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What changed in Lipocine Inc.'s 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of Lipocine Inc.'s 2023 and 2024 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 2024 report.

+473 added−462 removedSource: 10-K (2024-12-31) vs 10-K (2024-03-07)

Top changes in Lipocine Inc.'s 2024 10-K

473 paragraphs added · 462 removed · 366 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

134 edited+59 added−21 removed122 unchanged
Biggest changeWe believe through utilization of our proprietary technology we may have the ability to enable effective oral delivery of endogenous GABA A receptor PAMs which historically had been deemed to be not orally bioavailable.
Biggest changeIn October 2024, we announced positive data from our qEEG study of our oral brexanolone with results indicating robust central nervous system activity of oral brexanolone, with concentration- and time-dependent post-dose changes in qEEG as follows: ● Quantitative Electroencephalogram (“qEEG”) in healthy subjects administered single doses of oral brexanolone, a neuroactive steroid, confirmed GABAA modulation ● Rapid and durable CNS target engagement confirms effective oral delivery of bioidentical brexanolone ● Promising results support continued development of oral brexanolone for the treatment of neuropsychiatric disorders We believe through utilization of our proprietary technology we may have the ability to enable effective oral delivery of endogenous GABA A receptor PAMs which historically had been deemed to be not orally bioavailable.
There remains an unmet need for an ASM without the aforementioned downsides, with no to low fetal-neonatal toxicity and without any breast-feeding concerns as well as potential to treat associated comorbidities. While over 30 molecules have been approved for the treatment of epilepsy in the U.S., no epilepsy drug has been specifically approved for WWE of CB age.
There remains an unmet need for an ASM without the aforementioned downsides, with no to low fetal-neonatal toxicity and without any breast-feeding concerns, as well as the potential to treat associated comorbidities. While over 30 molecules have been approved for the treatment of epilepsy in the U.S., no epilepsy drug has been specifically approved for WWE of CB age.
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.
The only previously 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.
We believe our endogenous NASs as GABA A PAMs, while targeting the goal of seizure control, also have the potential for additional benefits in psychiatric disorders comorbidities (e.g., anxiety and/or depression) and sleep impairment. Moreover, these oral endogenous NAS could potentially address some of the fetal toxicity concerns related to unplanned or planned pregnancy in WWE.
We believe our endogenous NASs as GABA A PAMs, while targeting the goal of seizure control, also have the potential for additional benefits in psychiatric disorders comorbidities (e.g., anxiety and/or depression) and sleep impairment. Moreover, these oral endogenous NASs could potentially address some of the fetal toxicity concerns related to unplanned or planned pregnancy in WWE.
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.
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.
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.
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.
Disease Overview - PPD ● PPD is distinct from the “baby blues,” a condition that up to 70% of all new mother’s experience; “baby blues” tend to be short-lived emotional conditions that do not interfere with daily activities. ● Symptoms of PPD include hallmarks of major depression, including, but not limited to, sadness, depressed mood, loss of interest, change in appetite, insomnia, sleeping too much, fatigue, difficulty thinking/concentrating, excessive crying, fear of harming the baby/oneself, and/or thoughts of death or suicide. ● During pregnancy, levels of endogenous NAS increase considerably along with levels of progesterone; however, they drop sharply postpartum.
Disease Overview - PPD ● PPD is distinct from the “baby blues,” a condition that up to 70% of all new mother’s experience; “baby blues” tend to be short-lived emotional conditions that do not interfere with daily activities. ● Symptoms of PPD include hallmarks of major depression, including, but not limited to, sadness, depressed mood, loss of interest, change in appetite, insomnia, sleeping too much, fatigue, difficulty thinking/concentrating, excessive crying, fear of harming the baby/oneself, and/or thoughts of death or suicide. ● During pregnancy, levels of endogenous NASs increase considerably along with levels of progesterone; however, they drop sharply postpartum.
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.
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.
The testing, production, sale, and promotion of pharmaceutical products are also subject to other federal, state and local statutes and regulations. The process of obtaining regulatory approvals and the subsequent compliance with appropriate federal, state, local and foreign statutes and regulations require the expenditure of substantial time and financial resources.
The testing, production, sale, promotion, and pricing of pharmaceutical products are also subject to other federal, state and local statutes and regulations. The process of obtaining regulatory approvals and the subsequent compliance with appropriate federal, state, local and foreign statutes and regulations require the expenditure of substantial time and financial resources.
Phase 2 clinical trials sometimes include randomization of patients. Phase 3 Clinical Trials : Phase 3 clinical trials take approximately 2 to 5 years to complete and involve tests on a much larger population of patients (several hundred to several thousand patients) suffering from the targeted condition or disease.
Phase 2 clinical trials sometimes include randomization of patients. 19 Phase 3 Clinical Trials : Phase 3 clinical trials take approximately 2 to 5 years to complete and involve tests on a much larger population of patients (several hundred to several thousand patients) suffering from the targeted condition or disease.
In August 2015, the FDA granted AB rating to Perrigo’s 1.62% testosterone gel drug product (NDA 204268) which also received FDA approval in August 2015. Lilly and Acrux’s Axiron had patent expiry in February 2017.
In August 2015, the FDA granted AB rating to Perrigo’s 1.62% testosterone gel drug product (NDA 204268) which also received FDA approval in August 2015. Lilly and Company and Acrux’s Axiron had patent expiry in February 2017.
The latter often conducted according to GLPs or other applicable regulations, as well as synthesis and drug formulation development leading ultimately to clinical drug supplies manufactured according to cGMPs; ● Submission to the FDA of an IND, which must be submitted to the FDA and become effective before human clinical trials may begin in the United States; ● Performance of adequate and well-controlled human clinical trials according to the FDA’s current GCPs, to establish the safety and efficacy of the proposed pharmaceutical product for its intended use; ● Submission to the FDA of an NDA for a new pharmaceutical product; ● Satisfactory completion of an FDA inspection of the manufacturing facility or facilities where the pharmaceutical product is produced to assess compliance with the FDA’s cGMP to assure that the facilities, methods and controls are adequate to preserve the pharmaceutical product’s identity, strength, quality and purity; ● Potential FDA audit of the preclinical and clinical trial sites that generated the data in support of the NDA; and ● FDA review and approval of the NDA.
The latter, often conducted according to GLPs or other applicable regulations, as well as synthesis and drug formulation development leading ultimately to clinical drug supplies manufactured according to cGMPs; ● Submission to the FDA of an Investigational New Drug application (“IND”), which must be submitted to the FDA and become effective before human clinical trials may begin in the United States; ● Performance of adequate and well-controlled human clinical trials according to the FDA’s current GCPs, to establish the safety and efficacy of the proposed pharmaceutical product for its intended use; ● Submission to the FDA of an NDA for a new pharmaceutical product; ● Satisfactory completion of an FDA inspection of the manufacturing facility or facilities where the pharmaceutical product is produced to assess compliance with the FDA’s cGMP to assure that the facilities, methods and controls are adequate to preserve the pharmaceutical product’s identity, strength, quality and purity; ● Potential FDA audit of the preclinical and clinical trial sites that generated the data in support of the NDA; and ● FDA review and approval of the NDA.
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.
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 13 patents.
On January 12, 2024, we entered into a license agreement (the “Verity License Agreement”) with Gordon Silver Limited (“GSL”) and Verity Pharmaceuticals, Inc. (“Verity” or our “Licensee”), pursuant to which we granted to Verity an exclusive, royalty-bearing, sublicensable right and license to commercialize TLANDO for TRT in the U.S. and Canada.
On January 12, 2024, we entered into a license agreement (the “Verity License Agreement”) with Gordon Silver Limited (“GSL”) and Verity Pharmaceuticals, Inc. (“Verity” or our “Licensee”), pursuant to which we granted to Verity an exclusive, royalty-bearing, sublicensable right and license to commercialize TLANDO for TRT in the U.S. and Canada (the “Licensed Verity Territory”).
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.
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 (“NASs”) which have broad applicability in treating various CNS conditions where we can leverage our technology platform to develop highly differentiated oral therapeutics.
Most hormones act as NAS and can thus modulate brain excitability. Any changes in endogenous or exogenous hormone levels can affect the occurrence of seizures, either directly or via PK interactions that modify the plasma levels of ASMs (Harden, 2008). The PK interactions between oral contraceptives and ASMs are bidirectional (Johnston and Crawford, 2014).
Most hormones act as NASs and can thus modulate brain excitability. Any changes in endogenous or exogenous hormone levels can affect the occurrence of seizures, either directly or via PK interactions that modify the plasma levels of ASMs (Harden, 2008). The PK interactions between oral contraceptives and ASMs are bidirectional (Johnston and Crawford, 2014).
The FDA acknowledged that in the LiFT study subjects achieved improvements in key components associated with NASH histopathology after 36-weeks of treatment with LPCN 1144 in adult males and agreed that the proposed multicomponent primary surrogate endpoint is acceptable for seeking approval under the accelerated approval pathway.
The FDA acknowledged that subjects in the LiFT study achieved improvements in key components associated with MASH histopathology after 36-weeks of treatment with LPCN 1144 in adult males and agreed that the proposed multicomponent primary surrogate endpoint is acceptable for seeking approval under the accelerated approval pathway.
Both LPCN 1144 treatment arms met with statistical significance the pre-specified accelerated approval regulatory endpoint of NASH resolution with no worsening of fibrosis based on NASH CRN scoring. Additionally, both treatment arms showed substantial improvement of the observed NASH activity in steatosis, inflammation, and ballooning.
Both LPCN 1144 treatment arms met with statistical significance the pre-specified accelerated approval regulatory endpoint of MASH resolution with no worsening of fibrosis based on MASH CRN scoring. Additionally, both treatment arms showed substantial improvement of the observed MASH activity in steatosis, inflammation, and ballooning.
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.
This in turn could affect our ability to successfully commercialize our products and impact our profitability, results of operations, financial condition, and future success. 22 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, the late Dr. William I.
Key results from the OLE study are as follows: ● LPCN 1144 was well tolerated over 72-week exposure with no observed safety signals; ● Liver injury markers were reduced and maintained with extended LPCN 1144 treatment; and ● Observed liver histology improvements support further development In November 2021, the FDA granted Fast Track Designation to LPCN 1144 as a treatment for non-cirrhotic NASH.
Key results from the OLE study are as follows: ● LPCN 1144 was well tolerated over 72-week exposure with no observed safety signals; ● Liver injury markers were reduced and maintained with extended LPCN 1144 treatment; and ● Observed liver histology improvements support further development. 14 In November 2021, the FDA granted Fast Track Designation to LPCN 1144 as a treatment for non-cirrhotic MASH.
Any required post-marketing studies by the United States Food and Drug Administration (“FDA”) will also be the responsibility of our Licensee, Verity. On January 31, 2024, our license agreement with former licensee, Antares Pharma, Inc.
Any post-marketing studies required by the United States Food and Drug Administration (“FDA”) will also be the responsibility of our Licensee, Verity. On January 31, 2024, our license agreement with former licensee (the “Antares License Agreement”), Antares Pharma, Inc.
Analysis sets included the NASH Resolution Set (all subjects that have BL and EOS biopsy with NASH at BL [NAS ≥4 with lobular inflammation score ≥ 1 and hepatocyte ballooning score ≥1 at BL] (n=37)), the Biopsy Set (all subjects with baseline and EOS biopsies (n=44)), and the Safety Set (all randomized subjects (n=56)).
Analysis sets included the MASH Resolution Set (all subjects that have BL and EOS biopsy with MASH at BL [NAS ≥4 with lobular inflammation score ≥ 1 and hepatocyte ballooning score ≥1 at BL] (n=37)), the Biopsy Set (all subjects with baseline and EOS biopsies (n=44)), and the Safety Set (all randomized subjects (n=56)).
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.
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 OHE, and number of waitlist events, including all-cause mortality.
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.
Selective Serotonin Reuptake Inhibitors (“SSRIs”) have been the traditional first-line choice for women with severe PPD and require 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.
As a novel drug class, NAS have received considerable attention because of their potential to treat various neuropsychiatric conditions including depression, movement disorders, epilepsy, anxiety, and neurodegenerative diseases.
As a novel drug class, NASs have received considerable attention because of their potential to treat various neuropsychiatric conditions including depression, movement disorders, epilepsy, anxiety, and neurodegenerative diseases.
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”).
We entered into a license agreement for the development and commercialization of our product candidate, TLANDO®, an oral treatment indicated for testosterone replacement therapy (“testosterone replacement therapy” or “TRT”) in adult males for conditions associated with a deficiency or absence of endogenous testosterone (primary or hypogonadotropic hypogonadism) comprised of testosterone undecanoate (“testosterone undecanoate” or “TU”).
For ET patients, uncontrollable shaking of the hands, head, voice, or legs creates difficulty eating, dressing, writing, and pursuing other day-to-day tasks. The etiology of ET is largely unknown, but reduced GABAA receptor levels and decreased GABAergic activity have been observed in ET.
For ET patients, uncontrollable shaking of the hands, head, voice, or legs creates difficulty eating, dressing, writing, and pursuing other day-to-day tasks. The etiology of ET is largely unknown, but reduced GABA A receptor levels and decreased GABAergic activity have been observed in ET.
The FDA concluded that the available evidence does not show Makena is effective for its approved use and withdrew its approval of Makena and ordered the immediate withdrawal of Makena and several approved generic versions of the drug, making it unlawful for the drug to be distributed in the US.
The FDA concluded that the available evidence does not show Makena is effective for its approved use and withdrew its approval of Makena and ordered the immediate withdrawal of Makena and several approved generic versions of the drug, making it unlawful for the drug to be distributed in the U.S.
Cirrhotic patients typically have a years-long silent, asymptomatic phase (compensated cirrhosis) until decreasing liver function and increasing portal pressure move the patient into the symptomatic phase (decompensated cirrhosis). Transition to decompensated cirrhosis is marked by clinical events including ascites, encephalopathy, jaundice, and/or variceal hemorrhage. Decompensated subjects survive on average less than 2 years.
Patients with cirrhosis typically have a years-long silent, asymptomatic phase (compensated cirrhosis) until decreasing liver function and increasing portal pressure move the patient into the symptomatic phase (decompensated cirrhosis). Transition to decompensated cirrhosis is marked by clinical events including ascites, encephalopathy, jaundice, and/or variceal hemorrhage. Decompensated subjects survive on average less than two years.
Common complications in cirrhotic patients may include: compromised liver function, portal hypertension, varices in GI tract with internal bleeding, edema, ascites, hepatic encephalopathy, compromised immunity with post-transplant acute rejection risk, high sodium levels, increased bilirubin, low albumin level, insulin resistance with impaired peripheral uptake of glucose, depression, accelerated muscle disorder in the form of sarcopenia, myosteotosis, and frailty with compromised energetics, bone diseases (e.g., osteoporosis), high alkaline phosphatase (“ALP”), cachexia, malnutrition, weight loss (>5%), symptoms of hypogonadism such as abnormal hair distribution, anemia, sexual dysfunction, testicular atrophy, muscle wasting, fatigue, osteoporosis, gynecomastia, inflammation with elevated cytokines, and infection risk leading to hospital admissions and possibly death.
Common complications in patients with cirrhosis may include: compromised liver function, portal hypertension, varices in GI tract with internal bleeding, edema, ascites, hepatic encephalopathy (“hepatic encephalopathy” or “HE”), compromised immunity with post-transplant acute rejection risk, high sodium levels, increased bilirubin, low albumin level, insulin resistance with impaired peripheral uptake of glucose, depression, accelerated muscle disorder in the form of sarcopenia, myosteatosis, and frailty with compromised energetics, bone diseases (e.g., osteoporosis), high alkaline phosphatase (“ALP”), cachexia, malnutrition, weight loss (>5%), symptoms of hypogonadism such as abnormal hair distribution, anemia, sexual dysfunction, testicular atrophy, muscle wasting, fatigue, osteoporosis, gynecomastia, inflammation with elevated cytokines, and infection risk leading to hospital admissions and possibly death.
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 partnering agreement will be completed, or, if an agreement is completed, that such an agreement would be on terms favorable to us.
Preclinical studies include laboratory evaluations of product chemistry, toxicity and formulation, as well as animal studies to evaluate efficacy and activity, toxic effects, PKs and metabolism of the pharmaceutical product candidate and to provide evidence of the safety, bioavailability and activity of the pharmaceutical product candidate in animals.
Preclinical studies include laboratory evaluations of product chemistry, toxicity and formulation, as well as animal studies to evaluate efficacy and activity, toxic effects, pharmacokinetics (“PKs”) and metabolism of the pharmaceutical product candidate and to provide evidence of the safety, bioavailability and activity of the pharmaceutical product candidate in animals.
On April 6, 2023, the FDA withdrew its approval of Makena and ordered the immediate withdrawal of Makena and several approved generic versions of the drug, making it unlawful for the drug to be distributed in the US.
On April 6, 2023, the FDA withdrew its approval of Makena and ordered the immediate withdrawal of Makena and several approved generic versions of the drug, making it unlawful for the drug to be distributed in the U.S.
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.
Various therapeutics are used off-label for the treatment of MASH, including vitamin E (an antioxidant), insulin sensitizers (e.g., metformin, pioglitazone), antihyperlipidemic agents (e.g., gemfibrozil), pentoxifylline and ursodeoxycholic acid.
Oral Programs for CNS Disorders Some preferred endogenous or naturally occurring NAS present in central nervous system act as positive allosteric modulators (“PAM”) of the GABA A receptor, the major biological target of the inhibitory neurotransmitter γ-aminobutyric acid (“GABA A” ).
Oral Programs for CNS Disorders Some preferred endogenous or naturally occurring NAS present in the central nervous system act as positive allosteric modulators (“PAMs”) of the GABA A receptor, the major biological target of the inhibitory neurotransmitter γ-aminobutyric acid (“GABA A ”).
The only FDA approved pharmacological treatment for ET was approved more than 50 years ago, and the majority of patients with ET experience a sub-optimal response with standard-of-care treatments, highlighting numerous and compelling unmet needs in care such as daytime efficacy and improved tolerability, PRN or “as needed use” option, and a superior benefit-to-risk profile.
The only FDA approved pharmacological treatment for ET was approved more than 50 years ago, and the majority of patients with ET experience a sub-optimal response with standard-of-care treatments, highlighting numerous and compelling unmet needs in care such as daytime efficacy and improved tolerability, a PRN (pro re nata) or “as needed” option, and a superior benefit-to-risk profile.
We believe LPCN 1148 targets unmet needs for subjects with cirrhosis including improvement in the quality of life of patients while on the liver transplant waiting list, prevention or reduction in the occurrence of new decompensation events such as hepatic encephalopathy (“HE”), and improvement in post liver transplant survival, including outcomes and costs.
We believe LPCN 1148 targets unmet needs for patients with cirrhosis including improvement in the quality of life of patients while on the liver transplant waiting list, prevention or reduction in the occurrence of new decompensation events such as OHE, and improvement in post liver transplant survival, including outcomes and costs.
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.
We have completed a food effect study to characterize the dosing regimen for the pivotal study and we have submitted 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.
We make available free of charge on the Investor Relations portion of our website, ir.lipocine.com, our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934 as soon as reasonably practicable after we electronically file such material with, or furnish it to, the Securities and Exchange Commission.
We make available free of charge on the Investor Relations portion of our website our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act as soon as reasonably practicable after we electronically file such material with, or furnish it to, the SEC.
It has been hypothesized that the rapid perinatal decrease in circulating levels of endogenous NASs may be involved in the development of PPD. The first and only approved treatment option for PPD is an injectable containing endogenous NAS. ● Depression may persist long after child delivery.
It has been hypothesized that the rapid perinatal decrease in circulating levels of endogenous NASs may be involved in the development of PPD. The first approved treatment option for PPD was an injectable containing endogenous NASs. ● Depression may persist long after child delivery.
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.
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.
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.
In 2024 and 2023, we spent $7.4 million and $10.2 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 NASs as GABA A receptor PAMs are in active development for varied indications.
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.
We conducted a Phase 2 proof of concept (“POC”) study (NCT04874350) in male subjects with cirrhosis 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 patients with cirrhosis. Subjects were initially randomized 1:1 to 1 of 2 arms.
Tremor Other Kyperkinet Mov (NY). 2014;4:259. (2) Ref: Gerbasi et.al. Patient experiences in essential tremor: Mapping functional impacts to existing measures using qualitative research. MDS 2023.
(1) (2) (1) Ref: Louis ED, Ottman R. Tremor Other Kyperkinet Mov (NY). 2014;4:259. (2) Ref: Gerbasi et.al. Patient experiences in essential tremor: Mapping functional impacts to existing measures using qualitative research. MDS 2023.
Failure to comply with the FDA requirements can have negative consequences, including adverse publicity, enforcement letters from the FDA, mandated corrective advertising or communications with doctors and civil or criminal penalties.
Failure to comply with the FDA requirements can have negative consequences, including adverse publicity, enforcement letters from the FDA, removal of a product from the market, mandated corrective advertising or communications with doctors and civil or criminal penalties.
PPD can be clinically segmented by the severity of symptoms and presence of a comorbidity, including epilepsy. Approximately 1 in 8 mothers suffers from PPD in the United States alone; this equates to approximately 500,000 women being affected by PPD annually.
PPD can be clinically segmented by the severity of symptoms and presence of a comorbidity, including epilepsy. Approximately one in eight mothers suffers from PPD in the United States alone; this equates to approximately 600,000 women being affected by PPD annually.
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).
There are several product candidates in Phase 3 or earlier clinical or preclinical development for the treatment of MASH, including FGF21 stimulants such as BIO89 - 100 (89bio); 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 Agonisit and VK2809 (Viking Therapeutics) .
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.
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 are evaluating additional undisclosed CNS-focused candidates.
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.
Additionally, we have 13 U.S. patents that are listed in the FDA Orange Book for TLANDO that are expected to expire between 2029 and 2041.
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”).
We believe LPCN 1154 targets the unmet need for robust, rapid relief of PPD symptoms with a 48-hour dosing duration through a convenient oral therapy candidate comprising bioidentical NASs with good tolerability. LPCN 2101: NAS for Epilepsy We are currently evaluating an additional NAS candidate, LPCN 2101, for women with epilepsy (“WWE”).
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.
There are no therapies specifically approved for sarcopenia or decompensated 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.
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.
We are exploring the possibility of licensing LPCN 1021 (known as TLANDO in the United States) to third parties outside the Currently Licensed TLANDO Territories, although no licensing agreement has been entered into by the Company in any other territories.
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.
TRT Franchise – TLANDO and LPCN 1111 (TLANDO XR) 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.
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.
We will also continue efforts to enter into partnership arrangements for the continued development and/or marketing of LPCN 1144, LPCN 1148, LPCN 2401, LPCN 1107 as well as for the TRT Assets outside of the Currently Licensed TLANDO Territories. 5 Our products are based on our proprietary Lip’ral drug delivery technology platform.
FDA sanctions could include refusal to approve pending applications, withdrawal of an approval, a clinical hold, warning letters, product recalls, product seizures, total or partial suspension of production or distribution injunctions, fines, refusals of government contracts, restitution, disgorgement or civil or criminal penalties. Any agency or judicial enforcement action could have a material adverse effect on us.
FDA sanctions could include refusal to approve pending applications, withdrawal of an approval, a clinical hold, warning letters, product recalls, product seizures, total or partial suspension of production or distribution injunctions, fines, refusals of government contracts, restitution, disgorgement or civil or criminal penalties.
Orphan drug exclusivity, however, could also block the approval of one of our products for seven years if a competitor obtains approval of the same drug as defined by the FDA or if our drug candidate is determined to be contained within the competitor’s product for the same indication or disease.
Orphan drug exclusivity, however, could also block the approval of one of our products for seven years if a competitor obtains approval of the same drug as defined by the FDA or if our drug candidate is determined to be contained within the competitor’s product for the same indication or disease. 20 Priority Review Priority Review is a designation for an NDA after it has been submitted to the FDA for review.
The par value of the common stock and preferred stock was not adjusted as a result of the reverse stock split. All common stock and per share amounts in the financial statements have been retroactively adjusted for all periods presented to give effect to the reverse stock splits. Available Information Our website address is www.lipocine.com.
All common stock and per share amounts in the financial statements have been retroactively adjusted for all periods presented to give effect to the reverse stock splits. Available Information Our website address is www.lipocine.com.
Verity is also required to make an additional payment of $2.5 million to us before January 1, 2025 and an additional payment of $1 million to us before January 1, 2026.
Verity also made an additional payment of $2.5 million to us on December 30, 2024, and is required to make an additional payment of $1 million to us before January 1, 2026.
Common causes of liver cirrhosis include alcoholic liver disease, nonalcoholic fatty liver disease (“NAFLD”), chronic hepatitis B and C, primary biliary cirrhosis (“PBC”), primary sclerosing cholangitis (“PSC”) and cryptogenic.
Common causes of liver cirrhosis include alcoholic liver disease, non-alcoholic fatty liver disease (“NAFLD”), chronic hepatitis B and C, primary biliary cirrhosis (“PBC”), and primary sclerosing cholangitis (“PSC”) and some patients have liver disease of unknown cause (cryptogenic).
LPCN 1144: An Oral Prodrug of Bioidentical Testosterone Product Candidate for the Treatment of NASH We are exploring the possibility of partnering LPCN 1144 to a third party, although no partnering agreement has been entered into by the Company.
(3) Jindal Clin Mol Hepatol, 2019 LPCN 1144: An Oral Prodrug of Bioidentical Testosterone Product Candidate for the Treatment of MASH We are exploring the possibility of partnering with a third party for LPCN 1144, although no partnering agreement has been entered into by the Company.
We will continue to explore the possibility of partnering LPCN 1111 with third parties outside the United States and Canada, although no partnering agreement has been entered into by the Company.
We will continue to explore the possibility of partnering LPCN 1111 with third parties outside of the Licensed Verity Territory, although no additional partnering agreement has been entered into by the Company.
The LiFT clinical study was a prospective, multi-center, randomized, double-blind, placebo-controlled multiple-arm study in biopsy-confirmed hypogonadal and eugonadal male NASH subjects with grade F1-F3 fibrosis and a target NAFLD Activity Score ≥ 4 with a 36-week treatment period. The LiFT clinical study enrolled 56 biopsy confirmed NASH male subjects.
Current Status We have completed the LiFT Phase 2 clinical study in biopsy-confirmed non-cirrhotic MASH subjects. The LiFT clinical study was a prospective, multi-center, randomized, double-blind, placebo-controlled multiple-arm study in biopsy-confirmed hypogonadal and eugonadal male MASH subjects with grade F1-F3 fibrosis and a target NAFLD Activity Score ≥ 4 with a 36-week treatment period.
Our priority is on the development of LPCN 1154, a fast-acting oral antidepressant for postpartum depression (“PPD”) with potential for outpatient use. Support our Licensee in commercialization of our licensed oral TRT option . We believe the TRT market needs a differentiated, convenient oral option.
Our priority is on the development of LPCN 1154, a fast-acting oral antidepressant for PPD with potential for outpatient use. Support our Licensees, Verity, SPC, and Pharmalink, in commercialization of our licensed oral TRT product . We believe the TRT market needs a differentiated, convenient oral option.
It takes many years for a typical experimental drug to go from concept to approval. The process required by the FDA before a pharmaceutical product may be marketed in the United States generally includes the following: ● Completion of preclinical laboratory tests and animal studies.
Any agency or judicial enforcement action could have a material adverse effect on us. 18 It takes many years for a typical experimental drug to go from concept to approval. The process required by the FDA before a pharmaceutical product may be marketed in the United States generally includes the following: ● Completion of preclinical laboratory tests and animal studies.
Therefore, based on the results of our multi-dose PK study we had an End-of-Phase 2 meeting and subsequent guidance meetings with the FDA to define a pivotal Phase 2b/3 development plan for LPCN 1107. However, these discussions may be updated based on recent developments with Covis’ Makena® as described below.
Therefore, based on the results of our multi-dose PK study we had an End-of-Phase 2 meeting and subsequent guidance meetings with the FDA to define a pivotal Phase 2b/3 development plan for LPCN 1107.
Women of CB age with epilepsy face many additional challenges such as hormonal influences on seizure activity and endocrine function throughout the different phases of their reproductive cycles, and approximately 30% of patients with epilepsy cannot be efficiently controlled with available ASMs making consideration of newer pharmacological treatment development options important.
Women of CB age with epilepsy face many additional challenges such as hormonal influences on seizure activity and endocrine function throughout the different phases of their reproductive cycles, and approximately 30% of patients with epilepsy cannot efficiently control their seizures with available ASMs, making consideration of newer pharmacological treatment development options important. 9 Managing uncontrolled seizures in WWE of CB age is the primary aim during preconception, pregnancy, and postpartum phases.
No assurance can be given that any partnership 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 outside of the Licensed Verity Territory will be completed, or, if an agreement is completed, that such an agreement would be on terms favorable to us.
The FDA agreed that the proposed primary multicomponent surrogate endpoint, NASH resolution with no worsening of fibrosis, is acceptable for seeking approval under the accelerated approval pathway and the FDA recommended a Phase 3 trial with a study duration of 72 weeks. In July 2022, Lipocine held an End of Phase 2 meeting with FDA for LPCN 1144 in NASH.
The FDA agreed that the proposed primary multicomponent surrogate endpoint, MASH resolution with no worsening of fibrosis, is acceptable for seeking approval under the accelerated approval pathway and the FDA recommended a Phase 3 trial with a study duration of 72 weeks.
Intramuscular forms of testosterone also exist although commercialized mostly in generic forms by multiple companies and in branded form as Aveed® by Endo. Additionally, Endo markets the buccal testosterone replacement therapy Striant® and the Testopel® implantable testosterone pellets, which it acquired from Auxillium in 2015. Antares Pharma, Inc. markets a sub-cutaneous weekly auto-injector testosterone therapy, Xyosted®.
Transdermal patches include Allergan’s Androderm®. Intramuscular forms of testosterone also exist although commercialized mostly in generic forms by multiple companies and in branded form as Aveed® by Endo. Additionally, Endo markets the buccal testosterone replacement therapy Striant® and the Testopel® implantable testosterone pellets, which it acquired from Auxillium in 2015.
Additionally, to the extent that any of our products are sold in a foreign country, we may be subject to similar foreign laws and regulations, which may include, for instance, applicable post-marketing requirements, including fraud and abuse, privacy and transparency laws.
If drug products are made available to authorized users of the Federal Supply Schedule of the General Services Administration, additional laws and requirements may apply. 21 Additionally, to the extent that any of our products are sold in a foreign country, we may be subject to similar foreign laws and regulations, which may include, for instance, applicable post-marketing requirements, including fraud and abuse, privacy and transparency laws.
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).
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). 16 Reformulated Rifaximin SSD (by BAUSCH health) is in a Phase 3 study for Reduction of Early Decompensation in Cirrhosis with time to first occurrence of hepatic encephalopathy as the primary endpoint.
The FDA also may require post-marketing testing, known as Phase 4 testing, risk evaluation and mitigation strategies and surveillance to monitor the effects of an approved product or place conditions on an approval that could restrict the distribution or use of the product. 21 st Century Cures Act The 21 st Century Cures Act (Public Law No. 144-255) was enacted on December 13, 2016.
The FDA also may require post-marketing testing, known as Phase 4 testing, risk evaluation and mitigation strategies and surveillance to monitor the effects of an approved product or place conditions on an approval that could restrict the distribution or use of the product.
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.
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.
Acerus Pharmaceuticals markets an intranasal testosterone therapy, NATESTO®. Finally, Tolmar Pharmaceuticals markets an oral TRT, JATENZO®, which received FDA approval in March 2019 and Marius Pharmaceuticals markets an oral TU, K YZATREX ®, which received FDA approval for treatment of those with Klinefelter’s Syndrome on August 22, 2022 .
Antares Pharma, Inc. markets a sub-cutaneous weekly auto-injector testosterone therapy, Xyosted®. Acerus Pharmaceuticals markets an intranasal testosterone therapy, NATESTO®. Finally, Tolmar Pharmaceuticals markets an oral TRT, JATENZO®, which received FDA approval in March 2019 and Marius Pharmaceuticals markets an oral TU, KYZATREX®, which received FDA approval for treatment of those with Klinefelter’s Syndrome in August 2022.
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.
Disease Overview – Cirrhosis There are over two million cases of cirrhosis worldwide, with over 500,000 people living with decompensated cirrhosis in the U.S. Non-alcoholic 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.
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).
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).
The FDA recommended a Phase 2 dose ranging study be conducted to identify the optimal dose prior to conducting a pivotal study. The FDA agreed to the proposed unique testosterone ester, testosterone laurate, for future clinical studies.
In July 2022, Lipocine held an End of Phase 2 meeting with the FDA for LPCN 1144 in MASH. The FDA recommended a Phase 2 dose ranging study be conducted to identify the optimal dose prior to conducting a pivotal study. The FDA agreed to the proposed unique testosterone ester, testosterone laurate, for future clinical studies.
Associated Risk Factors ● Genetic: family history and/or previous experience of depression or other mood disorders ● Physiological: rapid changes in sex hormones, stress hormones, and thyroid hormone levels during and after delivery ● Environmental: stressful life events, changes in relationships at home and at work, and/or lack of familial support Unmet Medical Need We believe there is considerable unmet need within women with PPD due to lack of convenient and fast-acting oral therapies.
Associated Risk Factors ● Genetic: family history and/or previous experience of depression or other mood disorders. ● Physiological: rapid changes in sex hormones, stress hormones, and thyroid hormone levels during and after delivery. ● Environmental: stressful life events, changes in relationships at home and at work, and/or lack of familial support.
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.
Our Pipeline Product Candidates Our pipeline of clinical development candidates includes LPCN 1154 for PPD, LPCN 2101 for epilepsy, LPCN 2203 for essential tremor, and LPCN 2401 as an aid for improved body composition in obesity management. We will continue to explore other product development candidates targeting CNS indications with a significant unmet need.
Testosterone Replacement Therapy Market Overview The gel-based testosterone replacement products that are currently available include AbbVie’s AndroGel®, Lilly’s Axiron® Topical Solution and Endo ’ s Testim® and Fortesta® along with their respective authorized generics as well as the equivalent generic versions of each. Transdermal patches include Allergan’s Androderm®.
(1) Bank of American Global Reseach, Pharmaceutical Scripts/sales Data Report, Jan 21, 2025 Testosterone Replacement Therapy Market Overview The gel-based testosterone replacement products that are currently available include AbbVie’s AndroGel®, Lilly and Company’s Axiron® Topical Solution and Endo ’ s Testim® and Fortesta® along with their respective authorized generics as well as the equivalent generic versions of each.

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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 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.
Biggest changeIn assessing these risks, you should also refer to the other information contained in this Annual Report, including our consolidated financial statements and related notes. 23 Risk 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 2401, 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; ● 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; and ● cyber security risks.
In addition, the development of our product candidates will require significant capital resources and we may not be able to raise sufficient additional capital to fund continued development. Further, we may choose to allocate available capital resources to development of product candidates that do not ultimately achieve commercialization.
In addition, the development of our product candidates will require significant capital resources and we may not be able to raise sufficient additional capital to fund continued development. Further, we may choose to allocate available capital resources to the development of product candidates that do not ultimately achieve commercialization.
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 engaged a CRO to conduct our SOAR, DV and DF Phase 3 clinical studies for TLANDO, as well as the ABPM study for TLANDO. Additionally, we utilized a CRO for the Phase 2 LiFT clinical study for LPCN 1144, the Phase 2 clinical study for LPCN 1148 and the pilot and future pivotal studies for LPCN 1154.
We engaged a CRO to conduct our SOAR, DV and DF Phase 3 clinical studies for TLANDO, as well as the ABPM study for TLANDO. Additionally, we utilized a CRO for the Phase 2 LiFT clinical study for LPCN 1144, the Phase 2 clinical study for LPCN 1148 and the pilot, pivotal and future studies for LPCN 1154.
If we elect to increase our expenditures to fund development or commercialization activities either inside or outside of the United States on our own, we may need to obtain additional capital, which may not be available to us on acceptable terms, or at all.
If we elect to increase our expenditures to fund development or commercialization activities either inside or outside of the United States on our own, we may need to obtain additional capital, which may not be available to us on acceptable terms, or at all.
If a third-party claims that we or our collaborators infringe its intellectual property rights, we may face a number of issues, including, but not limited to: ● infringement and other intellectual property claims which, regardless of merit, may be expensive and time-consuming to litigate and may divert our management’s attention from our core business; ● substantial damages for infringement, which we may have to pay if a court decides that the product at issue infringes on or violates the third party’s rights, and if the court finds that the infringement was willful, we could be ordered to pay treble damages and the patent owner’s attorneys’ fees; ● a court prohibiting us from selling or licensing the product unless the third-party licenses its product rights to us, which it is not required to do; ● if a license is available from a third party, we may have to pay substantial royalties, upfront fees and/or grant cross-licenses to intellectual property rights for our products; and ● redesigning our products or processes so they do not infringe, which may not be possible or may require substantial monetary expenditures and time.
If a third-party claims that we or our collaborators infringe its intellectual property rights, we may face a number of issues, including, but not limited to: ● infringement and other intellectual property claims which, regardless of merit, may be expensive and time-consuming to litigate and may divert our management’s attention from our core business; 50 ● substantial damages for infringement, which we may have to pay if a court decides that the product at issue infringes on or violates the third party’s rights, and if the court finds that the infringement was willful, we could be ordered to pay treble damages and the patent owner’s attorneys’ fees; ● a court prohibiting us from selling or licensing the product unless the third-party licenses its product rights to us, which it is not required to do; ● if a license is available from a third party, we may have to pay substantial royalties, upfront fees and/or grant cross-licenses to intellectual property rights for our products; and ● redesigning our products or processes so they do not infringe, which may not be possible or may require substantial monetary expenditures and time.
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.
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; 39 ● 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.
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.
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 2401, 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 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.
The following T-replacement therapies currently on the market in the United States compete with TLANDO: ● Oral-T, such as Jatenzo and Kyzatrek; ● T-gels, such as AndroGel (marketed by Abbvie) and Perrigo’s AB-rated 1% generic of AndroGel, Teva’s 1% generic of AndroGel, Testim and its generics (marketed by Endo Health Solutions, or Endo), and Fortesta and its generics (marketed by Endo); ● T-injectables, including a subcutaneous auto-injector, XYOSTED, marketed by Antares Pharma, Inc.; ● Branded, longer-acting injectables, such as Aveed (marketed by Endo); ● T-nasals, such as Natesto (marketed by Acerus); ● methyl-T, such as Methitest (marketed by Impax) and Testred (marketed by Valeant); ● transdermal patches, such as Androderm (marketed by Allergan); ● buccal patches, such as Striant (marketed by Endo); ● generic testosterone enanthate intra-muscular injectables; ● authorized generic and generic T-gels; and ● subcutaneous injectable pellets, such as Testopel (marketed by Endo).
The following T-replacement therapies currently on the market in the United States compete with TLANDO: ● Oral-T, such as Jatenzo and Kyzatrek; ● T-gels, such as AndroGel (marketed by AbbVie) and Perrigo’s AB-rated 1% generic of AndroGel, Teva’s 1% generic of AndroGel, Testim and its generics (marketed by Endo Health Solutions, or Endo), and Fortesta and its generics (marketed by Endo); ● T-injectables, including a subcutaneous auto-injector, XYOSTED, marketed by Antares Pharma, Inc.; 32 ● Branded, longer-acting injectables, such as Aveed (marketed by Endo); ● T-nasals, such as Natesto (marketed by Acerus); ● methyl-T, such as Methitest (marketed by Impax) and Testred (marketed by Valeant); ● transdermal patches, such as Androderm (marketed by Allergan); ● buccal patches, such as Striant (marketed by Endo); ● generic testosterone enanthate intra-muscular injectables; ● authorized generic and generic T-gels; and ● subcutaneous injectable pellets, such as Testopel (marketed by Endo).
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.
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.
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.
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.
In addition, the Sarbanes-Oxley Act of 2002 and rules subsequently implemented by the SEC and U.S. stock exchanges impose numerous requirements on public companies, including requiring changes in corporate governance practices. Also, the Exchange Act requires, among other things, that we file annual, quarterly and current reports with respect to our business and operating results.
In addition, the Sarbanes-Oxley Act of 2002 and rules implemented by the SEC and U.S. stock exchanges impose numerous requirements on public companies, including requiring changes in corporate governance practices. Also, the Exchange Act requires, among other things, that we file annual, quarterly and current reports with respect to our business and operating results.
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.
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. 46 We cannot predict when we will generate product revenues and may never achieve or maintain profitability.
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.
Our future capital requirements may be substantial and will depend on many factors including: ● market conditions for raising capital, particularly for life science companies; 45 ● current and future clinical trials for our product candidates, including for LPCN 1154, LPCN 2401, 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.
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.
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. No assurance can be given that current regulations relating to regulatory approval will not change or become more stringent.
In such an event, our competitors might be able to enter the market and this circumstance would have a material adverse effect on our business. 50 We also may rely on trade secrets and confidentiality agreements to protect our technology and know-how, especially where we do not believe patent protection is appropriate or obtainable.
In such an event, our competitors might be able to enter the market and this circumstance would have a material adverse effect on our business. We also may rely on trade secrets and confidentiality agreements to protect our technology and know-how, especially where we do not believe patent protection is appropriate or obtainable.
Payers may require a more arduous prior authorization process as a condition to payment for TRT therapy. This could adversely affect the market for TRT products. In the United States and in many other countries, pricing and/or profitability of some or all prescription pharmaceuticals and biopharmaceuticals are subject to varying degrees of government control.
Payers may require a more arduous prior authorization process as a condition to payment for TRT therapy. This could adversely affect the market for TRT products. 30 In the United States and in many other countries, pricing and/or profitability of some or all prescription pharmaceuticals and biopharmaceuticals are subject to varying degrees of government control.
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.
However, 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.
The FDA has concluded that Makena, based on Makena’s failed definitive PROLONG study, a competing product with the same active ingredient and similar target indication, is ineffective and has withdrawn Makena from the market. It is entirely possible that any pivotal study on LPCN 1107 may require a placebo-controlled trial design.
The FDA has concluded that Makena, based on Makena’s failed definitive PROLONG study, a competing product with the same active ingredient and similar target indication, is ineffective and Makena has been withdrawn from the market. It is entirely possible that any pivotal study on LPCN 1107 may require a placebo-controlled trial design.
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.
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 1154, LPCN 1148, LPCN 1144, or LPCN 1107.
Physicians, patients, formularies, payors or the medical community in general may not accept or utilize any products that we or our collaborative partners may develop. Other drugs may be approved during our clinical testing which could change the accepted treatments for the disease targeted and make our compound obsolete.
Physicians, patients, formularies, payors or the medical community in general may not accept or utilize any products that we or our collaborative partners may develop. Other drugs may be approved during our clinical testing which could change the accepted treatments for the disease targeted and make our compound(s) obsolete.
If the regulation becomes effective, it could result in lower prices for pharmaceutical products in general. 34 Any further legislative or administrative action to reduce reimbursement or health benefits to beneficiaries under the Medicare or Medicaid program could affect the payment we could collect from sale of any product in the United States.
If the regulation becomes effective, it could result in lower prices for pharmaceutical products in general. Any further legislative or administrative action to reduce reimbursement or health benefits to beneficiaries under the Medicare or Medicaid program could affect the payment we could collect from sale of any product in the United States.
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.
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.
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.
Any termination or expiration of the Verity License Agreement, or any other or 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.
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.
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 ● be subject to manufacturing capacity limitations.
Our reliance on third parties that we do not control does not relieve us of these responsibilities and requirements. Problems with the timeliness or quality of the work of a CRO may lead us to seek to terminate the relationship and use an alternative service provider.
Our reliance on third parties that we do not control does not relieve us of these responsibilities and requirements. 40 Problems with the timeliness or quality of the work of a CRO may lead us to seek to terminate the relationship and use an alternative service provider.
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.
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.
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.
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 2401, LPCN 2101, LPCN 2203, LPCN 1144, LPCN 1148, or LPCN 1107.
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.
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. 51 ITEM 1B. UNRESOLVED STAFF COMMENTS None.
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.
As such, our product development processes for LPCN 1154, LPCN 2401, 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.
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.
If our license arrangements with Verity, or any other or 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.
In addition, a penetrated or compromised data system or the intentional, inadvertent or negligent release or disclosure of data could result in theft, loss or fraudulent or unlawful use of company, employee or clinical data which could harm our reputation, disrupt our operations, or result in remedial and other costs, fines or lawsuits. 37 Risks Related to Our Dependence on Third Parties We may enter into license agreements and/or collaborations with third parties for the development and commercialization of our drug candidates.
In addition, a penetrated or compromised data system or the intentional, inadvertent or negligent release or disclosure of data could result in theft, loss or fraudulent or unlawful use of company, employee or clinical data which could harm our reputation, disrupt our operations, or result in remedial and other costs, fines or lawsuits. 38 Risks Related to Our Dependence on Third Parties We may enter into license agreements and/or collaborations with third parties for the development and commercialization of our drug candidates.
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.
In addition, our capital resources may be consumed more rapidly if we pursue additional clinical studies for LPCN 1154, LPCN 2401, LPCN 2101, LPCN 2203, LPCN 1148, LPCN 1144, and LPCN 1107.
The result of the Phase 2 study may not be indicative of ultimate success in a larger Phase 2/3 clinical study and, although we are exploring the possibility of partnering LPCN 1148 to a third party for further development and commercialization, we may not be able to identify potential partners or successfully enter into partnership arrangements on terms favorable to us, if at all.
The result of the Phase 2 study may not be indicative of ultimate success in a larger Phase 2/3 clinical study and, although we are exploring the possibility of partnering LPCN 1148 to a third party for further development and commercialization, we may not be able to identify potential partners or successfully enter into a partnership arrangement on terms favorable to us, if at all.
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.
While we believe we have sufficient liquidity and capital resources to fund our projected operating requirements through at least March 31, 2026, 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, 2026, to support our operations, the on-going clinical development of our product candidates, and compliance with regulatory requirements.
LPCN 1107 is in a very early stage of development and consequently, although we are exploring the possibility of partnering LPCN 1107 to a third party for further development and commercialization, we may not be able to identify potential partners or successfully enter into partnership arrangements on terms favorable to us, if at all.
LPCN 1107 is in a very early stage of development and consequently, although we are exploring the possibility of partnering LPCN 1107 to a third party for further development and commercialization, we may not be able to identify potential partners or successfully enter into a partnership arrangement on terms favorable to us, if at all.
Although our results from the LiFT and open label extension clinical study results were positive for NASH resolution with no worsening of fibrosis, these results may not be indicative of ultimate success in a larger Phase 2/3 clinical study with required FDA endpoints and populations needed for regulatory approval of LPCN 1144 for the treatment of NASH.
Although our results from the LiFT and open label extension clinical study results were positive for MASH resolution with no worsening of fibrosis, these results may not be indicative of ultimate success in a larger Phase 2/3 clinical study with required FDA endpoints and populations needed for regulatory approval of LPCN 1144 for the treatment of MASH.
Furthermore, the limited number of suppliers of testosterone esters may provide such companies with greater opportunity to raise their prices. If we or our Licensee are unable to obtain testosterone esters in a timely manner and/or in sufficient quantities, our ability to develop, and potentially commercialize, LPCN 1111, LPCN 1148, and LPCN 1144 may be adversely affected.
Furthermore, the limited number of suppliers of testosterone esters may provide such companies with greater opportunity to raise their prices. If we or our Licensees are unable to obtain testosterone esters in a timely manner and/or in sufficient quantities, our ability to develop, and potentially commercialize, LPCN 1111, LPCN 1148, and LPCN 1144 may be adversely affected.
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.
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 MASH with LPCN 1144 in a pivotal trial.
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.
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, 2026. 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 have entered into the Verity License Agreement for TLANDO and LPCN 1111 with respect to TRT in the U.S.
We have entered into the Verity License Agreement for TLANDO and LPCN 1111 with respect to TRT in the U.S. and Canada.
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.
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 and potentially commercialize LPCN 1154, LPCN 2101, and LPCN 2203 may be adversely affected.
Since there are only a limited number of testosterone esters suppliers in the world, if this supplier ceases to provide us with testosterone esters, we or our Licensee may be unable to procure testosterone esters on commercially favorable terms and/or may not be able to obtain testosterone esters in a timely manner.
Since there are only a limited number of testosterone esters suppliers in the world, if this supplier ceases to provide us with testosterone esters, we or our Licensees may be unable to procure testosterone esters on commercially favorable terms and/or may not be able to obtain testosterone esters in a timely manner.
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.
We have incurred losses in most years since our inception. As of December 31, 2024, 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.
On March 27, 2019, Clarus’ product JATENZO®, an oral TU product, was approved by the FDA and also received three years of marketing exclusivity. On February 10, 2020, Clarus announced that JATENZO® has been launched and is commercially available.
On March 27, 2019, Clarus’ product JATENZO®, an oral TU product, was approved by the FDA and also received three years of marketing exclusivity. On February 10, 2020, Clarus announced that JATENZO® had been launched and is commercially available.
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.
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.
These therapies include T-gels, oral-T, an aromatase inhibitor, a new class of drugs called Selective Androgen Receptor Modulators and hydroalcoholic gel formulations of dihydrotestosterone (“DHT”). In light of the competitive landscape above, TLANDO will not be the only oral TRT to market, which may significantly affect the market acceptance and commercial success of TLANDO.
These therapies include T-gels, oral-T, an aromatase inhibitor, a new class of drugs called Selective Androgen Receptor Modulators and hydroalcoholic gel formulations of dihydrotestosterone (“DHT”). In light of the competitive landscape above, TLANDO is not the only oral TRT to market, which may significantly affect the market acceptance and commercial success of TLANDO.
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.
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; ● 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; 42 ● 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 current limited pre-clinical and phase 1 results we have observed may not be replicated in larger studies, future PK, Phase 2, or pivotal studies with a potential “to be marketed formulation”. We may not be able to further test in-clinic in a timely manner or at all due to other regulatory hurdles.
The current limited pre-clinical and phase 1 results we have observed may not be replicated in larger studies, future PK, Phase 2, or pivotal studies with a potential “to be marketed formulation.” We may not be able to further test in-clinic in a timely manner or at all due to other regulatory hurdles.
We intend to continue to develop some of our product candidates in the United States without a partner although our ability to advance these product candidates will depend on our capital resources.
We could continue to develop some of our product candidates in the United States without a partner although our ability to advance these product candidates will depend on our capital resources.
Obtaining regulatory approval for marketing of TLANDO in one country does not ensure we will be able to obtain regulatory approval in other countries but a failure or delay in obtaining regulatory approval in one country may have a negative effect on the regulatory process in other countries.
Obtaining regulatory approval for marketing of TLANDO in the United States or any other one country does not ensure we will be able to obtain regulatory approval in other countries, but a failure or delay in obtaining regulatory approval in one country may have a negative effect on the regulatory process in other countries.
Likewise, our United States patents covering certain technology used in our product candidates, including TLANDO, are expected to expire on various dates through 2041.
Likewise, our United States patents covering certain technology used in our product candidates, including TLANDO, are expected to expire on various dates through 2042.
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.
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 2401, LPCN 2101, LPCN 2203, and LPCN 1148 and our other programs and continued research efforts.
In particular, we have announced topline primary and key secondary endpoint results from our Phase 2 LiFT and open label extension clinical studies.
We have announced topline primary and key secondary endpoint results from our Phase 2 LiFT and open label extension clinical studies.
The laws that may affect our ability to operate include: ● the federal Anti-Kickback Statute, which constrains our marketing practices, educational programs, pricing policies, and relationships with healthcare providers or other entities, by prohibiting, among other things, soliciting, receiving, offering or paying remuneration, directly or indirectly, to induce, or in return for, either the referral of an individual or the purchase or recommendation of an item or service reimbursable under a federal healthcare program, such as the Medicare and Medicaid programs; ● federal civil and criminal false claims laws and civil monetary penalty laws, which prohibit, among other things, individuals or entities from knowingly presenting, or causing to be presented, claims for payment from Medicare, Medicaid, or other third-party payers that are false or fraudulent; ● HIPAA, which among other things created new federal criminal statutes that prohibit executing a scheme to defraud any healthcare benefit program or making false statements relating to healthcare matters; ● the federal Physician Payments Sunshine Act, which, among other things, requires manufacturers of drugs, devices, biologics and medical supplies for which payment is available under certain federal healthcare programs to report annually information related to “payments or other transfers of value” made to physicians (defined to include doctors, dentists, optometrists, podiatrists and chiropractors) and teaching hospitals, and ownership and investment interests held by certain healthcare professionals and their immediate family members; ● HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act of 2009, and its implementing regulations, which imposes certain requirements relating to the privacy, security, breach notification, and transmission of individually identifiable health information; and ● state and foreign law equivalents of each of the above federal laws, such as anti-kickback and false claims laws which may apply to items or services reimbursed by any third-party payer, including commercial insurers, and state and foreign laws governing the privacy and security of health information in certain circumstances, many of which differ from each other in significant ways and often are not preempted by HIPAA, thus complicating compliance efforts.
The laws that may affect our ability to operate include: ● the federal Anti-Kickback Statute, which constrains our marketing practices, educational programs, pricing policies, and relationships with healthcare providers or other entities, by prohibiting, among other things, soliciting, receiving, offering or paying remuneration, directly or indirectly, to induce, or in return for, either the referral of an individual or the purchase or recommendation of an item or service reimbursable under a federal healthcare program, such as the Medicare and Medicaid programs; ● federal civil and criminal false claims laws and civil monetary penalty laws, which prohibit, among other things, individuals or entities from knowingly presenting, or causing to be presented, claims for payment from Medicare, Medicaid, or other third-party payers that are false or fraudulent; ● HIPAA, which among other things created new federal criminal statutes that prohibit executing a scheme to defraud any healthcare benefit program or making false statements relating to healthcare matters; ● the federal Physician Payments Sunshine Act, which, among other things, requires manufacturers of drugs, devices, biologics and medical supplies for which payment is available under certain federal healthcare programs to report annually information related to “payments or other transfers of value” made to physicians (defined to include doctors, dentists, optometrists, podiatrists and chiropractors) and teaching hospitals, and ownership and investment interests held by certain healthcare professionals and their immediate family members; ● HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act of 2009, and its implementing regulations, which imposes certain requirements relating to the privacy, security, breach notification, and transmission of individually identifiable health information; and ● state and foreign law equivalents of each of the above federal laws, such as anti-kickback and false claims laws which may apply to items or services reimbursed by any third-party payer, including commercial insurers, and state and foreign laws governing the privacy and security of health information in certain circumstances, many of which differ from each other in significant ways and often are not preempted by HIPAA, thus complicating compliance efforts. 35 Because of the breadth of these laws and the narrowness of available statutory and regulatory exceptions, it is possible that some of our business activities could be subject to challenge under one or more such laws.
In order to market any products outside of the United States, we must establish and comply with numerous and varying regulatory requirements of other countries regarding safety and efficacy. Approval procedures vary among countries and can involve additional product candidate testing and additional administrative review periods.
In order to market any products outside of the United States including South Korea and the GCC countries, we must establish and comply with numerous and varying regulatory requirements of other countries regarding safety and efficacy. Approval procedures vary among countries and can involve additional product candidate testing and additional administrative review periods.
Employment with our executives and other employees are “at will”, meaning that there is no mandatory fixed term and their employment with us may be terminated by us or by them for any or no reason.
Employment with our executives and other employees are “at will,” meaning that there is no mandatory fixed term and their employment with us may be terminated by us or by them for any or no reason.
Our ability to generate revenues from this and other collaborative arrangements will depend on our collaborators’ abilities and efforts to successfully perform the functions agreed to with them in these arrangements.
Our ability to generate revenues from this and other collaborative arrangements, including with SPC and Pharmalink, will depend on our collaborators’ abilities and efforts to successfully perform the functions agreed to with them in these arrangements.
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.
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 and our Licensee rely on a single third-party supplier for our supply of testosterone esters, the active pharmaceutical ingredient of TLANDO, LPCN 1111, LPCN 1148, and LPCN 1144.
We and our Licensees rely/will rely on a single third-party supplier for our supply of testosterone esters, the active pharmaceutical ingredient of TLANDO, LPCN 1111, LPCN 1148, and LPCN 1144.
We have focused a significant portion of our efforts on developing TLANDO and more recently on our oral neuroactive steroids LPCN 1154 and LPCN 2101, LPCN 1148, and LPCN 1144. We have funded our operations to date through sales of our equity securities, debt, and payments received under our license and collaboration arrangements.
We have focused a significant portion of our efforts on developing TLANDO and more recently on our oral neuroactive steroids LPCN 1154, LPCN 2101, and LPCN 2203, in addition to LPCN 2401, and LPCN 1148. We have funded our operations to date through sales of our equity securities, debt, and payments received under our license and collaboration arrangements.
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.
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.
Certain publications have suggested potential health risks associated with T-replacement therapy, such as increased cardiovascular disease risk, including increased risk of heart attack or stroke, fluid retention, sleep apnea, breast tenderness or enlargement, increased red blood cells, development of clinical prostate disease, including prostate cancer, and the suppression of sperm production.
Certain publications have suggested potential health risks associated with T-replacement therapy, such as increased cardiovascular disease risk, including increased risk of heart attack or stroke, fluid retention, sleep apnea, breast tenderness or enlargement, increased red blood cells, development of clinical prostate disease, including prostate cancer, and the suppression of sperm production. On March 29, 2022, the FDA approved TLANDO.
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.
As of December 31, 2024, our executive officers and directors beneficially owned approximately 6.3% 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.
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.
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. Our Licensees’ ability to commercialize TLANDO may be limited.
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.
We expect our research and development expenses to increase in connection with clinical trials associated with our oral neuroactive steroids LPCN 1154, LPCN 2101, and LPCN 2203, and possible trials associated with LPCN 2401 and/or LPCN 1148, if further clinical trials are initiated.
Historically, securities class action litigation has often been brought against a company following a decline in the market price of its securities. Biotechnology and pharmaceutical companies, including us, have experienced significant stock price volatility in recent years, increasing the risk of such litigation.
Historically, securities class action litigation has often been brought against a company following a decline in the market price of its securities. Biotechnology and pharmaceutical companies, including us, have experienced significant stock price volatility in recent years, increasing the risk of such litigation. We have insurance that covers claims of this nature.
In addition, our oral NAS product candidate LPCN 2101 may not be effective in treating WWE or any other indications or may not have differentiation from competitive products on the market or in development. We may expend significant resources before determining that these programs are not viable candidates for regulatory approval and commercialization.
In addition, our oral NAS product candidate LPCN 2101 may not be effective in treating WWE or any other indications or may not have differentiation from competitive products on the market or in development. We may expend significant resources before determining that this program is not a viable candidate for regulatory approval and commercialization.
A hearing on the motion to dismiss occurred on January 12, 2022. On April 14, 2023, a judgment was issued ordering the case dismissed with prejudice and closure of the action. Although this outcome was in favor of our current and former officers and directors, we incurred litigation costs and expended managerial resources defending ourselves against these allegations.
On April 14, 2023, a judgment was issued ordering the case dismissed with prejudice and closure of the action. Although this outcome was in favor of our current and former officers and directors, we incurred litigation costs and expended managerial resources defending ourselves against these allegations.
Claims could also be asserted under state consumer protection acts. If we cannot successfully defend ourselves against product liability claims, we may incur substantial liabilities or be required to limit commercialization of our product candidates, if approved. Even successful defense would require significant financial and management resources.
If we cannot successfully defend ourselves against product liability claims, we may incur substantial liabilities or be required to limit commercialization of our product candidates, if approved. Even successful defense would require significant financial and management resources.
We cannot be certain of the safety profile upon single oral or multiple oral administration of LPCN 1107 to the patient or the fetus and its long term side effects on the mother as well as the child because (i) oral performance of LPCN 1107 may be substantially different from efficacy and/or safety standpoint compared to previously commercialized intramuscular HPC, Makena, and (ii) oral delivery of HPC could have a very different PK and/or pharmacodynamic profile that has never been experienced with non-oral administration of HPC, thus having its own significant liability exposure independent of known safety of non-oral HPC in humans. 35 Any product liability claims may include allegations of defects in manufacturing, defects in design, a failure to warn of dangers inherent in the product, negligence, strict liability and a breach of warranties.
We cannot be certain of the safety profile upon single oral or multiple oral administration of LPCN 1107 to the patient or the fetus and its long term side effects on the mother as well as the child because (i) oral performance of LPCN 1107 may be substantially different from efficacy and/or safety standpoint compared to previously commercialized intramuscular HPC, Makena, and (ii) oral delivery of HPC could have a very different PK and/or pharmacodynamic profile that has never been experienced with non-oral administration of HPC, thus having its own significant liability exposure independent of known safety of non-oral HPC in humans.
LPCN 2101 is in a very early stage of development and may not be further developed for a variety of reasons. Our oral NAS comprising program LPCN 2101 is in a very early stage of development and consequently the risk that we may fail to commercialize LPCN 2101 and related products is high.
Our oral NAS comprising program LPCN 2101 is in a very early stage of development and consequently the risk that we may fail to commercialize LPCN 2101 and related products is high.
Regulatory agencies could become more risk adverse to any side effects or set higher standards of safety and efficacy prior to reviewing or approving a product.
Regulatory agencies could become more risk adverse to any side effects or set higher standards of safety and efficacy prior to reviewing or approving a product. This could result in a product not being approved.
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.
Currently our common stock is quoted on the Nasdaq Capital Market under the symbol “LPCN.” 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.
The degree of market acceptance for our products, if approved, will depend on a number of factors, including: ● the relative convenience and ease of administration, including as compared to alternative treatments and competitive therapies; ● the prevalence and severity of any adverse side effects; ● limitations or warnings contained in the labeling approved by the FDA; ● availability of alternative treatments, including a number of competitive therapies already approved or expected to be commercially launched in the near future; ● distribution and use restrictions imposed by the FDA or agreed to by us as part of a mandatory REMS or voluntary risk management plan; ● pricing and cost effectiveness; ● the effectiveness of our or any future collaborators’ sales and marketing strategies; ● our ability to increase awareness of our products through marketing efforts; ● our ability to obtain sufficient third-party coverage or reimbursement; and ● the willingness of patients to pay out-of-pocket in the absence of third-party coverage.
The degree of market acceptance for our products, if approved, will depend on a number of factors, including: ● the relative convenience and ease of administration, including as compared to alternative treatments and competitive therapies; ● the prevalence and severity of any adverse side effects; ● limitations or warnings contained in the labeling approved by the FDA; ● availability of alternative treatments, including a number of competitive therapies already approved or expected to be commercially launched in the near future; ● distribution and use restrictions imposed by the FDA or agreed to by us as part of a mandatory REMS or voluntary risk management plan; ● pricing and cost effectiveness; ● the effectiveness of our or any future collaborators’ sales and marketing strategies; ● our ability to increase awareness of our products through marketing efforts; ● our ability to obtain sufficient third-party coverage or reimbursement; and ● the willingness of patients to pay out-of-pocket in the absence of third-party coverage. 34 If our product candidates are approved but do not achieve an adequate level of acceptance by physicians, healthcare payors and patients, we may not generate sufficient revenue from our products and we may never become or remain profitable.
The market price and trading volume of our common stock has been volatile over the past year, and it may continue to be volatile. During 2023, our common stock has traded as low as $2.36 and as high as $9.86 per share.
The market price and trading volume of our common stock has been volatile over the past year, and it may continue to be volatile. During 2024, our common stock has traded as low as $2.83 and as high as $10.69 per share.
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.
Other pharmaceutical companies may develop oral T-replacement therapies that compete with TLANDO. For example, because TU is not a patented compound and is commercially available to third parties, it is possible that competitors may design methods of TU administration that would be outside the scope of the claims of either our issued patents or our patent applications.
For example, because TU is not a patented compound and is commercially available to third parties, it is possible that competitors may design methods of TU administration that would be outside the scope of the claims of either our issued patents or our patent applications.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeGovernance Our board of directors oversees our risk management process, including as it pertains to cybersecurity risks, which focuses on the most significant risks we face in the short-, intermediate-, and long-term timeframe. Management is responsible for the operational oversight of company-wide cybersecurity strategy, policy, and standards across relevant departments to assess and help prepare us to address cybersecurity risks.
Biggest changeGovernance Our board of directors oversees our risk management process, including as it pertains to cybersecurity risks, which focuses on the most significant risks we face in the short-, intermediate-, and long-term timeframe.
We take a risk-based approach to cybersecurity and have implemented cybersecurity policies throughout our operations that are designed to address cybersecurity threats and incidents. 51
We take a risk-based approach to cybersecurity and have implemented cybersecurity policies throughout our operations that are designed to address cybersecurity threats and incidents.
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Management is responsible for the operational oversight of company-wide cybersecurity strategy, policy, and standards across relevant departments to assess and help prepare us to address cybersecurity risks .

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, 2025. 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, 2026. 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 changeOn 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
Biggest changeOn April 14, 2023, a judgment was issued ordering the case dismissed with prejudice and closure of the action. We are not currently a party to any material litigation or other material legal proceedings.
The complaint alleges that the defendants made false and/or misleading statements and/or failed to disclose that our filing of the NDA for TLANDO to the FDA contained deficiencies and as a result the defendants’ statements about our business and operations were false and misleading and/or lacked a reasonable basis in violation of federal securities laws.
The complaint alleged that the defendants made false and/or misleading statements and/or failed to disclose that our filing of the NDA for TLANDO to the FDA contained deficiencies and as a result the defendants’ statements about our business and operations were false and misleading and/or lacked a reasonable basis in violation of federal securities laws.
The lawsuit seeks certification as a class action (for a purported class of purchasers of the Company’s securities from March 27, 2019, through November 8, 2019), compensatory damages in an unspecified amount, and unspecified equitable or injunctive relief. We have insurance that covers claims of this nature. The retention amount payable by us under our policy is $1.25 million.
The lawsuit sought certification as a class action (for a purported class of purchasers of the Company’s securities from March 27, 2019, through November 8, 2019), compensatory damages in an unspecified amount, and unspecified equitable or injunctive relief. We have insurance that covers claims of this nature. The retention amount payable by us under our policy is $1.5 million.
On November 14, 2019, we and certain of our officers were named as defendants in a purported shareholder class action lawsuit, Solomon Abady v. Lipocine Inc. et al ., 2:19-cv-00906-PMW, filed in the United District Court for the District of Utah.
ITEM 3. LEGAL PROCEEDINGS On November 14, 2019, we and certain of our officers were named as defendants in a purported shareholder class action lawsuit, Solomon Abady v. Lipocine Inc. et al ., 2:19-cv-00906-PMW, filed in the United District Court for the District of Utah.
Removed
ITEM 3. LEGAL PROCEEDINGS On April 2, 2019, we filed a lawsuit against Clarus in the United States District Court for the District of Delaware alleging that Clarus’s JATENZO® product infringes six of Lipocine’s issued U.S. patents: 9,034,858; 9,205,057; 9,480,690; 9,757,390; 6,569,463; and 6,923,988. However, on February 11, 2020, we voluntarily dismissed allegations of patent infringement for expired U.S.
Added
We may, from time to time, be involved in various legal proceedings arising from the normal course of business activities, and, while the Company has insurance that covers claims of this nature, unfavorable resolution of any of these matters could materially affect our future results of operations, cash flows, or financial position. ITEM 4.
Removed
Patent Nos. 6,569,463 and 6,923,988 in an effort to streamline the issues and associated costs for dispute. Clarus answered the complaint and asserted counterclaims of non-infringement and invalidity. We answered Clarus’s counterclaims on April 29, 2019.
Added
MINE SAFETY DISCLOSURES Not Applicable. 52 PART II
Removed
The Court held a scheduling conference on August 15, 2019, a claim construction hearing on February 11, 2020, and a summary judgment hearing on January 15, 2021.
Removed
In May 2021, the Court granted Clarus’ motion for summary judgment, finding the asserted claims of Lipocine’s U.S. patents 9,034,858; 9,205,057; 9,480,690; and 9,757,390 invalid for failure to satisfy the written description requirement of 35 U.S.C. § 112. Clarus still had remaining claims before the Court.
Removed
On July 13, 2021, we entered into the Global Agreement with Clarus which resolved all outstanding claims of this litigation as well as the on-going United States Patent and Trademark Office (“USPTO”) Interference No. 106,128 between the parties (as described below).
Removed
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
In 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.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

1 edited+1 added−0 removed1 unchanged
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.
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 11, 2025, there were approximately 87 holders of record of our common stock.
Added
Recent Sales of Unregistered Securities None. Issuer Purchases of Equity Securities None ITEM 6. [RESERVED]

Item 7. Management's Discussion & Analysis

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

87 edited+19 added−23 removed37 unchanged
Biggest changeDuring 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.
Biggest changeThese cash outlays were offset by cash provided by the licensee and distribution agreements we entered into during 2024 of $11.2 million. 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.
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.
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.
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.
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 2401, LPCN 2101, LPCN 2203 or other future product candidates into later stage development, we will require additional capital.
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 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, LPCN 2401 and any other product candidate, including continued research efforts.
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.
To fund future operations, we will need to ultimately raise additional capital and our requirements will depend on many factors, including the following: 59 ● the scope, rate of progress, results and cost of our clinical studies, pre-clinical testing and other related activities for all of our product candidates including LPCN 1154, LPCN 2401, LPCN 2101, LPCN 2203, LPCN 1148, LPCN 1144, and LPCN 1107; ● 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.
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following discussion of our financial condition and results of operations should be read in conjunction with our consolidated financial statements and the related notes thereto and other financial information included elsewhere in this report.
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following discussion of our financial condition and results of operations should be read in conjunction with our consolidated financial statements and the related notes thereto and other financial information included elsewhere in this Annual Report.
Our estimates of the number of performance-based options that will vest will be revised, if necessary, in subsequent periods. We use the Black-Scholes model to compute the estimated fair value of stock option awards.
Our estimates of the number of performance-based options that will vest will be revised, if necessary, in subsequent periods. 62 We use the Black-Scholes model to compute the estimated fair value of stock option awards.
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.
In addition, our capital resources may be consumed more rapidly if we pursue additional clinical studies for LPCN 1154, LPCN 2401, LPCN 2101, LPCN 2203, LPCN 1148, LPCN 1144, and/or LPCN 1107.
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.
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 2401; ● 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.
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.
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 2401, LPCN 2101, LPCN 1148, LPCN 1144, and/or LPCN 1107.
We may seek to raise any necessary additional capital through a combination of public or private equity offerings, including the Sales Agreement, debt financings, collaborations, strategic alliances, licensing arrangements and other marketing and distribution arrangements. These arrangements may not be available to us or available on terms favorable to us.
We may seek to raise any necessary additional capital through a combination of public or private equity offerings, including the A.G.P. Sales Agreement, debt financings, collaborations, strategic alliances, licensing arrangements and other marketing and distribution arrangements. These arrangements may not be available to us or available 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.
We are also exploring the possibility of licensing LPCN 1144, LPCN 1148, LPCN 2401 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.
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.
While we believe we have sufficient liquidity and capital resources to fund our projected operating requirements through at least March 31, 2026, 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, 2026, to support our operations.
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.
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 2401, LPCN 2101, LPCN 2203, LPCN 1148, LPCN 1144, LPCN 1107 and other product candidates.
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 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, 2024, we do not have any active collaboration agreements.
We expect that general and administrative expenses will increase in the future as we continue as a public company, including legal and consulting fees, accounting and audit fees, director fees, directors’ and officers’ insurance premiums, fees for investor relations services and enhanced business and accounting systems, litigation costs, professional fees and other costs.
We expect that general and administrative expenses will increase in the future as we continue as a public company. These fees include legal and consulting fees, accounting and audit fees, director fees, directors’ and officers’ insurance premiums, fees for investor relations services and enhanced business and accounting systems, litigation costs, professional fees and other costs.
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.
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 A.G.P. Sales Agreement.
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.
We have entered into the Verity License Agreement, the SPC License Agreement and the Pharmalink Distribution Agreement with the potential for revenue from future milestones, royalties, and/or product sales, 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.
Research and development expenses also include an allocation of indirect costs, such as those for facilities, office expense and depreciation of equipment based on the ratio of direct labor hours for research and development personnel to total direct labor hours for all personnel. We expense research and development expenses as incurred.
Research and development expenses also include an allocation of indirect costs, such as those for facilities, office expense, and depreciation of equipment based on the ratio of direct labor hours for research and development personnel. We expense research and development expenses as incurred.
Cantor may sell our common stock by any method permitted by law deemed to be an “at the market offering” as defined in Rule 415(a)(4) of the Securities Act of 1933, as amended, including sales made directly on or through the NASDAQ Capital Market or any other existing trade market for our common stock, in negotiated transactions at market prices prevailing at the time of sale or at prices related to prevailing market prices, or any other method permitted by law.
A.G.P. may sell our common stock by any method permitted by law deemed to be an “at the market offering” as defined in Rule 415(a)(4) of the Securities Act, including sales made directly on or through the Nasdaq Capital Market or any other existing trade market for our common stock, in negotiated transactions at market prices prevailing at the time of sale or at prices related to prevailing market prices, or any other method permitted by law.
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.
Develop partnership(s) to continue the advancement of pipeline assets . We continuously strive to prioritize our resources in seeking partnerships of our pipeline assets.
The warrants are classified as a liability due to a provision contained within the warrant agreement which allows the warrant holder the option to elect to receive an amount of cash equal to the value of the warrants as determined in accordance with the Black-Scholes option pricing model with certain defined assumptions upon a change of control.
The warrants were classified as a liability due to a provision contained within the warrant agreement which allowed the warrant holder the option to elect to receive an amount of cash equal to the value of the warrants as determined in accordance with the Black-Scholes option pricing model with certain defined assumptions upon a change of control.
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.
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 Licensed Verity Territory. Our ability to realize benefits from the Verity License Agreement, including milestone and royalty payments, is subject to a number of risks.
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.
As of December 31, 2024, there was $440,000 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.
We can raise capital pursuant to the Sales Agreement but may choose not to issue common stock if our market price is too low to justify such sales in our discretion. There are numerous risks and uncertainties associated with the development and, subject to approval by the FDA, commercialization of our product candidates.
Sales Agreement but may choose not to issue common stock if our market price is too low to justify such sales in our discretion. There are numerous risks and uncertainties associated with the development and, subject to approval by the FDA, commercialization of our product candidates.
Net reversal of variable consideration revenue in 2023 was mainly attributable to the reversal of variable consideration revenue recognized for minimum guaranteed royalties in 2021 under the license agreement with Antares, offset by $110,000 in license revenue payments received from Spriaso under a licensing agreement in the cough and cold field.
Net reversal of variable consideration revenue in fiscal year ended December 31, 2023 was mainly attributable to the reversal of variable consideration revenue recognized for minimum guaranteed royalties in 2021 under the license agreement with Antares, offset by $110,000 in license revenue payments received from Spriaso under a licensing agreement in the cough and cold field.
The fair value estimate utilizes a pricing model and unobservable inputs. Unlike the fair value of other assets and liabilities which are readily observable and therefore more easily independently corroborated, the warrants are not actively traded, and fair value is determined based on significant judgments regarding models, unobservable inputs and valuation methodologies.
The fair value estimate utilized a pricing model and unobservable inputs. Unlike the fair value of other assets and liabilities which are readily observable and therefore more easily independently corroborated, the warrants were not actively traded, and fair value was determined based on significant judgments regarding models, unobservable inputs and valuation methodologies.
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.
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 an initial payment of $2.5 million, and subsequent payments of $5 million and $2.5 million in February 2024 and December 2024, respectively.
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.
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. Our proprietary delivery technologies are designed to improve patient compliance and safety through orally available treatment options.
As the cash payment is at the option of the warrant holder, we account for the common stock warrants as a liability, which is adjusted to fair value each reporting period as well as upon exercise of such warrants. The Company estimates the fair value of the warrant liability based on a hypothetical payout associated with a fundamental transaction.
As the cash payment was at the option of the warrant holder, we accounted for the common stock warrants as a liability, which was adjusted to fair value each reporting period as well as upon exercise of such warrants. The Company estimated the fair value of the warrant liability based on a hypothetical payout associated with a fundamental transaction.
Critical Accounting Policies and Significant Judgments and Estimates Our management’s discussion and analysis of our financial condition and results of operations is based on our financial statements which we have prepared in accordance with U.S. generally accepted accounting principles (“GAAP”).
Critical Accounting Policies and Significant Judgments and Estimates Our management’s discussion and analysis of our financial condition and results of operations is based on our financial statements which we have prepared in accordance with U.S. GAAP.
The warrants require us to pay such holders an amount of cash in the event of a fundamental transaction, as defined in the warrant agreement.
The warrants would have required us to pay such holders an amount of cash in the event of a fundamental transaction, as defined in the warrant agreement.
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.
Unrealized Gain on Warrant Liability We recorded gains of $17,000 and $213,000, respectively, on warrant liability during the fiscal years ended December 31, 2024 and 2023 related to the change in the fair value of outstanding common stock warrants issued in November 2019.
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.
During the year ended December 31, 2023, we sold 81,000 shares of our common stock under the Cantor Sales Agreement at a weighted-average sales price of $5.36 per share, resulting in net proceeds of approximately $405,000, which is net of approximately $24,000 in expenses. On April 24, 2024, we terminated the Cantor Sales Agreement.
Cantor uses its commercially reasonable efforts consistent with its normal trading and sales practices and applicable law and regulations to sell these shares. We pay Cantor 3.0% of the aggregate gross proceeds from each sale of shares under the Sales Agreement. We have also provided Cantor with customary indemnification rights.
A.G.P. will use its commercially reasonable efforts consistent with its normal trading and sales practices and applicable law and regulations to sell shares under the A.G.P. Sales Agreement. We will pay A.G.P. 3.0% of the aggregate gross proceeds from each sale of shares under the A.G.P. Sales Agreement. In addition, we have also provided A.G.P. with customary indemnification rights.
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.
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 the TLANDO product for TRT in the Licensed Verity Territory.
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.
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, 2026 which include a clinical study for LPCN 1154, research and development activities and compliance with regulatory requirements.
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.
We expect to incur significant research and development expenses in the future 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 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.
In addition to our clinical development product candidates, we have assets for which we expect to seek partnerships to enable further development including TLANDO for territories outside of North America, South Korea, and the GCC, LPCN 1148 comprising a novel prodrug of testosterone, and TL, for the management of cirrhosis, LPCN 1144, an oral prodrug of androgen receptor modulator for the treatment of non-cirrhotic MASH which has completed Phase 2 testing, and LPCN 1107, potentially the first oral HPC product indicated for the prevention of recurrent PTB, which has completed a dose finding clinical study in pregnant women and has been granted orphan drug designation by the FDA.
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, modify or suspend on-going clinical studies.
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, modify or suspend on-going and/or planned clinical studies. We can raise capital pursuant to the A.G.P.
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.
Research and Development Expenses We recorded research and development expenses of $7.4 million and $10.2 million, respectively, for the years ended December 31, 2024 and 2023.
Purchase Obligations We enter into contracts and issue purchase orders in the normal course of business with clinical research organizations for clinical trials and clinical and commercial supply manufacturing and with vendors for preclinical research studies, research supplies and other services and products for operating purposes. These contracts generally provide for termination on notice and are cancellable obligations.
Contractual Commitments and Contingencies Purchase Obligations We enter into contracts and issue purchase orders in the normal course of business with clinical research organizations for clinical trials and clinical and commercial supply manufacturing and with vendors for preclinical research studies, research supplies and other services and products for operating purposes.
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.
We will continue efforts to enter into partnership arrangements for the continued development and/or marketing of LPCN 1144, LPCN 1148, LPCN 2401, LPCN 1107, for the development and commercialization of TLANDO outside of the United States, Canada, South Korea, and the GCC countries and LPCN 1111 outside of the United States and Canada.
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.
Our priority is on the development of LPCN 1154, a fast-acting oral antidepressant for PPD with potential for outpatient use. Support our licensees, Verity, SPC, and Pharmalink in commercialization and/or of our licensed oral TRT product . We believe the TRT market needs a differentiated, convenient oral option.
(“Cantor”) pursuant to which we may issue and sell, from time to time, shares of our common stock having an aggregate offering price of up to the amount we have registered on an effective registration statement pursuant to which the offering is being made.
Sales Agreement”) with A.G.P./Alliance Global Partners (“A.G.P.”) pursuant to which we may issue and sell, from time to time, shares of our common stock having an aggregate offering price of up to the amount we registered on an effective registration statement pursuant to which the offering is being made.
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.
These contracts generally provide for termination on notice and are cancellable obligations. 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 December 2, 2024, we modified and extended the lease through February 28, 2026.
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, 2024, we had an accumulated deficit of approximately $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.
If we are unable to raise additional capital or obtain non-dilutive financing, we may need to reduce research and development 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.
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.
The offering of common stock pursuant to the A.G.P. Sales Agreement will terminate upon the termination of the A.G.P. Sales Agreement as permitted therein. We and A.G.P. may each terminate the A.G.P. Sales Agreement at any time upon ten days’ prior notice. As of December 31, 2024, we had not sold any shares under the A.G.P. Sales Agreement.
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.
Other general and administrative expenses include rent and utilities, travel expenses, and professional fees for auditing, tax, legal and various other services. 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.
Net cash provided by financing activities during the year ended December 31, 2023, was related to the sale of 81,000 shares of our common stock under our ATM Offering, less associated costs.
Net cash provided by financing activities during the year ended December 31, 2024 and 2023, was related to the sale of 32,110 shares of our common stock for net proceeds of $209,000 and 81,000 shares of our common stock for net proceeds of $405,000, respectively, under the Cantor Sales Agreement, less associated costs.
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.
Net Cash Provided by Investing Activities During the years ended December 31, 2024 and 2023, net cash used in investing activities was $2.4 million and $13.1 million.
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 NASs which have broad applicability in treating various CNS conditions where we can leverage our technology platform to develop highly differentiated oral therapeutics.
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 plan to support Verity’s, SPC’s and Pharmalink’s efforts to effectively enable the availability of TLANDO to patients in a timely manner, in addition to receiving milestone payments, royalty payments, and/or payments for product sales associated with TLANDO commercialization as agreed to in the Verity License Agreement, the SPC License Agreement and the Pharmalink Distribution Agreement.
Upon termination of the Antares License Agreement, all rights and licenses granted by the Company to Antares under the Antares License Agreement terminated and all rights in TLANDO were transferred to the Company’s new licensing partner, Verity.
The Antares License Agreement was terminated effective January 31, 2024. On January 12, 2024, we entered into the Verity License Agreement with Verity. Upon termination of the Antares License Agreement, all rights and licenses granted by us to Antares under the Antares License Agreement terminated and all rights in TLANDO were transferred to our new licensing partner, Verity.
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.
The decrease in research and development expenses during the year ended December 31, 2024 was primarily due to a $3.1 million decrease related to the completion of our LPCN 1148 Phase 2 POC study in male patients with cirrhosis in 2023, a $584,000 decrease in TLANDO related costs, and a $348,000 decrease in personnel related costs.
Financial Operations Overview Revenue To date, we have not generated any revenues from product sales and do not expect to do so until one of our product candidates receives approval from the FDA. Revenues to date have been generated substantially from license fees, royalty and milestone payments and research support from our licensees.
Financial Operations Overview Revenue To date, we have not generated any revenues from product sales and do not expect to do so until our FDA approved product receives regulatory approval in the SPC Territory or the Pharmalink Territory or until one of our other product candidates receives approval from the FDA.
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.
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.
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 entered into a license agreement for the development and commercialization our product candidate, TLANDO®, an oral testosterone replacement therapy comprised of testosterone undecanoate. 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.
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.
Net cash used in operating activities during 2024 was primarily attributable to cash outlays to support on-going operations, including research and development expenses primarily related to our LPCN 1154 clinical studies and manufacturing scale up, in addition to general and administrative expenses.
Substantially all of our operating losses resulted from expenses incurred in connection with our product candidate development programs, our research activities and general and administrative costs associated with our operations.
Our net income was approximately $8,000 for the year ended December 31, 2024, compared to approximately $16.4 million for the year ended December 31, 2023. Substantially all of our operating losses resulted from expenses incurred in connection with our product candidate development programs, our research activities and general and administrative costs associated with our operations.
Results 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.
Results of Operations Comparison of the Years Ended December 31, 2024, and 2023 The following table summarizes our results of operations for the years ended December 31, 2024 and 2023: Years Ended December 31, 2024 2023 Variance Revenue $ 11,198,144 $ (2,850,818 ) $ 14,048,962 Research and development expenses 7,351,753 10,175,251 (2,823,498 ) General and administrative expenses 5,001,426 4,904,888 96,538 Interest and investment income 1,146,902 1,366,940 (220,038 ) Unrealized gain on warrant liability 17,166 212,690 (195,524 ) Income tax expense (681 ) (755 ) 74 Revenue We recognized revenue of $11.2 million during the year ended December 31, 2024, compared to a net reversal of variable consideration revenue of $2.9 million during the year ended December 31, 2023.
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 currently have registered up to $10,616,169 of shares of common shares for sale under the A.G.P. Sales Agreement, pursuant to the Registration Statement on Form S-3, as amended (File No. 333-275716) (the “Form S-3”), through A.G.P. as sales agent.
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.
Verity has also agreed to make an additional payment to us of $1 million before January 1, 2026. The Verity License Agreement also provides Verity with a license to develop and commercialize TLANDO XR (“LPCN 1111”), our potential next generation, once daily oral product candidate for testosterone replacement therapy comprised of testosterone tridecanoate, in the Licensed Verity Territory.
Although we have previously been successful in obtaining financing through public and private equity securities offerings and our license and collaboration agreements, there can be no assurance that we will be able to do so in the future.
Although we have previously been successful in obtaining financing through public and private equity securities offerings and our license and collaboration agreements, there can be no assurance that we will be able to do so in the future. 54 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.
We have identified the following accounting policies that we believe require application of management’s most subjective judgments, often requiring the need to make estimates about the effect of matters that are inherently uncertain and may change in subsequent periods. Our actual results could differ from these estimates and such differences could be material.
License revenue from payments to be received in the future will be recognized when it is probable that we will receive license payments under the terms of the Verity License Agreement, the SPC License Agreement or the Pharmalink Distribution Agreement. 61 We have identified the following accounting policies that we believe require application of management’s most subjective judgments, often requiring the need to make estimates about the effect of matters that are inherently uncertain and may change in subsequent periods.
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) .
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) .
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.
Revenues to date have been generated substantially from license fees, royalty and milestone payments and research support from our licensees. Since our inception through December 31, 2024, we have generated $53.1 million in revenue under our various license and collaboration arrangements and from government grants.
(“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.
Any FDA post-marketing studies required will also be the responsibility of our Licensee, Verity. 53 In September 2024, we entered into the SPC License Agreement for the development and commercialization of TLANDO with SPC, pursuant to which the Company granted to SPC a non-transferable, exclusive, royalty-bearing license to commercialize our TLANDO product in the SPC Territory.
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.
Years Ended December 31, 2024 2023 Cash used in operating activities $ (1,221,233 ) $ (11,865,991 ) Cash provided by investing activities 2,446,061 13,084,686 Cash provided by financing activities 209,340 404,567 60 Net Cash Used in Operating Activities During each of the years ended December 31, 2024 and 2023, net cash used in operating activities was $1.2 million and $11.9 million, respectively.
We may not realize milestone or royalty payments in anticipated amounts, or at all. 58 On March 6, 2017, we entered into a sales agreement (“Sales Agreement”) with Cantor Fitzgerald & Co.
We may not realize milestone or royalty payments in anticipated amounts, or at all. Previously on March 6, 2017, we entered into a sales agreement (“Cantor Sales Agreement”) with Cantor Fitzgerald & Co. (“Cantor”) under which we agreed to sell shares of our common stock, having registered up to $50.0 million for sale under the Cantor Sales Agreement.
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 are exploring the possibility of licensing TLANDO to third parties outside of the Currently Licensed TLANDO Territories, although as of the date of this Annual Report, no additional licensing agreements have been entered into by the Company in any other territories.
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.
Net cash provided by investing activities during 2024 and 2023 was primarily the result of the maturity of marketable investment securities of $35.4 million and $36.0 million, respectively offset by the purchase of marketable investment securities of $32.9 million and $22.9 million, respectively.
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.
We are currently exploring partnerships for our liver programs LPCN 1144, our candidate for treatment of non-cirrhotic MASH and LPCN 1148 for the management of cirrhosis including prevention of the recurrence of overt hepatic encephalopathy; LPCN 2401 for improved body composition in obesity management as an adjunct therapy to or as a monotherapy post cessation of incretin mimetics use; and LPCN 1107, our candidate for prevention of pre-term birth.
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.
We may not realize milestone, product sale or royalty payments in anticipated amounts, or at all. 58 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 Licensed Verity Territory.
We have devoted our resources to funding research and development programs, including discovery research, preclinical and clinical development activities.
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.
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.
Other Income and Expense Other income and expense consists primarily of interest income earned on our cash, cash equivalents and marketable investment securities, imputed interest on minimum royalties under the Antares Licensing Agreement in 2023, and gains on our warrant liability.
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.
Interest and Investment Income The decrease in interest and investment income of approximately $220,000 during the year ended December 31, 2024 was due to declining cash and marketable investment securities balances in fiscal year ended December 31, 2024 compared to 2023.
The increase in general and administrative expenses during the year ended December 31, 2023 was primarily due to a $374,000 increase in business development and strategic advisory services related expenses, a $217,000 increase in legal fees relating to corporate matters such as our reverse stock split, potential licensing partnerships, and corporate strategy, a $219,000 increase in personnel related costs, a $188,000 increase in franchise taxes resulting from our increase in authorized shares and reverse stock split, a $133,000 increase in director fees, a $41,000 increase in other general and administrative expenses and a $22,000 increase in royalty expense relating to the net sales of TLANDO.
The increase in general and administrative expenses during the year ended December 31, 2024 was primarily due to a $800,000 increase in business development and strategic advisory services related expenses and a $53,000 increase in intellectual property and patent expenses, offset by a $222,000 decrease in corporate insurance expense, a $208,000 decrease in personnel related costs, a $161,000 decrease in professional fees relating to our annual shareholder’s meeting and subsequent decision to enact a reverse stock split, a $146,000 decrease in other various consulting and professional fees, and a $20,000 decrease in other general and administrative expenses.
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.
As of December 31, 2024, we had $21.6 million of unrestricted cash, cash equivalents and marketable investment securities compared to $22.0 million as of December 31, 2023. In October 2024, we entered into the Pharmalink Distribution Agreement with Pharmalink, pursuant to which we granted to Pharmalink a non-transferable, exclusive, license to commercialize our TLANDO product in the Pharmalink Territory.

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