What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2022-05-09 compared with 2021-11-10 · 795 added, 726 removed, 271 unchanged (85% of the section changed)

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additional context with which to understand our financial condition and results of operations, see the management’s discussion

and analysis included in our Form 10-K, filed with the U.S.

Securities and Exchange Commission (“SEC”) on March 11, 2021,

our first quarter Form 10-Q filed with the SEC on May 6, 2021, our second quarter Form 10-Q filed with the SEC on August 5, 2021, as

well as the financial statements and related notes contained therein.

and analysis included in our Form 10-K, filed with the SEC on March 9, 2022 as well as the financial statements and related notes contained

used in the discussion below, “we,” “our,” and “us” refers to Lipocine.

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Factors that might cause such differences include, but are not limited to, those discussed

in Part II, Item 1A (Risk Factors) of this Form 10-Q, or in Part II, Item 1A (Risk Factors) of our Form 10-Q for the quarter ended June

30, 2021 filed with the SEC on August 5, 2021, or in Part II, Item 1A (Risk Factors) of our Form 10-Q for the quarter ended March 31,

2021 filed with the SEC on May 6, 2021 or in Part I, Item 1A (Risk Factors) of our Form 10-K filed with the SEC on March 11, 2021.

as required by applicable law, we assume no obligation to revise or update any forward-looking statements for any reason.

in Part II, Item 1A (Risk Factors) of this Form 10-Q, or in Part I, Item 1A (Risk Factors) of our Form 10-K filed with the SEC on March

Except as required by applicable law, we assume no obligation to revise or update any forward-looking statements for any reason.

of Our Business

are a clinical-stage biopharmaceutical company focused on applying our oral drug delivery technology for the development of pharmaceutical

products focusing on metabolic and endocrine disorders.

Our proprietary delivery technologies are designed to improve patient compliance

and safety through orally available treatment options.

Our primary development programs are based on oral delivery solutions for poorly

bioavailable drugs.

We have a portfolio of proprietary product candidates designed to produce favorable pharmacokinetic (“PK”)

characteristics and facilitate lower dosing requirements, bypass first-pass metabolism in certain cases, reduce side effects, and eliminate

gastrointestinal interactions that limit bioavailability.

most advanced product candidate, TLANDO®, is an oral testosterone replacement therapy (“TRT”) comprised of testosterone

undecanoate (“TU”).

On December 8, 2020, we received tentative approval from the United States Food and Drug Administration

(“FDA”) regarding our new drug application (“NDA”) filed in February 2020 for TLANDO as a TRT in adult males

for conditions associated with a deficiency of endogenous testosterone, also known as hypogonadism.

In granting tentative approval, the

FDA concluded that TLANDO has met all required quality, safety and efficacy standards necessary for approval.

However, TLANDO has not

received final approval and is not eligible for final approval to market in the U.S.

until the expiration of the exclusivity period previously

granted to Clarus Therapeutics, Inc.

(“Clarus”) with respect to Jatenzo ®,

which expires on March 27, 2022.

The FDA has affirmed that the resubmission of the NDA for TLANDO will be a Class 1 resubmission.

1 NDA resubmission includes a two-month FDA review goal period.

On October 14, 2021, we entered into a license agreement (the “Antares

License Agreement”) with Antares Pharma, Inc.

(“Antares”), pursuant to which we granted to Antares an exclusive, royalty-bearing,

sublicensable right and license to develop and commercialize, upon final approval of TLANDO from the FDA, our TLANDO product with respect

to TRT in the U.S.

We and Antares remain committed to taking appropriate actions with the goal of receiving final approval to permit

the launch of TLANDO.

The FDA has also required us to conduct certain post-marketing studies to (i) assess patient understanding of key

risks relating to TLANDO and (ii) evaluate development of adrenal insufficiency with chronic TLANDO therapy which will be conducted and

paid for by Antares.

pipeline candidates include LPCN 1144, an oral prodrug of bioidentical testosterone comprised of TU for the treatment of non-cirrhotic

non-alcoholic steatohepatitis (“NASH”) which is currently in Phase 2 testing, TLANDO® XR, a next generation oral TRT

product comprised of testosterone tridecanoate (“TT”) with the potential for once daily dosing which has completed Phase

2 testing, LPCN 1148 comprising a novel prodrug of bioidentical testosterone, testosterone laurate (“TL”), for the management

of symptoms associated with cirrhosis, LPCN 1154, an oral neuro-steroid targeted for the treatment of postpartum depression (“PPD”) ,

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 Phase 2 clinical study and has been granted orphan

drug designation by the FDA.

1144 is currently being tested in an open label extension (“OLE”) study to the Liver Fat intervention with oral Testosterone

(“ LiFT “) proof-of-concept (“POC”) Phase 2 clinical study, a paired-biopsy study in confirmed non-cirrhotic

NASH subjects.

Positive top-line primary endpoint results after 12 weeks of treatment in the LiFT clinical study were released

in January 2021.

Treatments with LPCN 1144 resulted in robust liver fat reduction, assessed by magnetic resonance imaging, proton density

fat fraction (“MRI-PDFF”) technique, and showed improvement of liver injury markers with no observed tolerability issues.

Additionally, key secondary endpoint results after 36 weeks of treatment in the LiFT clinical study were released in August

Treatments with LPCN 1144 met the non-alcoholic steatohepatitis (“NASH”) resolution regulatory endpoint, showed positive

effects in appendicular lean mass and whole-body fat mass and continued to show substantial reductions in markers of liver injury compared

are a clinical-stage biopharmaceutical company focused on neuroendocrine and metabolic disorders using our proprietary oral drug delivery

Our proprietary delivery technologies are designed to improve patient compliance and safety through orally available treatment

Our primary development programs are based on oral delivery solutions for poorly bioavailable drugs.

We have a portfolio of

differentiated innovative product candidates that target high unmet needs for neurological and psychiatric CNS disorders, liver diseases,

and hormone supplementation for men and women.

entered into a license agreement for the development and commercialization our product candidate, TLANDO®, an oral testosterone replacement

therapy (“TRT”) comprised of testosterone undecanoate (“TU”).

TLANDO is a registered trademark assigned to Antares.

On October 14, 2021, we entered into a license agreement (the “Antares License Agreement”) with Antares Pharma, Inc.

or our “Licensee”), pursuant to which we granted to Antares an exclusive, royalty-bearing, sublicensable right and license

to develop and commercialize, upon final approval of TLANDO from the United States Food and Drug Administration (“FDA”),

the TLANDO product for TRT in the U.S.

Any FDA required post-marketing studies will also be the responsibility of our licensee, Antares.

On March 28, 2022, Antares received approval from the FDA for TLANDO as a TRT in adult males for conditions associated with a deficiency

of endogenous testosterone, also known as hypogonadism.

pipeline candidates include:

LPCN 1148 comprising a novel prodrug of testosterone, 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;

LPCN 1111 (TLANDO® XR), a next generation oral TRT product

comprised of testosterone tridecanoate (“TT”) with the potential for once daily dosing which has completed Phase 2 testing;

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;

and neuroactive steroids (NAS) including LPCN 1154 for postpartum depression (PPD) and LPCN 2101 for epilepsy.

following chart summarizes the status of our product candidate development programs:

date, we have funded our operations primarily through the sale of equity securities, debt and convertible debt and through up-front payments,

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We have not generated any revenues

from product sales and we do not expect to generate revenue or royalties from product sales unless and until we obtain regulatory approval

of TLANDO or other products.

from product sales and we do not expect to generate revenue other than TLANDO royalties and license fees from product sales by Antares

unless and until we obtain regulatory approval of our product candidates.

have incurred losses in most years since our inception.

As of September 30, 2021, we had an accumulated deficit of $185.3 million.

As of March 31, 2022, we had an accumulated deficit of $176.2 million.

and losses fluctuate year to year, primarily depending on the nature and timing of research and development occurring on our product

Our net loss was $13.3 million for the nine months ended September 30, 2021, compared to $16.5 million for the nine months

ended September 30, 2020.

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, including recently settled litigation, associated

with our operations.

Our net loss was $3.5 million for the three months ended March 31, 2022, compared to $3.4 million for the three months ended

March 31, 2021.

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.

expect to continue to incur significant expenses and operating losses for the foreseeable future as we:

the OLE clinical study with LPCN 1144;

further development of our other product candidates, including LPCN 1144, LPCN 1148, LPCN 1154 and LPCN 1107;

further development of our other product candidates, including LPCN 1148, LPCN 1144, LPCN 1111, LPCN 1107, LPCN 1154 and LPCN 2101;

our research efforts;

new product candidates or new uses for our existing products candidates;

new products or new uses for our existing products;

expand and protect our intellectual property portfolio;

general and administrative support for our operations.

fund future long-term operations, including the potential commercialization of our products, we will need to raise additional capital.

The amount and timing of future funding requirements will depend on many factors, including capital market conditions, regulatory requirements

related to our other product development programs, the timing and results of our ongoing development efforts, the potential expansion

of our current development programs, potential new development programs, our ability to license our products to third parties, the pursuit

of various potential commercial activities and strategies associated with our development programs and related general and administrative

We anticipate that we will seek to fund our operations through public or private equity or debt financings or other sources,

such as potential license, partnering and collaboration agreements.

We cannot be certain that anticipated additional financing will be

available to us on favorable terms, in amounts sufficient to fund our operations or at all.

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.

fund future long-term operations, including the potential commercialization of any of our product candidates, we will need to raise additional

The amount and timing of future funding requirements will depend on many factors, including capital market conditions, the commercial

success of TLANDO, regulatory requirements related to our other product development programs, the timing and results of our ongoing development

efforts, the potential expansion of our current development programs, potential new development programs, our ability to license our

products to third parties, the pursuit of various potential commercial activities and strategies associated with our development programs

and related general and administrative support.

We anticipate that we will seek to fund our operations through public or private equity

or debt financings or other sources, such as potential license, partnering and collaboration agreements.

We cannot be certain that anticipated

additional financing will be available to us on favorable terms, in amounts sufficient to fund our operations, or at all.

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.

goal is to become a leading biopharmaceutical company focused on applying our proprietary drug delivery technology for the development

of pharmaceutical products focusing on neuroendocrine and metabolic disorders.

The key components of our strategy are to:

a diversified multi-asset pipeline of novel therapies.

We intend to employ a value-driven strategy based on our proprietary technology

platform to identify and develop product candidates for neuroendocrine and metabolic disorders including Central Nervous System (CNS)

disorders and end stage diseases such as decompensated cirrhosis.

We intend to focus on product candidates that we believe are differentiated,

have attractive profiles, and address a clear unmet medical need that we can advance quickly and efficiently into late-stage development.

LPCN 1148, a unique prodrug of androgen receptor agonist to manage end stage (decompensated) liver cirrhosis disease.

LPCN 1148, a novel prodrug of testosterone, could address a significant unmet medical need in patients with decompensated liver cirrhosis

accompanied with muscle disorder such as secondary sarcopenia.

Sarcopenia in male cirrhotic patients is known to be independently associated

with poor outcomes including quality of life, increased decompensation events such as hepatic encephalopathy, increased hospital admissions,

and increased mortality rate.

We believe LPCN 1148 may be eligible for an orphan drug designation.

Enrollment in a multi-center placebo-controlled

phase 2 trial is currently ongoing.

our licensee in commercialization of our licensed oral TRT option .

We believe the TRT market needs a differentiated, convenient oral

We have exclusively licensed rights to TLANDO to Antares for commercialization of TLANDO in the US.

We plan to support our licensee’s

efforts to effectively enable the availability of TLANDO to patients in a timely manner, in addition to receiving milestone and royalty

payments associated with TLANDO commercialization as agreed to in the Antares License Agreement.

partnership(s) to continue the advancement of pipeline assets .

We continuously strive to prioritize our resources in seeking co-development

partnerships of our pipeline assets.

We currently plan to explore partnering of LPCN 1144, our candidate for treatment of non-cirrhotic

NASH, LPCN 1107, our candidate for prevention of pre-term birth, and LPCN 1111, a once-a-day therapy candidate for TRT.

Product Candidates

current portfolio includes our most advanced product candidate, TLANDO, an oral TRT product candidate, which received tentative approval

from the FDA on December 8, 2020.

Additionally, we are in the process of establishing our pipeline of other clinical candidates including

an oral androgen therapy for the treatment of non-cirrhotic NASH, LPCN 1144, a next-generation potential once daily oral TRT, TLANDO

XR, an androgen therapy for the management symptoms associated with cirrhosis, LPCN 1148, an oral neuro-steroid targeted for the treatment

of PPD , LPCN 1154, an oral therapy for the prevention of recurrent PTB, LPCN 1107, and we

continue to explore other product candidates targeting indications with a significant unmet need.

On October 14, 2021, we entered into

the Antares License Agreement with Antares, pursuant to which we granted to Antares an exclusive, royalty-bearing, sublicensable right

and license to develop and commercialize, upon final approval of TLANDO from the FDA, our TLANDO product with respect to TRT in the U.S.

The Antares License Agreement also provides Antares with an option, exercisable on or before March 31, 2022, to license TLANDO XR.

pipeline of clinical candidates including LPCN 1148, an androgen therapy for the management of cirrhosis, LPCN 1144, an oral androgen

therapy for the treatment of non-cirrhotic NASH, LPCN 1111, a next-generation potential once daily oral TRT, LPCN 1107, an oral therapy

for the prevention of PTB, and NAS including LPCN 1154 for postpartum depression (PPD) and LPCN 2101 for epilepsy.

We will continue to

explore other product candidates targeting indications with a significant unmet need.

products are based on our proprietary Lip’ral drug delivery technology platform.

Lip’ral technology is a patented technology

based on lipidic compositions which form an optimal dispersed phase in the gastrointestinal environment for improved absorption of insoluble

The drug loaded dispersed phase presents the solubilized drug efficiently at the absorption site (gastrointestinal tract membrane)

thus improving the absorption process and making the drug less dependent on physiological variables such as dilution, gastro-intestinal

pH and food effects for absorption.

Lip’ral based formulation enables improved solubilization and higher drug-loading capacity,

which can lead to improved bioavailability, reduced dose, faster and more consistent absorption, reduced variability, reduced sensitivity

to food effects, improved patient compliance, and targeted lymphatic delivery where appropriate.

Lip’ral based TLANDO was approved in

Lip’ral technology is a patented technology based on lipidic compositions which form an optimal dispersed phase

in the gastrointestinal environment for improved absorption of insoluble drugs.

The drug loaded dispersed phase presents the solubilized

drug efficiently at the absorption site (gastrointestinal tract membrane) thus improving the absorption process and making the drug less

dependent on physiological variables such as dilution, gastro-intestinal pH, and food effects for absorption.

Lip’ral based formulation

enables improved solubilization and higher drug-loading capacity, which can lead to improved bioavailability, reduced dose, faster and

more consistent absorption, reduced variability, reduced sensitivity to food effects, improved patient compliance, and targeted lymphatic

delivery where appropriate.

Development Pipeline

An Oral Product Candidate for Testosterone Replacement Therapy

most advanced product, TLANDO, is an oral formulation of the chemical, TU, which is an eleven-carbon side chain attached to testosterone

TU is an ester prodrug of T.

An ester is chemically formed by bonding an acid and an alcohol.

Upon the cleavage, or

breaking, of the ester bond, T is formed.

TU has been approved for use outside the United States for many years for delivery via intra-muscular

injection and in oral dosage form and more recently TU has received regulatory approval in the United States for delivery via intra-muscular

injection and in oral dosage form.

We are using our proprietary technology to facilitate steady gastrointestinal solubilization and absorption

Proof-of-concept was initially established in 2006, and subsequently TLANDO was licensed in 2009 to Solvay Pharmaceuticals, Inc.

which was then acquired by Abbott Products, Inc.

Following a portfolio review associated with the spin-off of

by Abbott in 2011, the rights to TLANDO were reacquired by us.

All obligations under the prior license agreement have been

completed except that Lipocine will owe Abbott a perpetual 1% royalty on net sales.

Such royalties are limited to $1 million in the first

two calendar years following product launch, after which period there is not a cap on royalties and no maximum aggregate amount.

versions of any such product are introduced, then royalties are reduced by 50%.

PDUFA Outcome

December 8, 2020 we received tentative approval from the FDA regarding our NDA filed in February 2020 for TLANDO as a TRT in adult males

for conditions associated with a deficiency of endogenous testosterone, also known as hypogonadism.

In granting tentative approval, the

FDA concluded that TLANDO has met all required quality, safety and efficacy standards necessary for approval.

However, TLANDO has not

received final approval and is not eligible for final approval to market in the U.S.

until the expiration of the exclusivity period previously

granted to Clarus with respect to Jatenzo ®, which expires on March 27, 2022.

has affirmed that the resubmission of the NDA for TLANDO will be a Class 1 resubmission.

A Class 1 NDA resubmission includes a two-month

FDA review goal period.

We remain committed to taking appropriate actions with the goal of receiving final approval to permit the launch

the Pediatric Research Equity Act (“PREA”), if TLANDO receives full approval, under the terms of the Antares Licensing Agreement,

Antares will need to address the PREA requirement to assess the safety and effectiveness of TLANDO in pediatric patients.

also required us to conduct certain post-marketing studies including:

(i) conduct an appropriately designed label comprehension and knowledge

study that assesses patient understanding of key risk messages in the Medication Guide for TLANDO and (ii) conduct an appropriately designed

one-year trial to evaluate development of adrenal insufficiency with chronic TLANDO therapy which will be conducted and paid for by Antares.

The timetables for these post-marketing requirements will be established at the time of full approval of TLANDO.

execution of the Antares License Agreement, Antares paid to us an initial payment of $11.0 million.

Antares will also make additional

payments of $5.0 million to us on each of January 1, 2025 and January 1, 2026, provided that certain conditions are satisfied.

also eligible to receive milestone payments of up to $160.0 million in the aggregate, depending on the achievement of certain sales milestones

in a single calendar year with respect to all products licensed by Antares under the Antares License Agreement.

In addition, upon commercialization,

we will receive tiered royalty payments at rates ranging from percentages in the mid-teens to up to 20% of net sales of TLANDO in the

United States, subject to certain minimum royalty obligations.

If Antares exercises its option to license TLANDO XR, we will be entitled

to an additional payment of $4.0 million, as well as development milestone payments of up to $35.0 million in the aggregate and tiered

royalty payments at rates ranging from percentages in the mid-teens to 20% of net sales of TLANDO XR in the United States.

Competition Update

March 27, 2019, Clarus’ product JATENZO®, an oral TU product, was approved by the FDA and also received three years of data

On February 10, 2020, Clarus announced that JATENZO® has been launched and is commercially available.

Based on the FDA’s

tentative approval of TLANDO, we will not be able to begin marketing TLANDO until receiving final approval no earlier than March 27,

2022, the expiration of the exclusivity period granted to Clarus with respect to JATENZO®.

Additionally,

our competitors may introduce other TRTs.

For example, on January 5, 2021 Marius submitted a NDA to the FDA seeking approval of KYZATREX®,

its novel oral TU soft gelatin capsule for the treatment of primary and secondary hypogonadism in adult men.

According to Marius, it

has been assigned a PDUFA date of October 31, 2021 for KYZATREX®.

are also aware of other pharmaceutical companies that have TRTs or testosterone therapies in development that may be approved for marketing

in the United States or outside of the United States.

on publicly available information, we believe that several other TRTs that would be competitive with TLANDO are in varying stages of

development, some of which may be approved, marketed and/or commercialized prior to 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

Oral Product Candidate for the Management of Decompensated Cirrhosis

are currently evaluating LPCN 1148 comprising testosterone laurate (TL) for the management of decompensated cirrhosis.

We believe LPCN

1148 targets unmet needs for cirrhosis subjects 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, and improvement in post liver transplant survival,

including outcomes and costs.

are currently conducting a Phase 2 POC study (NCT04874350) in male cirrhotic subjects to evaluate the therapeutic potential of LPCN 1148

for the management of sarcopenia.

The ongoing Phase 2 POC study is a prospective, multi-center, randomized, placebo-controlled study

in male sarcopenic cirrhotic patients.

Subjects will be randomized 1:1 to one of two arms.

The treatment arm is an oral dose of LPCN

1148, and the second arm is a matching placebo.

The primary endpoint is change in skeletal muscle index at week 24 with key secondary

endpoints including change in liver frailty index, rates of breakthrough hepatic encephalopathy, and number of waitlist events, including

all-cause mortality.

Total treatment is expected to be 52 weeks.

We currently expect enrollment in the Phase 2 study to be complete by

the end of the third quarter of 2022 and top-line 24-week results by the end of the first quarter of 2023.

outcomes of interest from the Phase 2 study include

clinical outcomes such as overall survival and new decompensation events (including hepatic encephalopathy and/or ascites occurrences),

rates of survival to transplant, rates of hospitalizations, infections, etc., muscle changes such as muscle mass, body composition, myosteatosis

(muscle fat), functional capacity changes such as liver frailty index (LFI), patient reported outcomes (PROs), and biochemical markers

including hematocrit for anemia status, albumin, creatinine/kidney function, etc.

Overview – Cirrhosis

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.

The economic burden (approximately $812,500/transplant) is high and continues to increase.

Each year about half of

the approximately 17,000 people in U.S.

on the LT waitlist undergo transplant, while nearly 3,000 patients either die or are removed

from the list because they were “too sick to transplant.”

cirrhosis is defined as the histological development of regenerative nodules surrounded by fibrous bands.

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.

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.

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.

encephalopathy (“HE”), a significant decompensation event in patient with cirrhosis, is a brain dysfunction caused by liver

insufficiency and/or portal systemic shunting.

Because the damaged liver cannot function normally (as in cirrhosis), neurotoxins such

as ammonia are inadequately removed from systemic circulation and travel to the brain, where they affect neurotransmission.

cause episodes of HE, which may present as alterations in consciousness, cognition, and behavior that range from minimal to severe.

HE occurs in 30% to 40% of patients with cirrhosis at some point during the clinical course of their disease.

As the burden of chronic

liver disease and cirrhosis is increasing, the frequency of HE is also increasing.

Disorders and Cirrhosis

disorders secondary to cirrhosis could be manifested in the form of several inter-related characteristics such as sarcopenia, myosteotosis,

and frailty impacting muscle mass, strength, quality, and function.

Chronic inflammation and oxidative stress have also been reported

to accelerate muscle wasting.

Muscle also plays a significant compensatory role in detoxifying ammonia, a neurotoxin and a myotoxin implicated

in precipitation of HE in cirrhosis patients.

and associated frailty affect up to 70% of cirrhotic men and are a leading cause of patients being removed from the LT wait list.

to the lack of available organs and aging demographics of those on the waitlist, patients that do receive a transplant are “increasingly

being described as frail”.

The presence of sarcopenia or frailty is associated with increased risk of hospitalization and hepatic

decompensation, a two-fold increase in waitlist mortality, poor post-transplant outcomes, and reportedly is equivalent to adding 9-10

points to the Model for End-Stage Liver Disease (MELD) score.

is typically associated with body composition changes with decreased muscle mass and/or low skeletal muscle index.

Change in one or more

of appendicular lean mass, total lean mass, fat mass, high VAT (visceral adipose tissue), waist circumference, weight, and/or BMI are

notable features.

Myosteotosis (fat infiltration in muscles) is indicative of poor muscle quality.

Frailty is a state of low energetics

accompanied with low physical performance/mobility probably because of poor muscle strength/function and is assessed via various measures

such as decreased gait speed, weak hand grip;

slow rising from a chair, balance, isometric knee extension peak torque or a composite

measure such as liver frailty index (LFI).

as shown in the figure below, muscle disorder such as sarcopenia and myosteotosis in cirrhosis could be a clinically meaningful predictor

of survival and mortality with lower survival in cirrhotic patients with accompanying muscle disorders.

Montano-Loza,

J Cachexia Sarcopenia Muscle.

Disorders and Mortality in Liver Cirrhosis

develops in the majority of male cirrhosis patients.

The main mechanisms associated with sarcopenia and decompensated cirrhosis include

a catabolic state, progressive immobility, imbalance between muscle breakdown and formation, and hormonal changes.

Patients are typically

diagnosed with decompensated cirrhosis upon development of cirrhotic symptoms (e.g., jaundice, HE), and the diagnosis is confirmed via

various liver function/imaging tests (e.g., MELD score, liver biopsy, CT scan).

A variety of clinical evaluations for muscle mass, strength,

and function are typically used to diagnose sarcopenia.

Sarcopenia in cirrhosis also correlates with decompensation events, particularly

HE (sarcopenia is about 2-fold more prevalent in overt HE patients than those without overt HE).

Notably, low testosterone in males is

associated with sarcopenia, severity of cirrhosis, and mortality.

as shown in figure below, sarcopenia is a predictor for increased mortality in cirrhosis (about 2-fold higher compared to no sarcopenia).

2022, 76, 588–599

as shown in figure below, pre transplant sarcopenia in liver cirrhosis often produces poor post-transplant outcomes with higher mortality

Longer post-transplant hospitalization and rehabilitation can be demanding on the individual, both physically and financially.

J Am Coll Surg.

2010 Aug;211(2):271-8

Myosteatosis,

fat infiltration in muscles, has been found in many cirrhotic patients undergoing liver transplant evaluation, and studies have associated

it with more complications and poor survival.

Myosteatosis is characteristically associated with liver steatosis in NAFLD, resulting

from ectopic fat accumulation in skeletal muscle.

Myosteatosis may affect many individuals who do not meet the anthropometric criteria

for sarcopenia or obesity.

The accumulation of excess fat in extramyocellular compartments is mostly pathologic.

It can be defined as

intramuscular (between muscle fibers) or intermuscular (between muscle fascicles) and is associated with lower muscle function and strength,

muscle atrophy, and physical disabilities.

and cirrhosis

is a state of low energetics accompanied with low physical performance/mobility, usually as a result of poor muscle strength/function

and its presence is assessed via various measures such as decreased gait speed, weak hand grip, slow rising from a chair, poor balance,

low isometric knee extension peak torque or a composite measure such as liver frailty index (LFI).

as shown in figure below, frailty predicts LT waitlist mortality among outpatients with cirrhosis regardless of the MELD score.

Am J Transplant.

2014 Aug;14(8):1870-9

presence of frailty is associated with increased waitlist death/delisting

it has also been reported, as shown in figure below, that there is a higher incidence of waitlist mortality as the frailty worsened.

2020 Sep;73(3):575-581.

of liver frailty and mortality

there are no FDA approved drugs to treat secondary sarcopenia in cirrhosis.

We believe we are the only clinical-stage company

pursuing decompensation in sarcopenic cirrhotic patients, and no regulatory precedent currently exists for the approval of decompensation

or sarcopenia-targeted therapies.

We believe LPCN 1148 has the potential to aid the management of decompensation events in male sarcopenic

cirrhotic patients through the following possible mechanisms of action:

myo-augmentation (impact muscle mass and/or quality and/or function)

via myostatin inhibition, myosteatosis reduction, anti-catabolic effect, changes in body composition (increase lean mass and/or reduce

fat mass) and slowing muscle autophagy;

inducing hepato-effective actions with improved key liver injury markers;

increase protein synthesis;

improve anemia, induce immunomodulation with improvement of immuno-dysregulation, and lower infection rates;

anti-inflammatory/antioxidant

effects by lowering undesirable cytokines such as IL-1, IL-6, and TNF-α;

and improve mitochondrial function.

Mayo Clin Proc.

Eur J Gastroenterol.

Clin Gastroenterol

World J Gastroenterol.

Carey, Hepatology, 2019;

Sinclair, Ailment

Pharmacol Ther, 2016;

Lai, Am J Transplant, 2014;

Montano-Loza, Clin Transl Gastroenterol,

Kahn, Clin Transp, 2018;

Montano-Loza, J Cach, Sarco, and Musc, 2016.

An Oral Prodrug of Bioidentical Testosterone Product Candidate for the Treatment of NASH

are currently evaluating LPCN 1144, an oral prodrug of bioidentical testosterone comprised of TU, for the treatment of non-cirrhotic

NASH is a more advanced state of non-alcoholic fatty liver disease (“NAFLD”) and can progress to a cirrhotic liver

and eventually hepatocellular carcinoma/ liver cancer.

Overview – NASH

is a more advanced state of non-alcoholic fatty liver disease (“NAFLD”) and can progress to a cirrhotic liver or liver failure,

require liver transplant, and can result in hepatocellular carcinoma/ liver cancer, and death.

Progression of NASH to end stage liver

disease will soon surpass all other causes of liver failure requiring liver transplantation.

Importantly, beyond these critical conditions,

NASH and NAFLD patients additionally suffer heightened cardiovascular risk and, in fact, die more frequently from cardiovascular events

than from liver disease.

NAFLD/NASH is becoming more common due to its strong correlation with obesity and metabolic syndrome, including

components of metabolic syndrome such as diabetes, cardiovascular disease and high blood pressure.

Twenty to thirty percent of the U.S.

population is estimated to suffer from NAFLD

and fifteen to twenty percent of this group progress to NASH, which is a substantially large population that lacks effective therapy.

Currently, there are no FDA approved treatments for NASH, a silent killer that affects approximately 30 million Americans.

Approximately

50% of NASH patients are in adult males.

NAFLD/NASH is becoming more common due to its strong correlation with obesity and metabolic

syndrome, including components of metabolic syndrome such as diabetes, cardiovascular disease and high blood pressure.

population is estimated to suffer from NAFLD and fifteen to twenty percent of this group progresses to NASH, which is a substantially

large population that lacks an effective therapy.

NASH is a silent killer that affects millions in the U.S.

Diagnoses have been on the

rise and are expected to increase dramatically in the next decade.

Approximately 50% of NASH patients are in adult males.

In men, especially

with comorbidities associated with NAFLD/NASH, testosterone deficiency has been associated with an increased accumulation of visceral

adipose tissue and insulin resistance, which could be factors contributing to NAFLD/NASH.

There is currently no approved therapy for

the treatment of NASH although there are several drug candidates currently under development with many having clinical failures to date.

of Liver Disease

liver is the largest internal organ in the human body and its proper function is indispensable for many critical metabolic functions,

including the regulation of lipid and sugar metabolism, the production of important proteins, including those involved in blood clotting,

and purification of blood.

There are over 100 described diseases of the liver, and because of its many functions, these can be highly

debilitating and life-threatening unless effectively treated.

Liver diseases can result from injury to the liver caused by a variety

of insults, including hepatitis C virus, hepatitis B virus, obesity, chronic excessive alcohol use or autoimmune diseases.

of the underlying cause of the disease, there are important similarities in the disease progression including increased inflammatory

activity and excessive liver cell apoptosis, which if unresolved leads to fibrosis.

Fibrosis, if allowed to progress, will lead to cirrhosis,

or excessive scarring of the liver, and eventually reduced liver function.

Some patients with liver cirrhosis have a partially functioning

liver and may appear asymptomatic for long periods of time, which is referred to as decompensated liver disease.

Decompensated liver

disease is when the liver is unable to perform its normal functions.

Many people with active liver disease remain undiagnosed largely

because liver disease patients are often asymptomatic for many years.

with comorbidities associated with NAFLD/NASH, testosterone deficiency has been associated with an increased visceral adipose tissue

and insulin resistance, which could be factors contributing to NAFLD/NASH.

There is currently no approved therapy for the treatment of

NASH although there are several drug candidates currently under development with many clinical failures to date.

critical pathophysiologic mechanisms underlying the development and progression of NASH include reduced ability to handle lipids, increased

insulin resistance, injury to hepatocytes and liver fibrosis in response to hepatocyte injury.

NASH patients have an excessive accumulation

of fat in the liver resulting primarily from a caloric intake above and beyond energy needs.

A healthy liver contains less than 5% fat,

but a liver in someone with NASH can contain more than 20% fat.

This abnormal liver fat contributes to the progression to NASH, a liver

necro-inflammatory state that can lead to scarring, also known as fibrosis, and, for some, can progress to cirrhosis and liver failure.

of Liver Cell Death

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elevated in liver disease and, like ALT, is considered an overall marker of liver inflammation.

between Hypogonadism and NAFLD

and clinical studies in the NAFLD/NASH literature have shown the prevalence of testosterone deficiency across the NAFLD/NASH histological

spectrum wherein low testosterone was independently associated with NAFLD/NASH with an inverse relationship between testosterone and

NAFLD/NASH symptom severity.

A recent National Institute of Diabetes and Digestive Kidney Diseases report suggests that 75% of biopsy

confirmed NASH subjects have less than 372 ng/dL of total testosterone and that the degree of fibrosis severity is inversely related

to free testosterone levels;

thus, providing a good rationale for testing LPCN 1144 in adult NASH patients regardless of their hypogonadal

We have received clearance from the FDA to clinically investigate LPCN 1144 in an expanded target population of adult male NASH

Specifically, the FDA waived the limitation of only testing LPCN 1144 in NASH subjects with total testosterone levels below

300 ng/dL (threshold for hypogonadism).

have recently completed the LiFT Phase 2 clinical study in confirmed non-cirrhotic NASH subjects.

The LiFT clinical study

was a prospective, multi-center, randomized, double-blind, placebo-controlled multiple-arm study in biopsy-confirmed hypogonadal or eugonadal

male NASH subjects with grade F1/F3 fibrosis and a NAFLD Activity Score ≥ 4 with a 36-week treatment period.

people with NASH are asymptomatic and their disease is often discovered incidentally following a liver imaging procedure, such as an

ultrasound, prescribed for other reasons or as part of an investigation for elevated liver enzymes.

Once suspected clinically, a liver

biopsy is required to definitively diagnose NASH, which necessitates the joint presence of steatosis, ballooning and lobular inflammation.

Once pathologically confirmed, the severity of NAFLD and NASH is determined using the histologically validated NAFLD activity score,

which grades disease activity on a scale of 0 to 8.

The NAFLD activity score is the sum of the individual scores for steatosis (0 to

3), lobular inflammation (0 to 3), and hepatocellular ballooning (0 to 2) but does not include a score for fibrosis.

Fibrosis staging

(F0-F4) relies on the NASH CRN classification (F0 = no fibrosis;

F1 = perisinusoidal or portal/periportal fibrosis (not both);

perisinusoidal and portal/periportal fibrosis;

F3 = bridging fibrosis;

F4 = cirrhosis).

diagnosis remains the gold standard for assessment of NASH and fibrosis.

However, given that liver biopsy is associated with risks of

pain, bleeding and other morbidity, as well as significant cost, the procedure is not practical for general patient screening.

non-invasive tools such as clinical risk scores and imaging techniques are increasingly used to assess potential NASH patients.

risk scores such as the NAFLD fibrosis score, Fibrosis-4 index, the Enhanced Liver Fibrosis score and vibration-controlled transient

elastography (“VCTE”), have been validated and are increasingly used.

These tools have an excellent negative predictive value

and an acceptable positive predictive value for detection of advanced (≥ F3) fibrosis and are increasingly used in clinical settings.

Extensive efforts are also under way to develop non-invasive means to identify patients with NAS ≥ 4 or fibrosis ≥ F2 without a

liver biopsy.

In draft guidance, the FDA encouraged sponsors to identify biochemical or noninvasive imaging biomarkers that, once characterized

and agreed by the FDA, could replace liver biopsies for patient selection and efficacy assessment in clinical trials.

expect that the validation and subsequent adoption of these new tools will result in an increase in the diagnosis and treatment rates

for NASH in the future.

have recently completed the LiFT Phase 2 clinical study in biopsy-confirmed non-cirrhotic NASH subjects.

The LiFT clinical

study enrolled 56 biopsy confirmed NASH male subjects.

Subjects were randomized 1:1:1 to one of three arms (Treatment A is a twice daily

oral dose of 142 mg testosterone equivalent, Treatment B is a twice daily oral dose of 142 mg testosterone equivalent formulated with

217 mg of d-alpha tocopherol equivalent, and the third arm is twice daily matching placebo).

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.

Subjects were randomized 1:1:1 to one of three arms (Treatment

A is a twice daily oral dose of 142 mg testosterone equivalent, Treatment B is a twice daily oral dose of 142 mg testosterone equivalent

formulated with 217 mg of d-alpha tocopherol equivalent, and the third arm is twice daily matching placebo).

primary endpoint of the LiFT clinical study was change in hepatic fat fraction via MRI-PDFF and exploratory liver fat/marker end

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Additionally, key secondary endpoints post 36 weeks of treatment included assessment of histological

change for NASH resolution and/or fibrosis improvement as well as liver fat data.

The LiFT clinical study was not powered to assess

statistical significance of any of the secondary endpoints.

change for NASH resolution and/or fibrosis improvement (biopsy) as well as liver fat data (MRI-PDFF).

The LiFT clinical study

was not powered to assess statistical significance of any of the secondary endpoints.

Other important endpoints included the following:

change in liver injury

markers, anthropomorphic measurements, lipids, insulin resistance and inflammatory/fibrosis markers;

as well as patient reported outcomes.

change in liver injury markers, anthropomorphic measurements, lipids, insulin resistance and inflammatory/fibrosis markers;

patient reported outcomes.

Additionally,

subjects have access to LPCN 1144 through an OLE study.

The extension study will enable the collection of additional data on LPCN 1144

for up to a total of 72 weeks of therapy.

The OLE is currently on-going and has enrolled 25 subjects.

We expect topline results from

the OLE study mid-2022.

subjects have access to LPCN 1144 through an open label extension (“OLE”) study.

The extension study will enable the collection

of additional data on LPCN 1144 for up to a total of 72 weeks of therapy, as well as data for 36 weeks of therapy for those subjects

on placebo in the LiFT study.

The OLE has been completed and we expect topline results from the study in May 2022.

with LPCN 1144 post 12 weeks of treatment resulted in robust liver fat reduction, assessed by MRI-PDFF, and showed improvement of liver

injury markers with no observed tolerability issues.

Inclusion of d-alpha tocopherol formulated with the testosterone prodrug resulted

in additional liver benefits, notably improved key liver markers without compromising tolerability.

results are presented in the following tables:

absolute liver fat using MRI-PDFF in all subjects (n=56)* at Week 12.

from baseline (CBL)

Placebo-adjusted

Placebo (n = 19)

Missing data was obtained using Multiple Imputation

Not significant (p > 0.05)

relative liver fat using MRI-PDFF at Week 12 in subjects (n=52) with liver fat ≥ 5% at baseline.*

from baseline (CBL)

Placebo-adjusted

Placebo (n = 18)

Based on available data.

with > 30% Relative Reduction in Liver Fat at Week 12, Intent to Treat Dataset (n=56)*.

Placebo (n = 19)

Subjects with missing data are considered non-responders

biopsies were performed at baseline (“BL”) and after 36 weeks of treatment (“EOS”).

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NASH activity in steatosis, inflammation, and ballooning.

results are presented in the following table:

Histology NASH CRN Scoring Outcomes1

NASH Resolution responders, n (%) 2

NASH Resolution with No Worsening of Fibrosis responders, n (%)

NASH Resolution Set

Improvement in NASH defined as improvement in ballooning or inflammation, and no worsening of ballooning or inflammation

p < 0.05 vs placebo

p < 0.01 vs placebo

p < 0.001 vs placebo

LPCN 1144 treatment arms showed significant improvement in NASH without worsening of fibrosis using Paired Technique, which concurred

with the NASH CRN scoring findings (per Biopsy Set;

NASH Improvement responders:

Placebo – 13%, Treatment A – 60%, Treatment

NASH Improvement with No Worsening of Fibrosis responders:

Placebo – 13%, Treatment A – 60%, Treatment B –

treatment effects on fibrosis improvement need confirmation in a larger study.

results from the LiFT clinical study are presented in the following tables and figures:

both treatment arms, substantial reductions in markers of liver injury compared to placebo were observed post four weeks of treatment

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baseline of 51.5 U/L and AST decreased up to a mean of 13.3 U/L at EOS from all group mean baseline of 31.9 U/L.

effects in appendicular lean mass and whole-body fat mass, an indicator overall tissue quality, based on dual-energy X-ray absorptiometry

effects in appendicular lean mass and whole-body fat mass, an indicator of overall tissue quality, based on dual-energy X-ray absorptiometry

scans, were noted in both LPCN 1144 treatment arms.

on liver injury marker and positive effects on body composition can be seen in the following table:

the 36 weeks of treatment, LPCN 1144 was well tolerated with an overall safety profile comparable to placebo.

Frequency and severity

of treatment emergent adverse events (“TEAEs”) in both treatment arms were comparable to placebo.

Study drug related TEAEs

were mild to moderate.

Four subjects discontinued due to TEAEs in the placebo arm vs one subject in total across the treatment arms.

Cardiovascular events were balanced among groups with hematocrit increases averaging <2% in the treatment arms, no observed thromboembolic

events, and comparable blood pressure changes in both treatment arms to placebo.

were no reported cases of hepatocellular carcinoma or Drug Induced Liver Injury (“DILI”).

Weight change from baseline, GI

adverse events and prostate-specific antigens (“PSA”) changes were small and comparable among groups.

Additionally, no clinically

meaningful changes in lipids in treatment groups were noted compared to placebo, and rates of pedal edema were low and similar in all

have requested a meeting with the FDA to discuss the clinical development path forward with LPCN 1144.

We anticipate that the meeting

will occur in the first quarter of 2022.

November 2021, the FDA granted Fast Track Designation to LPCN 1144 as a treatment for non-cirrhotic NASH.

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for which there is an unmet medical need.

to the LiFT clinical study, we completed a 16-week POC liver imaging clinical study to assess liver fat changes in hypogonadal

men at risk of developing NASH using MRI-PDFF technique.

Treatment results from the POC liver imaging study demonstrated that 48% of

the treated NAFLD subjects, defined as baseline liver fat of at least 5%, had NAFLD resolution, defined as liver fat <5% post treatment.

Additionally, 100% of the subjects experiencing NAFLD resolution had at least a 35% relative liver fat reduction from baseline with a

relative mean liver fat reduction of 55% in this group.

had a written only response from FDA for a LPCN 1144 Type C meeting with the FDA in January 2022 to discuss the development path forward

with LPCN 1144.

The FDA acknowledged that the NDA submission of LPCN 1144 would be via 505(b)2 regulatory pathway and agreed that no

additional non-clinical studies are needed to support an NDA submission.

The FDA recommended to request an end-of-phase 2 (EOP2) meeting.

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 also recommended either conducting a separate dose–ranging

study prior to phase 3 or evaluating multiple doses in phase 3.

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.

The FDA has requested that Lipocine submit an updated Phase 3 protocol

for FDA feedback on the study design and we have requested an EOP2 meeting to discuss the phase 3 and confirmatory trial designs.

are exploring the possibility of licensing LPCN 1144 to a third party, although no licensing agreement has been entered into by the Company.

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 acceptable terms.

An Oral Product Candidate for Testosterone Replacement Therapy

previously described, under the Antares License Agreement, we granted to Antares an exclusive, royalty-bearing, sublicensable right and

license to develop and commercialize, upon final approval of TLANDO from the FDA, our TLANDO product for TRT in the U.S.

8, 2020, the FDA provided tentative approval for TLANDO as a TRT in adult males for conditions associated with a deficiency of endogenous

testosterone, also known as hypogonadism.

The FDA provided final approval of TLANDO on March 28, 2022.

Any FDA requirement to conduct

certain post-marketing studies will be the responsibility of our licensee, Antares.

Proof-of-concept

for TLANDO was initially established in 2006, and subsequently TLANDO was licensed in 2009 to Solvay Pharmaceuticals, Inc.

then acquired by Abbott Products, Inc.

Following a portfolio review associated with the spin-off of AbbVie Inc.

by Abbott in 2011, the rights to TLANDO were reacquired by us.

All obligations under the prior license agreement have been completed

except that Lipocine will owe Abbott a perpetual 1% royalty on net sales.

Such royalties are limited to $1 million in the first two calendar

years following product launch, after which period there is not a cap on royalties and no maximum aggregate amount.

If generic versions

of any such product are introduced, then royalties are reduced by 50%.

the Pediatric Research Equity Act (“PREA”), since TLANDO received full FDA approval, under the Antares Licensing Agreement,

Antares will need to address the PREA requirement to assess the safety and effectiveness of TLANDO in pediatric patients.

also require certain post-marketing studies to be conducted which will also be the responsibility of our licensee, Antares.

execution of the Antares License Agreement, Antares paid to us an initial payment of $11.0 million.

Antares will also make additional

payments of $5.0 million to us on each of January 1, 2025, and January 1, 2026, provided that certain conditions are satisfied.

also eligible to receive milestone payments of up to $160.0 million in the aggregate, depending on the achievement of certain sales milestones

in a single calendar year with respect to all products licensed by Antares under the Antares License Agreement.

In addition, upon commercialization,

we will receive tiered royalty payments at rates ranging from percentages in the mid-teens to up to 20% of net sales of TLANDO in the

United States, subject to certain minimum royalty obligations.

Further, on October 14, 2021, we assigned our Manufacturing Agreement,

dated August 27, 2013, by and between the Company and Encap Drug Delivery (the “Manufacturing Agreement”) to Antares as part

of the Antares License Agreement.

are exploring the possibility of licensing LPCN 1021 (known as TLANDO in the United States) to third parties outside the United States,

although no licensing agreement has been entered into by the Company.

If and when an agreement is made with a partner, such arrangement

would likely be contingent upon obtaining acceptable cost of goods by securing an agreement with a new manufacturer in addition to obtaining

local regulatory approval.

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.

A Next-Generation Long-Acting Oral Product Candidate for TRT

XR is a next-generation, novel ester prodrug of testosterone comprised of TT which uses the Lip’ral technology to enhance solubility

and improve systemic absorption.

We completed a Phase 2b dose finding study in hypogonadal men in the third quarter of 2016.

objectives of the Phase 2b clinical study were to determine the starting Phase 3 dose of TLANDO XR along with safety and tolerability

of TLANDO XR and its metabolites following oral administration of single and multiple doses in hypogonadal men.

The Phase 2b clinical

trial was a randomized, open label, two-period, multi-dose PK study that enrolled hypogonadal males into five treatment groups.

of the 12 subjects in a group received treatment for 14 days.

Results of the Phase 2b study suggest that the primary objectives were

met, including identifying the dose expected to be tested in a Phase 3 study.

Good dose-response relationship was observed over the tested

dose range in the Phase 2b study.

Additionally, the target Phase 3 dose met primary and secondary end points.

Overall, TLANDO XR was

well tolerated with no drug-related severe or serious adverse events reported in the Phase 2b study.

in October 2014, we completed a Phase 2a POC study in hypogonadal men.

The Phase 2a open-label, dose-escalating single and multiple dose

study enrolled 12 males.

Results from the Phase 2a clinical study demonstrated the feasibility of a once daily dosing with TLANDO XR

in hypogonadal men and a good dose response.

Additionally, the study confirmed that steady state is achieved by day 14 with consistent

inter-day performance observed on day 14, 21 and 28.

No subjects exceeded Cmax of 1500 ng/dL at any time during the 28-day dosing period

on multi-dose exposure.

Overall, TLANDO XR was well tolerated with no serious adverse events (“AE’s”) reported.

have also completed a preclinical toxicology study with TLANDO XR in dogs.

is a next-generation, novel ester prodrug of testosterone comprised of testosterone tridecanoate (TT) which uses the proprietary

delivery technology to enhance solubility and improve systemic absorption.

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.

Good dose-response relationship was observed over the tested dose range in the Phase 2b study.

Additionally, the

target Phase 3 dose met primary and secondary end points.

Overall, LPCN 1111 was well tolerated with no drug-related severe or serious

adverse events reported in the Phase 2b study.

February 2018 we had a meeting with the FDA to discuss these pre-clinical results and to discuss the Phase 3 clinical study and path

forward for TLANDO XR.

Based on the results of the FDA meeting and additional pre-clinical trials conducted after the FDA meeting, we

have proposed a Phase 3 protocol for TLANDO XR and have solicited FDA feedback.

forward for LPCN 1111.

Based on the results of the FDA meeting and additional pre-clinical studies conducted after the FDA meeting, we

have proposed a Phase 3 protocol for LPCN 1111 and have solicited FDA feedback.

Based on initial FDA feedback, we expect the Phase 3

clinical trial design to follow the International Council for Harmonisation of Technical Requirements for Pharmaceuticals for Human Use

(“ICH”) guidelines and will include a three-month efficacy treatment period and a one-year safety component for up to 100

We continue to refine the Phase 3 protocol and plan to request FDA approval of the protocol once it is finalized.

Additionally,

the FDA previously requested that a food effect study needs to be completed, and that ambulatory blood pressure monitoring (“ABPM”)

be included as part of the Phase 3 clinical study.

We are currently transferring the manufacturing of TLANDO XR to a third-party contract

manufacturer and scaling up the formulation.

After that is complete, we anticipate the next steps in developing TLANDO XR will be to

conduct a food effect/phlebotomy study with TLANDO XR.

Under the terms of the Antares License Agreement, Antares has been granted an

option, exercisable on or before March 31, 2022, to license TLANDO XR to develop and commercialize upon approval..

An Oral Prodrug of Bioidentical Testosterone Product Candidate for the Management of Cirrhosis

is end-stage NAFLD for which there is no FDA approved drug treatment.

Liver cirrhosis is estimated to affect in excess of 600,000 Americans,

with men affected at twice the rate of women, and results in approximately 45,000 deaths every year.

Due to a lack of available organs,

only a third of waitlisted patients are getting liver transplants, and patients that do receive a transplant are increasingly being described

Low testosterone affects up to 90% of cirrhotic men, and is a predictor of mortality and increased adverse events including

ascites, hepatic encephalopathy, and clinically significant portal hypertension.

We are targeting LPCN 1148 for the management of symptoms

associated with liver cirrhosis.

We believe LPCN 1148 targets unmet needs for cirrhosis subjects including improvement in the quality

of life of patients while on the liver transplant waiting list, prevention or reduction in the occurrence of decompensation events and

improvement in post liver transplant survival, including outcomes and costs.

1148 comprises a novel prodrug of bioidentical testosterone,TL We are currently making preparations to initiate a Phase 2 POC study (NCT04874350)

in male cirrhotic subjects to evaluate the therapeutic potential of LPCN 1148 for the management of cirrhotic subjects.

The planned Phase

2 POC study is a prospective, multi-center, randomized, placebo-controlled study in approximately 48 to 60 male cirrhotic patients that

are on the liver transplant list.

Subjects will be randomized 1:1 to one of two arms.

The treatment arm is an oral dose of a testosterone

ester and the second arm is matching placebo.

The primary endpoint is change in skeletal muscle index at week 24 with key secondary endpoints

including change in liver frailty index and number of waitlist events, including all-cause mortality.

Total treatment is expected to

We currently expect the first subject will be dosed in the fourth quarter of 2021.

An Oral Neuro-Steroid Candidate for the Treatment of Postpartum Depression

a major depressive disorder that is under diagnosed in the U.S., impacts approximately 1 in 7 women after giving birth.

to devastating consequences for a woman, her newborn and her family.

Currently, there is no oral therapy approved for the treatment of

The active moiety in LPCN 1154 is an endogenous positive allosteric modulator of γ-aminobutyric acid (“GABA A ”)

LPCN 1154 is expected to be an “at home” treatment with easier treatment access than the current standard of care

invasive option that requires hospitalization with significant limitations.

Moreover, LPCN 1154 is expected to provide the required level

of privacy for a mother, avoiding bonding/breast feeding interruptions due to the required hospitalizations for the current option.

June 14, 2021, we announced that the FDA has cleared the Company’s Investigational New Drug Application (“IND”) to

initiate a Phase 2 study to evaluate the therapeutic potential of LPCN 1154 for the treatment of PPD in adults.

We have completed a PK

study to assess dose proportionality with LPCN 1154 in which dose proportionality was observed.

Pending further PK analyses, we plan

to conduct a proof-of-concept study to evaluate the safety, tolerability, and efficacy of LPCN 1154 in adult female subjects diagnosed

with PPD in the future.

(“ICH”) guidelines and we expect the trial will include at least a three-month efficacy treatment period and a one-year safety

component for approximately 100 subjects.

We are currently seeking further clarification from FDA with respect to the total subject LPCN

1111 exposure information needed for an NDA filing.

We continue to refine the Phase 3 protocol and plan to request FDA approval of the

protocol once it is finalized.

Additionally, the FDA previously requested that a food effect and a phlebotomy study be completed, and

that ambulatory blood pressure monitoring (“ABPM”) be included as part of the Phase 3 clinical study.

We are currently transferring

the manufacturing of LPCN 1111 to a third-party contract manufacturer and scaling up the formulation after which we anticipate the next

steps in developing LPCN 1111 may be to conduct a food effect/phlebotomy study with LPCN 1111.

Under the terms of the Antares License

Agreement, Antares has been granted an option to license LPCN 1111, exercisable on or before March 31, 2022, for further development

and, should LPCN 1111 receive FDA approval, commercialization.

On April 1, 2022, the Company entered into the First Amendment to the

License Agreement (the “Amendment”), pursuant to which the License Agreement was amended to extend the deadline by which

Antares shall exercise its option to license LPCN 1111 to June 30, 2022.

As consideration for the Company agreeing to enter into the

Amendment, Antares paid the Company a non-refundable cash fee of $500,000 in April 2022.If Antares exercises its option to license LPCN

1111, we will be entitled to an additional payment of $3.5 million, as well as development milestone payments of up to $35.0 million

in the aggregate and tiered royalty payments at rates ranging from percentages in the mid-teens to 20% of net sales of LPCN 1111 in the

United States.

We are currently in the process of scaling up manufacturing production of clinical supplies for a Phase 3 clinical trial.

An Oral Product Candidate for the Prevention of Preterm Birth

believe LPCN 1107 has the potential to become the first oral HPC product indicated for the reduction of risk of PTB (delivery less than

37 weeks) in women with singleton pregnancy who have a history of singleton spontaneous PTB.

Prevention of PTB is a significant unmet

need as approximately 11.7% of all U.S.

pregnancies result in PTB, a leading cause of neonatal mortality and morbidity.

believe LPCN 1107 has the potential to become the first oral hydroxyprogesterone caproate (“HPC”) product indicated for the

reduction of risk of PTB (delivery less than 37 weeks) in women with singleton pregnancy who have a history of singleton spontaneous

Prevention of PTB is a significant unmet need as approximately 11.7% of all U.S.

pregnancies result in PTB, a leading cause of neonatal

mortality and morbidity.

have completed a multi-dose PK dose selection study in pregnant women.

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The multi-dose PK dose selection study was an open-label,

four-period, four-treatment, randomized, single and multiple dose, PK study in pregnant women of three dose levels of LPCN 1107 and the

IM HPC (Makena®).

four-period, four-treatment, randomized, single and multiple dose PK study in pregnant women with three dose levels of LPCN 1107 and

the IM HPC (Makena®).

The study enrolled 12 healthy pregnant women (average age of 27 years) with a gestational age of approximately

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Also, unlike the injectable HPC, steady state exposure was achieved for all three LPCN 1107 doses within seven days.

also completed a POC Phase 1b clinical study of LPCN 1107 in healthy pregnant women in January 2015 and a POC Phase 1a clinical study

of LPCN 1107 in healthy non-pregnant women in May 2014.

These studies were designed to determine the PK and bioavailability of LPCN 1107

relative to an IM HPC, as well as safety and tolerability.

traditional PK/PD based Phase 2 clinical study in the intended patient population is not expected to be required prior to entering into

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We plan to resume our interactions with the FDA to discuss our pivotal clinical

trial design and better understand next steps to advance LPCN 1107 after completion of the planned food-effect study.

do not anticipate the initiation of a pivotal study with LPCN 1107 to occur until the required food effect study is complete.

exploring the possibility of licensing LPCN 1107 to a third party, although no licensing agreement has been entered into by the Company.

trial design and better understand next steps to advance LPCN 1107

are exploring the possibility of licensing LPCN 1107 to a third party, although no licensing agreement has been entered into by the Company.

No assurance can be given that any license agreement will be completed, or, if an agreement is completed, that such an agreement would

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Competition Update

October 5, 2020, the FDA’s CDER proposed that Makena be withdrawn from the market because the PROLONG trial failed to verify the

clinical benefit of Makena and concluded that the available evidence does not show Makena is effective for its approved use.

issued AMAG, the NDA holder at the time, a Notice of Opportunity for Hearing to withdraw approval of Makena, for which AMAG Pharmaceuticals

responded by requesting a hearing and providing detail on the company’s position, recognizing clinicians’ decade-long use

of Makena’s treatment and the public health implications of withdrawing approval.

The FDA Commissioner has recently granted Covis

a public hearing although the date of that hearing is not publicly known.

During this time, Makena and the approved generics of Makena

will remain on the market until the FDA makes a final decision about these products.

October 5, 2020, the FDA’s Center for Drug Evaluation and Research (“CDER”) proposed that Makena be withdrawn from

the market because the PROLONG trial failed to verify the clinical benefit of Makena and concluded that the available evidence does not

show Makena is effective for its approved use.

issued AMAG Pharmaceuticals, the NDA holder at the time, a Notice of Opportunity for Hearing to withdraw approval of Makena, for which

AMAG Pharmaceuticals responded by requesting a hearing and providing detail on the company’s position, recognizing clinicians’

decade-long use of Makena’s treatment and the public health implications of withdrawing approval.

The FDA Commissioner has recently

granted Covis a public hearing although the date of that hearing is not publicly known.

During this time, Makena and the approved generics

of Makena will remain on the market until the FDA makes a final decision about these products.

Makena and the approved generics of Makena are the only products approved for the prevention of recurrent preterm birth.

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how to facilitate development of effective and safe therapies to treat preterm birth.

NAS Programs for CNS Disorders

preferred endogenous or naturally occurring NAS present in central nervous system (CNS) act as positive allosteric modulators (PAM) of

the GABA A receptor, the major biological target of the inhibitory neurotransmitter γ-aminobutyric acid (GABA A ).

To improve oral delivery of these modulators, several synthetic NAS derivatives of endogenous GABA A receptor PAMs, have been

developed for therapeutic use in the past few decades.

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 challenging to deliver orally as they were deemed to be not orally bioavailable.

these endogenous GABA A receptor PAMs provide opportunity as a differentiated NAS for treatment of various CNS disorders via

the preferred and convenient oral route.

Product Candidate for PPD

are currently evaluating LPCN 1154 comprising an endogenous NAS for PPD.

FDA has cleared LPCN 1154 IND (investigational new drug) application

to conduct a phase 2 study in PPD.

We have completed a PK study with LPCN 1154 post oral administration in which we believe clinically

relevant levels of the active were observed.

We are currently conducting a food effect PK study.

(Postpartum depression), a type of major depressive disorder with onset either during pregnancy or within four weeks of delivery, refers

to depression persisting up to 12 months after childbirth.

PPD can be clinically segmented by the severity of symptoms and presence of

a comorbidity, including epilepsy.

Approximately 1 in 9 mothers suffers from PPD in the United States alone;

this equates to approximately

500,000 women being affected by PPD annually.

Overview - PPD

is distinct from the “baby blues,” a condition that affects up to 70% of all new mother’s experience;

blues” tend to be short-lived emotional conditions that do not interfere with daily activities.

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.

pregnancy, levels of endogenous NAS increase considerably along with levels of progesterone;

however, they drop sharply postpartum.

It has been hypothesized that the rapid perinatal decrease in circulating levels of endogenous NASs may be involved in the development

The first and only approved treatment option for PPD is an injectable containing endogenous NAS.

may persist long after child delivery.

Additionally, approximately 40% of women relapse in subsequent pregnancies or on other occasions.

comorbidities are common in patients with epilepsy.

Patients with epilepsy are at high risk for major depressive disorders and PPD.

Reported PPD rates are higher among women with epilepsy than the general population.

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

Approximately,

1 in 9 mothers suffer from PPD in the United States alone, which equates to approximately 500,000 women affected by PPD annually.

believe there is considerable unmet need within women with PPD due to lack of convenient and fast-acting oral therapies.

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 a faster onset of action remains a significant unmet need in treating PPD, especially in women with epilepsy risk

wherein psychiatric comorbidity is common and PPD rates are higher than the general population.

brexanolone (ZulressoTM, Sage Therapeutics) became the first FDA-approved treatment for postpartum depression.

However, numerous factors

limit the utilization of injectable brexanolone such as method of administration, cost, and safety concerns.

Administration of injectable

brexanolone requires a 60-hour continuous infusion in a supervised medical setting, a demanding ask for a mother with a newborn.

associated privacy concerns and social stigma, hospitalization may also require separation of the mother and child for a few days, which

may be difficult to the already strained mother-infant bond and may present breast feeding challenges.

Moreover, the pharmacotherapy

costs coupled with hospitalization/childcare costs limits its accessibility and affordability to women most in need of the therapy.

due to concerns about the safety of injectable ZulressoTM including excessive sedation or loss of consciousness, Zulresso has a Black

Box Warning in its label and is only available through a restricted distribution program (REMS), and sites need significant time to become

treatment ready.

believe the need for a convenient, at-home treatment with faster onset of action which could offer privacy and affordability, independent

of socio-economic status, for women with PPD is a significant unmet need.

LPCN 1154 targets this unmet need with affordable NAS.

NAS for epilepsy

are currently evaluating an additional NAS candidate, LPCN 2101, for women with epilepsy (“WWE”).

We have completed a pre-clinical

study for LPCN 2101.

We plan to file an IND with the U.S.

FDA for LPCN 2101 to conduct a proof-of-concept study for the evaluation

of safety, tolerability, and efficacy in adult female subjects of childbearing age diagnosed with epilepsy.

Overview - Epilepsy

is defined by the 1) occurrence of at least two unprovoked seizures more than 24 hours apart, 2) occurrence of one unprovoked seizure

and a probability of further seizures occurring over the next 10 years, and/or 3) diagnosis of an epilepsy syndrome.

Patients with epilepsy

are more likely to be comorbid with other conditions, including depression and anxiety.

with epilepsy have increased risk of mortality due to direct effects of seizures (e.g., status epilepticus, car accidents) and indirect

effects of seizures (e.g., suicide, cardiovascular effects.)

is a disorder of the brain that causes seizures, affecting the physical, mental, and social well-being of persons, and is associated

with a 2 to 3 times greater mortality rate compared with the general population.

About 60-65% of epilepsy is idiopathic and about 30%

of patients are refractory (i.e., epilepsy not well managed with currently available antiepileptic drugs (“AEDs”)).

is the most common neurological disorder during pregnancy.

is estimated that approximately 900,000 CB age women suffers from active epilepsy in the U.S.

Women of CB age with epilepsy face many

additional challenges due to hormonal influences on seizure activity and endocrine function throughout the different phases of their

reproductive cycles.

Elevated estrogen or decreased progesterone levels can exacerbate seizure frequency.

Often, these women experience

hormonal and endogenous NAS imbalances, coupled with fluctuations in the blood levels of AEDs that impact control of seizures, efficacy

of oral contraceptives, any coexisting anxiety and/or depression and any associated sleep impairment.

Epileptic patients are 5-20 times

more likely to develop depression.

segmentation can be categorized by epilepsy type, comorbidities and patient subgroups.

Categorization of focal epilepsy, generalized

epilepsy, combined focal and generalized epilepsy, and unknown epilepsy can guide the choice of AED.

Special patient subgroups, including

WWE of CB age and elderly patients, require special care and management of epilepsy.

Comorbidities such as depression and anxiety may

be co-treated with therapies that do not aggravate seizures and have no drug interaction with the AED used for epilepsy.

effective dose and monotherapy are preferred, management of patients with epilepsy is focused on controlling seizures, avoiding adverse

events, and maintaining quality of life.

Despite a wide range of AEDs available, about 30 % of all people with epilepsy still fail to

respond to treatment effectively.

Women with epilepsy face specific challenges throughout their lifespan because of seizures, AEDs,

and hormonal fluctuations.

with epilepsy were once counseled to avoid pregnancy, but epilepsy is no longer considered a contraindication to pregnancy.

for WWE in the preconception phase either intending to start a family (planning pregnancy) or using contraception to prevent an unplanned

pregnancy face significant challenges to balance seizure control efficacy with the selection and dosage of AEDs and AED-related risks

such as, among other risks, fetal-neonatal toxicity, contraception failure, and psychiatric side effects.

AEDs are known to have teratogenic effects on the developing fetus (converging evidence from registry studies indicates that teratogenic

risks are highest with valproate, followed by carbamazepine and topiramate).

Other commonly prescribed AEDs, including older generation

agents, such as phenobarbital and phenytoin, have been associated with higher risks as compared with lamotrigine, levetiracetam, clonazepam

and gabapentin (Vajda et al., 2014;

Voinescu and Pennell, 2015).

Moreover, risks associated with AEDs is considerable early in pregnancy;

therefore, it is necessary that WWE of CB age undergo counselling, monitoring, and adjustment to the most appropriate AED prior to becoming

It is preferable WWE of CB age discuss seizure control with their doctor for at least 6 months before conception and, if possible,

cease AED therapy or use the lowest effective dose of a single anticonvulsant according to the type of epilepsy and the fetal toxicity

Anxiety, depression, lack of adherence to AED, and/or contraception failure may be experienced by women who are worried about

unplanned pregnancy or are late in confirming pregnancy, planned or unplanned.

AEDs can reduce the efficacy of oral contraceptives, compounding

this problem.

multidirectional interactions between female hormones, seizures, and AEDs exist.

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 AEDs (Harden, 2008).

The PK interactions between oral contraceptives and AEDs are bidirectional

(Johnston and Crawford, 2014).

The efficacy of hormonal contraception may be diminished for women taking CYP-P450 enzyme inducing AEDs.

Epilepsy is not a medical condition in which contraceptives are contraindicated.

Contraceptive failure, possibly related to AEDs, may

be responsible for up to one in four unplanned pregnancies in WWE (-12.5% of all WWE pregnancies), vs a rate of 1% in healthy women.

need to treat WWE in CB age

is estimated that approximately 900,000 CB age women suffer from active epilepsy in the U.S.

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 AEDs making consideration

of newer pharmacological treatment development options important.

uncontrolled seizures in WWE of CB age is the primary aim during preconception, pregnancy, and postpartum phases.

Therefore, uncompromised

AED efficacy with acceptable variability and less or no drug-drug interactions achieved with lowest possible monotherapy dose to address

fetal toxicity concerns, remain highly unmet needs.

Moreover, control of seizures including prevention of breakthrough seizures is critical

when planning for pregnancy and also during pregnancy, as it can also lead to undesired falls or auto-accidents and compromise freedom

AEDs have the potential to induce contraception failures, reproductive hormone imbalance, anxiety, and depression.

There remains an unmet

need for an AED 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.

over 30 molecules have been approved for the treatment of epilepsy in the U.S., no epilepsy drug has been specifically approved for 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 NAS could potentially address some of the fetal toxicity concerns related to unplanned or planned pregnancy in WWE.

S.Bangar et al.

Functional Neurology 2016;

Reimers et al.

2015 May;28:66-70.

Operations Overview

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.

Since our inception through September 30, 2021, we have generated $28.1 million in revenue under our various license

and collaboration arrangements and from government grants.

We may never generate revenues from TLANDO or any of our other clinical or

preclinical development programs or licensed products as we or our licensees may never succeed in obtaining regulatory approval or commercializing

any of these product candidates.

date, we have not generated any revenues from product sales and do not expect to generate revenue other than TLANDO royalties and licensing

fees 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.

Since our inception through March 31, 2022, we have generated

$44.2 million in revenue under our various license and collaboration arrangements and from government grants.

We may never generate revenues

from any of our clinical or preclinical development programs other than TLANDO as we may never succeed in obtaining regulatory approval

or commercializing any of these product candidates.

and Development Expenses

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external service providers such as contract research organizations and contract manufacturing organizations, contractual obligations

for clinical development, clinical sites, manufacturing and scale-up for late-stage clinical trials, formulation of clinical drug supplies,

and expenses associated with regulatory submissions.

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.

for clinical development, clinical sites, manufacturing and scale-up for clinical trials, formulation of clinical drug supplies, and

expenses associated with regulatory submissions.

Research and development expenses also include an allocation of indirect costs, such

as those for facilities, office expense, travel, 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.

our inception, we have spent approximately $126.3 million in research and development expenses through September 30, 2021.

December 8, 2020 we received tentative approval from the FDA regarding our NDA filed in February 2020 for TLANDO as a TRT in adult males

for conditions associated with a deficiency of endogenous testosterone, also known as hypogonadism.

In granting tentative approval, the

FDA concluded that TLANDO has met all required quality, safety and efficacy standards necessary for approval.

However, TLANDO has not

received final approval and is not eligible for final approval to market in the U.S.

until the expiration of the exclusivity period previously

granted to Clarus with respect to Jatenzo ®, which expires on March 27, 2022.

14, 2021, we entered into the Antares License Agreement with Antares, pursuant to which we granted to Antares an exclusive, royalty-bearing,

sublicensable right and license to develop and commercialize, upon final approval of TLANDO from the FDA, our TLANDO product with respect

to TRT in the U.S.

The Antares License Agreement also provides Antares with an option, exercisable on or before March 31, 2022, to license

Under the terms of the Antares License Agreement, all future research and development activities for TLANDO will be conducted

and paid for by Antares.

Any further expenditures, if needed, are subject to numerous uncertainties regarding timing and cost to completion.

expect to continue to incur significant costs as we develop our other product candidates, including the ongoing LiFT Phase 2 OLE

clinical study with LPCN 1144 and the planned Phase 2 study with LPCN 1148.

our inception, we have spent approximately $132.5 million in research and development expenses through March 31, 2022.

expect to continue to incur significant costs as we develop our other product candidates, including the ongoing Phase 2 POC study in

male cirrhotic subjects with LPCN 1148.

general, the cost of clinical trials may vary significantly over the life of a project as a result of uncertainties in clinical development,

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cost, timing and outcome of regulatory review;

changes by the FDA in clinical trial and NDA filing requirements.

have also incurred significant manufacturing costs to prepare launch supplies for TLANDO.

However, any additional expenditures required

to prepare for a commercial launch of TLANDO, should it be approved, will be paid by Antares.

research and development expenditures are subject to numerous uncertainties regarding timing and cost to completion, including, among

timing and outcome of regulatory filings and FDA reviews and actions for product candidates;

dependence on third-party manufacturers for the production of satisfactory finished product for registration and launch should regulatory

approval be obtained on any of our product candidates;

potential for future license or co-promote arrangements for our product candidates, when such arrangements will be secured, if at

all, and to what degree such arrangements would affect our future plans and capital requirements;

effect on our product development activities of actions taken by the FDA or other regulatory authorities.

change of outcome for any of these variables with respect to our product development candidates could mean a substantial change in the

costs and timing associated with these efforts, will require us to raise additional capital, and may require us to reduce operations.

changes by the FDA in clinical trial and NDA filing requirements for testosterone replacement therapies.

change of outcome for any of these variables with respect to the development of our product development candidates could mean a substantial

change in the costs and timing associated with these efforts, could require us to raise additional capital, and may require us to reduce

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 1148,

TLANDO XR, LPCN 1148, LPCN 1154, LPCN 1107 and other product candidates.

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 1144, TLANDO XR, LPCN 1148, LPCN 1154, LPCN 1107 or other product candidates into later stage development, we will

require additional capital.

The amount and timing of our future research and development expenses for these product candidates will depend

on the preclinical and clinical success of both our current development activities and potential development of new product candidates,

as well as ongoing assessments of the commercial potential of such activities.

LPCN 1144, LPCN 1111 (TLANDO XR), LPCN 1107, LPCN 1154, LPCN 2101, and other product candidates.

Clinical development timelines, the

probability of success and development costs can differ materially from expectations and results from our clinical trials may not be

If we are successful in progressing LPCN 1148, LPCN 1111, LPCN 1144, LPCN 1107, NAS including LPCN 1154 and LPCN 2101, or

other product candidates into later stage development, we will require additional capital.

The amount and timing of our future research

and development expenses for these product candidates will depend on the preclinical and clinical success of both our current development

activities and potential development of new product candidates, as well as ongoing assessments of the commercial potential of such activities.

of Research and Development Expense

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The following table summarizes our research and development expenses:

September 30,

External service provider

Total external service

provider costs

Three Months Ended March 31,

External service provider costs:

Total external service provider costs

Internal personnel costs

Other research and development

Other research and development costs

Total research and development

expect research and development expenses to increase in the future as we complete on-going clinical studies, including the LiFT

Phase 2 OLE clinical study with LPCN 1144, and as we conduct future clinical studies with LPCN 1148, LPCN 1154 and LPCN 1107.

if we are unable to raise additional capital, we may need to reduce research and development expenses in order to extend our ability

to continue as a going concern.

expect research and development expenses to increase in the future as we complete on-going clinical studies, including the Phase 2 POC

study in male cirrhotic subjects with LPCN 1148, as we conduct future clinical studies, including when and if we conduct Phase 2 clinical

studies with our product candidates and Phase 3 clinical studies with LPCN 1144, LPCN 1111, and LPCN 1107.

However, if we are unable

to raise additional capital, we may need to reduce research and development expenses in order to extend our ability to continue as a

going concern.

and Administrative Expenses

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Other general and administrative expenses include rent and utilities, travel expenses,

professional fees for auditing, tax and legal services, litigation settlement and market research and market analytics.

professional fees for auditing, tax and legal services.

and administrative expenses also include expenses for the cost of preparing, filling and prosecuting patent applications and maintaining,

enforcing and defending intellectual property-related claims, including the patent interference and patent infringement lawsuits against

expect that general and administrative expenses will decrease in the future as we expect to incur decreased legal fees due to the global

settlement agreement (“Global Agreement”) with Clarus.

We expect that such decreases will be offset by other increases as

we mature as a public company, including legal and consulting fees, accounting and audit fees, director fees, increased directors’

and officers’ insurance premiums, fees for investor relations services and enhanced business and accounting systems, litigation

costs, professional fees and other costs.

However, if we are unable to raise additional capital, we may need to further reduce general

and administrative expenses in order to extend our ability to continue as a going concern.

Expense (Income), Net

expense (income), net, consists primarily of interest income earned on our cash, cash equivalents and marketable investment securities,

interest expense incurred on our outstanding Loan and Security Agreement, losses (gains) on our warrant liability and litigation settlement

enforcing and defending intellectual property-related claims, including our on-going patent interference and patent infringement lawsuits

against Clarus.

expect that general and administrative expenses will increase in the future as we mature as a public company including legal and consulting

fees, accounting and audit fees, director fees, increased directors’ and officers’ insurance premiums, fees for investor

relations services and enhanced business and accounting systems, litigation costs, professional fees and other costs.

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.

Expense (Income)

expense (income) consists primarily of interest income earned on our cash, cash equivalents and marketable investment securities and

interest expense incurred on our outstanding Loan and Security Agreement and losses (gains) on our warrant liability.

of Operations

of the Three Months Ended September 30, 2021 and 2020

following table summarizes our results of operations for the three months ended September 30, 2021 and 2020:

Three Months Ended September 30,

License revenue

Research and development expenses

General and administrative expenses

Interest and investment income

Interest expense

Gain on warrant liability

recognized license revenue of $55,000 during the three months ended September 30, 2021, compared to no license revenue recognized during

the three ended September 30, 2020.

License revenue in 2021 relates to payments received from Spriaso LLC (“Spriaso”) under

a licensing agreement in the cough and cold field.

of the Three Months Ended March 31, 2022 and 2021

following table summarizes our results of operations for the three months ended March 31, 2022 and 2021:

Months Ended March 31,

and development expenses

decrease in research and development expenses during the three months ended September 30, 2021 was primarily due to a $819,000 decrease

in contract research organization expense and outside consulting costs related to the LPCN 1144 LiFT Phase 2 clinical study in

NASH subjects, a $466,000 decrease in costs associated with TLANDO, a $37,000 decrease in personnel expense, net decreases in other R&D

expenses of $68,000.

The decreases were offset by a $806,000 increase in costs related to LPCN 1154, a $384,000 increase in costs related

to LPCN 1148, and a $80,000 increase in costs for TLANDO XR.

and administrative expenses

decrease in general and administrative expenses during the three months ended September 30, 2021 was primarily due to a $552,000 decrease

in legal costs in 2021 as compared to 2020 relating to a decrease the following legal activities:

lawsuit filed against Clarus for patent

infringement in April 2019 and the on-going class action lawsuit defense;

and a $122,000 decrease in personnel costs, which was mainly

due to a decrease in stock compensation expense.

These decreases were offset mainly by a $31,000 increase in corporate insurance expenses.

and investment income

increase in interest and investment income during the three months ended September 30, 2021 was due to higher cash and marketable investment

securities balances in 2021 compared to 2020.

decrease in interest expense during the three months ended September 30, 2021 was due to a decrease in interest expense on our Loan and

Security Agreement with Silicon Valley Bank (“SVB”), as a result of lower principal balances in 2021 compared to 2020.

(Gain) on Warrant Liability

recorded a gain of $480,000 and $140,000, respectively, on warrant liability during the three months ended September 30, 2021 and 2020

related to the change in the fair value of outstanding common stock warrants issued in the November 2019 Offering.

The gain in 2021 was

attributable to a decrease in the value of warrants outstanding as of September 30, 2021 as compared to June 30, 2021 due to a decrease

in our stock price.

The gain in 2020 was mainly due to a decrease in the value of warrants outstanding as of September 30, 2020 as compared

to June 30, 2020 primarily attributable to a decrease in the value of warrants exercised during the period, offset by an increase in

the value of warrants outstanding as of September 30, 2020 as compared to June 30, 2020 due to an increase in our stock price.

were no common stock warrants from the November 2019 Offering (as defined below) exercised during the three months ended September 30,

2021 and 2020, respectively.

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 warrant liability will continue

to fluctuate in the future based on inputs to the Black-Scholes model including our current stock price, the remaining life of the warrants,

the volatility of our stock price, the risk-free interest rate and the number of common stock warrants outstanding.

of the Nine Months Ended September 30, 2021 and 2020

following table summarizes our results of operations for the nine months ended September 30, 2021 and 2020:

months ended September 30,

License revenue

Research and development expenses

General and administrative expenses

Interest and investment income

Interest expense

Loss (gain) on warrant liability

Litigation settlement

Income tax expense

recognized license revenue of $55,000 during the nine months ended September 30, 2021, compared to no license revenue recognized during

the nine ended September 30, 2020.

License revenue in 2021 relates to payments received from Spriaso under a licensing agreement in the

cough and cold field.

loss on warrant liability

and Development Expenses

decrease in research and development expenses during the nine months ended September 30, 2021 was primarily due to a $2.6 million decrease

in contract research organization expense and outside consulting costs related to the LPCN 1144 LiFT Phase 2 clinical study in

NASH subjects, a $565,000 decrease in costs associated with TLANDO and a $127,000 net decrease in personnel expense which was mainly

due to a decrease in stock compensation expense offset by increases in salaries partially due to headcount increases.

These decreases

were offset by a $908,000 increase in costs related to LPCN 1154, a $384,000 increase in costs associated with LPCN 1148 and a $58,000

increase in costs for LPCN 1107, as well as increases in other R&D expenses of $48,000.

The increase in research and

development expenses during the three months ended March 31, 2022, as compared to the three months ended March 31, 2021 consisted of

$431,000 in contract research organization expense related to our ongoing Phase 2 clinical study for LPCN 1148, an increase of $288,000

for PK and food effect studies for LPCN 1107 and LPCN 1154, an increase of $152,000 in manufacturing scale up for LPCN 1111, an increase

of $125,000 in personnel expenses and an increase of $77,000 in other R&D costs.

These increases were offset by a decrease

of $679,000 in contract research organization expense and outside consulting costs related to the completion of our LPCN 1144 LiFT

Phase 2 clinical study in NASH subjects and a decrease of $87,000 in costs associated with TLANDO.

and Administrative Expenses

decrease in general and administrative expenses during the nine months ended September 30, 2021 was primarily due to a $1.4 million decrease

in legal costs in 2021 as compared to 2020 relating to a decrease the following legal activities:

lawsuit filed against Clarus Therapeutics

for patent infringement in April 2019 and the on-going class action lawsuit defense;

and, a decrease of $410,000 in personnel costs

mainly due a reduction in stock compensation expense.

These decreases were offset by a $131,000 increase in corporate insurance expenses

and a $35,000 increase in other general and administrative expenses.

decrease in general and administrative expenses during the three months ended March 31, 2022 was primarily due to a $474,000 decrease

in legal costs due to less activity in 2022 as compared to 2021 with the July 2021 settlement of the lawsuit filed against Clarus Therapeutics

for patent infringement and a decrease of $22,000 in personnel costs.

These decreases were offset by an increase of $65,000 in professional

fees related to the recruitment of additional directors to our Board, a $64,0000 increase in various consulting services, an increase

of $35,000 for proxy solicitation services, $26,000 increase in corporate insurance expenses, and a $16,000 decrease in other general

and administrative costs.

and Investment Income

decrease in interest and investment income during the nine months ended September 30, 2021 was due to lower interest rates in 2021 compared

to 2020, despite higher cash and marketable investment securities balances.

decrease in interest expense during the nine months ended September 30, 2021 was due to a decrease in interest expense on our Loan and

Security Agreement with SVB, mainly as a result of lower principal balances 2021 compared to 2020.

(Gain) on Warrant Liability

recorded a gain of $506,000 and a loss of $3.0 million, respectively, on warrant liability during the nine months ended September

30, 2021 and 2020 related to the change in the fair value of outstanding common stock warrants issued in the November 2019 Offering.

The gain in 2021 was attributable to a decrease in the value of warrants outstanding as of September 30, 2021 as compared to

December 31, 2020 due to a small decrease in the number of warrants outstanding, a decrease in our volatility, and a shorter term

remaining on the outstanding warrants.

The loss in 2020 was mainly due to an increase in the value of warrants outstanding as of

September 30, 2020 as compared to December 31, 2019 due to an increase in our stock price.

There were 10,000 and 10,127,000 common

stock warrants from the November 2019 Offering exercised during the nine months ended September 30, 2021 and 2020, respectively.

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 warrant liability will continue to fluctuate in

the future based on inputs to the Black-Scholes model including our current stock price, the remaining life of the warrants, the

volatility of our stock price, the risk-free interest rate and the number of common stock warrants outstanding.

recorded an expense of $4.0 million and zero, respectively, on litigation settlement during the nine months ended September 30, 2021

and 2020 related to the Global Agreement with Clarus to resolve all outstanding claims in the on-going intellectual property litigation

between the two companies as well as the on-going interference proceeding between the two companies.

Under the terms of the settlement,

we 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

No future royalties are owing from either party.

Under the terms of the Global Agreement, Lipocine and Clarus have agreed to

dismiss the Lipocine Inc.

v Clarus Therapeutics, Inc., No 19-cv-622 (WCB) litigation presently pending in the U.S.

District Court for

the District of Delaware.

Also, both parties have reached an agreement on the interference proceedings captioned Clarus Therapeutics,

Lipocine Inc., Interference No.

106,128 presently pending in the U.S.

Patent and Trademark Office.

increase in interest and investment income during the three months ended March 31, 2022 was due to higher interest rates in 2022 compared

decrease in interest expense during the three months ended March 31, 2022, was due to a decrease in interest expense on our Loan and

Security Agreement with SVB as a result of lower principal balances in 2022 compared to 2021.

on Warrant Liability

recorded a loss of $378,000 and $195,000, respectively, on warrant liability during the three months ended March 31, 2022, and 2021 related

to the change in the fair value of outstanding common stock warrants issued in the November 2019 Offering.

The loss in 2022 and 2021

was mainly attributable to an increase in the value of warrants outstanding as of March 31, as compared to December 31, in both 2022

and 2021 due to an increase in our stock price.

There were zero and 10,000 common stock warrants from the November 2019 Offering exercised

during the three months ended March 31, 2022, and March 31, 2021, respectively.

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 warrant liability will continue to fluctuate in the future based on inputs to the Black-Scholes model including

our current stock price, the remaining life of the warrants, the volatility of our stock price, the risk-free interest rate and the number

of common stock warrants outstanding.

and Capital Resources

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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 1144, TLANDO XR,

LPCN 1148, LPCN 1154, LPCN 1107 and any other product candidate, including continued research efforts.

of September 30, 2021, we had $38.7 million of unrestricted cash, cash equivalents and marketable investment securities compared to $19.7

expect to continue to incur operating losses into the foreseeable future as we advance clinical development of LPCN 1148, LPCN 1111,

LPCN 1144, LPCN 1107, NAS including LPCN 1154 and LPCN 2101, and any other product candidate, including continued research efforts.

of March 31, 2022, we had $42.0 million of unrestricted cash, cash equivalents and marketable investment securities compared to $46.6

million at December 31, 2021.

Additionally, as of December 31, 2020 we had $5.0 million of restricted cash, which was required to be

maintained as cash collateral under the SVB Loan and Security Agreement until TLANDO is approved by the FDA.

However on February 16,

2021, we amended the Loan and Security Agreement with SVB to, among other things, remove the cash collateral requirement.

October 14, 2021, we entered into the Antares License Agreement with Antares, pursuant to which we granted to Antares an exclusive, royalty-bearing,

sublicensable right and license to develop and commercialize, upon final approval of TLANDO from the FDA, our TLANDO product with respect

to TRT in the U.S.

The Antares License Agreement also provides Antares with an option, exercisable on or before March 31, 2022, to license

Upon execution of the Antares License Agreement, Antares paid to us an initial payment of $11.0 million.

Antares will also

make additional payments of $5.0 million to us on each of January 1, 2025 and January 1, 2026, provided that certain conditions are satisfied.

We are also eligible to receive milestone payments of up to $160.0 million in the aggregate, depending on the achievement of certain

sales milestones in a single calendar year with respect to all products licensed by Antares under the Antares License Agreement.

upon commercialization, we will receive tiered royalty payments at rates ranging from percentages in the mid-teens to up to 20% of net

sales of TLANDO in the United States, subject to certain minimum royalty obligations.

If Antares exercises its option to license TLANDO

XR, we will be entitled to an additional payment of $4.0 million, as well as development milestone payments of up to $35.0 million in

the aggregate and tiered royalty payments at rates ranging from percentages in the mid-teens to 20% of net sales of TLANDO XR in the

United States.

Our ability to realize benefits from the Antares License Agreement, including milestone and royalty payments, is subject

to a number of risks.

We may not realize milestone or royalty payments in anticipated amounts, or at all.

January 28, 2021, we completed a public offering of securities registered under an effective registration statement filed pursuant to

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we sold 16,428,571 shares of our common stock.

April 21, 2020, we entered into a loan (the “Loan”) from SVB in the aggregate amount of $234,000, pursuant to the Paycheck

Protection Program (the “PPP”) under Division A, Title I of the CARES Act, which was enacted March 27, 2020.

The Loan, which

was in the form of a note dated April 21, 2020, originally matured on April 21, 2022 and bears interest at a rate of 1.0% per annum,

payable monthly commencing on November 21, 2020.

Under the terms of the PPP, certain amounts of the Loan may be forgiven if they are

used for qualifying expenses as described in the CARES Act.

On November 2, 2020, we were notified by the Small Business Administration

that our PPP Loan had been forgiven.

February 27, 2020, we completed a registered direct offering of securities registered under an effective registration statement filed

pursuant to the Securities Act of 1933, as amended (“February 2020 Offering”).

The gross proceeds from the February 2020

Offering were approximately $6.0 million, before deducting placement agent fees and other offering expenses of $347,000.

In the February

2020 Offering, the Company sold 10,084,034 Class A Units, with each Class A Unit consisting of one share of common stock and a one-half

of one common warrant to purchase one share of common stock, at a price of $0.595 per Class A Unit.

The common stock warrants were immediately

exercisable at an exercise price of $0.53 per share, subject to adjustment, and expire on February 27, 2025.

By their terms, however,

the common stock warrants cannot be exercised at any time that the common stock warrant holder would beneficially own, after such exercise,

more than 4.99% (or, at the election of the holder, 9.99%) of the shares of common stock then outstanding after giving effect to such

January 5, 2018, we entered into the Loan and Security Agreement with SVB pursuant to which SVB agreed to lend us $10.0 million.

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insolvency, a material adverse change, and one or more judgments against us in an amount greater than $100,000 individually or in the

March 6, 2017, we entered into the Sales Agreement with Cantor Fitzgerald & Co.

(“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.

We currently have registered up to $50.0 million for

sale under the Sales Agreement, pursuant to our Registration Statement on Form S-3 (File No.

333-250072) (the “Form S-3”),

March 6, 2017, we entered into the Sales Agreement with 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.

We currently have registered up to $50.0 million for sale under the Sales Agreement, pursuant to

our Registration Statement on Form S-3 (File No.

333-250072), through Cantor as our sales agent.

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.

Cantor uses its commercially

reasonable efforts consistent with its normal trading and sales practices and applicable law and regulations to sell these shares.

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.

shares of our common stock sold under the Sales Agreement are sold and issued pursuant to our Form S-3, which was previously declared

effective by the Securities and Exchange Commission, and the related prospectus and one or more prospectus supplements.

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,

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

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.

shares of our common stock sold under the Sales Agreement are sold and issued pursuant to our Registration Statement on Form S-3 (File

333-250072) (the “Form S-3”), which was previously declared effective by the Securities and Exchange Commission, and

the related prospectus and one or more prospectus supplements.

are not obligated to make any sales of our common stock under the 2020 Sales Agreement.

3 unchanged sentences

terminate the 2020 Sales Agreement at any time upon ten days’ prior notice.

the three months ended September 30, 2021, we did not sell any shares of our common stock our current Registration Statement on Form

S-3 (File No.

As of September 30, 2021, we had $41.2 million available for sale under the Sales Agreement.

did not sell any shares of our common stock pursuant to the Sales Agreement during the three months ended March 31, 2022.

three months ended March 31, 2021, we sold 1,811,238 shares of our common stock resulting in net proceeds of approximately $3.4 million

under the Sales Agreement which is net of $112,000 in expenses consisting of commissions paid to Cantor in connection with these sales

and other offering and accounting costs.

As of March 31, 2022, we had $41.2 million available for sale under the Sales Agreement.

believe that our existing capital resources, together with interest thereon, will be sufficient to meet our projected operating requirements

through at least September 30, 2022 which include planned and on-going clinical studies for LPCN 1144 and LPCN 1148, future clinical

studies for TLANDO XR, LPCN 1154 and LPCN 1107, compliance with regulatory requirements, and satisfaction of our obligations under the

settlement agreement with Clarus.

through at least March 31, 2023 which includes an on-going clinical study for LPCN 1148, research and development activities and compliance

with regulatory requirements.

We have based this estimate on assumptions that may prove to be wrong, and we could utilize our available

capital resources sooner than we currently expect if additional activities are performed by us including new clinical studies for LPCN

1144, TLANDO XR, LPCN 1148, LPCN 1154 and LPCN 1107.

While we believe we have sufficient liquidity and capital resources to fund our

projected operating requirements through at least September 30, 2022, 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 September 30, 2022, to support our

If we are unsuccessful in raising additional capital, our ability to continue as a going concern will be limited.

our operating plan may change, and we may need additional funds to meet operational needs and capital requirements for product development,

regulatory compliance and clinical trial activities sooner than planned.

In addition, our capital resources may be consumed more rapidly

if we pursue additional clinical studies for LPCN 1144, TLANDO XR, LPCN 1148, LPCN 1154 and LPCN 1107.

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.

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.

In addition, we currently have 1,586,959 unissued and unreserved

shares available for issuance at September 30, 2021.

Without sufficient shares available for issuance, our ability to raise capital through

sales of equity, including under the Sales Agreement, is limited.

There are numerous risks and uncertainties associated with the development

and, subject to approval by the FDA, commercialization of our product candidates.

There are numerous risks and uncertainties impacting

our ability to enter into collaborations with third parties to participate in the development and potential commercialization of our

product candidates, and the potential benefits to us of such arrangements, including the Antares License Agreement.

Licensees of our

product candidates, including Antares, may not successfully commercialize our products and, as a result, we may not receive anticipated

royalty or other payments under such arrangements.

Additionally, TLANDO is not eligible for final FDA approval until March 2022 and,

therefore, we do not expect to receive any royalty or milestone payments until after such time, if any such payments will be received

1111, LPCN 1144, LPCN 1107 and NASs.

While we believe we have sufficient liquidity and capital resources to fund our projected operating

requirements through at least March 31, 2023, 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, 2023, to support our operations.

If we are unsuccessful in raising

additional capital, our ability to continue as a going concern will be limited.

Further, our operating plan may change, and we may need

additional funds to meet operational needs and capital requirements for product development, regulatory compliance and clinical trial

activities sooner than planned.

In addition, our capital resources may be consumed more rapidly if we pursue additional clinical studies

for LPCN 1111, LPCN 1144, LPCN 1107 and NASs including LPCN 1154 and LPCN 2101.

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 or intellectual property litigation, or if we terminate or settle any on-going litigation activities.

We can raise capital

pursuant to the Sales Agreement when not restricted due to terms of previous financings but may choose not to issue common stock if our

market price is too low to justify such sales in our discretion.

In addition, as of March 31, 2022, we have 5,223,779 unissued and unreserved

shares available for issuance.

Without sufficient shares available for issuance, our ability to raise capital through sales of equity,

including under the Sales Agreement, is limited.

While we are seeking shareholder approval of an amendment to our Amended and Restated

Certificate of Incorporation of the Company to increase the number of authorized shares of common stock, there is no guarantee that we

will obtain such approval.

We rely on our authorized but unissued shares of common stock to raise capital from time to time to fund the

development of our pipeline and advance product candidates to stages that allow for out licensing, allow us to remain independent and

maintain business flexibility, and create value for our shareholders.

Without sufficient authorized but unissued shares of common stock,

we will be limited in our ability to raise capital, which could have an adverse impact on our liquidity and ability to operate our business.

If we are unable to effectively raise capital, including through the sale of capital stock or other equity securities, our business and

financial condition will be adversely affected.

There are numerous risks and uncertainties associated with the development and, subject

to approval by the FDA, commercialization of our product candidates.

There are also numerous risks and uncertainties impacting our ability

to enter into collaborations with third parties to participate in the development and potential commercialization of our product candidates.

We are unable to precisely estimate the amounts of increased capital outlays and operating expenditures associated with our anticipated

or unanticipated clinical studies and ongoing development efforts.

All of these factors affect our need for additional capital resources.

To fund future operations, we will need to ultimately raise additional capital and our requirements will depend on many factors, including

the following:

or unanticipated clinical studies and ongoing development and pre-commercialization efforts.

All of these factors affect our need for

additional capital resources.

To fund future operations, we will need to ultimately raise additional capital and our requirements will

depend on many factors, including the following:

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 1144, TLANDO XR, LPCN 1148, LPCN 1154 and LPCN 1107;

cost of manufacturing clinical supplies, and establishing commercial supplies, of our product candidates and any products that we

product candidates, including LPCN 1148, LPCN 1111, LPCN 1144, LPCN 1107 and neuroactive steroids including LPCN 1154 and LPCN 2101;

cost of manufacturing clinical supplies and establishing commercial supplies of our product candidates and any products that we may

cost and timing of establishing sales, marketing and distribution capabilities, if any;

terms and timing of any collaborative, licensing, settlement and other arrangements that we may establish;

terms and timing of any collaborative, licensing and other arrangements that we may establish;

number and characteristics of product candidates that we pursue;

cost, timing and outcomes of regulatory approvals;

timing, receipt and amount of sales, profit sharing or royalties, if any, from our potential products;

timing, receipt and amount of sales, profit sharing, milestones or royalties, if any, from our potential products;

cost of preparing, filing, prosecuting, defending and enforcing any patent claims and other intellectual property rights;

26 unchanged sentences

and Uses of Cash

following table provides a summary of our cash flows for the nine months ended September 30, 2021 and 2020:

Nine Months Ended September 30,

Cash used in operating activities

following table provides a summary of our cash flows for the three months ended March 31, 2022, and 2021:

Months Ended March 31,

used in operating activities

$ (3,885,402 )

$ (4,061,774 )

Cash used in investing activities

provided by (used in) investing

(33,994,221 )

Cash provided by financing activities

provided by financing activities

Cash From Operating Activities

the nine months ended September 30, 2021 and 2020, net cash used in operating activities was $13.4 million and $11.6 million, respectively.

cash used in operating activities during the nine months September 30, 2021 and 2020 was primarily attributable to cash outlays to support

ongoing operations, including research and development expenses and general and administrative expenses.

During 2021 and 2020, we were

performing activities related to the LPCN 1144 LiFT Phase 2 paired biopsy clinical study.

During 2021, we were also preparing

for a future trial with LPCN 1154 and we entered into the Global Agreement with Clarus.

During 2020, we were also performing activities

around the submission of the TLANDO NDA.

the three months ended March 31, 2022, and 2021, net cash used in operating activities was $3.9 million and $4.1 million, respectively.

cash used in operating activities during the three months ended March 31, 2022, and 2021 was primarily attributable to cash outlays

to support ongoing operations, including research and development expenses and general and administrative expenses.

During 2022 we performed

activities related mainly to the following:

Phase 2 POC study in male cirrhotic subjects with LPCN 1148, PK and food effect studies with

LPCN 1154 and LPCN 1107, and manufacturing scale up with LPCN 1111.

During 2021 we primarily performed activities related to the LPCN

1144 LiFT Phase 2 paired biopsy clinical study.

Cash From Investing Activities

the nine months ended September 30, 2021 and 2020, net cash used in investing activities was $34.1 million and $1.5 million, respectively.

cash used in investing activities during the nine months ended September 30, 2021 and 2020, was primarily the result of purchasing marketable

investment securities, net, of $34.1 million and $1.5 million, respectively.

There were no capital expenditures for the nine months ended

September 30, 2021 and 2020.

the three months ended March 31, 2022, net cash provided by investing activities was $7.3 million compared to net cash used in investing

activities of $34.0 million during the three months ended March 31, 2021.

cash provided by investing activities during the three months ended March 31, 2022, was primarily the result of the net maturities of

marketable investment securities of $7.3 million.

Net cash used in investing activities during the three months ended March 31, 2021

was primarily the result of purchasing marketable investment securities, net, of $34.4 million.

There were $27,000 in capital expenditures

during the three months ended March 31, 2022, and no capital expenditures during the three months ended March 31, 2021.

Cash From Financing Activities

the nine months ended September 30, 2021 and 2020 net cash provided by financing activities was $27.8 million and $16.3 million, respectively.

cash provided by financing activities during the nine months ended September 30, 2021 was attributable to the net proceeds from the sale

of 16,428,571 shares of common stock pursuant to January 2021 Offering resulting in net proceeds of $26.8 million and $3.4 million in

proceeds from the sale of 1,811,238 shares of common stock pursuant to the Sales Agreement with Cantor, offset by $2.5 million in debt

principal repayments under the SVB Loan and Security Agreement.

cash provided by financing activities during the nine months ended September 30, 2020 was attributable to the net proceeds from the sale

of 10,084,034 shares of common stock pursuant to the February 2020 Offering resulting in net proceeds of $5.7 million, to $7.7 million

in proceeds from the exercise of warrants, $3.9 million in proceeds from the sale of 2,830,000 shares of common stock pursuant to the

ATM and $234,000 in loan proceeds under the Payment Protection Program, offset by $1.1 million in debt principal repayments under the

SVB Loan and Security Agreement.

the three months ended March 31, 2022, net cash used in financing activities was $627,000 and during the three months ended March 31,

2021, net cash provided by financing activities was $29.4 million.

cash used in financing activities during the three months ended March 31, 2022, was due to $833,000 in debt principal repayments under

the SVB Loan and Security Agreement, offset by $206,000 cash provided by proceeds from stock option exercises.

Net cash provided by financing

activities during the three months ended March 31, 2021, was attributable to the net proceeds from the sale of 16,428,571 shares of common

stock pursuant to January 2021 Offering resulting in net proceeds of $26.8 million and $3.4 million in proceeds from the sale of 1,811,238

shares of common stock pursuant to the ATM, offset by $833,000 in debt principal repayments.

Commitments and Contingencies

4 unchanged sentences

is payable monthly.

The loan matures on June 1, 2022 and we were required to make equal monthly payments of principal and interest for

the remaining term of the loan beginning on January 1, 2019 although there was a principal deferment period of six months beginning on

April 1, 2020 due to COVID-19.

The loan matures on June 1, 2022 and we are required to make equal monthly payments of principal and interest for

the remaining term of the loan beginning on November 1, 2020 although there was a principal deferment period of six months beginning

on April 1, 2020 due to COVID-19.

We will also be required to pay the Final Payment Charge at maturity.

April 21, 2020, we were granted a Loan from SVB in the aggregate amount of approximately $234,000, pursuant to the PPP under Division

A, Title I of the CARES Act, which was enacted March 27, 2020.

The PPP Loan, which was in the form of a Note dated April 21, 2020, originally

matured on April 21, 2022 and bears interest at a rate of 1.0% per annum, payable monthly commencing on November 21, 2020.

terms of the PPP, certain amounts of the PPP Loan may be forgiven if they are used for qualifying expenses as described in the CARES

On November 2, 2020, we were notified by the Small Business Administration that our PPP Loan had been forgiven.

enter into contracts and issue purchase orders in the normal course of business with clinical research organizations for clinical trials

4 unchanged sentences

serves as our corporate headquarters.

On March 3, 2021, we modified and extended the lease through February 28, 2022.

On January 24, 2022, we modified and extended the lease through February 28, 2023.

Accounting Policies and Significant Judgments and Estimates

10 unchanged sentences

There have been no significant

and material changes in our critical accounting policies during the nine months ended September 30, 2021, as compared to those disclosed

and material changes in our critical accounting policies during the three months ended March 31, 2022, as compared to those disclosed

in “Management’s Discussion and Analysis of Financial Condition and Results of Operations-Critical Accounting Policies and

3 unchanged sentences

not yet adopted.

Sheet Arrangements

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis