What changed in this filing

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Item 2. Management’s Discussion and Analysis

2022-08-08 compared with 2022-05-09 · 520 added, 422 removed, 644 unchanged (59% 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 SEC on March 9, 2022 as well as the financial statements and related notes contained

and analysis included in our Form 10-K, filed with the SEC on March 9, 2022, our first quarter Form 10-Q filed with the SEC on May 9,

2022, as well as the financial statements and related notes contained therein.

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 I, Item 1A (Risk Factors) of our Form 10-K filed with the SEC on March

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 March

31, 2022 filed with the SEC on May 9, 2022 or in Part I, Item 1A (Risk Factors) of our Form 10-K filed with the SEC on March 9, 2022.

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 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”).

are a biopharmaceutical company focused on metabolic and CNS disorders using our proprietary oral drug delivery technology.

Our proprietary

delivery technologies are designed to improve patient compliance and safety through orally available treatment options.

Our primary development

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

We have a portfolio of differentiated innovative product

candidates that target high unmet needs for neurological and psychiatric CNS disorders, liver diseases, and hormone supplementation for

men and women.

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

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

On October 14, 2021, we

entered into a license agreement (the “Antares License Agreement”) with Antares Pharma, Inc.

(“Antares” or our

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

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

product for TRT in the U.S.

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.

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.

On May 24, 2022, Halozyme Therapeutics

completed an acquisition of Antares Pharma Inc.

through a merger of a wholly owned subsidiary of Halozyme with and into Antares, with

Antares continuing as the surviving corporation and becoming a wholly owned subsidiary of Halozyme.

On June 7, 2022, Halozyme announced

the commercial launch of TLANDO®, an oral treatment indicated for testosterone replacement therapy in adult males for conditions

associated with a deficiency or absence of endogenous testosterone (primary or hypogonadotropic hypogonadism).

pipeline candidates include:

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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.

LPCN 1111, a next generation oral TRT product comprised of

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

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

LPCN 1154 for postpartum depression (“PPD”);

and LPCN 2101 for epilepsy.

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

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We have not generated any revenues

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.

from product sales and we do not expect to generate revenue from product sales and we do not expect to generate revenue, other than TLANDO

royalties and potential milestone payments from product sales by Antares, unless and until we obtain regulatory approval of our pipeline

product candidates.

have incurred losses in most years since our inception.

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

As of June 30, 2022, we had an accumulated deficit of $178.8 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 $3.5 million for the three months ended March 31, 2022, compared to $3.4 million for the three months ended

March 31, 2021.

Our net loss was $6.1 million for the six months ended June 30, 2022, compared to $10.2 million for the six months ended

June 30, 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.

programs, our research activities and general and administrative costs including litigation costs, associated with our operations.

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

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

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

our research efforts;

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

Product Candidates

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

Product and Product Candidates

pipeline of clinical candidates includes 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.

for the prevention of PTB, 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 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.

Lip’ral based TLANDO was approved in March

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.

An Oral Product 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.

On May 24, 2022, Halozyme Therapeutics completed

an acquisition of Antares Pharma Inc.

through a merger of a wholly owned subsidiary of Halozyme with and into Antares, with Antares continuing

as the surviving corporation and becoming a wholly owned subsidiary of Halozyme.

Proof-of-concept

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

was then acquired by Abbott Products, Inc.

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 no cap on royalties and no maximum aggregate

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

During the three and six months

ended June 30, 2022, we incurred royalty expense of $17,000 resulting from the commercial launch of TLANDO in June 2022.

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.

Development Pipeline

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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.

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 proof of concept (“POC”) study (NCT04874350) in male cirrhotic subjects to evaluate the

therapeutic potential of LPCN 1148 for the management of sarcopenia.

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

placebo-controlled study in male sarcopenic cirrhotic patients.

Subjects will be randomized 1:1 to 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.

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.

We currently expect enrollment in the Phase

2 study to be complete in the second half of 2022 and top-line 24-week results in the first half 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

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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.

waitlist are male and 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

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Disorders and Cirrhosis

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

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

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

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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.

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

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

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notable features.

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

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

Frailty is a state of low energetics

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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

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

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

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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).

low isometric knee extension peak torque or a composite measure such as LFI.

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

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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;

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

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;

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.

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Eur J Gastroenterol.

Clin Gastroenterol

Clin Gastroenterol Hepatol.

World J Gastroenterol.

Carey, Hepatology, 2019;

Sinclair, Ailment

Pharmacol Ther, 2016;

Sinclair, Ailment Pharmacol Ther, 2016;

Lai, Am J Transplant, 2014;

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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.

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.

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 progresses to NASH, which is a substantially

large population that lacks an effective therapy.

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

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 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.

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.

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

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patient reported outcomes.

Additionally,

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.

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

showed improvement of liver injury markers with no observed tolerability issues.

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

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

Additionally,

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

The extension study

enabled 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.

Key results from the OLE study are as follows:

1144 was well tolerated over 72-week exposure with no observed safety signals;

injury markers were reduced and maintained with extended LPCN 1144 treatment;

liver histology improvements support further development

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

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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 recommended to request an end-of-phase 2 (“EOP2”)

The FDA acknowledged that in the LiFT study subjects achieved improvements in key components associated with NASH histopathology

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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.

In July 2022, Lipocine held an End of Phase 2 meeting with FDA for LPCN 1144 in NASH.

The FDA recommends Lipocine conduct a phase 2 dose

ranging study to identify the optimal dose prior to conducting a pivotal study.

The FDA agreed to the proposed unique testosterone ester,

testosterone dodecanoate, for future clinical studies.

are exploring the possibility of partnering LPCN 1144 to a third party, although no partnering 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.

be on terms favorable to us.

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

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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.

Amendment, Antares paid the Company a non-refundable cash fee of $500,000 in April 2022.

On June 30, 2022, Antares’ option to license

a license for TLANDO XR expired and was not exercised.

are currently in the process of scaling up the manufacturing process and generation of supplies to enable conduct of pivotal studies

for registration.

We are exploring the possibility of partnering LPCN 1111 to a third party, although no partnering 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 terms favorable to us.

An Oral Product Candidate for the Prevention of Preterm Birth

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with the FDA to define a pivotal Phase 2b/3 development plan for LPCN 1107.

However, these discussions will need to be updated based

on recent developments with Covis’ Makena®.

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

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

However, these discussions may be updated based on recent

developments with Covis’ Makena® as described below.

We have completed a food effect study to characterize the dosing regimen

for the pivotal study.

We plan to submit a pivotal clinical study protocol to the FDA.

are exploring the possibility of partnering LPCN 1107 to a third party, although no partnering 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.

be on terms favorable to us.

FDA has granted orphan drug designation to LPCN 1107 based on a major contribution to patient care.

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Competition Update

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’

On 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.

CDER issued AMAG Pharmaceuticals, the NDA holder at the time, a Notice of Opportunity for Hearing (“NOOH”) to withdraw approval of Makena, for

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

decade-long use of 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.

granted Covis a public hearing to be held October 17 through 19, 2022.

During this time, Makena and the approved generics of Makena have

remained on the market pending a final decision about these products by the FDA.

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

Neuroactive Steroids (“NAS”) Programs for CNS Disorders

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

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the preferred and convenient oral route.

We have conducted Phase 1 PK studies for each of our two lead NAS candidates which have demonstrated

promising PK results, safety, and tolerability.

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.

The FDA has cleared the LPCN 1154 investigational new drug (“IND”)

application to conduct a phase 2 study in PPD.

In addition to completing an oral PK study, we completed a food effect study with LPCN

In the second quarter of 2022, a type C meeting was held with the FDA to discuss PK data and the clinical development path of LPCN 1154,

our candidate for postpartum depression (“PPD”).

Based on feedback from the meeting, the company plans to initiate a multi-dose

proof-of-concept study of LPCN 1154 in the second half of 2022.

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

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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.

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

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

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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.

Reuptake Inhibitors (“SSRIs”) have been the traditional first-line choice for women with severe PPD requiring weeks for onset

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.

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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.

believe LPCN 1154 targets the unmet need for a convenient, oral treatment with faster onset of action.

NAS for epilepsy

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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.

study for LPCN 2101 which demonstrated promising PK results, safety and tolerability.

In July 2022 our IND was accepted by the FDA for

LPCN 2101 for adults with epilepsy and we plan to initiate a Phase 2 IND opening proof-of-concept study to evaluate the safety, tolerability,

and efficacy of LPCN 2101 in the second half of 2022.

The Phase 2 study will be a photosensitive epilepsy (“PSE”) study with

the first patient expected to be dosed in the second half of 2022.

The photosensitivity model enrolls patients who have an EEG-measurable

photoparoxysmal response (“PPR”) triggered by light stimulation.

Reduction in photosensitivity can be quantified after a

single dose of a potential anti-seizure medication (“ASM”).

Reportedly, positive results in the PSE model have proven to

be a reliable marker of antiseizure efficacy for most approved ASMs.

Overview - Epilepsy

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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”)).

of patients are refractory (i.e., epilepsy not well managed with currently available ASMs).

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.

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

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Often, these women experience

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

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

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

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Categorization of focal epilepsy, generalized

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

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

Special patient subgroups, including

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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.

be co-treated with therapies that do not aggravate seizures and have no drug interaction with the ASM 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

Despite a wide range of ASMs 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.

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

pregnancy face significant challenges to balance seizure control efficacy with the selection and dosage of ASMs and ASM-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

ASMs 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

Other commonly prescribed ASMs, including older generation

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

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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

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

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

cease ASM 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 ASM, and/or contraception failure may be experienced by women who are worried about

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

AEDs can reduce the efficacy of oral contraceptives, compounding

ASMs can reduce the efficacy of oral contraceptives, compounding

this problem.

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

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

Most hormones act as NAS and can thus modulate brain

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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

interactions that modify the plasma levels of ASMs (Harden, 2008).

The PK interactions between oral contraceptives and ASMs are bidirectional

(Johnston and Crawford, 2014).

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

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

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

Contraceptive failure, possibly related to AEDs, may

Contraceptive failure, possibly related to ASMs, 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.

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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

reproductive cycles, and approximately 30% of patients with epilepsy cannot be efficiently controlled with available ASMs making consideration

of newer pharmacological treatment development options important.

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Therefore, uncompromised

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

ASM 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.

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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.

ASMs 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

need for an ASM without the aforementioned downsides, with no to low fetal-neonatal toxicity and without any breast-feeding concerns

as well as potential to treat associated comorbidities.

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Operations Overview

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.

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

June 30, 2022, we have generated $44.7 million in revenue under our various license and collaboration arrangements and from

government grants.

Based on the terms of the Antares license agreement, we estimate that we will receive a payment of approximately

$235,000 for royalties based on estimated second quarter 2022 net sales of TLANDO.

If received, receipt of this payment will reduce

our contract asset in the third quarter of 2022.

We may never generate revenues from any of our clinical or pre-clinical development

programs other than TLANDO as we may never succeed in obtaining regulatory approval or commercializing any of these product

and Development Expenses

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We expense research and development expenses as incurred.

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

our inception, we have spent approximately $133.3 million in research and development expenses through June 30, 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.

male cirrhotic subjects with LPCN 1148 and our NAS projects, as well as the clinical development of other pipeline product candidates.

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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regulatory approval process, we are unable to estimate with any certainty the time or cost to complete the development of LPCN 1148,

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.

LPCN 1144, LPCN 1111, 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 favorable.

are successful in progressing LPCN 1148, LPCN 1144, LPCN 1111, LPCN 1107, 1148, LPCN 1154, 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 pre-clinical 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:

Three Months Ended March 31,

Three Months Ended June 30,

Six Months Ended June 30,

External service provider costs:

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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.

study in male cirrhotic subjects with LPCN 1148 and our NAS studies, 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.

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

and administrative expenses consist primarily of salaries and related benefits, including stock-based compensation related to our executive,

finance, business development, and support functions.

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

professional fees for auditing, tax and legal services.

finance, business development, and marketing analytics.

Other general and administrative expenses include rent and utilities, travel

expenses, and 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 our on-going patent interference and patent infringement lawsuits

against Clarus.

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

Clarus in 2021.

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

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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.

However, if we

are unable to raise additional capital, we may need to reduce general and administrative expenses in order to extend our ability to continue

as a going concern.

Expense (Income), Net

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

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

of Operations

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,

of the Three Months Ended June 30, 2022 and 2021

following table summarizes our results of operations for the three months ended June 30, 2022 and 2021:

Three Months Ended June 30,

Research and development expenses

General and administrative expenses

Interest and investment income

Interest expense

Gain on warrant liability

Loss (gain) on litigation settlement

increase in revenue during the three months ended June 30, 2022 related to a non-refundable cash fee of $500,000 received from Antares

for consideration of a 90 day extension to exercise its option to license LPCN 1111.

On June 30, 2022, Antares’ option to license

TLANDO XR expired and was not exercised.

and Development Expenses

increase in research and development expenses during the three months ended June 30, 2022 was primarily due to a $989,000 increase in

contract research organization expense related to the Phase 2 POC study in male cirrhotic subjects with LPCN 1148, a $729,000 increase

in costs related to LPCN 1154 clinical studies, a $115,000 increase in personnel expense from recruiting and salaries of additional

personnel, and a $60,000 increase in our LPCN 1111 and LPCN 1107 clinical studies.

These increases were offset by a $397,000 decrease

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 $58,000 decrease in costs associated with TLANDO, as well as a $5,000 decrease in other R&D

and Administrative Expenses

decrease in general and administrative expenses during the three months ended June 30, 2022 was due to a $561,000 decrease in legal fees

primarily related to the 2021 settlement of the patent infringement lawsuit with Clarus Therapeutics Inc.

and the ongoing class action

lawsuit defense and a $42,000 decrease in personnel costs due to employee turnover.

These decreases were offset by a $82,000 increase

in professional fees related to the recruitment of additional directors to our Board, a $55,000 increase related to proxy solicitation

services and proxy distribution services, a $23,000 increase in corporate insurance expenses, a $17,000 increase in royalty expense related

to the net sales of TLANDO resulting from its commercial launch in June 2022, and a $30,000 increase in other general and administrative

and Investment Income

loss on warrant liability

increase in interest and investment income during the three months ended June 30, 2022 was mainly due to higher interest rates in 2022

compared to 2021.

decrease in interest expense during the three months ended June 30, 2022 was due to a decrease in interest expense on our Loan and Security

Agreement with SVB as a result of lower principal balances on the loan in 2022 as compared with 2021.

The SVB loan matured and was paid

in full in June of 2022.

Gain on Warrant Liability

recorded a gain of $583,000 and a gain of $221,000, respectively, on warrant liability during the three months ended June 30, 2022 and

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

The gain in 2022

was attributable to a decrease in the value of warrants outstanding as of June 30, 2022 as compared to March 31, 2022 which was mainly

due to a decrease in our stock price.

The gain in 2021 was attributable to a decrease in the value of warrants outstanding as of June

30, 2021 as compared to March 31, 2021 and was also mainly due to a decrease in our stock price.

There were zero common stock warrants

from the November 2019 Offering exercised during the three months ended June 30, 2022 and 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.

the three months ended June 30, 2022, we recorded a gain on the settlement of litigation liability of $250,000 as a result of the April

2022 Amendment to the Global Agreement with Clarus (“Amended Settlement Agreement”).

The Amended Settlement Agreement settled

the payments due in July 2022 and 2023 for $1,250,000 rather than the $1,500,000 total future payments due under the terms of the Global

Agreement agreed to in 2021.

Under the terms of the Global Agreement we entered into in 2021, we had agreed to pay Clarus $4.0 million

payable as follows:

$2.5 million which was paid in July 2021, $1.0 million which was to be paid on July 13, 2022, and $500,000 to be

paid on July 13, 2023.

the three months ended June 30, 2021, we recorded a litigation settlement expense of $4.0 million resulting from the Global Agreement

with Clarus which resolved all outstanding claims between the two companies.

future royalties are owing from either party.

On July 15, 2021, the Court dismissed with prejudice the Company’s claims and Clarus’

counterclaims.

of the Six Months Ended June 30, 2022 and 2021

following table summarizes our results of operations for the six months ended June 30, 2022 and 2021:

Six months ended June 30,

Research and development expenses

General and administrative expenses

Interest and investment income

Interest expense

Gain on warrant liability

Loss (gain) on litigation settlement

Income tax expense

increase in revenue during the six months ended June 30, 2022 related to a non-refundable cash fee of $500,000 received from Antares

for consideration of a 90 day extension to exercise its option to license LPCN 1111.

On June 30, 2022, Antares’ option to license

a license for TLANDO XR expired and was not exercised.

and Development Expenses

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.

increase in research and development expenses during the six months ended June 30, 2022 was due to a $1.4 million increase in contract

research organization expense related to the Phase 2 POC study in male cirrhotic subjects with LPCN 1148, a $976,000 increase in costs

related to LPCN 1154 clinical studies, a $254,000 increase related to LPCN 1111 scale up activities and a food effect study in LPCN 1107,

a $239,000 increase in personnel expense resulting from the recruiting and hiring of additional personnel, and a $72,000 increase in

other research and development costs.

These increases were offset by a $1.1 million decrease 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 $145,000

decrease in costs associated with TLANDO.

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.

decrease in general and administrative expenses during the six months ended June 30, 2022 was primarily due to a $1.0 million

decrease in legal fees related to the 2021 settlement of the patent infringement lawsuit with Clarus Therapeutics Inc.

ongoing class action lawsuit defense, a decrease of $63,000 in personnel costs due to employee turnover, and a $41,000 decrease

in other general and administrative expenses.

These decreases were offset by a $140,000 increase in professional fees related to the

recruitment of additional directors to our Board, a $110,000 increase related to proxy solicitation services and proxy distribution

services, $97,000 increase in various other consulting fees, a $49,000 increase in corporate insurance expenses, and a $17,0000

increase in royalty expense related to the net sales of TLANDO resulting from its commercial launch in June 2022.

and Investment Income

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.

increase in interest and investment income during the six months ended June 30, 2022 was due to higher interest rates in 2022 compared

to 2021, despite lower cash and marketable investment securities balances.

decrease in interest expense during the six months ended June 30, 2022 was due to a decrease in interest expense on our Loan and Security

Agreement with SVB, mainly as a result of lower principal balances 2022 as compared to 2021.

The SVB loan matured and was paid in full

in June of 2022.

Gain on Warrant Liability

recorded a gain of $205,000 and a gain of $26,000, respectively, on warrant liability during the six months ended June 30, 2022 and 2021

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

The gain in 2022 was

attributable to a decrease in the value of warrants outstanding as of June 30, 2022 as compared to December 31, 2021 due to a a decrease

in our stock price and the shorter term remaining on the outstanding warrants.

The gain in 2021 was attributable to a decrease in the

value of warrants outstanding as of June 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 the shorter term remaining on the outstanding warrants.

There were zero and 10,000 common

stock warrants from the November 2019 Offering exercised during the six months ended June 30, 2022 and 2021, respectively.

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.

the six months ended June 30, 2022, we recorded a gain on the settlement of litigation liability of $250,000 as a result of the April

2022 Amendment to Global Agreement with Claurus (“Amended Settlement Agreement”).

The Amended Settlement Agreement settled

the payments due in July 2022 and 2023 for $1,250,000 rather than the $1,500,000 total future payments due under the terms of the Global

Agreement agreed to in 2021.

Under the terms of the Global Agreement we entered into in 2021, we had agreed to pay Clarus $4.0 million

payable as follows:

$2.5 million which was paid in July 2021, $1.0 million which was to be paid on July 13, 2022 and $500,000 to be paid

on July 13, 2023.

the six months ended June 30, 2021, we recorded a litigation settlement expense of $4.0 million resulting from the Global Agreement with

Clarus which resolved all outstanding claims between the two companies.

future royalties are owing from either party.

On July 15, 2021, the Court dismissed with prejudice the Company’s claims and Clarus’

counterclaims.

and Capital Resources

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We have devoted our resources to funding research and development programs, including discovery

research, preclinical and clinical development activities.

research, pre-clinical and clinical development activities.

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 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

expect to continue to incur operating losses into the foreseeable future as we advance the clinical development of LPCN 1144, LPCN 1111,

LPCN 1148, LPCN 1107, LPCN 1154 and LPCN 2101, and any other product candidate, including continued research efforts.

of June 30, 2022, we had $37.4 million of unrestricted cash, cash equivalents and marketable investment securities compared to $46.6

million at December 31, 2021.

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

principal borrowed under the Loan and Security Agreement bears interest at a rate equal to the Prime Rate, as reported in money rates

principal borrowed under the Loan and Security Agreement bore interest at a rate equal to the Prime Rate, as reported in money rates

section of The Wall Street Journal or any successor publication representing the rate of interest per annum then in effect, plus one

percent per annum, which interest is payable monthly.

percent per annum, which interest was payable monthly.

Additionally on April 1, 2020, we entered into a Deferral Agreement with SVB.

the Deferral Agreement, principal repayments were deferred by six months and we were only required to make monthly interest payments

Under the Deferral Agreement, principal repayments were deferred by six months and we were only required to make monthly interest payments

during the deferral period.

The Loan matures on June 1, 2022.

Previously, we were only required to make monthly interest payments until

December 31, 2018, following which we also made equal monthly payments of principal and interest until the signing of the Deferral Agreement.

We will also be required to pay an additional final payment at maturity equal to $650,000 (the “Final Payment Charge”).

our option, we may prepay all amounts owed under the Loan and Security Agreement (including all accrued and unpaid interest and the Final

Payment Charge).

In connection with the Loan and Security Agreement, we granted to SVB a security interest in substantially all of our

assets now owned or hereafter acquired, excluding intellectual property and certain other assets.

In addition, as TLANDO was not approved

by the FDA by May 31, 2018, we were required to maintain $5.0 million of cash collateral at SVB until such time as TLANDO is approved

However, on February 16, 2021, we amended the Loan and Security Agreement with SVB to, among other things, remove the financial

trigger and financial trigger release event provisions requiring us to maintain a minimum cash collateral value and collateral pledge

While any amounts are outstanding under the Loan and Security Agreement, we are subject to a number of affirmative and negative

covenants, including covenants regarding dispositions of property, business combinations or acquisitions, incurrence of additional indebtedness

and transactions with affiliates, among other customary covenants.

The credit facility also includes events of default, the occurrence

and continuation of which could cause interest to be charged at the rate that is otherwise applicable plus 5.0% and would provide SVB,

as collateral agent, with the right to exercise remedies against us and the collateral securing the credit facility, including foreclosure

against the property securing the credit facilities, including our cash.

These events of default include, among other things, any failure

by us to pay principal or interest due under the credit facility, a breach of certain covenants under the credit facility, the Company’s

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

The Loan matured and was paid in full on June 1, 2022.

Additionally, we made a final payment at maturity

equal to $650,000 (the “Final Payment Charge”) at the time the loan matured.

The expense of the final payment charge had

been recognized over the term of the facility using the effective interest method.

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

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

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.

the three and six months ended June 30, 2022, we did not sell any shares of our common stock pursuant to our current Registration

Statement on Form S-3 (File No.

During the six months ended June 30, 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 June 30, 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 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

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 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

through at least June 30, 2023 which includes an on-going clinical study for LPCN 1148, future clinical studies for LPCN 1154 and LPCN

2101, 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, LPCN 1111, LPCN 1107, and NAS including LPCN 1154 and LPCN 2101.

we believe we have sufficient liquidity and capital resources to fund our projected operating requirements through at least June 30,

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 June 30, 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.

our capital resources may be consumed more rapidly if we pursue additional clinical studies for LPCN 1144, LPCN 1111, LPCN 1107, and

NAS 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, modify or suspend on-going clinical studies.

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.

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.

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 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, pre-clinical testing and other related activities for all of our

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 of manufacturing clinical supplies, and establishing commercial supplies, of our product candidates and any products that we

cost and timing of establishing sales, marketing and distribution capabilities, if any;

terms and timing of any collaborative, licensing and other arrangements that we may establish;

terms and timing of any collaborative, licensing, settlement 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, milestones or royalties, if any, from our potential products;

timing, receipt and amount of sales, profit sharing or royalties, if any, from our potential products;

cost of preparing, filing, prosecuting, defending and enforcing any patent claims and other intellectual property rights;

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and Uses of Cash

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

following table provides a summary of our cash flows for the six months ended June 30, 2022 and 2021:

Six Months Ended June 30,

Cash used in operating activities

$ (6,931,731 )

$ (6,425,056 )

provided by (used in) investing

Cash provided by (used in) investing activities

(35,426,211 )

provided by financing activities

Cash From Operating Activities

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 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 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.

Cash provided from (used in) financing activities

Cash Used In Operating Activities

the six months ended June 30, 2022 and 2021, net cash used in operating activities was $6.9 million and $6.4 million, respectively.

cash used in operating activities during the six months June 30, 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 were performing

activities related to our 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 were performing activities related to the LPCN 1144 LiFT

Phase 2 paired biopsy clinical study.

Cash Provided By (Used In) Investing Activities

the six months ended June 30, 2022, net cash provided by investing activities was $11.1 million and during the six months ended

June 30, 2021, net cash used in investing activities was $35.4 million.

Net cash provided by investing activities during the six months ended June

30, 2022 was primarily the result of the maturity of of marketable investment securities, net.

Net cash used in investing activities during

the six months ended June 30, 2021 was due to the purchase of marketable securities.

There were $37,000 in capital expenditures during

the six months ended June 30, 2022 and no capital expenditures for the six months ended June 30, 2021.

Cash Provided From (Used in) Financing Activities

the six months ended June 30, 2022, net cash used in financing activities was $2.1 million and during the six months ended June 30,

2021 net cash provided from financing activities was $28.6 million.

cash used in financing activities during the six months ended June 30, 2022 was mainly due to loan repayments of $1.7 million and payment

of the Final Payment Charge of $650,000 related to the SVB Loan and Security Agreement, offset by net proceeds from stock option exercise

cash provided from financing activities during the six months ended June 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 ATM, offset by $1.7 million in debt principal repayments under

the SVB Loan and Security Agreement.

Commitments and Contingencies

2 unchanged sentences

The principal

borrowed under the Loan and Security Agreement bears interest at a rate equal to the Prime Rate plus one percent per annum, which interest

is payable monthly.

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.

borrowed under the Loan and Security Agreement bore interest at a rate equal to the Prime Rate plus one percent per annum, which interest

was payable monthly.

The loan matured on June 1, 2022 and the outstanding principal, interest and Final Payment Charge were paid in full.

enter into contracts and issue purchase orders in the normal course of business with clinical research organizations for clinical trials

and clinical and commercial supply manufacturing and with vendors for preclinical research studies, research supplies and other services

and clinical and commercial supply manufacturing and with vendors for pre-clinical research studies, research supplies and other services

and products for operating purposes.

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There have been no significant

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

Significant Judgments and Estimates” in our Form 10-K filed March 9, 2022.

and material changes in our critical accounting policies during the six months ended June 30, 2022, as compared to those disclosed in

“Management’s Discussion and Analysis of Financial Condition and Results of Operations-Critical Accounting Policies and Significant

Judgments and Estimates” in our Form 10-K filed March 9, 2022.

Accounting Standards

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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