What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2022-11-09 compared with 2022-08-08 · 632 added, 782 removed, 382 unchanged (79% of the section changed)

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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.

2022, our second quarter Form 10-Q filed with the SEC on August 8, 2022, as well as the financial statements and related notes contained

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

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

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

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

30, 2022 filed with the SEC on August 8, 2022, 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 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.

are a biopharmaceutical company focused on leveraging our proprietary Lip’ral platform to develop differentiated products

through the oral delivery of previously difficult to deliver molecules, focused on treating Central Nervous System

(“CNS”) disorders.

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

orally available treatment options.

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

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.

On October 14, 2021, we entered into a

license agreement (the “Antares License Agreement”) for the development and commercialization of our TLANDO® product, an oral testosterone replacement therapy (“TRT”) comprised of testosterone undecanoate

(“TU”) with Antares Pharma, Inc.

(“Antares” or our “Licensee”), pursuant to which we granted to

Antares an exclusive, royalty-bearing, sublicensable right and license to develop and commercialize our TLANDO product for TRT in

TLANDO is a registered trademark assigned to Antares.

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:

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

of decompensated cirrhosis;

LPCN 1144, an oral prodrug of androgen receptor modulator for the treatment of non-cirrhotic non-alcoholic

steatohepatitis (“NASH”) which has completed phase 2 testing;

LPCN 1111, 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

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).

clinical development pipeline candidates include:

LPCN 1154 for postpartum depression (“PPD”);

and LPCN 2101 for epilepsy.

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

LPCN 2101 for epilepsy;

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

decompensated cirrhosis.

In addition to our CNS product candidates, we have assets for which we expect to seek partnerships to

enable further development including LPCN 1144, an oral prodrug of androgen receptor modulator for the treatment of non-cirrhotic

non-alcoholic steatohepatitis (“NASH”) which has completed phase 2 testing;

LPCN 1111, a next generation oral TRT

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

and LPCN 1107, potentially the first oral hydroxy progesterone caproate (“HPC”) product indicated for the

prevention of recurrent preterm birth (“PTB”), which has completed a dose finding clinical study in pregnant women and

has been granted orphan drug designation by the FDA.

following charts summarize the status of our product candidate development and partnering programs:

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

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We have not generated any revenues

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

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

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

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have incurred losses in most years since our inception.

As of June 30, 2022, we had an accumulated deficit of $178.8 million.

As of September 30, 2022, we had an accumulated deficit of $181.2 million.

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

Our net loss was $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 including litigation costs, associated with our operations.

Our net loss was $8.5 million for the nine months ended September 30, 2022, compared to $13.3 million for the nine months

ended September 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 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 1107, LPCN 1154 and LPCN 2101;

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

our efforts to partner LPCN 1144, LPCN 1148, LPCN 1111, LPCN 1107 and Ex-US TLANDO;

our research efforts;

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general and administrative support for our operations.

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

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

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

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

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

and related general and administrative support.

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

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

We cannot be certain that anticipated

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

have previously been successful in obtaining financing through public and private equity securities offerings and our license and collaboration

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

additional capital.

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

conditions, the commercial success of TLANDO, regulatory requirements related to our other product development programs, the timing

and results of our ongoing development efforts, the potential expansion of our current development programs, potential new

development programs, our ability to partner and/or license our products to third parties, the pursuit of various potential

commercial activities and strategies associated with our development programs and related general and administrative support.

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

potential license, partnering and collaboration agreements.

We cannot be certain that anticipated additional financing will be

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

Although we have previously been

successful in obtaining financing through public and private equity securities offerings and our license and collaboration

agreements, there can be no assurance that we will be able to do so in the future.

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

of pharmaceutical products focusing on neuroendocrine and metabolic disorders.

The key components of our strategy are to:

a diversified multi-asset pipeline of novel therapies.

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

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

disorders and end stage diseases such as decompensated cirrhosis.

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

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

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

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

accompanied with muscle disorder such as secondary sarcopenia.

Sarcopenia in male cirrhotic patients is known to be independently associated

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

and increased mortality rate.

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

Enrollment in a multi-center placebo-controlled

phase 2 trial is currently ongoing.

goal is to become a leading biopharmaceutical company focused on leveraging our proprietary Lip’ral drug delivery technology platform

to develop differentiated products through oral delivery of previously difficult to deliver molecules for CNS disorders.

The key components

of our strategy are to:

LPCN 1154 and other CNS product candidates.

We intend to focus on the development of endogenous neuroactive steroids (“NAS”)

which have broad applicability in treating various CNS conditions where we can leverage our technology platform to develop highly differentiated

oral therapeutics.

Our priority is on the development of LPCN 1154, a fast-acting oral antidepressant for postpartum depression (“PPD”)

with potential for outpatient use.

our licensee in commercialization of our licensed oral TRT option .

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

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

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

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

We continuously strive to prioritize our resources in seeking

partnerships of our pipeline assets.

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

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

Product 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, 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.

We are currently exploring partnering of our liver programs LPCN 1144, our candidate for treatment

of non-cirrhotic NASH and LPCN 1148 for the management of decompensated cirrhosis, LPCN 1111, a once-a-day therapy candidate for TRT

and LPCN 1107, our candidate for prevention of pre-term birth.

We are 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.

Development Pipeline Product Candidates

pipeline of clinical development candidates includes LPCN 1154 for postpartum depression (“PPD”), LPCN 2101 for epilepsy,

and LPCN 1148, an androgen therapy for the management of cirrhosis.

We will continue to explore other product development candidates

targeting CNS indications with a significant unmet need.

We will also continue efforts to enter into partnership arrangements for the continued development and/or marketing

of LPCN 1144, LPCN 1148, LPCN 1111, LPCN 1107 and Ex-US TLANDO.

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

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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

Programs for CNS Disorders

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

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

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

developed for therapeutic use in the past few decades.

believe through utilization of our proprietary technology we may have the ability to enable effective oral delivery of endogenous GABA A

receptor PAMs which historically had been deemed to be not orally bioavailable.

As a novel drug class, NAS have received considerable

attention because of their potential to treat various neuropsychiatric conditions including depression, movement disorders, epilepsy,

anxiety, and neurodegenerative diseases.

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

promising PK results, safety, and tolerability and we are evaluating additional undisclosed CNS-focused candidates.

Product Candidate for PPD

most advanced NAS candidate is LPCN 1154, a non-invasive, oral formulation of the neuroactive steroid brexanolone which we are

developing for the treatment of PPD.

The FDA recently agreed with our proposal for establishing the efficacy of LPCN 1154 through a

pivotal PK bridge to an approved IV infusion brexanolone via a 505(b)(2) NDA filing .

Based on feedback from the FDA, the

company has initiated a pilot PK bridge study of LPCN 1154, a prelude to a pivotal study required for NDA filing, and results from

the pilot PK bridge study are expected in the first half of 2023.

We have previously completed an oral PK study and a food effect

study with LPCN 1154.

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

delivery, refers to depression persisting up to 12 months after childbirth.

PPD can be clinically segmented by the severity of symptoms

and presence of a comorbidity, including epilepsy.

Approximately 1 in 8 mothers suffers from PPD in the United States alone;

to approximately 500,000 women being affected by PPD annually.

Overview - PPD

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

“baby blues” tend to be short-lived emotional conditions that do

not interfere with daily activities.

of PPD include hallmarks of major depression, including, but not limited to, sadness, depressed

mood, loss of interest, change in appetite, insomnia, sleeping too much, fatigue, difficulty

thinking/concentrating, excessive crying, fear of harming the baby/oneself, and/or thoughts

of death or suicide.

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

however, they drop sharply postpartum.

It has been hypothesized that the rapid perinatal

decrease in circulating levels of endogenous NASs may be involved in the development of PPD.

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

may persist long after child delivery.

Additionally, approximately 40% of women relapse in

subsequent pregnancies or on other occasions.

● Psychiatric

comorbidities are common in patients with epilepsy.

Patients with epilepsy are at high risk

for major depressive disorders and PPD.

Reported PPD rates are higher among women with epilepsy

than the general population.

family history and/or previous experience of depression or other mood disorders

● Physiological:

rapid changes in sex hormones, stress hormones, and thyroid hormone levels during and after

● Environmental:

stressful life events, changes in relationships at home and at work, and/or lack of familial

Approximately,

1 in 8 mothers suffer from PPD in the United States alone, which equates to approximately 500,000 women affected by PPD annually.

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

Selective Serotonin

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

therefore, a need for an oral treatment option with a faster onset of action remains a significant unmet need in treating PPD, especially in women with

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

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

However, numerous factors

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

Administration of injectable

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

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

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

Moreover, the pharmacotherapy

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

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

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

treatment ready.

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

NAS for epilepsy

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

We have completed a pre-clinical

study for LPCN 2101 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 2023 subject to the availability of additional resources.

Overview – Epilepsy

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

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

Patients with epilepsy

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

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

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

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

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

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

of patients are refractory (i.e., epilepsy not well managed with currently available Anti-Seizure Medications (“ASMs”).

is the most common neurological disorder during pregnancy.

is estimated that approximately 900,000 child-bearing (“CB”) age women suffer from active epilepsy in the U.S.

Women of CB age with epilepsy face many

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

reproductive cycles.

Elevated estrogen or decreased progesterone levels can exacerbate seizure frequency.

Often, these women experience

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

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

Epileptic patients are 5-20 times

more likely to develop depression.

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

Categorization of focal epilepsy, generalized

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

Special patient subgroups, including

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

Comorbidities such as depression and anxiety may

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

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

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 ASMs, including older generation

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

and gabapentin (Vajda et al., 2014;

Voinescu and Pennell, 2015).

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

therefore, it is necessary that WWE of CB age undergo counseling, 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 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.

ASMs can reduce the efficacy of oral contraceptives, compounding

this problem.

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

Most hormones act as NAS and can thus modulate brain

excitability.

Any changes in endogenous or exogenous hormone levels can affect the occurrence of seizures, either directly or via PK

interactions that modify the plasma levels of 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 ASMs.

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

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.

need to treat WWE in CB age

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

Women of CB age with epilepsy face many

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

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

of newer pharmacological treatment development options important.

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

Therefore, uncompromised

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.

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

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

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

There remains an unmet

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

as well as potential to treat associated comorbidities.

over 30 molecules have been approved for the treatment of epilepsy in the U.S., no epilepsy drug has been specifically approved for WWE

We believe our endogenous NASs as GABA A PAMs, while targeting the goal of seizure control, also have the potential

for additional benefits in psychiatric disorders comorbidities (e.g., anxiety and/or depression), and sleep impairment.

Moreover, these

oral endogenous NAS could potentially address some of the fetal toxicity concerns related to unplanned or planned pregnancy in WWE.

S.Bangar et al.

Functional Neurology 2016;

Reimers et al.

2015 May;28:66-70.

Oral Product Candidate for the Management of Decompensated Cirrhosis

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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.

liver transplant waiting list, prevention or reduction in the occurrence of new decompensation events such as hepatic encephalopathy

(“HE”), and improvement in post liver transplant survival, including outcomes and costs.

are currently conducting a Phase 2 proof of concept (“POC”) study (NCT04874350) in male cirrhotic subjects to evaluate the

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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.

24 with key secondary endpoints including change in liver frailty index, rates of breakthrough HE, and number of waitlist events, including

all-cause mortality.

Total treatment is expected to be 52 weeks.

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.

Enrollment in the Phase 2 study is expected to be completed in the fourth quarter of 2022 and top-line 24-week

results are expected 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”),

HE and/or ascites occurrences), rates of survival to transplant, rates of hospitalizations, infections, etc., muscle changes such as

muscle mass, body composition, myosteatosis (muscle fat), functional capacity changes such as liver frailty index (“LFI”),

patient reported outcomes (“PROs”), and biochemical markers including hematocrit for anemia status, albumin, creatinine/kidney

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Decompensated subjects survive on average less than 2 years.

Common causes of liver cirrhosis include alcoholic liver disease, nonalcoholic fatty liver disease (“NAFLD”), chronic hepatitis B and C,

primary biliary cirrhosis (“PBC”), primary sclerosing cholangitis (“PSC”) and cryptogenic.

Common causes of liver cirrhosis include alcoholic liver disease, nonalcoholic fatty liver disease (“NAFLD”), chronic hepatitis

B and C, primary biliary cirrhosis (“PBC”), primary sclerosing cholangitis (“PSC”) and cryptogenic.

complications in cirrhotic patients may include:

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in the form of sarcopenia, myosteotosis, and frailty with compromised energetics, bone diseases (e.g., osteoporosis), high alkaline phosphatase

(“ALP”), cachexia, malnutrition, weight loss (>5%), symptoms of hypogonadism such as abnormal hair distribution, anemia, sexual dysfunction,

testicular atrophy, muscle wasting, fatigue, osteoporosis, gynecomastia, inflammation with elevated cytokines, and infection risk leading

to hospital admissions and possibly death.

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

insufficiency and/or portal systemic shunting.

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

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

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

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

As the burden of chronic

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

Disorders and Cirrhosis

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

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

Chronic inflammation and oxidative stress have also been reported

to accelerate muscle wasting.

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

in precipitation of HE in cirrhosis patients.

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

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

being described as frail”.

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

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

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

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

Change in one or more

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

notable features.

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

Frailty is a state of low energetics

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

such as decreased gait speed, weak hand grip;

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

measure such as liver frailty index (“LFI”).

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

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

Montano-Loza,

J Cachexia Sarcopenia Muscle.

Disorders and Mortality in Liver Cirrhosis

develops in the majority of male cirrhosis patients.

The main mechanisms associated with sarcopenia and decompensated cirrhosis include

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

Patients are typically

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

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

A variety of clinical evaluations for muscle mass, strength,

and function are typically used to diagnose sarcopenia.

Sarcopenia in cirrhosis also correlates with decompensation events, particularly

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

Notably, low testosterone in males is

associated with sarcopenia, severity of cirrhosis, and mortality.

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

2022, 76, 588–599

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

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

J Am Coll Surg.

2010 Aug;211(2):271-8

Myosteatosis,

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

it with more complications and poor survival.

Myosteatosis is characteristically associated with liver steatosis in NAFLD, resulting

from ectopic fat accumulation in skeletal muscle.

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

for sarcopenia or obesity.

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

It can be defined as

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

muscle atrophy, and physical disabilities.

and cirrhosis

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

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

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

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

Am J Transplant.

2014 Aug;14(8):1870-9

presence of frailty is associated with increased waitlist death/delisting

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

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

of liver frailty and mortality

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

We believe we are the only clinical-stage company pursuing

decompensation in sarcopenic cirrhotic patients, and no regulatory precedent currently exists for the approval of decompensation or sarcopenia-targeted

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;

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

anti-inflammatory/antioxidant effects

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

and improve mitochondrial function.

Mayo Clin Proc.

Eur J Gastroenterol.

Clin Gastroenterol Hepatol.

World J Gastroenterol.

Carey, Hepatology, 2019;

Sinclair, Ailment Pharmacol Ther, 2016;

Lai, Am J Transplant, 2014;

Montano-Loza, Clin Transl Gastroenterol,

Kahn, Clin Transp, 2018;

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

(“ALP”), cachexia, malnutrition, weight loss (>5%), symptoms of hypogonadism such as abnormal hair distribution, anemia,

sexual dysfunction, testicular atrophy, muscle wasting, fatigue, osteoporosis, gynecomastia, inflammation with elevated cytokines, and

infection risk leading to hospital admissions and possibly death.

a significant decompensation event in patient with cirrhosis, is a brain dysfunction caused by liver insufficiency and/or portal systemic

Because the damaged liver cannot function normally (as in cirrhosis), neurotoxins such as ammonia are inadequately removed

from systemic circulation and travel to the brain, where they affect neurotransmission.

This can cause episodes of HE, which may present

as alterations in consciousness, cognition, and behavior that range from minimal to severe.

Overt HE occurs in 30% to 40% of patients

with cirrhosis at some point during the clinical course of their disease.

As the burden of chronic liver disease and cirrhosis is increasing,

the frequency of HE is also increasing.

Partnership Pipeline Product Candidates

continue to pursue opportunities for partnering arrangements for the continued development and/or marketing of LPCN 1144, LPCN

1148, LPCN 1111, LPCN 1107 and Ex-US TLANDO.

We do not currently anticipate conducting any further significant development activities

with respect to these products and product candidates, without the participation of a partner.

There can be no guarantee that we will

be able to identify or enter into partnering arrangements on terms that are beneficial to us or at all.

Even if we do enter into partnering

arrangements, such arrangements may not be sufficient to successfully develop and commercialize these products.

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 TLANDO, our TLANDO product for TRT in the U.S.

TLANDO received FDA approval on March 28, 2022.

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 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 of TLANDO.

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 amount.

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

During the three and nine months ended September 30,

2022, we incurred royalty expense of approximately $0 and $17,000 resulting from the commercial launch of TLANDO in 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 us an initial payment of $11.0 million.

Antares will also make additional payments

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

We are also eligible

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

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

In addition, we will receive tiered

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

to certain minimum royalty obligations.

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

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.

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

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

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

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.

Overview – NASH

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.

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

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

Progression of NASH to end stage liver

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

Importantly, beyond these critical conditions,

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

than from liver disease.

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

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

Twenty to thirty percent of the U.S.

population is estimated to suffer

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

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

population that lacks effective therapy.

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

Diagnoses have been on the rise and are expected to increase dramatically

in the next decade.

Approximately 50% of NASH patients are in adult males In men, especially with comorbidities associated with NAFLD/NASH,

testosterone deficiency has been associated with an increased accumulation of visceral adipose tissue and insulin resistance, which could

be factors contributing to NAFLD/NASH.

There is currently no approved therapy for the treatment of NASH although there are several drug

candidates currently under development with many having clinical failures to date.

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

of Liver Cell Death

aminotransferase (“ALT”) is an enzyme that is produced in liver cells and is naturally found in the blood of healthy individuals.

In liver disease, liver cells are damaged and as a consequence, ALT is released into the blood, increasing ALT levels above the normal

Physicians routinely test blood levels of ALT to monitor the health of a patient’s liver.

ALT level is a clinically important

biochemical marker of the severity of liver inflammation and ongoing liver disease.

Elevated levels of ALT represent general markers

of liver cell death and inflammation without regard to any specific mechanism.

Aspartate aminotransferase (“AST”) is a second

enzyme found in the blood that is produced in the liver and routinely measured by physicians along with ALT.

As with ALT, AST is often

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

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

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

Once suspected clinically, a liver

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

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

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

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

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

Fibrosis staging

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

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

perisinusoidal and portal/periportal fibrosis;

F3 = bridging fibrosis;

F4 = cirrhosis).

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

However, given that liver biopsy is associated with risks of

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

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

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

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

These tools have an excellent negative predictive value

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

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

liver biopsy.

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

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

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

for NASH in the future.

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

The LiFT clinical study was

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

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

The LiFT clinical

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

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

The LiFT clinical study enrolled 56 biopsy confirmed NASH male subjects.

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

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

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

study enrolled 56 biopsy confirmed NASH male subjects.

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

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

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

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

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NASH activity in steatosis, inflammation, and ballooning.

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

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

and were sustained through EOS.

Using all available Safety Set data, ALT decreased up to a mean of 23.4 U/L at EOS from all group mean

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

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

scans, were noted in both LPCN 1144 treatment arms.

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

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

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.

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:

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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”)

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

after 36-weeks of treatment with LPCN 1144 in adult males and agreed that the proposed multicomponent primary surrogate endpoint is acceptable

for seeking approval under the accelerated approval pathway.

The FDA also recommended either conducting a separate dose–ranging

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

The FDA agreed that the proposed primary multicomponent surrogate endpoint,

NASH resolution with no worsening of fibrosis, is acceptable for seeking approval under the accelerated approval pathway and the FDA

recommended a phase 3 trial with a study duration of 72 weeks.

The FDA acknowledged that in the LiFT study subjects achieved

improvements in key components associated with NASH histopathology after 36-weeks of treatment with LPCN 1144 in adult males and agreed

that the proposed multicomponent primary surrogate endpoint is acceptable for seeking approval under the accelerated approval pathway.

The FDA agreed that the proposed primary multicomponent surrogate endpoint, NASH resolution with no worsening of fibrosis, is acceptable

for seeking approval under the accelerated approval pathway and the FDA recommended a phase 3 trial with a study duration of 72 weeks.

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

The FDA recommends Lipocine conduct a phase 2 dose

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

The FDA recommended a phase 2 dose ranging study

be conducted to identify the optimal dose prior to conducting a pivotal study.

The FDA agreed to the proposed unique testosterone ester,

testosterone 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 terms favorable to us.

testosterone laurate, for future clinical studies.

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

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

delivery technology to enhance solubility and improve systemic absorption.

We completed a Phase 2b dose finding study in hypogonadal

men in the third quarter of 2016.

The primary objectives of the Phase 2b clinical study were to determine the starting Phase 3 dose of

LPCN 1111 along with safety and tolerability of LPCN 1111 and its metabolites following oral administration of single and multiple doses

in hypogonadal men.

are in the process of scaling up the manufacturing process and generation of supplies of LPCN 1111 to enable potential partners to conduct

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.

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

the proprietary delivery technology to enhance solubility and improve systemic absorption.

We completed a Phase 2b dose finding study

in hypogonadal men in the third quarter of 2016.

The primary objectives of the Phase 2b clinical study were to determine the starting

Phase 3 dose of LPCN 1111 along with safety and tolerability of LPCN 1111 and its metabolites following oral administration of single

and multiple doses in hypogonadal men.

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

Additionally, the

target Phase 3 dose met primary and secondary end points.

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

adverse events reported in the Phase 2b study.

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

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

severe or serious adverse events reported in the Phase 2b study.

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

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

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

Under the terms of the Antares License

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

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

Under the terms of the Antares

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

and, should LPCN 1111 receive FDA approval, commercialization.

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

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

As consideration for the Company agreeing to enter into the

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

As consideration for the Company’s agreement to the

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.

On June 30, 2022, Antares’ option to license LPCN 1111 expired and was not exercised.

An Oral Product Candidate for the Prevention of Preterm Birth

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

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

would be on terms favorable to us.

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

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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 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

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 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.

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 (“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

held a public hearing with Covis October 17 through 19, 2022, and a decision whether to withdraw approval of Makena is likely in the

first quarter of 2023.

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.

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

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

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

developed for therapeutic use in the past few decades.

believe through utilization of our proprietary technology we may have the ability to enable effective oral delivery of endogenous GABA A

receptor PAMs which historically had been challenging to deliver orally as they were deemed to be not orally bioavailable.

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

the preferred and convenient oral route.

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.

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

to depression persisting up to 12 months after childbirth.

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

a comorbidity, including epilepsy.

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

this equates to approximately

500,000 women being affected by PPD annually.

Overview - PPD

is distinct from the “baby blues,” a condition that 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

appetite, insomnia, sleeping too much, fatigue, difficulty thinking/concentrating, excessive crying, fear of harming the baby/oneself,

and/or thoughts of death or suicide.

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

however, they drop sharply postpartum.

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

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

may persist long after child delivery.

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

comorbidities are common in patients with epilepsy.

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

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

family history and/or previous experience of depression or other mood disorders

Physiological:

rapid changes in sex hormones, stress hormones, and thyroid hormone levels during and after delivery

Environmental:

stressful life events, changes in relationships at home and at work, and/or lack of familial support

Approximately,

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

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

Selective Serotonin

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

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

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

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

However, numerous factors

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

Administration of injectable

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

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

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

Moreover, the pharmacotherapy

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

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

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

treatment ready.

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

NAS for epilepsy

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

We have completed a pre-clinical

study for LPCN 2101 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

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

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

Patients with epilepsy

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

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

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

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

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

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

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

is the most common neurological disorder during pregnancy.

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

Women of CB age with epilepsy face many

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

reproductive cycles.

Elevated estrogen or decreased progesterone levels can exacerbate seizure frequency.

Often, these women experience

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

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

Epileptic patients are 5-20 times

more likely to develop depression.

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

Categorization of focal epilepsy, generalized

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

Special patient subgroups, including

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

Comorbidities such as depression and anxiety may

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

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

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 ASMs, including older generation

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

and gabapentin (Vajda et al., 2014;

Voinescu and Pennell, 2015).

Moreover, risks associated with 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 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.

ASMs can reduce the efficacy of oral contraceptives, compounding

this problem.

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

Most hormones act as NAS and can thus modulate brain

excitability.

Any changes in endogenous or exogenous hormone levels can affect the occurrence of seizures, either directly or via PK

interactions that modify the plasma levels of 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 ASMs.

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

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.

need to treat WWE in CB age

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

Women of CB age with epilepsy face many

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

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

of newer pharmacological treatment development options important.

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

Therefore, uncompromised

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.

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

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

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

There remains an unmet

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

as well as potential to treat associated comorbidities.

over 30 molecules have been approved for the treatment of epilepsy in the U.S., no epilepsy drug has been specifically approved for WWE

We believe our endogenous NASs as GABA A PAMs, while targeting the goal of seizure control, also have the potential

for additional benefits in psychiatric disorders comorbidities (e.g., anxiety and/or depression), and sleep impairment.

Moreover, these

oral endogenous NAS could potentially address some of the fetal toxicity concerns related to unplanned or planned pregnancy in WWE.

S.Bangar et al.

Functional Neurology 2016;

Reimers et al.

2015 May;28:66-70.

Operations Overview

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Since our inception through

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

September 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

Based on the terms of the Antares license agreement, in the fourth quarter of 2021 we recorded $4.1 million in

revenue and an associated contract asset for future contractual minimum royalties.

We reduced our contract asset by $218,000 in the

third quarter of 2022 due to a royalty payment received from Antares under the terms of our license agreement, based on net sales of

TLANDO in the second quarter of 2022.

We estimate that we will not receive a payment for royalties based on estimated third quarter

2022 net sales of TLANDO.

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 candidates.

and Development Expenses

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

as those for facilities, office expense, travel, and depreciation of equipment based on the ratio of direct labor hours for research

as those for facilities, office expense, and depreciation of equipment based on the ratio of direct labor hours for research

and development personnel to total direct labor hours for all personnel.

We expense research and development expenses as incurred.

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 and our NAS projects, as well as the clinical development of other pipeline product candidates.

our inception, we have spent approximately $135.4 million in research and development expenses through September 30, 2022.

expect to continue to incur significant costs as we develop our other product candidates, including our CNS product candidates and

the ongoing Phase 2 POC study in male cirrhotic subjects with LPCN 1148, as well as the development of

any future pipeline product candidates.

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

5 unchanged sentences

cost, timing and outcome of regulatory review;

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

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

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

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

the stage of clinical development and the significant risks and uncertainties inherent in the clinical development, manufacturing and

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

the stage of clinical development and the significant risks and uncertainties inherent in the clinical development, manufacturing

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

1154, LPCN 2101, LPCN 1148, LPCN 1144, LPCN 1111, LPCN 1107 and other product candidates.

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

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 1154, LPCN 2101, or other future 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.

continue efforts to enter into partnership arrangements for the continued development and/or marketing of LPCN 1144, LPCN 1148, LPCN

1111, LPCN 1107 and Ex-US TLANDO.

of Research and Development Expense

are conducting on-going clinical and regulatory activities with most of our product candidates.

Additionally, we incur costs for our

other research programs.

The following table summarizes our research and development expenses:

Three Months Ended June 30,

Six Months Ended June 30,

External service provider costs:

Total external service provider costs

Internal personnel costs

Other research and development costs

Total research and development

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

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.

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

for our CNS product candidates and the Phase 2 POC study in male cirrhotic subjects with LPCN 1148, and as we conduct future

clinical studies, including when and if we conduct Phase 2 clinical studies with our development product candidates and when and if

we conduct Phase 3 clinical studies with LPCN 1144, LPCN 1148, LPCN 1111, and LPCN 1107.

We are exploring the possibility of

licensing LPCN 1144, LPCN 1148, LPCN 1111, and LPCN 1107, although we have not entered into a licensing agreement and no assurance

can be given that any license agreement will be completed, or, if an agreement is completed, that such an agreement would be on

terms favorable to us.

If we are unable to raise additional capital or obtain non-dilutive financing, we may need to reduce research

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

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 marketing analytics.

finance, and administrative employees.

Other general and administrative expenses include rent and utilities, travel

expenses, and professional fees for auditing, tax and legal services.

expenses, and professional fees for auditing, tax, legal and various other services.

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

1 unchanged sentence

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

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

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

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

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

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

However, if we

3 unchanged sentences

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

imputed interest on minimum royalties under the Antares Licensing Agreement, interest expense incurred on our Loan and Security Agreement,

gains on our warrant liability and losses (gains) on the our litigation liability.

of Operations

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.

of the Three Months Ended September 30, 2022 and 2021

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

Months Ended September 30,

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

and administrative expenses

and investment income

on warrant liability

decrease in revenue during the three months ended September 30, 2022 was due to $55,000 in license revenue in 2021 related to payments

received from Spriaso under a licensing agreement in the cough and cold field which did not recur in 2022.

and Development Expenses

decrease in research and development expenses during the three months ended September 30, 2022 was primarily due to a $582,000 decrease

in contract research organization expense related to the LPCN 1154 clinical studies, a $249,000 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

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

These decreases were offset by a $312,000

increase in contract research organization costs related to the Phase 2 POC study in male cirrhotic subjects with LPCN 1148, a $151,000

increase in our LPCN 1111 manufacturing scale up, a $16,000 increase in LPCN1107 clinical studies, a $54,000 increase in other research and development

costs, and a $34,000 increase in personnel expense resulting from the recruiting and salaries of additional personnel.

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

decrease in general and administrative expenses during the three months ended September 30, 2022 was due to a $335,000 decrease in legal

fees primarily related to the 2021 out-licensing of TLANDO to Antares Pharmaceuticals and fees related to the ongoing class action lawsuit

defense that did not reoccur in 2022, a $112,000 decrease in personnel costs due to employee turnover, a $16,000 decrease in corporate

insurance expense, and a $5,000 decrease in other general and administrative expenses.

The decreases were offset by a $20,000 increase

in directors’ fees resulting from the addition of two new directors, $15,000 in other various professional and consulting fees

and $11,000 in travel related expense.

and Investment Income

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

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

2022 compared to 2021 and interest earned on the Antares licensing contract asset.

decrease in interest expense during the three months ended September 30, 2022 was due to the fact that the SVB loan matured and was paid

in full in June of 2022, thus there was no interest expense related to this loan in the third quarter of 2022.

on Warrant Liability

recorded a gain of $326,000 and a gain of $480,000, respectively, on warrant liability during the three months ended September 30,

2022 and 2021 related to the change in the fair value of outstanding common stock warrants issued in the November 2019 Offering.

gain in 2022 was attributable to a decrease in the value of warrants outstanding as of September 30, 2022 as compared to June 30,

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

were zero common stock warrants from the November 2019 Offering exercised during either the three months ended September 30, 2022

or the three months ended September 30, 2021.

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

of the Nine Months Ended September 30, 2022 and 2021

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

months ended September 30,

and development expenses

and administrative expenses

and investment income

on warrant liability

(gain) on litigation settlement

increase in revenue during the nine months ended September 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.

On June 30, 2022, Antares’ option to license TLANDO XR expired and was not exercised.

This increase in revenue in the nine months ended September 30, 2022 was offset

by a decrease in revenue from the nine months ended September 30, 2021 of $55,000 in license revenue related to payments received from

Spriason under a licensing agreement in the cough and cold field which did not recur in 2022.

and Development Expenses

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.

increase in research and development expenses during the nine months ended September 30, 2022 was due to a $1.7 million increase in

contract research organization expense related to the Phase 2 POC study in male cirrhotic subjects with LPCN 1148, a $394,000

increase in costs related to LPCN 1154 clinical studies, a $335,000 increase related to LPCN 1111 scale up activities, a $273,000

increase in personnel expense resulting from the recruiting and hiring of additional personnel, a $84,000 increase related to a food

effect study in LPCN 1107, a $73,000 increase in lab supplies, small equipment and other research and development costs and a $63,000 increase in non-project specific consulting costs.

These increases were offset by a $1.3 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 $147,000 decrease in costs associated with TLANDO.

and Administrative Expenses

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.

decrease in general and administrative expenses during the nine months ended September 30, 2022 was primarily due to a $1.3 million decrease

in legal fees related to the settlement of the patent infringement lawsuit with Clarus Therapeutics Inc., the ongoing class action lawsuit

defense and legal fees incurred in connection with the Antares Licensing Agreement which occurred in 2021, a decrease of $175,000 in

personnel costs due to employee turnover and a $87,000 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 $125,000 increase related

to proxy solicitation services and proxy distribution services, a $117,000 increase in various other consulting fees, a $33,000 increase

in corporate insurance expenses, a $20,000 increase in travel related expenses, and a $17,000 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 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

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

to 2021, despite lower cash and marketable investment securities balances, and interest earned on the Antares licensing contract asset.

decrease in interest expense during the nine months ended September 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.

on Warrant Liability

recorded a gain of $532,000 and $506,000, respectively, on warrant liability during the nine months ended September 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

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

value of warrants outstanding as of September 30, 2021 as compared to December 31, 2020 due to a small decrease in the number of warrants

outstanding, a decrease in our volatility and 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”).

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

warrants are classified as a liability due to a provision contained within the warrant agreement which allows the warrant holder the

option to elect to receive an amount of cash equal to the value of the warrants as determined in accordance with the Black-Scholes option

pricing model with certain defined assumptions upon a change of control.

The warrant liability will continue to fluctuate in the future

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

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

the nine months ended September 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 Clarus (“Amended Settlement Agreement”).

The Amended Settlement Agreement settled

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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.

the nine months ended September 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.

2 unchanged sentences

and Capital Resources

our inception, our operations have been primarily financed through sales of our equity securities, debt and payments received under our

license and collaboration arrangements.

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

research, 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 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

our inception, our operations have been primarily financed through sales of our equity securities, debt and payments received under

our license and collaboration arrangements.

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

discovery research, 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 the clinical development of

LPCN 1154, LPCN 2101, LPCN 1148 and any other future product candidate, including continued research

of September 30, 2022, we had $34.3 million of unrestricted cash, cash equivalents and marketable investment securities compared to $46.6

million at December 31, 2021.

39 unchanged sentences

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

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

the three and nine months ended September 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

During the nine months ended September 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 September 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 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.

believe that our existing capital resources, together with interest thereon, will be sufficient to meet our projected operating

requirements through at least September 30, 2023, which includes clinical studies for LPCN 1154 and/or LPCN 2101 and an on-going

clinical study for LPCN 1148, and future research and development activities and compliance with regulatory requirements.

based this estimate on assumptions that may prove to be wrong, and we could utilize our available capital resources sooner than we

currently expect if additional activities are performed by us including new clinical studies for LPCN 1144, LPCN 1111, and LPCN

While we believe we have sufficient liquidity and capital resources to fund our projected operating requirements through at

least September 30, 2023, we will need to raise additional capital at some point through the equity or

debt markets or through partnering activities to support our operations.

If we are unsuccessful in raising additional capital as

necessary, 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 1154, LPCN 2101, LPCN 1148, LPCN 1144, LPCN 1111, and/or LPCN 1107.

Conversely, our capital resources could last longer if we reduce expenses, reduce the number of activities currently

contemplated under our operating plan or if we terminate, modify or suspend on-going clinical studies.

We can raise capital pursuant

to the Sales Agreement 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

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

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 neuroactive steroids

including LPCN 1154 and LPCN 2101, LPCN 1148, LPCN 1111, LPCN 1144, LPCN 1107 and;

cost of manufacturing clinical supplies, and establishing commercial supplies, of our product

candidates and any products that we may develop;

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

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

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

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

extent to which we acquire or invest in businesses, products or technologies, although we currently have no commitments or agreements

relating to any of these types of transactions;

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

cost of preparing, filing, prosecuting, defending and enforcing any patent claims and other

intellectual property rights;

extent to which we acquire or invest in businesses, products or technologies, although we

currently have no commitments or agreements relating to any of these types of transactions;

extent to which we grow significantly in the number of employees or the scope of our operations.

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and Uses of Cash

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

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

Months Ended September 30,

used in operating activities

$ (10,129,905 )

$ (13,405,843 )

Cash provided by (used in) investing activities

provided by (used in) investing activities

(34,057,767 )

Cash provided from (used in) financing activities

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.

the nine months ended September 30, 2022 and 2021, net cash used in operating activities was $10.1 million and $13.4 million, respectively.

cash used in operating activities during the nine months ended September 30, 2022 and 2021 was primarily attributable to cash

outlays to support ongoing operations, including research and development expenses and general and administrative expenses.

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, LPCN 2101 and LPCN 1107 and manufacturing scale up with LPCN 1111.

During 2021, 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.

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.

the nine months ended September 30, 2022, net cash provided by investing activities was $11.7 million and during the nine months ended

September 30, 2021, net cash used in investing activities was $34.1 million.

cash provided by investing activities during the nine months ended September 30, 2022 was primarily the result of the maturity of marketable

investment securities, net.

Net cash used in investing activities during the nine months ended September 30, 2021 was due to the purchase

of marketable securities.

There were $37,000 in capital expenditures during the nine months ended September 30, 2022 and no capital expenditures

for the nine months ended September 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,

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

30, 2021 net cash provided from financing activities was $27.8 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.

cash used in financing activities during the nine months ended September 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 of $211,000.

cash provided from financing activities during the nine months ended September 30, 2021 was attributable to the net proceeds from the

sale of 16,428,571 shares of common stock pursuant to January 2021 Offering resulting in net proceeds of $26.8 million and $3.4 million

in proceeds from the sale of 1,811,238 shares of common stock pursuant to the ATM, offset by $2.5 million in debt principal repayments

under the SVB Loan and Security Agreement.

Commitments and Contingencies

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On January 24, 2022, we modified and extended the lease through February 28, 2023.

Accounting Policies and Significant Judgments and Estimates

Accounting Estimates

management’s discussion and analysis of our financial condition and results of operations is based on our financial statements

9 unchanged sentences

There have been no significant

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.

and material changes in our critical accounting policies during the nine months ended September 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

2 unchanged sentences

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