, LPCN 1107 and TLANDO outside of the U.S.
Our Partnership Pipeline Product Candidates We continue to pursue opportunities for partnering arrangements for the continued development and/or marketing of LPCN 1144, LPCN 1148, LPCN 1107, in addition to TLANDO and LPCN 1111 outside of the U.S. and Canada.
We believe LPCN 1154 targets the unmet need for a convenient oral treatment with faster onset of action or rapid relief. 7 LPCN 2101: NAS for Epilepsy We are currently evaluating an additional NAS candidate, LPCN 2101, for women with epilepsy (“WWE”).
We believe LPCN 1154 targets the unmet need for robust rapid relief with 48-hour treatment duration through a convenient oral treatment candidate comprising bioidentical NAS with good tolerability. 7 LPCN 2101: NAS for Epilepsy We are currently evaluating an additional NAS candidate, LPCN 2101, for women with epilepsy (“WWE”).
The only approved therapy for prevention of PTB in women with a prior history of at least one preterm birth (approximately 145,000 pregnancies annually) is a weekly intramuscular injection of HPC, marketed by Covis under the brand name Makena®.
The only approved therapy for prevention of PTB in women with a prior history of at least one preterm birth (approximately 145,000 pregnancies annually) which was a weekly intramuscular injection of HPC, marketed by Covis under the brand name Makena®, was pulled from the market effective April 6, 2023 because the PROLONG trial failed to verify the clinical benefit of Makena.
LPCN 1107: An Oral Product Candidate for the Prevention of Preterm Birth We are exploring the possibility of partnering LPCN 1107 to a third party, although no partnering agreement has been entered into by the Company.
All future development and commercialization of LPCN 1111 in the U.S. and Canada will be the responsibility of our Licensee, Verity. LPCN 1107: An Oral Product Candidate for the Prevention of Preterm Birth We are exploring the possibility of partnering LPCN 1107 to a third party, although no partnering agreement has been entered into by the Company.
In the United States, drugs and products are subject to regulation by the FDA. There are other comparable agencies in Europe and other parts of the world. Regulations govern, among other things, the research, development, testing, manufacture, quality control, approval, labeling, packaging, storage, record-keeping, promotion, advertising, distribution, post-approval monitoring and reporting, marketing and export and import of products.
Regulations govern, among other things, the research, development, testing, manufacture, quality control, approval, labeling, packaging, storage, record-keeping, promotion, advertising, distribution, post-approval monitoring and reporting, marketing and export and import of products.
We have previously completed an oral PK study and a food effect study with LPCN 1154. 6 PPD PPD (“Postpartum depression”), a type of major depressive disorder with onset either during pregnancy or within four weeks of delivery, refers to depression persisting up to 12 months after childbirth.
The company has completed an oral PK study, a food effect study, and a pilot PK bridge study of LPCN 1154, as a prelude to a pivotal study using the scaled up “to be marketed” formulation required for NDA filing. 6 PPD PPD (“Postpartum depression”), a type of major depressive disorder with onset either during pregnancy or within four weeks of delivery, refers to depression persisting up to 12 months after childbirth.
The primary endpoint of the LiFT clinical study was change in hepatic fat fraction via MRI-PDFF and exploratory liver fat/marker end points post 12 weeks of treatment. Additionally, key secondary endpoints post 36 weeks of treatment included assessment of histological change for NASH resolution and/or fibrosis improvement (biopsy) as well as liver fat data (MRI-PDFF).
Additionally, key secondary endpoints post 36 weeks of treatment included assessment of histological change for NASH resolution and/or fibrosis improvement (biopsy) as well as liver fat data (MRI-PDFF). The LiFT clinical study was not powered to assess statistical significance of any of the secondary endpoints.
We have exclusively licensed rights to TLANDO to Antares for commercialization of TLANDO in the US. We plan to support our licensee’s efforts to effectively enable the availability of TLANDO to patients in a timely manner, in addition to receiving milestone and royalty payments associated with TLANDO commercialization as agreed to in the Antares License Agreement.
We plan to support our Licensee’s efforts to effectively enable the availability of TLANDO to patients in a timely manner, in addition to receiving milestone and royalty payments associated with TLANDO commercialization as agreed to in the Verity License Agreement. Develop partnership(s) to continue the advancement of non-core pipeline assets .
LPCN 1111 is targeted to meet this unmet need. NASH Market Overview There are currently no medications approved for the treatment of NASH. However, various therapeutics are used off-label for the treatment of NASH, including vitamin E (an antioxidant), insulin sensitizers (e.g., metformin, pioglitazone), antihyperlipidemic agents (e.g., gemfibrozil), pentoxifylline and ursodeoxycholic acid.
However, various therapeutics are used off-label for the treatment of NASH, including vitamin E (an antioxidant), insulin sensitizers (e.g., metformin, pioglitazone), antihyperlipidemic agents (e.g., gemfibrozil), pentoxifylline and ursodeoxycholic acid.
Selective Serotonin Reuptake Inhibitors (“SSRIs”) have been the traditional first-line choice for women with severe PPD requiring weeks for onset of efficacy; therefore, a need for an oral treatment option with a faster onset of action remains a significant unmet need in treating PPD, especially in women with epilepsy risk wherein psychiatric comorbidity is common and PPD rates are higher than the general population.
Selective Serotonin Reuptake Inhibitors (“SSRIs”) have been the traditional first-line choice for women with severe PPD requiring weeks for onset of efficacy; therefore, a need for an oral treatment option with a faster onset of action remains a significant unmet need in treating PPD, especially in mothers with moderate to severe depression prone to harmful actions.
In addition, we will receive tiered royalty payments at rates ranging from percentages in the mid-teens to up to 20% of net sales of TLANDO in the United States, subject to certain minimum royalty obligations.
In addition, we will receive tiered royalty payments at rates ranging from 12% to up to 18% of net sales of TLANDO in the United States and Canada.
The Inflation Reduction Act of 2022 signals an increased desire to control the prices and costs associated with pharmaceutical products.
The Inflation Reduction Act of 2022 signals an increased desire to control the prices and costs associated with pharmaceutical products. In recent years, state laws have been enacted to lower prescription drug costs and prices.
We are currently exploring partnering (i) LPCN 1144, our candidate for treatment of non-cirrhotic NASH, (ii) LPCN 1148, for the management of decompensated cirrhosis, (iii) LPCN 1111, a once-a-day therapy candidate for TRT, and (iv) LPCN 1107, our candidate for prevention of pre-term birth.
We continuously strive to prioritize our resources in seeking partnerships of our pipeline assets. We are currently exploring partnering (i) LPCN 1144, our candidate for treatment of non-cirrhotic NASH, (ii) LPCN 1148, for the management of decompensated cirrhosis, and (iii) LPCN 1107, our candidate for prevention of pre-term birth.
The treatment arm is an oral dose of LPCN 1148, and the second arm is a matching placebo. The primary endpoint is change in skeletal muscle index at week 24 with key secondary endpoints including change in liver frailty index, rates of breakthrough HE, and number of waitlist events, including all-cause mortality. Total treatment is expected to be 52 weeks.
The primary endpoint was a change in skeletal muscle index at week 24 with key secondary endpoints including change in liver frailty index, rates of breakthrough HE, and number of waitlist events, including all-cause mortality.
This legislation, as well as any future statutes or regulations at the federal or state level, may impact reimbursement for our product candidates and may challenge our ability to realize an appropriate return on our investment in research and product development.
This legislation, as well as any future statutes or regulations at the federal or state level, may impact reimbursement for our product candidates and may challenge our ability to realize an appropriate return on our investment in research and product development. 20 The market for our product candidates for which we may receive regulatory approval will depend significantly on access to third-party payers’ drug formularies or lists of medications for which third-party payers provide coverage and reimbursement.
The efficacy of hormonal contraception may be diminished for women taking CYP-P450 enzyme inducing ASMs. Epilepsy is not a medical condition in which contraceptives are contraindicated.
The efficacy of hormonal contraception may be diminished for women taking CYP-P450 enzyme inducing ASMs. Epilepsy is not a medical condition in which contraceptives are contraindicated. Contraceptive failure, possibly related to ASMs, may be responsible for up to 1 in 4 unplanned pregnancies in WWE (~12.5% of all WWE pregnancies), versus a rate of 1% in healthy women.
Currently, the only curative therapy for decompensated cirrhosis is liver transplant; however, liver transplantation is very costly, limited by the supply of available donors, and has a high risk of post-operative complications. 14 Xifaxan® (rifaximin) is the only FDA-approved medicine indicated for the reduction in risk of overt hepatic encephalopathy (HE) recurrence in adults, a decompensation event typically associated with liver cirrhosis.
Currently, the only curative therapy for decompensated cirrhosis is liver transplant; however, liver transplantation is very costly, limited by the supply of available donors, and has a high risk of post-operative complications.
Similarly, an IRB or ethics committee can suspend or terminate approval of a clinical trial at its institution if the clinical trial is not being conducted in accordance with the IRB’s or ethics committee’s requirements or if the pharmaceutical product has been associated with unexpected serious harm to patients.
Similarly, an IRB or ethics committee can suspend or terminate approval of a clinical trial at its institution if the clinical trial is not being conducted in accordance with the IRB’s or ethics committee’s requirements or if the pharmaceutical product has been associated with unexpected serious harm to patients. 18 Concurrent with clinical trials, companies usually complete additional animal studies and must also develop additional information about the chemistry and physical characteristics of the pharmaceutical product, as well as finalize a process for manufacturing the product in commercial quantities in accordance with cGMP requirements.
Subjects were randomized 1:1:1 to one of three arms (Treatment A is a twice daily oral dose of 142 mg testosterone equivalent, Treatment B is a twice daily oral dose of 142 mg testosterone equivalent formulated with 217 mg of d-alpha tocopherol equivalent, and the third arm is twice daily matching placebo).
Subjects were randomized 1:1:1 to one of three arms (Treatment A is a twice daily oral dose of 142 mg testosterone equivalent, Treatment B is a twice daily oral dose of 142 mg testosterone equivalent formulated with 217 mg of d-alpha tocopherol equivalent, and the third arm is twice daily matching placebo). 11 The primary endpoint of the LiFT clinical study was change in hepatic fat fraction via MRI-PDFF and exploratory liver fat/marker end points post 12 weeks of treatment.
Research and Development As disclosed in our development pipeline, we continue to build a diversified multi-asset pipeline of novel therapies. In 2022 and 2021, we spent $8.6 million and $7.7 million, respectively, on research and development. Competition Neuroactive Steroids Market overview The unique potential mechanism of action (“MOA”) of NAS presents an opportunity to treat variety of CNS disorders.
In 2023 and 2022, we spent $10.2 million and $8.6 million, respectively, on research and development. Competition Neuroactive Steroids Market overview The unique potential mechanism of action (“MOA”) of NAS presents an opportunity to treat a variety of CNS disorders. Accordingly, multiple NAS as GABA A receptor PAMs are in active development for varied indications.
Related Party Transaction On July 23, 2013, we entered into assignment/license and services agreements with Spriaso, an entity that is majority-owned by Mahesh V. Patel, Gordhan Patel, John W. Higuchi, Dr. William I. Higuchi, and their affiliates. Mahesh V. Patel is our President and Chief Executive Officer. Mr.
This in turn could affect our ability to successfully commercialize our products and impact our profitability, results of operations, financial condition, and future success. Related Party Transaction On July 23, 2013, we entered into assignment/license and services agreements with Spriaso, an entity that is majority-owned by Mahesh V. Patel, Gordhan Patel, John W. Higuchi, Dr. William I.
The agreement to provide services expired in 2021; however, it may be extended upon written agreement of Spriaso and us. Additionally, Spriaso filed its first NDA in 2014, and as an affiliated entity of Lipocine, it used up the one-time waiver of user fees for a small business submitting its first human drug application to FDA.
Additionally, Spriaso filed its first NDA in 2014, and as an affiliated entity of Lipocine, it used up the one-time waiver of user fees for a small business submitting its first human drug application to FDA. 21 Employees As of December 31, 2023, we had 17 full time employees and we also utilize the services of consultants on a regular basis.
We also hold license rights in fields other than cough and cold, to 2 U.S. patents and 1 U.S. application (and related foreign patents and applications) that we previously assigned to Spriaso LLC, which could be possibly used with future product candidates.
As of March 7, 2024, our intellectual property patent portfolio consists of various issued patents and patent applications related to Oral TU, LPCN 1111, LPCN 1107, LPCN 1144/1148, and Neurosteroids/CNS treatments both in the U.S. and in multiple countries outside of the U.S. 16 We also hold license rights in fields other than cough and cold, to 2 U.S. patents and 1 U.S. application (and related foreign patents and applications) that we previously assigned to Spriaso LLC, which could be possibly used with future product candidates.
See Item 3 – Legal Proceedings, for a discussion of intellectual property related legal proceedings. Government Regulation The Regulatory Process for Drug Development The production and manufacture of our product candidates and our research and development activities are subject to regulation by various governmental authorities around the world.
Government Regulation The Regulatory Process for Drug Development The production and manufacture of our product candidates and our research and development activities are subject to regulation by various governmental authorities around the world. In the United States, drugs and products are subject to regulation by the FDA. There are other comparable agencies in Europe and other parts of the world.
Madrigal stated that they intend to file a new drug application seeking accelerated approval of resmetirom for the treatment of non-cirrhotic NASH with liver fibrosis. Hydroxyprogesterone caproate, or HPC, Preterm Birth, or PTB, Market Overview PTB is defined as delivery before 37 weeks of gestation.
Madrigal has submitted an NDA to the FDA and was granted Priority Review for Resmetirom for the treatment of non-cirrhotic NASH with liver fibrosis and has been assigned a PDUFA date of March, 14, 2024. Hydroxyprogesterone caproate, or HPC, Preterm Birth, or PTB, Market Overview PTB is defined as delivery before 37 weeks of gestation.
The results of the formal IND-enabling preclinical studies, together with manufacturing information, analytical data, any available clinical data or literature as well as the comprehensive descriptions of proposed human clinical studies, are then submitted as part of the IND application to the FDA. 18 The IND automatically becomes effective 30 days after receipt by the FDA, unless the FDA places the IND on a clinical hold within that 30-day time period.
The conduct of the preclinical safety evaluations must comply with federal regulations and requirements including GLPs. The results of the formal IND-enabling preclinical studies, together with manufacturing information, analytical data, any available clinical data or literature as well as the comprehensive descriptions of proposed human clinical studies, are then submitted as part of the IND application to the FDA.
Injectable brexanolone (Zulresso™, Sage Therapeutics) became the first FDA-approved treatment for postpartum depression. However, numerous factors limit the utilization of injectable brexanolone such as method of administration, cost, and safety concerns. Administration of injectable brexanolone requires a 60-hour continuous infusion in a supervised medical setting, a demanding ask for a mother with a newborn.
Injectable brexanolone (Zulresso™, SAGE Therapeutics) became the first FDA-approved treatment for postpartum depression. However, numerous factors limit the utilization of injectable brexanolone such as method of administration, cost, and safety concerns. In addition to Zulresso, SAGE Therapeutics received FDA approval for zuranolone (brand name ZURZUVAE™) in August, 2023 and Zurzuvae was launched commercially in December 2023.
Even if we do enter into partnering arrangements, such arrangements may not be sufficient to successfully develop and commercialize these products. TLANDO: An Oral Product for Testosterone Replacement Therapy As previously described, under the Antares License Agreement, we granted to Antares an exclusive, royalty-bearing, sublicensable right and license to develop and commercialize TLANDO, our product for TRT in the U.S.
TLANDO: An Oral Product for Testosterone Replacement Therapy As previously described, under the Verity License Agreement, in January 2024 we granted to Verity an exclusive, royalty-bearing, sublicensable right and license to develop and commercialize TLANDO, our product for TRT, in the U.S. and Canada effective February 1, 2024. TLANDO received FDA approval on March 28, 2022.
Contraceptive failure, possibly related to ASMs, may be responsible for up to 1 in 4 unplanned pregnancies in WWE (~12.5% of all WWE pregnancies), versus a rate of 1% in healthy women. 8 Unmet need to treat WWE in CB age It is estimated that approximately 900,000 CB age women suffer from active epilepsy in the U.S.
Unmet need to treat WWE in CB age It is estimated that approximately 900,000 CB age women suffer from active epilepsy in the U.S.
Also, third-party payers may refuse to include a particular branded drug in their formularies or may otherwise restrict patient access to a branded drug when a less-costly generic equivalent or other alternative is available. In addition, because each third-party payer individually approves coverage and reimbursement levels, obtaining coverage and adequate reimbursement is a time-consuming and costly process.
The industry competition to be included in such formularies often leads to downward pricing pressures on pharmaceutical companies. Also, third-party payers may refuse to include a particular branded drug in their formularies or may otherwise restrict patient access to a branded drug when a less-costly generic equivalent or other alternative is available.
During this time, Makena and the approved generics of Makena will remain on the market until the FDA makes a final decision about these products. 16 Intellectual Property Drug Delivery Technologies for Lipophilic Drug Substances Our patent portfolio is directed to various types of compositions and methods for delivery of lipophilic drugs, which are drugs that are soluble in lipids.
Intellectual Property Drug Delivery Technologies for Lipophilic Drug Substances Our patent portfolio is directed to various types of compositions and methods for delivery of lipophilic drugs, which are drugs that are soluble in lipids. Our FDA approved product, TLANDO, is an oral formulation of the lipophilic prodrug TU, utilizing our proprietary technology for improved delivery of lipophilic therapeutic agents.
We entered into a license agreement for the development and commercialization of our product candidate, TLANDO®, an oral testosterone replacement therapy (“TRT”) comprised of testosterone undecanoate (“TU”). TLANDO is a registered trademark assigned to Antares. On October 14, 2021, we entered into the license agreement (the “Antares License Agreement”) with Antares Pharma, Inc.
We entered into a license agreement for the development and commercialization of our product candidate, TLANDO®, an oral treatment indicated for testosterone replacement therapy (“TRT”) in adult males for conditions associated with a deficiency or absence of endogenous testosterone (primary or hypogonadotropic hypogonadism) comprised of testosterone undecanoate (“TU”).
Proof-of-concept for TLANDO was initially established in 2006, and subsequently TLANDO was licensed in 2009 to Solvay Pharmaceuticals, Inc., which was then acquired by Abbott Products, Inc. (“Abbott”). Following a portfolio review associated with the spin-off of AbbVie Inc. by Abbott in 2011, the rights to TLANDO were reacquired by us.
Any FDA requirement to conduct certain post-marketing studies will be the responsibility of our Licensee, Verity. Proof-of-concept for TLANDO was initially established in 2006, and subsequently TLANDO was licensed in 2009 to Solvay Pharmaceuticals, Inc., which was then acquired by Abbott Products, Inc. (“Abbott”).
The FDA Commissioner held a public hearing with Covis October 17 through 19, 2022, which resulted in a 14-1 vote recommending removal of the product from the market. A decision whether to withdraw approval of Makena is likely in the first half of 2023 .
The FDA Commissioner held a public hearing with Covis October 17 through 19, 2022, which resulted in a 14-1 vote recommending removal of the product from the market. On October 31, 2022, Covis approached the CDER and outlined a plan of orderly withdrawal which would set a withdrawal timeframe sufficient for current patients to complete their courses of treatment.
Postpartum Depression Sage Therapeutics is currently marketing an injectable version of an endogenous neuroactive steroid, brexanolone, under the tradename of ZULRESSO™, as the first and only FDA approved product (approval on 03/19/2019) for treatment in postpartum depression (“PPD”).
Some companies engaged in development include SAGE Therapeutics, Inc., Marinus Pharmaceuticals, Praxis Precision Medicines, and Eliem Therapeutics. Postpartum Depression SAGE Therapeutics is currently marketing an injectable version of an endogenous neuroactive steroid, brexanolone, under the tradename of ZULRESSO™, for treatment in postpartum depression (“PPD”). In August 2023, the FDA approved ZURZUVAE (zuranolone) as an oral, once-daily, 14-day treatment for PPD.
All obligations under the prior license agreement have been completed except that Lipocine will owe Abbott a perpetual 1% royalty on net sales of TLANDO. Such royalties are limited to $1 million in the first 2 calendar years following product launch, after which period there is no cap on royalties and no maximum aggregate amount.
Such royalties are limited to $1 million in the first 2 calendar years following product launch, after which period there is no cap on royalties and no maximum aggregate amount. If generic versions of any such product are introduced, then royalties are reduced by 50%. TLANDO was commercially launched on June 7, 2022.
Additional assets of the same MOA are indicated for MDD (PRAX-114 and ETX-155) but could be pivoted to a PPD indication. Cirrhosis Market Overview Decompensated cirrhosis patients with sarcopenia exhibit significantly shorter overall survival than those without sarcopenia. There are no therapies specifically approved for sarcopenia or decompensated cirrhosis.
ZURZUVAE became commercially available in December 2023. 14 Cirrhosis Market Overview Decompensated cirrhosis patients with sarcopenia exhibit significantly shorter overall survival than those without sarcopenia. There are no therapies specifically approved for sarcopenia or decompensated cirrhosis.
Employees As of December 31, 2022, we had 17 full time employees and we also utilize the services of consultants on a regular basis. Twelve employees are engaged in drug development activities and five are in general and administration functions and the majority of our employees work out of our Salt Lake City facility.
Twelve employees are engaged in drug development activities and five are in general and administration functions and the majority of our employees work out of our Salt Lake City facility. The Company continually evaluates the business need and opportunity and balances in house expertise and capacity with outsourced expertise and capacity.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeRisk Factors Summary Our business operations are subject to numerous risks, factors and uncertainties, including those outside of our control, that could cause our actual results to be harmed, including risks regarding the following: Risks Relating to Our Business and Industry ● the timelines of our clinical trials; ● the early stage of development of LPCN 1154, LPCN 2101, LPCN 1148, LPCN 1144, LPCN 1111 and LPCN 1107; ● the early stage of development of our research and development programs and processes and the risk of competition; ● the regulatory requirements for our product candidates and the possibility that regulatory approval will not be received; ● the commercial success of our licensed product candidate, TLANDO; ● the possibility that T-replacement therapies could be found to create, or could be perceived to create, health risks; ● any possible failure to obtain adequate healthcare reimbursement for our products; ● competition in the TRT market, including the entrance of generic TRTs into the market; ● our licensee’s ability to commercialize TLANDO may be limited; ● successful commercialization of our product candidates internally or through collaborators; ● the possibility that we may never receive regulatory approval to market our products outside the United States; ● the stringent government regulations concerning the clinical testing of our products; ● the market’s acceptance of our products; ● physicians and patients using other products may not switch to our product; ● the possibility that regulatory agencies could find that we have improperly promoted off-label uses; ● any possible failure to comply with federal and state healthcare laws; ● our ability to retain our chief executive officer and other key executives and to attract, retain and motivate qualified personnel; ● difficulties in managing the growth of the Company; ● re-importation of drugs from foreign countries into the United States by our competitors; ● any product liability claims; ● any failure to comply with the Controlled Substances Act; ● the defense and resolution of any litigation; ● cyber security risks; Risks Related to Our Dependence on Third Parties ● our reliance on third-party contractors and service providers for the execution of some aspects of our development programs; ● our reliance on contract research organizations or other third parties to assist us in conducting clinical trials; ● our reliance on suppliers for the active and inactive ingredients for our products; ● our ability to establish successful collaborations for our products; Risks Related to Ownership of Our Common Stock ● our stock price’s reaction to the results and timing of clinical trials, regulatory and other decisions; ● the effectiveness of our internal control over financial reporting; ● the cost and expense to comply with the requirements of being a public company; ● the volatility of our share price; ● fluctuations in the value of our warrants outstanding from the November 2019 Offering; ● the possibility of delisting of our securities from the Nasdaq Capital Market; ● anti-takeover provisions in our amended and restated certificate of incorporation and our amended and restated bylaws, as well as provisions of Delaware law and our stockholder rights plan; ● the right of the holders of the common warrants issued in the November 2019 Offering to receive the Black Scholes value of the warrants in the event of a fundamental transaction; ● our decision not to pay dividends on our common stock; ● our management and directors’ ability to exert influence over our affairs; ● volatility in the trading price of our common stock; ● any failure of securities or industry analysts to publish accurate research about our business; 23 Risks Relating to Our Financial Position and Capital Requirements ● our need for and ability to obtain substantial additional capital in the future; ● potential dilution to our existing stockholders from raising any additional capital; ● our inability to predict when we will generate product revenues or achieve profitability; ● our incurrence of significant operating losses; ● any fluctuation in our operating results; Risks Relating to Our Intellectual Property ● our ability to protect our intellectual property; ● our ability to obtain additional protection under the Drug Price Competition and Patent Term Restoration Act; ● the possibility of incurring substantial costs as a result of litigation or other proceedings relating to patent and other intellectual property rights, or our inability to protect our rights to our products and technology; ● the cost and expense, and any unfavorable outcomes, resulting from any claims for infringing intellectual property rights of third parties; ● the fact that we do not have patent protection for our product candidates in a significant number of countries; ● our ability to comply with various procedural, document submission, fee payment and other requirements imposed by governmental patent agencies; and ● the possibility that we may be subject to claims that our employees have wrongfully used or disclosed alleged trade secrets of their former employers.
Biggest changeRisk Factors Summary Our business operations are subject to numerous risks, factors and uncertainties, including those outside of our control, that could cause our actual results to be harmed, including risks regarding the following: Risks Relating to Our Business and Industry ● the timelines of our clinical trials; ● the early stage of development of LPCN 1154, LPCN 2101, LPCN 2203, LPCN 1148, LPCN 1144, LPCN 1111 and LPCN 1107; ● the early stage of development of our research and development programs and processes and the risk of competition; ● there can be no assurance as to our ability to file an NDA for LPCN 1154 for postpartum depression or our ability to utilize the streamlined approval pathway under 505(b)(2); ● the regulatory requirements for our product candidates and the possibility that regulatory approval will not be received; ● the commercial success of our licensed product candidate, TLANDO; ● the possibility that T-replacement therapies could be found to create, or could be perceived to create, health risks; ● any possible failure to obtain adequate healthcare reimbursement for our products; ● competition in the TRT market, including the entrance of generic TRTs into the market; ● our Licensee’s ability to commercialize TLANDO may be limited; ● successful commercialization of our product candidates internally or through collaborators; ● the possibility that we may never receive regulatory approval to market our products outside the United States; ● the stringent government regulations concerning the clinical testing of our products; ● the market’s acceptance of our products; ● physicians and patients using other products may not switch to our product; ● the possibility that regulatory agencies could find that we have improperly promoted off-label uses; ● any possible failure to comply with federal and state healthcare laws; ● our ability to retain our chief executive officer and other key executives and to attract, retain and motivate qualified personnel; ● difficulties in managing the growth of the Company; ● re-importation of drugs from foreign countries into the United States by our competitors; ● any product liability claims; ● any failure to comply with the Controlled Substances Act; ● the defense and resolution of any litigation; ● cyber security risks; 22 Risks Related to Our Dependence on Third Parties ● our reliance on third-party contractors and service providers for the execution of some aspects of our development programs; ● our reliance on contract research organizations or other third parties to assist us in conducting clinical trials; ● our reliance on suppliers for the active and inactive ingredients for our products; ● our ability to establish successful collaborations for our products; Risks Related to Ownership of Our Common Stock ● our stock price’s reaction to the results and timing of clinical trials, regulatory and other decisions; ● the effectiveness of our internal control over financial reporting; ● the cost and expense to comply with the requirements of being a public company; ● the volatility of our share price; ● fluctuations in the value of our warrants outstanding from the November 2019 Offering; ● the possibility of delisting of our securities from the Nasdaq Capital Market; ● anti-takeover provisions in our amended and restated certificate of incorporation and our amended and restated bylaws, as well as provisions of Delaware law and our stockholder rights plan; ● the right of the holders of the common warrants issued in the November 2019 Offering to receive the Black Scholes value of the warrants in the event of a fundamental transaction; ● our decision not to pay dividends on our common stock; ● our management and directors’ ability to exert influence over our affairs; ● volatility in the trading price of our common stock; ● any failure of securities or industry analysts to publish accurate research about our business; Risks Relating to Our Financial Position and Capital Requirements ● our need for and ability to obtain substantial additional capital in the future; ● potential dilution to our existing stockholders from raising any additional capital; ● our inability to predict when we will generate product revenues or achieve profitability; ● our incurrence of significant operating losses; ● any fluctuation in our operating results; Risks Relating to Our Intellectual Property ● our ability to protect our intellectual property; ● our ability to obtain additional protection under the Drug Price Competition and Patent Term Restoration Act; ● the possibility of incurring substantial costs as a result of litigation or other proceedings relating to patent and other intellectual property rights, or our inability to protect our rights to our products and technology; ● the cost and expense, and any unfavorable outcomes, resulting from any claims for infringing intellectual property rights of third parties; ● the fact that we do not have patent protection for our product candidates in a significant number of countries; ● our ability to comply with various procedural, document submission, fee payment and other requirements imposed by governmental patent agencies; and ● the possibility that we may be subject to claims that our employees have wrongfully used or disclosed alleged trade secrets of their former employers. 23 Risks Relating to Our Business and Industry The timelines and costs of our clinical trials may be impacted by numerous factors and any delays may adversely affect our ability to execute our current business strategy.
Moreover, any regulatory approval of a drug which is eventually obtained may entail limitations on the indicated uses for which that drug may be marketed. Furthermore, product approvals may be withdrawn or limited in some way if problems occur following initial marketing or if compliance with regulatory standards is not maintained.
Moreover, any regulatory approval of a drug which is eventually obtained may entail limitations on the indicated uses for which that drug may be marketed. Furthermore, product approvals may be withdrawn or limited in some way if problems occur following initial marketing or if compliance with regulatory standards is not maintained.
The proposal reflects a clear intent to substantially alter many of the current drug discount and services compensation practices among pharmaceutical manufacturers and Medicare and Medicaid managed care organizations and their pharmacy benefit managers.
The proposal reflects a clear intent to substantially alter many of the current drug discount and services compensation practices among pharmaceutical manufacturers and Medicare and Medicaid managed care organizations and their pharmacy benefit managers.
The proposal also reflects a skepticism that current drug discount and compensation practices among manufacturers and pharmacy benefit managers are sufficiently transparent to health plans to ensure that all appropriate cost reductions and value is passed through to health plans and reflected in lower health plans costs and lower premiums for beneficiaries.
The proposal also reflects a skepticism that current drug discount and compensation practices among manufacturers and pharmacy benefit managers are sufficiently transparent to health plans to ensure that all appropriate cost reductions and value is passed through to health plans and reflected in lower health plans costs and lower premiums for beneficiaries.
We may also seek to enter into collaborative arrangements to develop and commercialize our product candidates outside the United States. We will face significant competition in seeking appropriate collaborators and these collaborations are complex and time-consuming to negotiate and document. We may not be able to negotiate collaborations on acceptable terms or in a timely manner, or at all.
We may also seek to enter into collaborative arrangements to develop and commercialize our product candidates outside the United States. We will face significant competition in seeking appropriate collaborators and these collaborations are complex and time-consuming to negotiate and document. We may not be able to negotiate collaborations on acceptable terms or in a timely manner, or at all.
Because some patent applications in the United States may be maintained in secrecy until the patents are issued, because patent applications in the United States and many foreign jurisdictions are typically not published until eighteen months after filing, and because publications in the scientific literature often lag behind actual discoveries, we cannot be certain that others have not filed patent applications for technology covered by our or our licensor’s issued patents or our pending applications, or that we were the first to invent the technology.
Because some patent applications in the United States may be maintained in secrecy until the patents are issued, because patent applications in the United States and many foreign jurisdictions are typically not published until eighteen months after filing, and because publications in the scientific literature often lag behind actual discoveries, we cannot be certain that others have not filed patent applications for technology covered by our or our licensor’s patents or our pending applications, or that we were the first to invent the technology.
The provisions of ACA of importance to our potential product candidates include the following: ● an annual, nondeductible fee on any entity that manufactures or imports certain branded prescription drugs and biologic agents; ● an increase in the statutory minimum rebates a manufacturer must pay under the Medicaid Drug Rebate Program; ● expansion of healthcare fraud and abuse laws, including the False Claims Act and the Anti-Kickback Statute, new government investigative powers, and enhanced penalties for noncompliance; ● a new Medicare Part D coverage gap discount program, in which manufacturers must agree to offer 50% point-of-sale discounts off negotiated prices of applicable brand drugs to eligible beneficiaries during their coverage gap period, as a condition for the manufacturer’s outpatient drugs to be covered under Medicare Part D; ● extension of manufacturers’ Medicaid rebate liability to covered drugs dispensed to individuals who are enrolled in Medicaid managed care organizations; ● expansion of eligibility criteria for Medicaid programs by, among other things, allowing states to offer Medicaid coverage to additional individuals beginning in 2014 and by adding new mandatory eligibility categories for certain individuals with specified income levels, thereby potentially increasing manufacturers’ Medicaid rebate liability; ● expansion of the entities eligible for discounts under the Public Health Service pharmaceutical pricing program; ● new requirements to report annually certain financial arrangements with physicians, certain other healthcare professionals, and teaching hospitals; ● a new requirement to annually report drug samples that manufacturers and distributors provide to licensed practitioners, pharmacies of hospitals and other healthcare entities; and ● a new Patient-Centered Outcomes Research Institute to oversee, identify priorities in, and conduct comparative clinical effectiveness research, along with funding for such research. 30 In addition, other legislative changes have been proposed and adopted since ACA was enacted.
The provisions of ACA of importance to our potential product candidates include the following: ● an annual, nondeductible fee on any entity that manufactures or imports certain branded prescription drugs and biologic agents; ● an increase in the statutory minimum rebates a manufacturer must pay under the Medicaid Drug Rebate Program; ● expansion of healthcare fraud and abuse laws, including the False Claims Act and the Anti-Kickback Statute, new government investigative powers, and enhanced penalties for noncompliance; ● a new Medicare Part D coverage gap discount program, in which manufacturers must agree to offer 50% point-of-sale discounts off negotiated prices of applicable brand drugs to eligible beneficiaries during their coverage gap period, as a condition for the manufacturer’s outpatient drugs to be covered under Medicare Part D; ● extension of manufacturers’ Medicaid rebate liability to covered drugs dispensed to individuals who are enrolled in Medicaid managed care organizations; ● expansion of eligibility criteria for Medicaid programs by, among other things, allowing states to offer Medicaid coverage to additional individuals beginning in 2014 and by adding new mandatory eligibility categories for certain individuals with specified income levels, thereby potentially increasing manufacturers’ Medicaid rebate liability; ● expansion of the entities eligible for discounts under the Public Health Service pharmaceutical pricing program; ● new requirements to report annually certain financial arrangements with physicians, certain other healthcare professionals, and teaching hospitals; ● a new requirement to annually report drug samples that manufacturers and distributors provide to licensed practitioners, pharmacies of hospitals and other healthcare entities; and ● a new Patient-Centered Outcomes Research Institute to oversee, identify priorities in, and conduct comparative clinical effectiveness research, along with funding for such research. 29 In addition, other legislative changes have been proposed and adopted since ACA was enacted.
Our corporate governance documents include provisions: ● limiting the ability of our stockholders to call and bring business before special meetings and to take action by written consent in lieu of a meeting; ● requiring advance notice of stockholder proposals for business to be conducted at meetings of our stockholders and for nominations of candidates for election to our Board of Directors; ● authorizing blank check preferred stock, which could be issued with voting, liquidation, dividend and other rights superior to our common stock; and ● limiting the liability of, and providing indemnification to, our directors and officers.
Our corporate governance documents include provisions: ● limiting the ability of our stockholders to call and bring business before special meetings and to take action by written consent in lieu of a meeting; 43 ● requiring advance notice of stockholder proposals for business to be conducted at meetings of our stockholders and for nominations of candidates for election to our Board of Directors; ● authorizing blank check preferred stock, which could be issued with voting, liquidation, dividend and other rights superior to our common stock; and ● limiting the liability of, and providing indemnification to, our directors and officers.
The FDA has also asked health care professionals and patients to report side effects involving prescription testosterone products to the agency. 28 Following the FDA’s announcement, the Endocrine Society, a professional medical organization, released a statement in February 2014 in support of further studies regarding the risks and benefits of FDA-approved T-replacement products for men with age-related T deficiency.
The FDA has also asked health care professionals and patients to report side effects involving prescription testosterone products to the agency. Following the FDA’s announcement, the Endocrine Society, a professional medical organization, released a statement in February 2014 in support of further studies regarding the risks and benefits of FDA-approved T-replacement products for men with age-related T deficiency.
For example, all regular Schedule III drug prescriptions must be signed by a physician and may not be refilled more than six months after the date of the original prescription or more than five times unless renewed by the physician. 37 Entities must register annually with the DEA to manufacture, distribute, dispense, import, export and conduct research using controlled substances.
For example, all regular Schedule III drug prescriptions must be signed by a physician and may not be refilled more than six months after the date of the original prescription or more than five times unless renewed by the physician. Entities must register annually with the DEA to manufacture, distribute, dispense, import, export and conduct research using controlled substances.
If we raise additional funds through collaboration, strategic alliance and licensing arrangements with third parties, we may have to relinquish valuable rights to our product candidates, our intellectual property, future revenue streams or grant licenses on terms that are not favorable to us. 47 We cannot predict when we will generate product revenues and may never achieve or maintain profitability.
If we raise additional funds through collaboration, strategic alliance and licensing arrangements with third parties, we may have to relinquish valuable rights to our product candidates, our intellectual property, future revenue streams or grant licenses on terms that are not favorable to us. We cannot predict when we will generate product revenues and may never achieve or maintain profitability.
License agreements and/or collaborations involving our drug candidates, such as our agreement with Antares, pose numerous risks to us, including the following: ● partners have significant discretion in determining the efforts and resources that they will apply to these efforts and may not perform their obligations as expected; ● partners may de-emphasize or not pursue development and commercialization of our drug candidates or may elect not to continue or renew development or commercialization programs based on clinical trial results, changes in the partners’ strategic focus, including as a result of a sale or disposition of a business unit or development function, or available funding or external factors such as an acquisition that diverts resources or creates competing priorities; ● partners may delay clinical trials, provide insufficient funding for a clinical trial program, stop a clinical trial or abandon a drug candidate, repeat or conduct new clinical trials or require a new formulation of a drug candidate for clinical testing; 39 ● partners could independently develop, or develop with third parties, products that compete directly or indirectly with our products or drug candidates if the partners believe that competitive products are more likely to be successfully developed or can be commercialized under terms that are more economically attractive than ours; ● partners may not be able to acquire and maintain supplier and manufacturer relationships necessary to successfully commercialize our products; ● a partner with marketing and distribution rights to multiple products may not commit sufficient resources to the marketing and distribution of our product relative to other products; ● partners may not properly obtain, maintain, defend or enforce our intellectual property rights or may use our proprietary information and intellectual property in such a way as to invite litigation or other intellectual property related proceedings that could jeopardize or invalidate our proprietary information and intellectual property or expose us to potential litigation or other intellectual property related proceedings; ● disputes may arise between our partners and us that result in the delay or termination of the research, development or commercialization of our products or drug candidates or that result in costly litigation or arbitration that diverts management attention and resources; ● agreements may be terminated and, if terminated, may result in a need for additional capital to pursue further development or commercialization of the applicable drug candidates; ● agreements may not lead to development or commercialization of drug candidates in the most efficient manner or at all; and ● if a partner of ours were to be involved in a business combination, the continued pursuit and emphasis on our product development or commercialization program could be delayed, diminished or terminated.
License agreements and/or collaborations involving our drug candidates, such as our agreement with Verity, pose numerous risks to us, including the following: ● partners have significant discretion in determining the efforts and resources that they will apply to these efforts and may not perform their obligations as expected; ● partners may de-emphasize or not pursue development and commercialization of our drug candidates or may elect not to continue or renew development or commercialization programs based on clinical trial results, changes in the partners’ strategic focus, including as a result of a sale or disposition of a business unit or development function, or available funding or external factors such as an acquisition that diverts resources or creates competing priorities; ● partners may delay clinical trials, provide insufficient funding for a clinical trial program, stop a clinical trial or abandon a drug candidate, repeat or conduct new clinical trials or require a new formulation of a drug candidate for clinical testing; ● partners could independently develop, or develop with third parties, products that compete directly or indirectly with our products or drug candidates if the partners believe that competitive products are more likely to be successfully developed or can be commercialized under terms that are more economically attractive than ours; ● partners may not be able to acquire and maintain supplier and manufacturer relationships necessary to successfully commercialize our products; ● a partner with marketing and distribution rights to multiple products may not commit sufficient resources to the marketing and distribution of our product relative to other products; ● partners may not properly obtain, maintain, defend or enforce our intellectual property rights or may use our proprietary information and intellectual property in such a way as to invite litigation or other intellectual property related proceedings that could jeopardize or invalidate our proprietary information and intellectual property or expose us to potential litigation or other intellectual property related proceedings; 38 ● disputes may arise between our partners and us that result in the delay or termination of the research, development or commercialization of our products or drug candidates or that result in costly litigation or arbitration that diverts management attention and resources; ● agreements may be terminated and, if terminated, may result in a need for additional capital to pursue further development or commercialization of the applicable drug candidates; ● agreements may not lead to development or commercialization of drug candidates in the most efficient manner or at all; and ● if a partner of ours were to be involved in a business combination, the continued pursuit and emphasis on our product development or commercialization program could be delayed, diminished or terminated.
Although we use reasonable efforts to protect our trade secrets, our employees, consultants, contractors, outside scientific collaborators and other advisors may unintentionally or willfully disclose our information to competitors. Enforcing a claim that a third party illegally obtained and is using any of our trade secrets is expensive and time consuming, and the outcome is unpredictable.
Although we use reasonable efforts to protect our trade secrets, our employees, consultants, contractors, outside scientific collaborators and other advisors may unintentionally or willfully disclose our information to competitors. Enforcing a claim that a third party illegally obtained and is using for any of our trade secrets is expensive and time consuming, and the outcome is unpredictable.
The payment of this and other settlement payments divert capital resources away from our operations, which may adversely affect our business. 38 Cyber security risks and the failure to maintain the integrity of company, employee or guest data could expose us to data loss, litigation and liability, and our reputation could be significantly harmed.
The payment of this and other settlement payments divert capital resources away from our operations, which may adversely affect our business. Cyber security risks and the failure to maintain the integrity of company, employee or guest data could expose us to data loss, litigation and liability, and our reputation could be significantly harmed.
If we do not establish successful collaborations, we may have to alter our development and commercialization plans for our products. Our drug development programs for our product candidates will require substantial additional cash to fund expenses. We have not yet established any collaborative arrangements relating to the development or commercialization of LPCN 1148, LPCN 1144, LPCN 1111, or LPCN 1107.
If we do not establish successful collaborations, we may have to alter our development and commercialization plans for our products. Our drug development programs for our product candidates will require substantial additional cash to fund expenses. We have not yet established any collaborative arrangements relating to the development or commercialization of LPCN 1148, LPCN 1144, or LPCN 1107.
Products containing controlled substances may generate public controversy. As a result, these products may have their marketing approvals withdrawn. State and Federal legislatures and administrative agencies may take additional action to combat a perceived misuse or overuse of such products. We may have to dedicate resources to the defense and resolution of litigation.
Products containing controlled substances may generate public controversy. As a result, these products may have their marketing approvals withdrawn. State and Federal legislatures and administrative agencies may take additional action to combat a perceived misuse or overuse of such products. 36 We may have to dedicate resources to the defense and resolution of litigation.
Our commercial success depends upon our ability and the ability of our collaborators to develop, manufacture, market and sell our product candidates and use our proprietary technologies without infringing the proprietary rights of third parties. Numerous U.S. and foreign issued patents and pending patent applications, which are owned by third parties, exist in the fields relating to our product candidates.
Our commercial success depends upon our ability and the ability of our collaborators to develop, manufacture, market and sell our product candidates and use our proprietary technologies without infringing the proprietary rights of third parties. Numerous U.S. and foreign patents and pending patent applications, which are owned by third parties, exist in the fields relating to our product candidates.
Outside parties, including CROs, may: ● have staffing difficulties or disruptions; ● fail to comply with contractual obligations; ● experience regulatory compliance issues; 40 ● undergo changes in priorities or may become financially distressed; ● form relationships with other entities, some of which may be our competitors; or ● manufacturing capacity limitations.
Outside parties, including CROs, may: ● have staffing difficulties or disruptions; ● fail to comply with contractual obligations; ● experience regulatory compliance issues; ● undergo changes in priorities or may become financially distressed; ● form relationships with other entities, some of which may be our competitors; or ● manufacturing capacity limitations.
Furthermore, the limited number of suppliers of NAS may provide such suppliers with a greater opportunity to raise their prices. If we are unable to obtain NAS in a timely manner and/or in sufficient quantities, our ability to develop LPCN 1154 and LPCN 2101 may be adversely affected.
Furthermore, the limited number of suppliers of NAS may provide such suppliers with a greater opportunity to raise their prices. If we are unable to obtain NAS in a timely manner and/or in sufficient quantities, our ability to develop LPCN 1154, LPCN 2101, and LPCN 2203 may be adversely affected.
Conversely, our capital resources could last longer if we reduce expenses, reduce the number of activities currently contemplated under our operating plan or if we terminate or suspend on-going clinical studies. Funding may not be available to us on favorable terms, or at all.
Conversely, our capital resources could last longer if we reduce expenses, reduce the number of activities currently contemplated under our operating plan or if we terminate or suspend on-going clinical studies. 45 Funding may not be available to us on favorable terms, or at all.
The market price of our common stock may fluctuate significantly in response to a number of factors, most of which we cannot control, including: ● the success of the commercial launch of TLANDO; ● plans for, costs of, progress of and results from clinical trials of our product candidates; ● the failure of our product candidates to receive FDA approval; 42 ● regulatory uncertainty in the TRT class; ● FDA Advisory Committee meetings and related recommendations including meetings convened on the TRT class or on similar companies; ● announcements by the FDA that may impact on-going clinical studies related to safety or efficacy of TRT products; ● product approval and potential FDA required labeling language and/or Phase 4 study commitments; ● announcements of new products, technologies, commercial relationships, acquisitions or other events by us or our competitors; ● our ability to license our products to third parties; ● failure to engage with collaborators or build an internal sales force to commercialize our products should a product candidate other than TLANDO receive FDA approval; ● the success or failure of other TRT products or non-testosterone based testosterone therapy products; ● failure of our products, if approved, to achieve commercial success; ● fluctuations in stock market prices and trading volumes of similar companies; ● general market conditions and overall fluctuations in U.S. equity markets; ● variations in our quarterly operating results; ● changes in our financial guidance or securities analysts’ estimates of our financial performance; ● changes in accounting principles; ● sales of large blocks of our common stock, including sales by our executive officers, directors and significant stockholders; ● additions or departures of key personnel; ● discussion of us or our stock price by the press and by online investor communities; ● our cash balance; and ● other risks and uncertainties described in these risk factors.
The market price of our common stock may fluctuate significantly in response to a number of factors, most of which we cannot control, including: ● the success of the commercialization of TLANDO; ● plans for, costs of, progress of and results from clinical trials of our product candidates; ● the failure of our product candidates to receive FDA approval; ● regulatory uncertainty in the TRT class; ● FDA Advisory Committee meetings and related recommendations including meetings convened on the TRT class or on similar companies; ● announcements by the FDA that may impact on-going clinical studies related to safety or efficacy of TRT products; ● product approval and potential FDA required labeling language and/or Phase 4 study commitments; ● announcements of new products, technologies, commercial relationships, acquisitions or other events by us or our competitors; ● our ability to license our products to third parties; ● failure to engage with collaborators or build an internal sales force to commercialize our products should a product candidate other than TLANDO receive FDA approval; ● the success or failure of other TRT products or non-testosterone based testosterone therapy products; 41 ● failure of our products, if approved, to achieve commercial success; ● fluctuations in stock market prices and trading volumes of similar companies; ● general market conditions and overall fluctuations in U.S. equity markets; ● variations in our quarterly operating results; ● changes in our financial guidance or securities analysts’ estimates of our financial performance; ● changes in accounting principles; ● sales of large blocks of our common stock, including sales by our executive officers, directors and significant stockholders; ● additions or departures of key personnel; ● discussion of us or our stock price by the press and by online investor communities; ● our cash balance; and ● other risks and uncertainties described in these risk factors.
Even if we are successful in defending against these claims, litigation could result in substantial costs and be a distraction to management, which would adversely affect our financial condition. 52 ITEM 1B. UNRESOLVED STAFF COMMENTS None.
Even if we are successful in defending against these claims, litigation could result in substantial costs and be a distraction to management, which would adversely affect our financial condition. ITEM 1B. UNRESOLVED STAFF COMMENTS None.
Any of these penalties could delay or prevent the promotion, marketing or sale of our products. 33 The successful commercialization of our product candidates and ability to generate significant revenue will depend on achieving market acceptance.
Any of these penalties could delay or prevent the promotion, marketing or sale of our products. The successful commercialization of our product candidates and ability to generate significant revenue will depend on achieving market acceptance.
The FDA has also requested that companies enter into consent decrees or permanent injunctions under which specified promotional conduct is changed or curtailed. 34 If we fail to comply with federal and state healthcare laws, including fraud and abuse and health information privacy and security laws, we could face substantial penalties and our business, results of operations, financial condition and prospects could be adversely affected.
The FDA has also requested that companies enter into consent decrees or permanent injunctions under which specified promotional conduct is changed or curtailed. 33 If we fail to comply with federal and state healthcare laws, including fraud and abuse and health information privacy and security laws, we could face substantial penalties and our business, results of operations, financial condition and prospects could be adversely affected.
These warnings may deter physicians and patients from using TLANDO, which could adversely affect our business. The FDA has also required that certain post-marketing studies be conducted to (i) assess patient understanding of key risks relating to TLANDO and (ii) evaluate development of adrenal insufficiency with chronic TLANDO therapy. Antares is responsible for conducting these post-marketing studies.
These warnings may deter physicians and patients from using TLANDO, which could adversely affect our business. The FDA has also required that certain post-marketing studies be conducted to (i) assess patient understanding of key risks relating to TLANDO and (ii) evaluate development of adrenal insufficiency with chronic TLANDO therapy. Verity is responsible for conducting these post-marketing studies.
Preclinical and clinical data are often susceptible to varying interpretations and analyses, and many companies that have believed their product candidates performed satisfactorily in preclinical studies and clinical trials have nonetheless failed to obtain FDA approval for their products. 27 No assurance can be given that current regulations relating to regulatory approval will not change or become more stringent.
Preclinical and clinical data are often susceptible to varying interpretations and analyses, and many companies that have believed their product candidates performed satisfactorily in preclinical studies and clinical trials have nonetheless failed to obtain FDA approval for their products. 26 No assurance can be given that current regulations relating to regulatory approval will not change or become more stringent.
Even if we obtain required financing, we cannot ensure successful product development or that we will obtain regulatory approval or successfully commercialize or partner any of our product candidates and generate product revenues. 26 All of our clinical candidates will be subject to extensive regulation which can be costly and time consuming, cause delays or prevent approval of the products for commercialization.
Even if we obtain required financing, we cannot ensure successful product development or that we will obtain regulatory approval or successfully commercialize or partner any of our product candidates and generate product revenues. 25 All of our clinical candidates will be subject to extensive regulation which can be costly and time consuming, cause delays or prevent approval of the products for commercialization.
If Antares is not able to successfully commercialize TLANDO, we may not realize any royalty revenue under the Antares License Agreement and our business could be adversely affected. Additionally, regulatory approval of TLANDO may be withdrawn and the failure to maintain regulatory approvals would prevent TLANDO from being marketed and would have a material adverse effect on our business.
If Verity is not able to successfully commercialize TLANDO, we may not realize any royalty revenue under the Verity License Agreement and our business could be adversely affected. Additionally, regulatory approval of TLANDO may be withdrawn and the failure to maintain regulatory approvals would prevent TLANDO from being marketed and could have a material adverse effect on our business.
For example: ● others may be able to make or use compounds that are the same or similar to the pharmaceutical compounds used in our product candidates but that are not covered by the claims of our patents; ● the Active Pharmaceutical Ingredients (“APIs”) in our licensed product TLANDO and current product candidates LPCN 1148, LPCN 1144, LPCN 1111, and LPCN 1107 are, or may soon become, commercially available in generic drug products, and no patent protection may be available without regard to formulation or method of use; ● we may not be able to detect infringement against our owned or licensed patents, which may be especially difficult for manufacturing processes or formulation patents; ● we might not have been the first to make the inventions covered by our issued patents or pending patent applications or those we license; ● we might not have been the first to file patent applications for these inventions; ● others may independently develop similar or alternative technologies or duplicate any of our technologies; ● it is possible that our pending patent applications or those of our licensor will not result in issued patents; ● it is possible that there are dominating patents to any of our product candidates of which we are not aware; ● it is possible that there are prior public disclosures that could invalidate our patents, or parts of our patents, of which we are not aware; ● it is possible that others may circumvent our owned or licensed patents; ● it is possible that there are unpublished applications or patent applications maintained in secrecy that may later issue with claims covering our products or technology similar to ours; ● the laws of foreign countries may not protect our proprietary rights to the same extent as the laws of the United States; ● the claims of our owned or licensed issued patents or patent applications, if and when issued, may not cover our product candidates; ● our issued patents or those of our licensor may not provide us with any competitive advantages, or may be narrowed in scope, be held invalid or unenforceable as a result of legal challenges by third parties; ● our licensor or licensees as the case may be, who have access to our patents, may attempt to enforce our owned or licensed patents, which if unsuccessful, may result in narrower scope of protection of our owned or licensed patents or our owned or licensed patents becoming invalid or unenforceable; ● we may not develop additional proprietary technologies for which we can obtain patent protection; or ● the patents of others may have an adverse effect on our business.
For example: ● others may be able to make or use compounds that are the same or similar to the pharmaceutical compounds used in our product candidates but that are not covered by the claims of our patents; ● the Active Pharmaceutical Ingredients (“APIs”) in our licensed product TLANDO and current product candidates LPCN 1154, LPCN 1148, LPCN 1144, LPCN 1111, and LPCN 1107 are, or may soon become, commercially available in generic drug products, and no patent protection may be available without regard to formulation or method of use; ● we may not be able to detect infringement against our owned or licensed patents, which may be especially difficult for manufacturing processes or formulation patents; ● we might not have been the first to make the inventions covered by our issued patents or pending patent applications or those we license; ● we might not have been the first to file patent applications for these inventions; ● others may independently develop similar or alternative technologies or duplicate any of our technologies; ● it is possible that our pending patent applications or those of our licensor will not result in issued patents; ● it is possible that there are dominating patents to any of our product candidates of which we are not aware; ● it is possible that there are prior public disclosures that could invalidate our patents, or parts of our patents, of which we are not aware; ● it is possible that others may circumvent our owned or licensed patents; 47 ● it is possible that there are unpublished applications or other patent applications maintained in secrecy that may issue later than our patents/applications but may have priority dates that are earlier than our priority dates and may have claims covering our products or technology similar to ours; ● the laws of foreign countries may not protect our proprietary rights to the same extent as the laws of the United States; ● the claims of our owned or licensed issued patents or patent applications, if and when issued, may not cover our product candidates; ● our issued patents or those of our licensor may not provide us with any competitive advantages, or may be narrowed in scope, be held invalid or unenforceable as a result of legal challenges by third parties; ● our licensor or licensees as the case may be, who have access to our patents, may attempt to enforce our owned or licensed patents, which if unsuccessful, may result in narrower scope of protection of our owned or licensed patents or our owned or licensed patents becoming invalid or unenforceable; ● we may not develop additional proprietary technologies for which we can obtain patent protection; or ● the patents of others may have an adverse effect on our business.
As we defend the class action lawsuits or future patent infringement actions should they be filed, or if we are required to defend additional actions brought by other shareholders, we may be required to pay substantial litigation costs and managerial attention and financial resources may be diverted from business operations even if the outcome is in our favor.
As we defend class action lawsuits or future patent infringement actions should they be filed, or if we are required to defend future actions brought by shareholders, we may be required to pay substantial litigation costs and managerial attention and financial resources may be diverted from business operations even if the outcome is in our favor.
On March 29, 2022, the FDA granted approval to TLANDO for testosterone replacement therapy in adult males indicated for conditions associated with a deficiency or absence of endogenous testosterone : primary hypogonadism (congenital or acquired) and hypogonadotropic hypogonadism (congenital or acquired). Our ability to realize royalty revenue, will depend on the commercialization efforts of Antares.
On March 29, 2022, the FDA granted approval to TLANDO for testosterone replacement therapy in adult males indicated for conditions associated with a deficiency or absence of endogenous testosterone: primary hypogonadism (congenital or acquired) and hypogonadotropic hypogonadism (congenital or acquired). Our ability to realize royalty revenue, will depend on the commercialization efforts of Verity.
We must satisfy certain minimum listing maintenance requirements to maintain the NASDAQ Capital Market quotation, including certain governance requirements and a series of financial tests relating to stockholders’ equity or net income or market value, public float, number of market makers and stockholder, market capitalization, and maintaining a minimum bid price of $1.00 per share.
We must satisfy certain minimum listing maintenance requirements to maintain the NASDAQ Capital Market quotation, including certain governance requirements and a series of financial tests relating to stockholders’ equity or net income or market value, public float, number of market makers and stockholders, market capitalization, and maintaining a minimum bid price of $1.00 per share.
We believe that our existing capital resources, together with interest thereon, will be sufficient to meet our projected operating requirements through at least March 31, 2024. We have based this estimate on assumptions that may prove to be wrong, and we could utilize our available capital resources sooner than we currently expect.
We believe that our existing capital resources, together with interest thereon, will be sufficient to meet our projected operating requirements through at least March 31, 2025. We have based this estimate on assumptions that may prove to be wrong, and we could utilize our available capital resources sooner than we currently expect.
Any termination or expiration of the Antares License Agreement, or any future license or collaboration we may enter into, if any, could adversely affect us financially or harm our business reputation, development and commercialization efforts. We rely upon third-party contractors and service providers for the execution of some aspects of our development programs.
Any termination or expiration of the Verity License Agreement, or any future license or collaboration we may enter into, if any, could adversely affect us financially or harm our business reputation, development and commercialization efforts. We rely upon third-party contractors and service providers for the execution of some aspects of our development programs.
While our in-licensed patents and applications are not currently used in our product candidates, should we develop other product candidates that are covered by this intellectual property, we will rely on our licensor to file and prosecute patent applications and maintain patents and otherwise protect the intellectual property we license from them.
While our in-licensed patents and applications are not currently used in our product candidates, should we develop other product candidates that are covered by this intellectual property, we may rely on our licensor to file and prosecute patent applications and maintain patents and otherwise protect the intellectual property we license from them.
Our clinical development of LPCN 1154, LPCN 2101, LPCN 1148, LPCN 1111, LPCN 1144, and LPCN 1107 and any future product candidates is subject to extensive regulations by the FDA. Product development is a very lengthy and expensive process and can vary significantly based upon the product candidate’s novelty and complexity.
Our clinical development of LPCN 1154, LPCN 2101, LPCN 2203, LPCN 1148, LPCN 1144, and LPCN 1107 and any future product candidates is subject to extensive regulations by the FDA. Product development is a very lengthy and expensive process and can vary significantly based upon the product candidate’s novelty and complexity.
If those collaborations, including, without limitation, our license arrangement with Antares for the development and commercialization of TLANDO, are not successful, we may not be able to capitalize on the market potential of these drug candidates and may have to alter our development and commercialization plans for our products.
If those collaborations, including, without limitation, our license arrangement with Verity for the development and commercialization of TLANDO, are not successful, we may not be able to capitalize on the market potential of these drug candidates and may have to alter our development and commercialization plans for our products.
Failure of these collaborators to provide services of a suitable quality and within acceptable timeframes may cause the delay or failure of our development programs. We outsource certain functions, tests and services to contract research organizations (“CROs”), medical institutions and collaborators; and also outsource manufacturing to collaborators and/or contract manufacturers (“CMO’s”).
Failure of these collaborators to provide services of a suitable quality and within acceptable timeframes may cause the delay or failure of our development programs. We outsource certain functions, tests and services to contract research organizations (“CROs”), medical institutions and collaborators; and also outsource manufacturing to collaborators and/or contract manufacturers (“CMOs”).
If another party has filed a U.S. patent application on inventions similar to those owned or licensed by us, we may have to participate in an interference proceeding declared by the PTO to determine priority of invention in the United States.
If another party has filed a U.S. patent application on inventions similar to those owned or licensed by us, we may have to participate in an interference proceeding declared by the USPTO to determine priority of invention in the United States.
If another party has an allowed reason to question the validity of our owned or licensed U.S. patents, the third party can request that the PTO reexamine the patent claims, which may result in a loss of scope of some claims or a loss of the entire patent.
If another party has an allowed reason to question the validity of our owned or licensed U.S. patents, the third party can request that the USPTO reexamine the patent claims, which may result in a loss of scope of some claims or a loss of the entire patent.
Our drug development programs for our product candidates will require substantial additional cash to fund expenses. We have not yet established any collaborative arrangements relating to the development or commercialization of LPCN 1154, LPCN 2101, LPCN 1111, LPCN 1144, LPCN 1148, or LPCN 1107.
Our drug development programs for our product candidates will require substantial additional cash to fund expenses. We have not yet established any collaborative arrangements relating to the development or commercialization of LPCN 1154, LPCN 2101, LPCN 2203, LPCN 1144, LPCN 1148, or LPCN 1107.
As a result, we expect to continue to incur significant operating losses for the foreseeable future as we evaluate further clinical development of LPCN 1154, LPCN 2101, LPCN 1148, LPCN 1111, LPCN 1144, and LPCN 1107 and our other programs and continued research efforts.
As a result, we expect to continue to incur significant operating losses for the foreseeable future as we evaluate further clinical development of LPCN 1154, LPCN 2101, LPCN 2203, LPCN 1148, LPCN 1144, and LPCN 1107 and our other programs and continued research efforts.
Future studies may not have clinical results that support continued develop and/or a path towards regulatory approval and commercialization. In addition, the active ingredient in LPCN 1111 has only been manufactured on a small scale.
Future studies may not have clinical results that support continued development and/or a path towards regulatory approval and commercialization. In addition, the active ingredient in LPCN 1111 has only been manufactured on a small scale.
The FDA required certain post-marketing studies including: (i) conduct an appropriately designed label comprehension and knowledge study that assesses patient understanding of key risk messages in the Medication Guide for TLANDO and (ii) conduct an appropriately designed one-year trial to evaluate development of adrenal insufficiency with chronic TLANDO therapy. Antares is responsible for conducting these post-marketing studies.
The FDA required certain post-marketing studies including: (i) conducting an appropriately designed label comprehension and knowledge study that assesses patient understanding of key risk messages in the Medication Guide for TLANDO and (ii) conducting an appropriately designed one-year trial to evaluate development of adrenal insufficiency with chronic TLANDO therapy. Verity is responsible for conducting these post-marketing studies.
The outside collaborators we work with, including Antares under the Antares License Agreement with respect to TLANDO, may not be adequate or successful and any collaborators could terminate or materially reduce the effort they direct to our products.
The outside collaborators we work with, including Verity under the Verity License Agreement with respect to TLANDO, may not be adequate or successful and any collaborators could terminate or materially reduce the effort they direct to our products.
If our license arrangements with Antares, or any future license or collaboration we may enter into, if any, are not successful, our business, financial condition, results of operations, prospects and development and commercialization efforts may be adversely affected.
If our license arrangements with Verity, or any future license or collaboration we may enter into, if any, are not successful, our business, financial condition, results of operations, prospects and development and commercialization efforts may be adversely affected.
LPCN 1148 is in a very early stage of development and consequently the risk that we may fail to commercialize or partner LPCN 1148 and related products is high. This development program is susceptible to technical failures in ongoing and future clinical studies, and regulatory hurdles for further testing and/or meeting FDAs needs for NDA filing or approval.
LPCN 1148 is in a very early stage of development and consequently the risk that we may fail to commercialize or partner LPCN 1148 and related products is high. This development program is susceptible to technical failures in future clinical studies and regulatory hurdles for further testing and/or meeting the FDA’s needs for NDA filing or approval.
We rely on a limited third-party supplier for our supply NAS, the active pharmaceutical ingredient of LPCN 1154 and LPCN 2101. Since there are only a limited number of NAS suppliers in the world, if a supplier ceases to provide us with NAS, we may be unable to procure NAS on developmental or commercially favorable terms.
We rely on a limited third-party supplier for our supply of NAS, the active pharmaceutical ingredients of LPCN 1154, LPCN 2101, and LPCN 2203. Since there are only a limited number of NAS suppliers in the world, if a supplier ceases to provide us with NAS, we may be unable to procure NAS on developmental or commercially favorable terms.
The actual timing of these events can vary dramatically due to factors such as slow enrollment of subjects in studies, uncertainties in scale-up, manufacturing and formulation of our compounds, failures in research, the inability to identify clinical candidates, failures in our clinical trials, requirements for additional clinical trials and uncertainties inherent in the regulatory approval process and regulatory submissions.
The actual timing of these events can vary dramatically due to factors such as available capital resources, slow enrollment of subjects in studies, uncertainties in scale-up, manufacturing and formulation of our compounds, failures in research, the inability to identify clinical candidates, failures in our clinical trials, requirements for additional clinical trials and uncertainties inherent in the regulatory approval process and regulatory submissions.
Obtaining approval of any of our product candidates is an extensive, lengthy, expensive and uncertain process, and the FDA may delay, limit or deny approval for many reasons, including: ● we may not be able to demonstrate that the product candidate is safe and effective to the satisfaction of the FDA; ● the results of our clinical trials may not meet the level of statistical or clinical significance required by the FDA for marketing approval; ● the FDA may disagree with the number, design, size, conduct or implementation of our clinical trials; ● the contract research organization that we retain to manage our clinical trials may take actions outside of our control that materially adversely impact our clinical trials; ● the FDA may not find the data from preclinical studies and clinical trials sufficient to demonstrate that a particular product candidate’s clinical and other benefits outweigh its safety risks; ● the FDA may disagree with our interpretation of data from our preclinical studies and clinical trials or may require that we conduct additional trials; ● the FDA may not accept data generated at our clinical trial sites; ● if an NDA, once submitted, is reviewed by an Advisory Committee, the FDA may have difficulties scheduling an Advisory Committee meeting in a timely manner or the Advisory Committee may recommend against approval of our application or may recommend that the FDA require, as a condition of approval, additional preclinical studies or clinical trials, limitations on approved labeling or distribution and use restrictions; ● the FDA may require development of a REMS as a condition of approval; ● the FDA may require longer or additional duration of stability data on the clinical lots prior to initiation of further clinical trials; ● the FDA may identify deficiencies in the formulation or stability of our product candidates or products, or relating to our manufacturing processes or facilities, or in the processes and facilities of the contract manufacturing organization (“CMO”), our suppliers, or other third parties that may be utilized in the production supply chain of our products; and ● with respect to LPCN 1111, the FDA may not grant a 3-year exclusivity as the active is a Testosterone prodrug.
Obtaining approval of any of our product candidates is an extensive, lengthy, expensive and uncertain process, and the FDA may delay, limit or deny approval for many reasons, including: ● we may not be able to demonstrate that the product candidate is safe and effective to the satisfaction of the FDA; ● the results of our clinical trials may not meet the level of statistical or clinical significance required by the FDA for marketing approval; ● the FDA may disagree with the number, design, size, conduct or implementation of our clinical trials; ● the contract research organization that we retain to manage our clinical trials may take actions outside of our control that materially adversely impact our clinical trials; ● the FDA may not find the data from preclinical studies and clinical trials sufficient to demonstrate that a particular product candidate’s clinical and other benefits outweigh its safety risks; ● the FDA may disagree with our interpretation of data from our preclinical studies and/or clinical trials or may require that we conduct additional trials; ● the FDA may not accept data generated at our clinical trial sites; ● if an NDA, once submitted, is reviewed by an Advisory Committee, the FDA may have difficulties scheduling an Advisory Committee meeting in a timely manner or the Advisory Committee may recommend against approval of our application or may recommend that the FDA require, as a condition of approval, additional preclinical studies or clinical trials, limitations on approved labeling or distribution and use restrictions; ● the FDA may require development of a REMS as a condition of approval; ● the FDA may require longer or additional duration of stability data on the clinical lots prior to initiation of further clinical trials; and ● the FDA may identify deficiencies in the formulation or stability of our product candidates or products, or relating to our manufacturing processes or facilities, or in the processes and facilities of the contract manufacturing organization (“CMO”), our suppliers, or other third parties that may be utilized in the production supply chain of our products.
We expect our research and development expenses to increase in connection with clinical trials associated with our oral neuroactive steroids LPCN 1154 and LPCN 2101, LPCN 1148, and LPCN 1111, LPCN 1144, and LPCN 1107, if further clinical trials are initiated.
We expect our research and development expenses to increase in connection with clinical trials associated with our oral neuroactive steroids LPCN 1154, LPCN 2101, LPCN 2203, and LPCN 1148, and LPCN 1144 and LPCN 1107, if further clinical trials are initiated.
Supreme Court has changed some standards relating to the granting of patents and assessing the validity of patents. As a consequence, issued patents may be found to contain invalid claims according to the newly revised standards.
Supreme Court has changed and continues to change some standards relating to the granting of patents and assessing the validity of patents. As a consequence, issued patents may be found to contain invalid claims according to the newly revised standards.
In the event that we seek regulatory approval of TLANDO outside the United States, such markets have requirements for approval of drug candidates with which we must comply prior to marketing.
In the event that we seek regulatory approval of TLANDO outside the United States and Canada, such markets have requirements for approval of drug candidates with which we must comply prior to marketing.
If our licensee is unable to successfully launch TLANDO commercially at scale, our business and operations could be adversely affected. We will not be able to successfully commercialize our product candidates without establishing sales, marketing and market access capabilities internally or through collaborators. We currently do not have a sales, marketing and market access staff.
If our Licensee is unable to successfully commercialize TLANDO at scale, our business and operations could be adversely affected. We will not be able to successfully commercialize our product candidates without establishing sales, marketing and market access capabilities internally or through collaborators. We currently do not have sales, marketing and market access staff.
As of December 31, 2022, our executive officers and directors beneficially owned approximately 5.5% of our common stock. These stockholders, if they act together, may be able to influence our management and affairs and all matters requiring stockholder approval, including significant corporate transactions.
As of December 31, 2023, our executive officers and directors beneficially owned approximately 5.9% of our common stock. These stockholders, if they act together, may be able to influence our management and affairs and all matters requiring stockholder approval, including significant corporate transactions.
These current class action lawsuits and any future class action litigation that may be initiated against us may result in us incurring substantial costs and our management’s attention may be diverted from our operations, which could significantly harm our business. In addition, such litigation could lead to increased volatility in our share price.
Any future class action litigation that may be initiated against us may result in us incurring substantial costs and our management’s attention may be diverted from our operations, which could significantly harm our business. In addition, such litigation could lead to increased volatility in our share price.
In addition, our capital resources may be consumed more rapidly if we pursue additional clinical studies for LPCN 1154, LPCN 2101, LPCN 1148, LPCN 1111, LPCN 1144, and LPCN 1107.
In addition, our capital resources may be consumed more rapidly if we pursue additional clinical studies for LPCN 1154, LPCN 2101, LPCN 2203, LPCN 1148, LPCN 1144, and LPCN 1107.
Negative outcomes from such studies could adversely affect the ability of Antares to successfully commercialize TLANDO, which would adversely affect our ability to realize royalty revenue under the Antares License Agreement. 29 If we fail to obtain adequate healthcare reimbursement for our products, our revenue-generating ability will be diminished and there is no assurance that the anticipated market for our products will be sustained.
Negative outcomes from such studies could adversely affect the ability of Verity to successfully commercialize TLANDO, which would adversely affect our ability to realize royalty revenue under the Verity License Agreement. 28 If we fail to obtain adequate healthcare reimbursement for our products, our revenue-generating ability will be diminished and there is no assurance that the anticipated market for our products will be sustained.
Consequently, our ability to generate any revenues from TLANDO with respect to TRT in the U.S. depends on the efforts of Antares to commercialize TLANDO. We have very limited control over the amount and timing of resources that Antares dedicates to these efforts.
Consequently, our ability to generate any revenues from TLANDO with respect to TRT in the U.S. and Canada depends on the efforts of Verity to commercialize TLANDO. We have very limited control over the amount and timing of resources that Verity dedicates to these efforts.
The pre-funded warrants were issued in lieu of common stock in order to ensure the purchaser did not exceed certain beneficial ownership limitations. The pre-funded warrants were immediately exercisable at an exercise price of $.0001 per share, subject to adjustment.
The pre-funded warrants were issued in lieu of common stock in order to ensure the purchaser did not exceed certain beneficial ownership limitations. The pre-funded warrants were immediately exercisable at an exercise price of $0.0017 per share, subject to adjustment.
We anticipate that we will face intense and increasing competition as new drugs enter the market and advanced technologies become available. Failure to successfully compete in this market would materially and negatively impact our business and operations. 32 Our licensee’s ability to commercialize TLANDO may be limited. Our licensee partner’s ability to commercialize TLANDO is uncertain.
We anticipate that we will face intense and increasing competition as new drugs enter the market and advanced technologies become available. Failure to successfully compete in this market could materially and negatively impact our business and operations. 31 Our Licensee’s ability to commercialize TLANDO may be limited. Our Licensee partner’s ability to commercialize TLANDO is uncertain.
Under the PREA, our licensing partner, Antares, will need to address the PREA requirement to assess the safety and effectiveness of TLANDO in pediatric patients.
Under the PREA, our licensing partner, Verity, will need to address the PREA requirement to assess the safety and effectiveness of TLANDO in pediatric patients.
As such, our product development processes for LPCN 1154, LPCN 2101, LPCN 1148, LPCN 1111, LPCN 1144, and LPCN 1107 are very risky and uncertain, and our product candidates may fail to advance beyond the current study.
As such, our product development processes for LPCN 1154, LPCN 2101, LPCN 2203, and LPCN 1148, in addition to LPCN 1111, LPCN 1144, and LPCN 1107 are very risky and uncertain, and our product candidates may fail to advance beyond the current study.
In addition, any increase in price for testosterone esters will likely reduce our potential gross margins for LPCN 1111, LPCN 1148 and LPCN 1144. We rely on limited suppliers for our supply of NAS, the active pharmaceutical ingredient of LPCN 1154 and LPCN 2101, and the loss of these limited suppliers could harm our business.
In addition, any increase in price for testosterone esters will likely reduce our potential gross margins for LPCN 1148 and LPCN 1144. We rely on limited suppliers for our supply of NAS, the active pharmaceutical ingredients of LPCN 1154, LPCN 2101, and LPCN 2203 and the loss of these limited suppliers could harm our business.
As part of their approval, the FDA required the inclusion of certain warnings and precautions in our labeling for TLANDO, including a “black box warning,” including warnings relating to blood pressure increases and an indication that the safety and efficacy of TLANDO in males less than 18 years has not been established.
On March 29, 2022, the FDA approved TLANDO. As part of their approval, the FDA required the inclusion of certain warnings and precautions in our labeling for TLANDO, including a “black box warning,” including warnings relating to blood pressure increases and an indication that the safety and efficacy of TLANDO in males less than 18 years has not been established.
We have only conducted Phase 1 clinical studies of these programs and the ultimate regulatory or technical success of each of the neuroactive steroids under investigation in these programs is uncertain.
We have only conducted Phase 1 clinical studies of LPCN 2101 and the ultimate regulatory or technical success of the neuroactive steroids under investigation in these programs is uncertain.
The Centers for Medicare and Medicaid Services issued an interim final rule on November 20, 2020, that would tie prices for certain drugs under Medicare Part B to the lowest price for those drugs available in certain countries that are members of the Organization for Economic Co-operation and Development.
The Centers for Medicare and Medicaid Services issued an interim final rule on November 20, 2020, that would tie prices for certain drugs under Medicare Part B to the lowest price for those drugs available in certain countries that are members of the Organization for Economic Co-operation and Development. This rule was rescinded in December 2021.
While we believe we have sufficient liquidity and capital resources to fund our projected operating requirements through at least March 31, 2024, we will need to raise additional capital at some point through the equity or debt markets or through out-licensing activities, either before or after March 31, 2024, to support our operations, the on-going clinical development of LPCN 1154, and compliance with regulatory requirements.
While we believe we have sufficient liquidity and capital resources to fund our projected operating requirements through at least March 31, 2025, we will need to raise additional capital at some point through the equity or debt markets or through out-licensing activities, either before or after March 31, 2025, to support our operations, the on-going clinical development of our product candidates, and compliance with regulatory requirements.
We face an inherent risk of product liability as a result of the clinical testing of our product candidates and will face an even greater risk on commercialized products. Human therapeutic products involve the risk of product liability claims and associated adverse publicity.
We may become subject to the risk of product liability claims. We face an inherent risk of product liability as a result of the clinical testing of our product candidates and will face an even greater risk on commercialized products. Human therapeutic products involve the risk of product liability claims and associated adverse publicity.
If we, or any future marketing collaborators or CMOs, fail to comply with applicable regulatory requirements, we may be subject to sanctions including fines, product recalls or seizures and related publicity requirements, injunctions, total or partial suspension of production, civil penalties, suspension or withdrawals of previously granted regulatory approvals, warning or untitled letters, refusal to approve pending applications for marketing approval of new products or of supplements to approved applications, import or export bans or restrictions, and criminal prosecution and penalties.
This could result in a product not being approved. 32 If we, or any future marketing collaborators or CMOs, fail to comply with applicable regulatory requirements, we may be subject to sanctions including fines, product recalls or seizures and related publicity requirements, injunctions, total or partial suspension of production, civil penalties, suspension or withdrawals of previously granted regulatory approvals, warning or untitled letters, refusal to approve pending applications for marketing approval of new products or of supplements to approved applications, import or export bans or restrictions, and criminal prosecution and penalties.
Our future capital requirements may be substantial and will depend on many factors including: ● market conditions for raising capital, particularly for life science companies; ● current and future clinical trials for our product candidates, including for LPCN 1154, LPCN 2101, and LPCN 1148; ● regulatory actions of the FDA; 46 ● the scope, size, rate of progress, results and costs of completing ongoing clinical trials and development plans with our product candidates; ● the cost, timing and outcomes of our efforts to obtain marketing approval for our product candidates in the United States; ● payments received under any current or future license agreements, strategic partnerships or collaborations; ● the cost of filing, prosecuting and enforcing patent claims; ● the costs associated with commercializing our product candidates if we receive marketing approval for product candidates other than TLANDO, including the cost and timing of developing internal sales and marketing capabilities or entering into strategic collaborations to market and sell our products; ● the costs of on-going and future litigation; ● covenants in the Securities Purchase Agreements entered into in the February 2020 Offering and the November 2019 Offering restricting our ability to enter into variable rate transactions; and ● funding additional product line expansions.
Our future capital requirements may be substantial and will depend on many factors including: ● market conditions for raising capital, particularly for life science companies; ● current and future clinical trials for our product candidates, including for LPCN 1154, LPCN 2101, LPCN 2203 and LPCN 1148; ● regulatory actions of the FDA; ● the scope, size, rate of progress, results and costs of completing ongoing clinical trials and development plans with our product candidates; ● the cost, timing and outcomes of our efforts to obtain marketing approval for our product candidates in the United States; ● payments received under any current or future license agreements, strategic partnerships or collaborations; ● the cost of filing, prosecuting and enforcing patent claims; ● the costs associated with commercializing our product candidates if we receive marketing approval for product candidates other than TLANDO, including the cost and timing of developing internal sales and marketing capabilities or entering into strategic collaborations to market and sell our products; ● the costs of on-going and future litigation; and ● funding additional product line expansions.
We have incurred losses in most years since our inception. As of December 31, 2022, we had an accumulated deficit of $183.4 million. Substantially all of our operating losses resulted from costs incurred in connection with our research and development programs and from general and administrative costs associated with our operations.
We have incurred losses in most years since our inception. As of December 31, 2023, we had an accumulated deficit of $199.8 million. Substantially all of our operating losses resulted from costs incurred in connection with our research and development programs and from general and administrative costs associated with our operations.
These actions could have a material impact on our stock price. In order to complete a financing, or for other business reasons, we may elect to consolidate our shares of common stock. Investors may not agree with these actions and may sell our shares.
These actions could have a material impact on our stock price. In order to complete a financing, or for other business reasons, we may elect to consolidate our shares of common stock. Investors may not agree with these actions and may sell our shares. We may have little or no ability to impact or alter such decisions.
Likewise, our United States patents covering certain technology used in our product candidates, including TLANDO, are expected to expire on various dates from 2023 through 2037.
Likewise, our United States patents covering certain technology used in our product candidates, including TLANDO, are expected to expire on various dates through 2041.
In addition, a number of companies in the pharmaceutical and biotechnology industries have suffered significant setbacks in late-stage clinical trials, even after achieving positive results in early-stage development. The FDA currently insists on histopathology endpoint for diagnosis and assessment of efficacy in a pivotal trial.
In addition, a number of companies in the pharmaceutical and biotechnology industries have suffered significant setbacks in late-stage clinical trials, even after achieving positive results in early-stage development. The FDA currently insists on histopathology endpoints for diagnosis and assessment of efficacy of treatment for NASH with LPCN 1144 in a pivotal trial.
The ramifications of the results of these studies conducted by Antares, or the ramifications of Antares’ inability or unwillingness to conduct these studies, are unknown to us and would be the between Antares and the FDA.
The ramifications of the results of these studies conducted by Verity, or the ramifications of Verity’s inability or unwillingness to conduct these studies, are unknown to us and would be the between Verity and the FDA.
We may not be able to further test in-clinic due to other regulatory hurdles in a timely manner or at all. In addition, our oral NAS product candidates may not be effective in treating PPD or WWE or may not have differentiation from competitive products on the market or in development.
We may not be able to further test in-clinic in a timely manner or at all due to other regulatory hurdles. In addition, our oral NAS product candidate LPCN 2203 may not be effective in treating ET or may not have differentiation from competitive products on the market or in development.
LPCN 1148 is in a very early stage of development and is currently undergoing Phase 2 clinical evaluation in a proof-of-concept study for management of liver cirrhosis in male patients and while there are no therapies specifically approved by the FDA for secondary sarcopenia or cirrhosis beyond treatment of underlying conditions, there are candidates known to be under development for cirrhosis related indication(s).
LPCN 1148 is in a very early stage of development for management of liver cirrhosis in male patients and while there are no therapies specifically approved by the FDA for secondary sarcopenia or cirrhosis beyond treatment of underlying conditions, there are candidates known to be under development for cirrhosis related indication(s).
In order to commercialize our TLANDO product candidates in the United States, we have partnered with Antares with respect to TLANDO and we will likely look to establish a partnership arrangements with respect to the development of some of our other product candidates.
In order to commercialize our TLANDO product candidates in the United States and Canada, we have partnered with Verity with respect to TLANDO and LPCN 1111 and we will likely look to establish partnership arrangements with respect to the development of some of our other product candidates.
Also, market conditions and the number of authorized shares we have available may prevent us from accessing the debt and equity capital markets, including sales of our common stock through the ATM Offering (as defined below).
Also, market conditions may prevent us from accessing the debt and equity capital markets, including sales of our common stock through the ATM Offering (as defined below).

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Item 2. Properties

Properties — owned and leased real estate

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Biggest changeITEM 2. PROPERTIES Our corporate headquarters are located in a leased facility in Salt Lake City, Utah. Our lease expires on February 28, 2024. We believe that our existing facility is suitable and adequate and that we have sufficient capacity to meet our current anticipated needs.
Biggest changeITEM 2. PROPERTIES Our corporate headquarters are located in a leased facility in Salt Lake City, Utah. Our lease expires on February 28, 2025. We believe that our existing facility is suitable and adequate and that we have sufficient capacity to meet our current anticipated needs.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeIn April 2022, we amended the Global Agreement with Clarus in an Amended Settlement Agreement and we agreed to settle the payments due in July 2022 and 2023 for $1,250,000 rather than the $1,500,000 total future payments due under the terms of the Global Agreement agreed to in 2021. No future royalties are owing from either party.
Biggest changeIn April 2022, we agreed to an amendment to Section 3.1 of the Global Agreement with Clarus pursuant to which we agreed to settle the payments due in July 2022 and 2023 for $1,250,000 rather than the $1,500,000 total future payments due. No future royalties are owing from either party.
Under the terms of the Global Agreement, Lipocine agreed to pay Clarus $4.0 million payable as follows: $2.5 million immediately, $1.0 million on July 13, 2022, and $500,000 on July 13, 2023.
Under the terms of the Global Agreement, Lipocine agreed to pay Clarus $4.0 million payable as follows: $2.5 million immediately, $1.0 million on July 13, 2022, and $500,000 on July 13, 2023. On July 15, 2021, the Court dismissed with prejudice Lipocine’s claims and Clarus’ counterclaims.
Removed
On July 15, 2021, the Court dismissed with prejudice Lipocine’s claims and Clarus’ counterclaims. On April 29, 2022, the Company agreed to an amendment to Section 3.1 of the Global Agreement, pursuant to which the Company agreed to pay Clarus $1,250,000 in May 2022, with no additional payments required thereafter. No future royalties are owing from either party.
Added
On April 14, 2023, a judgment was issued ordering the case dismissed with prejudice and closure of the action. ITEM 4. MINE SAFETY DISCLOSURES Not Applicable. 52 PART II
Removed
We filed a motion to dismiss this class action lawsuit on July 24, 2020. In response, the plaintiffs filed their response to the motion to dismiss the class action lawsuit on September 22, 2020, and we filed our reply to our motion to dismiss on October 22, 2020.
Removed
A hearing on the motion to dismiss occurred on January 12, 2022 and there has been no update on the motion to dismiss since the hearing occurred.
Removed
We intend to vigorously defend ourselves against these allegations and have not recorded a liability related to this shareholder class action lawsuit as the outcome is not probable nor can an estimate be made of loss, if any. On March 13, 2020, we filed U.S. patent application serial number 16/818,779 (the “Lipocine ‘779 Application”) with the USPTO.
Removed
On October 16 and November 3, 2020, we filed suggestions for interference with the USPTO requesting that a patent interference be declared between the Lipocine ‘779 Application and US patent application serial number 16/656,178 to Clarus Therapeutics, Inc. (the “Clarus ‘178 Application”).
Removed
Pursuant to our request, the Patent Trial and Appeal Board (“PTAB”) at the USPTO declared the interference on January 4, 2021, to ultimately determine, as between us and Clarus, who is entitled to the claimed subject matter. The interference number is 106,128, and we were initially declared Senior Party.
Removed
A conference call with the PTAB was held on January 25, 2021, to discuss proposed motions. On February 1, 2021, the PTAB issued an order authorizing certain motions and setting the schedule for the preliminary motions phase. On July 13, 2021, we entered into the Global Agreement with Clarus to resolve interference No. 106,128 among other items.
Removed
On July 26, 2021, the PTAB granted our request for adverse judgment in interference No. 106,128 in accordance with the Global Agreement.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeITEM 5. MARKET FOR THE REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Market Information Our common stock is quoted on The NASDAQ Capital Market under the symbol “LPCN”. Holders As of March 7, 2023, there were approximately 90 holders of record of our common stock.
Biggest changeITEM 5. MARKET FOR THE REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Market Information Our common stock is quoted on The NASDAQ Capital Market under the symbol “LPCN”. Holders As of March 5, 2024, there were approximately 87 holders of record of our common stock.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeResults of Operations Comparison of the Years Ended December 31, 2022 and 2021 The following table summarizes our results of operations for the years ended December 31, 2022 and 2021: Years Ended December 31, 2022 2021 Variance Revenue $ 500,000 $ 16,140,838 $ (15,640,838 ) Research and development expenses 8,556,888 7,665,559 891,329 General and administrative expenses 4,062,487 5,329,776 (1,267,289 ) Interest and investment income (572,578 ) (67,700 ) (504,878 ) Interest expense 27,098 203,292 (176,194 ) Unrealized gain on warrant liability (565,940 ) (355,890 ) 210,050 (Gain) loss on litigation settlement (250,000 ) 4,000,000 (4,250,000 ) Income tax expense 681 200 481 Revenue We recognized license revenue of $500,000 during the year ended December 31, 2022, compared to $16.1 million during the year ended December 31, 2021.
Biggest changeResults of Operations Comparison of the Years Ended December 31, 2023 and 2022 The following table summarizes our results of operations for the years ended December 31, 2023 and 2022: Years Ended December 31, 2023 2022 Variance Revenue $ (2,850,818 ) $ 500,000 $ (3,350,818 ) Research and development expenses 10,175,251 8,556,888 1,618,363 General and administrative expenses 4,904,888 4,062,487 842,401 Interest and investment income 1,366,940 572,578 794,362 Interest expense - (27,098 ) 27,098 Unrealized gain on warrant liability 212,690 565,940 (353,250 ) Gain on litigation settlement - 250,000 (250,000 ) Income tax expense (755 ) (681 ) (74 ) Revenue We recognized a net reversal of variable consideration revenue of $2.9 million during the year ended December 31, 2023, compared to revenue of $500,000 during the year ended December 31, 2022.
In general, the cost of clinical trials may vary significantly over the life of a project as a result of uncertainties in clinical development, including, among others: ● the number of sites included in the trials; ● the length of time required to enroll suitable subjects; ● the duration of subject follow-ups; ● the length of time required to collect, analyze and report trial results; ● the cost, timing and outcome of regulatory review; and ● potential changes by the FDA in clinical trial and NDA filing requirements.
In general, the cost of clinical trials may vary significantly over the life of a project as a result of uncertainties in clinical development, including, among others: ● the number of sites included in the trials; ● the length of time required to enroll suitable subjects; 55 ● the duration of subject follow-ups; ● the length of time required to collect, analyze and report trial results; ● the cost, timing and outcome of regulatory review; and ● potential changes by the FDA in clinical trial and NDA filing requirements.
Clinical development timelines, the probability of success and development costs can differ materially from expectations and results from our clinical trials may not be favorable. If we are successful in progressing LPCN 1154, LPCN 2101, or other future product candidates into later stage development, we will require additional capital.
Clinical development timelines, the probability of success and development costs can differ materially from expectations and results from our clinical trials may not be favorable. If we are successful in progressing LPCN 1154, LPCN 2101, LPCN 2203 or other future product candidates into later stage development, we will require additional capital.
We are exploring the possibility of licensing LPCN 1144, LPCN 1148, LPCN 1111 and LPCN 1107, although we have not entered into a licensing agreement and no assurance can be given that any license agreement will be completed, or, if an agreement is completed, that such an agreement would be on terms favorable to us.
We are exploring the possibility of licensing LPCN 1144, LPCN 1148, and LPCN 1107, although we have not entered into a licensing agreement and no assurance can be given that any license agreement will be completed, or, if an agreement is completed, that such an agreement would be on terms favorable to us.
Given the stage of clinical development and the significant risks and uncertainties inherent in the clinical development, manufacturing and regulatory approval process, we are unable to estimate with any certainty the time or cost to complete the development of LPCN 1154, LPCN 2101, LPCN 1148, LPCN 1144, LPCN 1111, LPCN 1107 and other product candidates.
Given the stage of clinical development and the significant risks and uncertainties inherent in the clinical development, manufacturing and regulatory approval process, we are unable to estimate with any certainty the time or cost to complete the development of LPCN 1154, LPCN 2101, LPCN 2203, LPCN 1148, LPCN 1144, LPCN 1111, LPCN 1107 and other product candidates.
We have entered into the Antares license agreement with the potential for revenue from future milestones and royalties, but we may never generate revenues from any of our clinical or preclinical development programs or licensed products as we may never succeed in obtaining regulatory approval or commercializing any of these product candidates.
We have entered into the Verity License Agreement with the potential for revenue from future milestones and royalties, but we may never generate revenues from any of our clinical or preclinical development programs or licensed products as we may never succeed in obtaining regulatory approval or commercializing any of these product candidates.
Net cash used in financing activities during the year ended December 31, 2022 was mainly due to loan repayments of $1.7 million and payment of the Final Payment Charge of $650,000 related to the SVB Loan and Security Agreement, offset by net proceeds from stock option exercises.
Net cash used in financing activities during the year ended December 31, 2022 was mainly due to loan repayments of $1.7 million and payment of the Final Payment Charge of $650,000 related to the SVB Loan and Security Agreement, offset by $211,000 in cash provided by proceeds from stock option exercises.
While we believe we have sufficient liquidity and capital resources to fund our projected operating requirements through at least March 31, 2024, we will need to raise additional capital at some point through the equity or debt markets or through additional out-licensing activities, either before or after March 31, 2024, to support our operations.
While we believe we have sufficient liquidity and capital resources to fund our projected operating requirements through at least March 31, 2025, we will need to raise additional capital at some point through the equity or debt markets or through additional out-licensing activities, either before or after March 31, 2025, to support our operations.
Interest Expense The decrease in interest expense during the year ended December 31, 2022 is due to a decrease in interest expense on our Loan and Security Agreement with SVB, mainly as a result of lower principal balances in 2022 compared to 2021. The SVB loan matured and was paid in full in June of 2022.
Interest Expense The decrease in interest expense during the year ended December 31, 2023 is due to a decrease in interest expense on our Loan and Security Agreement with SVB, mainly as a result of lower principal balances in 2023 compared to 2022 as the SVB loan matured and was paid in full in June of 2022.
We have incurred operating losses in most years since our inception and we expect to continue to incur operating losses into the foreseeable future as we advance clinical development of LPCN 1154, LPCN 2101, LPCN 1148 and any other product candidate, including continued research efforts.
We have incurred operating losses in most years since our inception and we expect to continue to incur operating losses into the foreseeable future as we advance clinical development of LPCN 1154, LPCN 2101, LPCN 2203 and any other product candidate, including continued research efforts.
We have based this estimate on assumptions that may prove to be wrong, and we could utilize our available capital resources sooner than we currently expect if additional activities are performed by us including new clinical studies for LPCN 1144, LPCN 1111, and LPCN 1107.
We have based this estimate on assumptions that may prove to be wrong, and we could utilize our available capital resources sooner than we currently expect if additional activities are performed by us including new clinical studies for LPCN 1148, LPCN 1144, and/or LPCN 1107.
In addition, our capital resources may be consumed more rapidly if we pursue additional clinical studies for LPCN 1154, LPCN 2101, LPCN 1148, LPCN 1144, LPCN 1111, and/or LPCN 1107.
In addition, our capital resources may be consumed more rapidly if we pursue additional clinical studies for LPCN 1154, LPCN 2101, LPCN 2203, LPCN 1148, LPCN 1144, and/or LPCN 1107.
To fund future operations, we will need to ultimately raise additional capital and our requirements will depend on many factors, including the following: ● the scope, rate of progress, results and cost of our clinical studies, preclinical testing and other related activities for all of our product candidates, including LPCN 1154 and LPCN 2101, LPCN 1148, LPCN 1111, LPCN 1144, LPCN 1107 and; ● the cost of manufacturing clinical supplies, and establishing commercial supplies, of our product candidates and any products that we may develop; ● the cost and timing of establishing sales, marketing and distribution capabilities, if any; ● the terms and timing of any collaborative, licensing, settlement and other arrangements that we may establish; ● the number and characteristics of product candidates that we pursue; ● the cost, timing and outcomes of regulatory approvals; ● the timing, receipt and amount of sales, profit sharing or royalties, if any, from our potential products; ● the cost of preparing, filing, prosecuting, defending and enforcing any patent claims and other intellectual property rights; ● the extent to which we acquire or invest in businesses, products or technologies, although we currently have no commitments or agreements relating to any of these types of transactions; and ● the extent to which we grow significantly in the number of employees or the scope of our operations. 61 Funding may not be available to us on favorable terms, or at all.
To fund future operations, we will need to ultimately raise additional capital and our requirements will depend on many factors, including the following: ● the scope, rate of progress, results and cost of our clinical studies, preclinical testing and other related activities for all of our product candidates, including LPCN 1154, LPCN 2101 and LPCN 2203, LPCN 1148, LPCN 1144, LPCN 1107; 59 ● the cost of manufacturing clinical supplies, and establishing commercial supplies, of our product candidates and any products that we may develop; ● the cost and timing of establishing sales, marketing and distribution capabilities, if any; ● the terms and timing of any collaborative, licensing, settlement and other arrangements that we may establish; ● the number and characteristics of product candidates that we pursue; ● the cost, timing and outcomes of regulatory approvals; ● the timing, receipt and amount of sales, profit sharing or royalties, if any, from our potential products; ● the cost of preparing, filing, prosecuting, defending and enforcing any patent claims and other intellectual property rights; ● the extent to which we acquire or invest in businesses, products or technologies, although we currently have no commitments or agreements relating to any of these types of transactions; and ● the extent to which we grow significantly in the number of employees or the scope of our operations.
Operating Leases In August 2004, we entered into an agreement to lease our facility in Salt Lake City, Utah consisting of office and laboratory space which serves as our corporate headquarters. On January 16, 2023, we modified and extended the lease through February 28, 2024.
Operating Leases In August 2004, we entered into an agreement to lease our facility in Salt Lake City, Utah consisting of office and laboratory space which serves as our corporate headquarters. On January 24, 2024, we modified and extended the lease through February 28, 2025.
We are exploring the possibility of licensing LPCN 1021 (known as TLANDO in the United States) to third parties outside the United States, although no licensing agreement has been entered into by the Company.
We are exploring the possibility of licensing LPCN 1021 (known as TLANDO in the United States) and LPCN 1111 to third parties outside the United States and Canada, although no licensing agreement has been entered into by the Company.
We currently have registered up to $50.0 million for sale under the Sales Agreement, pursuant to our Registration Statement on Form S-3 (File No. 333-250072) (the “Form S-3”), through Cantor as our sales agent.
We currently have registered up to $50.0 million for sale under the Sales Agreement, pursuant to our Registration Statement on Form S-3 (the “Form S-3”), through Cantor as our sales agent.
We believe that our existing capital resources, together with interest thereon, will be sufficient to meet our projected operating requirements through at least March 31, 2024 which include on-going clinical studies for LPCN 1154 and/or LPCN 2101 and an on-going study for LPCN 1148, and research and development activities and compliance with regulatory requirements.
We believe that our existing capital resources, together with interest thereon, will be sufficient to meet our projected operating requirements through at least March 31, 2025 which include on-going clinical studies for LPCN 1154 and/or LPCN 2101 or LPCN 2203 and research and development activities and compliance with regulatory requirements.
The offering of our common stock pursuant to the Sales Agreement will terminate upon the termination of the Sales Agreement as permitted therein. We and Cantor may each terminate the Sales Agreement at any time upon ten days’ prior notice.
We are not obligated to make any sales of our common stock under the Sales Agreement. The offering of our common stock pursuant to the Sales Agreement will terminate upon the termination of the Sales Agreement as permitted therein. We and Cantor may each terminate the Sales Agreement at any time upon ten days’ prior notice.
Unrealized Loss (Gain) on Warrant Liability We recorded a gain of $566,000 and $356,000, respectively, on warrant liability during the years ended December 31, 2022 and 2021 related to the change in the fair value of outstanding common stock warrants issued in the November 2019 Offering.
Unrealized Loss (Gain) on Warrant Liability We recorded gains of $213,000 and $566,000, respectively, on warrant liability during the years ended December 31, 2023 and 2022 related to the change in the fair value of outstanding common stock warrants issued in the November 2019 Offering.
As of December 31, 2022, we had an accumulated deficit of $183.4 million. Income and losses fluctuate year to year, primarily depending on the nature and timing of research and development occurring on our product candidates. Our net loss was $10.8 million for the year ended December 31, 2022, compared to $634,000 for the year ended December 31, 2021.
As of December 31, 2023, we had an accumulated deficit of $199.8 million. Income and losses fluctuate year to year, primarily depending on the nature and timing of research and development occurring on our product candidates. Our net loss was $16.4 million for the year ended December 31, 2023, compared to $10.8 million for the year ended December 31, 2022.
As of December 31, 2022, there was $1.0 million of total unrecognized compensation cost related to unvested share-based compensation arrangements granted under the Company’s stock option plan. Warrant Liability In connection with the November 2019 public offering, we issued warrants to purchase common stock.
As of December 31, 2023, there was $455,000 of total unrecognized compensation cost related to unvested share-based compensation arrangements granted under the Company’s stock option plan. Warrant Liability In connection with the November 2019 public offering, we issued warrants to purchase common stock.
On March 28, 2022, Antares received approval from the FDA for TLANDO as a TRT in adult males for conditions associated with a deficiency of endogenous testosterone, also known as hypogonadism.
On March 28, 2022, the FDA approved TLANDO as a TRT in adult males for conditions associated with a deficiency of endogenous testosterone, also known as hypogonadism.
We are also eligible to receive milestone payments of up to $160.0 million in the aggregate, depending on the achievement of certain sales milestones in a single calendar year with respect to all products licensed by Antares under the Antares License Agreement.
We are also eligible to receive milestone payments of up to $259 million in the aggregate, depending on the achievement of certain development milestones and sales milestones in a single calendar year with respect to all products licensed by Verity under the Verity License Agreement.
(“Antares” or our “Licensee”), pursuant to which we granted to Antares an exclusive, royalty-bearing, sublicensable right and license to develop and commercialize our TLANDO product for TRT in the U.S. TLANDO is a registered trademark assigned to Antares. Any FDA required post-marketing studies will also be the responsibility of our licensee, Antares.
(“Verity” or our “Licensee”), pursuant to which we granted to Verity an exclusive, royalty-bearing, sublicensable right and license to develop and commercialize the TLANDO product for TRT in the U.S. and Canada. Any FDA required post-marketing studies will also be the responsibility of our Licensee, Verity.
General and Administrative Expenses We recorded general and administrative expenses of $4.1 million and $5.3 million, respectively, for the years ended December 31, 2022 and 2021.
General and Administrative Expenses We recorded general and administrative expenses of $4.9 million and $4.1 million, respectively, for the years ended December 31, 2023 and 2022.
Since our inception through December 31, 2022, we have generated $44.7 million in revenue under our various license and collaboration arrangements and from government grants.
Since our inception through December 31, 2023, we have generated $41.9 million in revenue under our various license and collaboration arrangements and from government grants.
As of December 31, 2022, we had $32.5 million of unrestricted cash, cash equivalents and marketable investment securities compared to $46.6 million at December 31, 2021.
As of December 31, 2023, we had $22.0 million of unrestricted cash, cash equivalents and marketable investment securities compared to $32.5 million at December 31, 2022.
Our proprietary delivery technologies are designed to improve patient compliance and safety through orally available treatment options. Our primary development programs are based on oral delivery solutions for poorly bioavailable drugs. We have a portfolio of differentiated innovative product candidates that target high unmet needs for neurological and psychiatric CNS disorders, liver diseases, and hormone supplementation for men and women.
Our primary development programs are based on oral delivery solutions for poorly bioavailable drugs. We have a portfolio of differentiated innovative product candidates that target high unmet needs for neurological and psychiatric CNS disorders, liver diseases, and hormone supplementation for men and women.
Net Cash Provided by (Used In) Financing Activities During the year ended December 31, 2022, net cash used in financing activities was $2.1 million and during the year ended December 31, 2021 net cash provided from financing activities was $26.9 million.
Net Cash Provided by (Used In) Financing Activities During the year ended December 31, 2023, net cash provided by financing activities was $405,000 and during the year ended December 31, 2022 net used in financing activities was $2.1 million.
In addition to our CNS product candidates, we have assets for which we expect to seek partnerships to enable further development including LPCN 1144, an oral prodrug of androgen receptor modulator for the treatment of non-cirrhotic non-alcoholic steatohepatitis (“NASH”) which has completed Phase 2 testing; LPCN 1111, a next generation oral TRT product comprised of testosterone tridecanoate (“TT”) with the potential for once daily dosing which has completed Phase 2 testing; and LPCN 1107, potentially the first oral hydroxy progesterone caproate (“HPC”) product indicated for the prevention of recurrent preterm birth (“PTB”), which has completed a dose finding clinical study in pregnant women and has been granted orphan drug designation by the FDA.
In addition to our CNS product candidates, we have assets for which we expect to seek partnerships to enable further development including TLANDO for territories outside of North America, LPCN 1148 comprising a novel prodrug of testosterone, and testosterone laurate (“TL”), for the management of decompensated cirrhosis, LPCN 1144, an oral prodrug of androgen receptor modulator for the treatment of non-cirrhotic non-alcoholic steatohepatitis (“NASH”) which has completed Phase 2 testing; and LPCN 1107, potentially the first oral hydroxy progesterone caproate (“HPC”) product indicated for the prevention of recurrent preterm birth (“PTB”), which has completed a dose finding clinical study in pregnant women and has been granted orphan drug designation by the FDA.
General and administrative expenses also include expenses for the cost of preparing, filling and prosecuting patent applications and maintaining, enforcing and defending intellectual property-related claims, including the patent interference and patent infringement lawsuits against Clarus in 2021.
General and administrative expenses also include expenses for the cost of preparing, filling and prosecuting patent applications and maintaining, enforcing and defending intellectual property-related claims.
We may provide research and development services under collaboration arrangements to advance the development of jointly owned products. We record the expenses incurred and reimbursed on a net basis in research and development expense.
We may provide research and development services under collaboration arrangements to advance the development of jointly owned products. We record the expenses incurred and reimbursed on a net basis in research and development expense. As of December 31, 2023, we do not have any active collaboration agreements.
We expect to continue to incur significant expenses and operating losses for the foreseeable future as we: ● conduct further development of our other product candidates, including LPCN 1154, LPCN 2101 and LPCN 1148; ● continue our research efforts; ● research new products or new uses for our existing products; ● maintain, expand and protect our intellectual property portfolio; and ● provide general and administrative support for our operations, including on-going litigation. 55 To fund future long-term operations, including the potential commercialization of any of our product candidates, we will need to raise additional capital.
We expect to continue to incur significant expenses and operating losses for the foreseeable future as we: ● subject to resource availability, conduct further development of our other product candidates, including LPCN 1154, LPCN 2101, LPCN 2203, and LPCN 1148; ● continue our research efforts; ● research new products or new uses for our existing products; ● maintain, expand and protect our intellectual property portfolio; and ● provide general and administrative support for our operations.
Net cash provided by investing activities during 2022 was primarily the result of the maturity of marketable investment securities, net. Net cash used in investing activities in 2021 was due to the purchase of marketable securities. There were $134,000 and $8,000 capital expenditures for the years ended December 31, 2022, and 2021, respectively.
Net cash provided by investing activities during 2023 and 2022 was primarily the result of the maturity of marketable investment securities, net of $36.0 million and $59.5 million, respectively. There were $13,000 and $134,000 in capital expenditures for the years ended December 31, 2023 and 2022, respectively.
In addition, we receive tiered royalty payments at rates ranging from percentages in the mid-teens to up to 20% of net sales of TLANDO in the United States, subject to certain minimum royalty obligations. Our ability to realize benefits from the Antares License Agreement, including milestone and royalty payments, is subject to a number of risks.
In addition, we receive tiered royalty payments at rates ranging from percentages of 12% up to 18% of net sales of all products licensed to Verity in the United States and Canada. Our ability to realize benefits from the Verity License Agreement, including milestone and royalty payments, is subject to a number of risks.
Sources and Uses of Cash The following table provides a summary of our cash flows for the years ended December 31, 2022 and 2021: Years ended December 31, 2022 2021 Cash used in operating activities $ (11,968,819 ) $ (4,411,303 ) Cash provided by (used in) investing activities 14,293,707 (43,780,397 ) Cash provided by (used in) financing activities (2,126,944 ) 26,924,870 Net Cash Used in Operating Activities During the years ended December 31, 2022 and 2021, net cash used in operating activities was $12.0 million and $4.4 million, respectively.
Sources and Uses of Cash The following table provides a summary of our cash flows for the years ended December 31, 2023 and 2022: Years Ended December 31, 2023 2022 Cash used in operating activities $ (11,865,991 ) $ (11,968,819 ) Cash provided by investing activities 13,084,686 14,293,707 Cash provided by (used in) financing activities 404,567 (2,126,944 ) Net Cash Used in Operating Activities During each of the years ended December 31, 2023 and 2022, net cash used in operating activities was $11.9 and $12.0 million, respectively.
We intend to focus on the development of endogenous neuroactive steroids (“NAS”) which have broad applicability in treating various CNS conditions where we can leverage our technology platform to develop highly differentiated oral therapeutics. Our priority is on the development of LPCN 1154, a fast-acting oral antidepressant for postpartum depression (“PPD”) with potential for outpatient use.
We intend to focus on the development of endogenous neuroactive steroids (“NAS”) which have broad applicability in treating various CNS conditions where we can leverage our technology platform to develop highly differentiated oral therapeutics.
Also, market conditions may prevent us from accessing the debt and equity capital markets, including sales of our common stock through the Sales Agreement.
Funding may not be available to us on favorable terms, or at all. Also, market conditions may prevent us from accessing the debt and equity capital markets, including sales of our common stock through the Sales Agreement.
These increases are offset by a $1.2 million decrease in contract research organization expense and outside consulting costs related to the LPCN 1144 LiFT Phase 2 clinical study in NASH subjects, a $319,000 decrease in our LPCN 1107 clinical study, and a $81,000 decrease in costs related to LPCN 1154.
These increases are offset by a $600,000 decrease related to LPCN 1111 scale up costs in 2022, a $416,000 decrease in contract research organization expense and outside consulting costs related to the LPCN 1144 LiFT Phase 2 clinical study in NASH subjects, a $144,000 decrease in our LPCN 1107 clinical study, and a $123,000 decrease in other research and development activities.
On October 14, 2021, we entered into the Antares License Agreement with Antares, pursuant to which we granted to Antares an exclusive, royalty-bearing, sublicensable right and license to develop and commercialize, upon final approval of TLANDO from the FDA, our TLANDO product with respect to TRT in the U.S.
On January 12, 2024, we entered into the Verity License Agreement with Verity, pursuant to which we granted to Verity an exclusive, royalty-bearing, sublicensable right and license to develop and commercialize our TLANDO product with respect to TRT in the U.S. and Canada.
We plan to support our licensee’s efforts to effectively enable the availability of TLANDO to patients in a timely manner, in addition to receiving milestone and royalty payments associated with TLANDO commercialization as agreed to in the Antares License Agreement. Develop partnership(s) to continue the advancement of non-core pipeline assets .
We have exclusively licensed rights to TLANDO to Verity for commercialization of TLANDO in the U.S. and Canada. We plan to support our Licensee’s efforts to effectively enable the availability of TLANDO to patients in a timely manner, in addition to receiving milestone and royalty payments associated with TLANDO commercialization as agreed to in the Verity License Agreement.
We continuously strive to prioritize our resources in seeking partnerships of our pipeline assets. We are currently exploring partnering of our liver programs LPCN 1144, our candidate for treatment of non-cirrhotic NASH and LPCN 1148 for the management of decompensated cirrhosis, LPCN 1111, a once-a-day therapy candidate for TRT and LPCN 1107, our candidate for prevention of pre-term birth.
We are currently exploring partnering of our liver programs LPCN 1144, our candidate for treatment of non-cirrhotic NASH and LPCN 1148 for the management of decompensated cirrhosis, and LPCN 1107, our candidate for prevention of pre-term birth.
The increase in research and development expenses during the year ended December 31, 2022 was primarily due to $1.7 million increase in contract research organization expense related to the Phase 2 POC study in male cirrhotic subjects with LPCN 1148, a $353,000 increase in our LPCN 1111 due to manufacturing scale up costs, a $274,000 increase in personnel expense primarily resulting from additional headcount, and a $155,000 increase in other R&D expenses.
The increase in research and development expenses during the year ended December 31, 2023 was primarily due to a $1.2 million increase in contract research organization expense related to our LPCN 1154 clinical studies, a $591,000 increase in TLANDO manufacturing related costs, a $560,000 increase related to our Phase 2 POC study in male patients with cirrhosis with LPCN 1148, and a $537,000 increase in personnel expense primarily resulting from additional headcount.
We entered into a license agreement for the development and commercialization our product candidate, TLANDO®, an oral testosterone replacement therapy (“TRT”) comprised of testosterone undecanoate (“TU”). TLANDO is a registered trademark assigned to Antares. On October 14, 2021, we entered into a license agreement (the “Antares License Agreement”) with Antares Pharma, Inc.
We entered into a license agreement for the development and commercialization our product candidate, TLANDO®, an oral testosterone replacement therapy (“TRT”) comprised of testosterone undecanoate (“TU”). On January 12, 2024, we entered into a license agreement (the “Verity License Agreement”) with Verity Pharmaceuticals, Inc.
We expect to continue to incur significant costs as we develop our other product candidates, including our CNS product candidates and the ongoing Phase 2 POC study in male cirrhotic subjects with LPCN 1148, as well as the development of any future pipeline product candidates.
We expect to continue to incur significant costs as we develop our other product candidates, including our CNS product candidates as well as the development of any future pipeline product candidates.
We will continue efforts to enter into partnership arrangements for the continued development and/or marketing of LPCN 1144, LPCN 1148, LPCN 1111, LPCN 1107 and TLANDO outside of the U.S. 57 We expect research and development expenses to increase in the future as we complete on-going clinical studies, including the studies for our CNS product candidates and the Phase 2 POC study in male subjects with cirrhosis with LPCN 1148, and as we conduct future clinical studies, including when and if we conduct Phase 2 clinical studies with our development product candidates and when and if we conduct Phase 3 clinical studies with LPCN 1144, LPCN 1148, LPCN 1111 and LPCN 1107.
We expect research and development expenses to increase in the future as we complete on-going clinical studies, including the studies for our CNS product candidates and as we conduct future clinical studies, including when and if we conduct Phase 2 clinical studies with our development product candidates and when and if we conduct Phase 3 clinical studies with LPCN 1144, LPCN 1148, and LPCN 1107.
In accruing service fees, we estimate the time period over which services will be performed and the level of effort to be expended in each period. If possible, we obtain information regarding unbilled services directly from these service providers. However, we may be required to estimate these services based on other information available to us.
If possible, we obtain information regarding unbilled services directly from these service providers. However, we may be required to estimate these services based on other information available to us.
During 2022, we were performing activities related to our Phase 2 POC study in male subjects with cirrhosis with LPCN 1148 and PK and food effect studies with LPCN 1154, LPCN 2101 and LPCN 1107, in addition to manufacturing scale up with LPCN 1111.
During 2022, we were performing activities related to our Phase 2 POC study in male subjects with cirrhosis with LPCN 1148, our PK and food effect studies with LPCN 1154 and LPCN 1107, and the LPCN 1111 manufacturing scale up. 60 Net Cash Provided by Investing Activities During the year ended December 31, 2023, net cash provided by investing activities was $13.1 million and during the year ended December 31, 2022, net cash used in investing activities was $14.3 million.
The guidance also requires disclosures regarding the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. We adopted this pronouncement effective January 1, 2017. We recognized revenue of $500,000 under our agreement with Antares in 2022 and $16.1 million in 2021 under agreements with Antares and Spriaso LLC.
The guidance also requires disclosures regarding the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. We adopted this pronouncement effective January 1, 2017. We recognized net reversal of variable consideration revenue of $2.9 million during the year ended December 31, 2023, and license revenue of $500,000 during the year ended December 31, 2022.
On June 7, 2022, Halozyme announced the commercial launch of TLANDO, an oral treatment indicated for testosterone replacement therapy in adult males for conditions associated with a deficiency or absence of endogenous testosterone (primary or hypogonadotropic hypogonadism).
On June 7, 2022, our former commercial partner Antares (a wholly owned subsidiary of Halozyme) announced the commercial launch of TLANDO, an oral treatment indicated for testosterone replacement therapy in adult males for conditions associated with a deficiency or absence of endogenous testosterone (primary or hypogonadotropic hypogonadism). 53 Additional clinical development pipeline candidates include: LPCN 1154 for postpartum depression (“PPD”); LPCN 2101 for epilepsy; and LPCN 2203 for essential tremor.
Factors that might cause such differences include, but are not limited to, those discussed in Part I, Item 1A (Risk Factors) of this Form 10-K.
Factors that might cause such differences include, but are not limited to, those discussed in Part I, Item 1A (Risk Factors) of this Form 10-K. Except as required by applicable law, we assume no obligation to revise or update any forward-looking statements for any reason.
The gain in 2022 was attributable to a decrease in the value of warrants outstanding as of December 31, 2022 as compared to December 31, 2021 due to a decrease in our stock price, and a shorter term remaining on the outstanding warrants.
The gains in 2023 and 2022 were attributable to a decrease in the value of warrants outstanding as of December 31, 2023 as compared to December 31, 2022, and a decrease in the value of warrants outstanding as of December 31, 2022 as compared to December 31, 2021.
Revenue Recognition In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers (Topic 606) with amendments in 2015 (ASU 2015-14) and 2016 (ASU 2016-8, ASU 2016-10, ASU 2016-12 and ASU 2016-20) .
While our significant accounting policies are described in more detail in Note 2 of our annual financial statements included in this filing, we believe the following accounting policies to be critical to the judgments and estimates used in the preparation of our financial statements. 61 Revenue Recognition In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers (Topic 606) with amendments in 2015 (ASU 2015-14) and 2016 (ASU 2016-8, ASU 2016-10, ASU 2016-12 and ASU 2016-20) .
Net cash used in operating activities during 2022 and 2021 was primarily attributable to cash outlays to support on-going operations, including research and development expenses and general and administrative expenses.
Net cash used in operating activities during 2023 and 2022 was primarily attributable to cash outlays to support on-going operations, including research and development expenses and general and administrative expenses. During 2023, we were performing activities mainly related to our LPCN 1154 clinical studies and our LPCN 1148 Phase 2 POC Study in male subjects with cirrhosis.
As of December 31, 2022, we do not have any active collaboration agreements. 63 Accrued Research and Development Expenses We make estimates of our accrued expenses as of each balance sheet date in our financial statements based on the facts and circumstances known to us at that time.
Research and Development Expenses We make estimates of our accrued expenses as of each balance sheet date in our financial statements based on the facts and circumstances known to us at that time. Our expense accruals for contract research, contract manufacturing and other contract services are based on estimates of the fees associated with services provided by the contracting organizations.
Except as required by applicable law, we assume no obligation to revise or update any forward-looking statements for any reason. 54 Overview of Our Business We are a biopharmaceutical company focused on leveraging our proprietary Lip’ral platform to develop differentiated products through the oral delivery of previously difficult to deliver molecules, focused on treating Central Nervous System (“CNS”) disorders.
Overview of Our Business We are a biopharmaceutical company focused on leveraging our proprietary Lip’ral platform to develop differentiated products through the oral delivery of previously difficult to deliver molecules, focused on treating Central Nervous System (“CNS”) disorders. Our proprietary delivery technologies are designed to improve patient compliance and safety through orally available treatment options.
The gain in 2021 was attributable to a decrease in the value of warrants outstanding as of December 31, 2021 as compared to December 31, 2020, partially due to a small decrease in the number of warrants outstanding, but mainly due to an decrease in our stock price, and a shorter term remaining on the outstanding warrants There were zero and 10,000 common stock warrants from the November 2019 Offering exercised during 2022 and 2021, respectively.
These decreases in value were due to a decrease in our stock price and a shorter term remaining on the outstanding warrants. There were no common stock warrants from the November 2019 Offering exercised during 2023 or 2022.
On March 28, 2022, Antares received approval from the FDA for TLANDO as a TRT in adult males for conditions associated with a deficiency of endogenous testosterone, also known as hypogonadism.
Any FDA required post-marketing studies will also be the responsibility of our Licensee, Verity. On March 28, 2022, TLANDO was approved by the FDA as a TRT in adult males for conditions associated with a deficiency of endogenous testosterone, also known as hypogonadism. On January 31, 2024, our license agreement with former licensee, Antares Pharma, Inc.
As of December 31, 2022 and 2021, the warrant liability was $230,000 and $796,000, respectively. Accounting Standards Issued Not Adopted Refer to Note 13 in “Notes to Consolidated Financial Statements” for a discussion of new accounting standards.
As of December 31, 2023 and 2022, the warrant liability was $17,000 and $230,000, respectively. Accounting Standards Issued Not Adopted None.
Interest and Investment Income The increase in interest and investment income during the year ended December 31, 2022 was due to higher interest rates in 2022 compared to 2021, despite declining cash and marketable investment securities balances quarter over quarter in 2022.
These increases were offset by a $222,000 decrease in corporate insurance expense, a $138,000 decrease related to the recruitment of two additional directors, and a $8,000 decrease in our various consulting and professional fees. 57 Interest and Investment Income The increase in interest and investment income during the year ended December 31, 2023 was due to higher interest rates in 2023 compared to 2022, despite declining cash and marketable investment securities balances quarter over quarter in 2023.
Our expense accruals for contract research, contract manufacturing and other contract services are based on estimates of the fees associated with services provided by the contracting organizations. Payments under some of the contracts we have with such parties depend on factors such as successful enrollment of patients, site initiation and the completion of clinical trial milestones.
Payments under some of the contracts we have with such parties depend on factors such as successful enrollment of patients, site initiation and the completion of clinical trial milestones. In accruing service fees, we estimate the time period over which services will be performed and the level of effort to be expended in each period.
Liquidity and Capital Resources Since our inception, our operations have been primarily financed through sales of our equity securities, debt and payments received under our license and collaboration arrangements. We have devoted our resources to funding research and development programs, including discovery research, preclinical and clinical development activities.
We have devoted our resources to funding research and development programs, including discovery research, preclinical and clinical development activities.
During the year ended December 31, 2021, we sold 1,811,238 shares of our common stock resulting in net proceeds of approximately $3.4 million under the Sales Agreement which is net of $112,000 in expenses consisting of commissions paid to Cantor in connection with these sales and other offering and accounting costs.
During the year ended December 31, 2023, we sold 81,000 shares of our common stock pursuant to the ATM Offering at a weighted-average sales price of $5.36 per share, resulting in net proceeds of approximately $405,000, under the Sales Agreement which is net of approximately $24,000 in expenses.
Support our licensee in commercialization of our licensed oral TRT option . We believe the TRT market needs a differentiated, convenient oral option. We have exclusively licensed rights to TLANDO to Antares for commercialization of TLANDO in the US.
Our priority is on the development of LPCN 1154, a fast-acting oral antidepressant for postpartum depression (“PPD”) with potential for outpatient use. 54 Support our Licensee in commercialization of our licensed oral TRT option . We believe the TRT market needs a differentiated, convenient oral option.
In addition, Antares will also make additional payments of $5.0 million to us on each of January 1, 2025 and January 1, 2026, provided that certain conditions are satisfied.
Verity has also agreed to make additional payments to us of $2.5 million before January 1, 2025 and $1 million before January 1, 2026.
During the year ended December 31, 2022, we did not sell any shares of our common stock pursuant to our current Registration Statement on Form S-3 (File No. 333-250072).
During the year ended December 31, 2022, we did not sell any shares of our common stock pursuant to the ATM Offering. As of December 31, 2023, we had $40.8 million available for sale under the Sales Agreement.
However, if we are unable to raise additional capital, we may need to reduce general and administrative expenses in order to extend our ability to continue as a going concern.
However, if we are unable to raise additional capital, we may need to reduce general and administrative expenses in order to extend our ability to continue as a going concern. 56 Other Expense (Income), Net Other expense (income), net consists primarily of interest income earned on our cash, cash equivalents and marketable investment securities, imputed interest on minimum royalties under the license agreement we had with Antares, which was terminated January 31, 2024, gains on our warrant liability and gains on our litigation liability.
Additionally, we recognized $55,000 in license revenue in 2021 related to payments received from Spriaso under a licensing agreement in the cough and cold field. 58 Research and Development Expenses We recorded research and development expenses of $8.6 million and $7.7 million, respectively, for the years ended December 31, 2022 and 2021.
Research and Development Expenses We recorded research and development expenses of $10.2 million and $8.6 million, respectively, for the years ended December 31, 2023 and 2022.
Upon execution of the Antares License Agreement, Antares paid to us an initial payment of $11.0 million.
Upon execution of the Verity License Agreement in January 2024 and upon transition of the commercialization of TLANDO from Antares to Verity in February 2024, Verity paid to us initial payments of $2.5 million and $5 million, respectively.
Since our inception, we have spent approximately $137.1 million in research and development expenses through December 31, 2022. 56 On October 14, 2021, we entered into a license agreement (the “Antares License Agreement”) for the development and commercialization of our TLANDO® product, an oral testosterone replacement therapy (“TRT”) comprised of testosterone undecanoate (“TU”) with Antares Pharma, Inc.
Since our inception, we have spent approximately $147.2 million in research and development expenses through December 31, 2023. On January 12, 2024, we entered into the Verity License Agreement, pursuant to which we granted to Verity an exclusive, royalty-bearing, sublicensable right and license to develop and commercialize our TLANDO product for TRT in the U.S. and Canada.
Removed
(“Antares” or our “Licensee”), pursuant to which we granted to Antares an exclusive, royalty-bearing, sublicensable right and license to develop and commercialize, upon final approval of TLANDO from the United States Food and Drug Administration (“FDA”), the TLANDO product for TRT in the U.S. Any FDA required post-marketing studies will also be the responsibility of our licensee, Antares.
Added
To fund future long-term operations, including the potential commercialization of any of our product candidates, we will need to raise additional capital.
Removed
On May 24, 2022, Halozyme Therapeutics completed an acquisition of Antares through a merger of a wholly owned subsidiary of Halozyme with and into Antares, with Antares continuing as the surviving corporation and becoming a wholly owned subsidiary of Halozyme.
Added
Develop partnership(s) to continue the advancement of non-core pipeline assets . We continuously strive to prioritize our resources in seeking partnerships of our pipeline assets.
Removed
Additional clinical development pipeline candidates include: LPCN 1154 for postpartum depression (“PPD”); LPCN 2101 for epilepsy; and LPCN 1148 comprising a novel prodrug of testosterone, testosterone laurate (“TL”), for the management of decompensated cirrhosis.
Added
(“Antares”), was terminated and the transition of the U.S. commercial rights for TLANDO from Antares to Verity was completed on February 1, 2024, for the distribution, marketing and sale of TLANDO.
Removed
On May 24, 2022, Halozyme Therapeutics completed an acquisition of Antares through a merger of a wholly owned subsidiary of Halozyme with and into Antares, with Antares continuing as the surviving corporation and becoming a wholly owned subsidiary of Halozyme.
Added
The Verity License Agreement also provides Verity with a license to develop and commercialize TLANDO XR (LPCN 1111), the Company’s potential next generation, once daily oral product candidate for testosterone replacement therapy comprised of testosterone tridecanoate (“TT”), in the U.S. and Canada.
Removed
On June 7, 2022, Halozyme announced the commercial launch of TLANDO, an oral treatment indicated for testosterone replacement therapy in adult males for conditions associated with a deficiency or absence of endogenous testosterone (primary or hypogonadotropic hypogonadism).
Added
We will continue efforts to enter into partnership arrangements for the continued development and/or marketing of LPCN 1144, LPCN 1148, LPCN 1107 and for TLANDO and LPCN 1111 outside of the U.S. and Canada.

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Other LPCN 10-K year-over-year comparisons