What changed in this filing

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Item 2. Management’s Discussion and Analysis

2023-05-11 compared with 2022-11-09 · 458 added, 549 removed, 465 unchanged (68% of the section changed)

DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL

CONDITION AND RESULTS OF OPERATIONS

following discussion of our financial condition and results of operations should be read in conjunction with our unaudited condensed

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

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

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

and analysis included in our Form 10-K, filed with the SEC on March 10, 2023 as well as the financial statements and related notes contained

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

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

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

30, 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.

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

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

of Our Business

are a 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).

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 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.

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

or our “Licensee”) for the development and commercialization of our product candidate, TLANDO®, an oral testosterone

replacement therapy (“TRT”) comprised of testosterone undecanoate (“TU”), pursuant to which we granted to Antares

an exclusive, royalty-bearing, sublicensable right and license to develop and commercialize the TLANDO product for TRT in the U.S.

is a registered trademark assigned to Antares.

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

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:

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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.

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 2 testing;

and LPCN 1107, potentially the first oral hydroxy progesterone

caproate (“HPC”) product indicated for the prevention of recurrent preterm birth (“PTB”), which has completed

a dose finding clinical study in pregnant women and has been granted orphan drug designation by the FDA.

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,

research funding and royalty and milestone payments from our license and collaboration arrangements.

We have not generated any revenues

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

product candidates.

have incurred losses in most years since our inception.

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 $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 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;

new products or new uses for our existing products;

expand and protect our intellectual property portfolio;

general and administrative support for our operations.

fund future long-term operations, including the potential commercialization of 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 leveraging our proprietary Lip’ral drug delivery technology platform

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partnerships of our pipeline assets.

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

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

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

We are exploring the possibility of licensing LPCN 1021 (known as TLANDO

We are currently exploring partnering (i) LPCN 1144, our candidate for treatment of non-cirrhotic

NASH, (ii) LPCN 1148, for the management of decompensated cirrhosis, (iii) LPCN 1111, a once-a-day therapy candidate for TRT, and (iv)

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

We are also exploring the possibility of licensing LPCN 1021 (known as TLANDO

in the United States) to third parties outside the United States, although no licensing agreement has been entered into by the Company.

Development Pipeline Product Candidates

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

pipeline of clinical development candidates includes LPCN 1154 for PPD, LPCN 2101 for epilepsy,

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

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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.

We will also continue efforts to enter into partnership arrangements for the

continued development and/or marketing of LPCN 1144, LPCN 1148, LPCN 1111, LPCN 1107 and TLANDO outside of the United States.

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

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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.

We have conducted Phase 1 pharmacokinetic (“PK”) studies for each of our two lead

NAS candidates which have demonstrated promising PK results, safety, and tolerability and we are evaluating additional undisclosed CNS-focused

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.

most advanced NAS candidate is LPCN 1154, a rapid onset, 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 second quarter of 2023.

We have previously completed an oral PK study and a food effect study with LPCN 1154.

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

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

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

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

“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.

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 of PPD.

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

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.

● Psychiatric

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.

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

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

Approximately,

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

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

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

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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.

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

However, numerous

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

Administration of

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

Besides associated privacy concerns and social stigma, inpatient treatment 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 inpatient treatment/childcare costs limits its accessibility and affordability to women most in need

of the therapy.

Finally, 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 candidate with faster onset of action or rapid relief.

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.

We have completed pre-clinical

and Phase 1 studies 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, subject to the availability of additional resources.

Overview – Epilepsy

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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.)

Patients 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

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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.

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.

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.

patients are 5-20 times more likely to develop depression.

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

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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.

It is preferable that 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 of the ASM.

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.

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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.

be responsible for up to 1 in 4 unplanned pregnancies in WWE (~12.5% of all WWE pregnancies), versus a rate of 1% in healthy women.

need to treat WWE in CB age

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Reimers et al.

2015 May;28:66-70.

Oral Product Candidate for the Management of Decompensated Cirrhosis

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(“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

therapeutic potential of LPCN 1148 for the management of sarcopenia.

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

placebo-controlled study in male sarcopenic cirrhotic patients.

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

the therapeutic potential of LPCN 1148 for the management of sarcopenia.

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

randomized, placebo-controlled study in male sarcopenic patients with cirrhosis.

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

The treatment arm

is an oral dose of LPCN 1148, and the second arm is a matching placebo.

The primary endpoint is change in skeletal muscle index at week

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

all-cause mortality.

The treatment arm is an oral dose of LPCN 1148, and the second arm is a matching placebo.

The primary endpoint is change in skeletal

muscle index at week 24 with key secondary endpoints including change in liver frailty index, rates of breakthrough HE, and number of

waitlist events, including all-cause mortality.

Total treatment is expected to be 52 weeks.

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.

Enrollment in the Phase 2 study was completed

in the fourth quarter of 2022 and top-line 24-week results are expected in mid-2023.

outcomes of interest from the Phase 2 study include clinical outcomes such as overall survival and new decompensation events (including

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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.

B and C, primary biliary cirrhosis (“PBC”), and primary sclerosing cholangitis (“PSC”) and some patients have

liver disease of unknown cause (cryptogenic).

complications in cirrhotic patients may include:

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bilirubin, low albumin level, insulin resistance with impaired peripheral uptake of glucose, depression, accelerated muscle disorder

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

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

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

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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

a significant decompensation event in patients 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

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continue to pursue opportunities for partnering arrangements for the continued development and/or marketing of LPCN 1144, LPCN 1148,

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

LPCN 1111, LPCN 1107 and TLANDO outside of the U.S.

We do not currently anticipate conducting any further significant development activities

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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.

license to develop and commercialize TLANDO, our 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.

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

On May 24, 2022, Halozyme

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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.

2 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.

TLANDO was commercially launched on June 7, 2022.

the year ended December 31, 2022, we incurred royalty expense of approximately $12,000 resulting from the commercial launch of TLANDO

in 2022 and during the three months ended March 31, 2023, we incurred royalty expense of $4,000.

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

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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.

would likely be contingent upon obtaining acceptable cost of goods 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

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

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

Twenty to thirty percent of the U.S.

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

population that lacks effective therapy.

In the U.S., 20% to 30% of the population

is estimated to suffer from NAFLD and 15% to 20% of this group progress to NASH, which is a substantially large population that lacks

an effective therapy.

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

Diagnoses have been on the rise and

are expected to increase dramatically in the next decade.

Approximately 50% of NASH patients are in adult males.

In men, especially with

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

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

There is currently no approved therapy for the treatment

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

Diagnoses have been on the rise and are expected to increase

dramatically in the next decade.

Approximately 50% of NASH patients are 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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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 enrolled 56 biopsy confirmed NASH male subjects.

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

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

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

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

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

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

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

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

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

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

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Key results from the OLE study are as follows:

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

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

liver histology improvements support further development

LPCN 1144 was well tolerated

over 72-week exposure with no observed safety signals;

Liver injury markers were

reduced and maintained with extended LPCN 1144 treatment;

Observed liver histology

improvements support further development.

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

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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.

1111 is a next-generation, novel ester prodrug of testosterone comprised of testosterone tridecanoate (“TT”) which uses our

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

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

(“ICH”) guidelines and we expect the trial will include at least a 3-month efficacy treatment period and a 1-year safety

component for approximately 100 subjects.

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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 LPCN 1111 expired and was not exercised.

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 LPCN

1111 expired and was not exercised.

An Oral Product Candidate for the Prevention of Preterm Birth

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

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

the IM HPC (Makena®).

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

16 to 19 weeks.

Subjects received three dose levels of LPCN 1107 (400 mg BID, 600 mg BID, or 800 mg BID) in a randomized, crossover manner

during the first three treatment periods and then received five weekly injections of HPC during the fourth treatment period.

of the LPCN 1107 treatment periods, subjects received a single dose of LPCN 1107 on Day 1 followed by twice daily administration from

Day 2 to Day 8.

Following completion of the three LPCN 1107 treatment periods and a washout period, all subjects received five weekly

injections of HPC.

Results from this study demonstrated that average steady state HPC levels (Cavg0-24) were comparable or higher for

all three LPCN 1107 doses than for injectable HPC.

Additionally, HPC levels as a function of daily dose were linear for the three LPCN

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

4-period, 4-treatment, randomized, single and multiple dose PK study in pregnant women with 3 dose levels of LPCN 1107 and the IM HPC

The study enrolled 12 healthy pregnant women (average age of 27 years) with a gestational age of approximately 16 to 19

Subjects received three dose levels of LPCN 1107 (400 mg BID, 600 mg BID, or 800 mg BID) in a randomized, crossover manner during

the first 3 treatment periods and then received 5 weekly injections of HPC during the fourth treatment period.

During each of the LPCN

1107 treatment periods, subjects received a single dose of LPCN 1107 on Day 1 followed by twice daily administration from Day 2 to Day

Following completion of the 3 LPCN 1107 treatment periods and a washout period, all subjects received 5 weekly injections of HPC.

Results from this study demonstrated that average steady state HPC levels (Cavg0-24) were comparable or higher for all 3 LPCN 1107 doses

than for injectable HPC.

Additionally, HPC levels as a function of daily dose were linear for the 3 LPCN 1107 doses.

Also, unlike the

injectable HPC, steady state exposure was achieved for all 3 LPCN 1107 doses within 7 days.

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

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

for the pivotal study.

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

for the pivotal study and we have submitted a pivotal clinical study protocol to the FDA.

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

6 unchanged sentences

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

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.

clinicians’ decade-long use of treatment with Makena 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.

FDA also indicated that it intends to hold a meeting with experts in obstetrics, neonatal care, and clinical trial design to discuss

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

held a public hearing with Covis from October 17 through 19, 2022, which resulted in a 14-1 vote recommending removal of the product

from the market.

On October 31, 2022, Covis approached the CDER and outlined a plan of orderly withdrawal which would set a withdrawal

timeframe sufficient for current patients to complete their courses of treatment.

The CDER declined this proposal.

On March 6, 2023,

Covis announced its plan to voluntarily withdraw Makena from the market and submitted a request to the CDER for a minimum 21-week wind-down.

On April 6, 2023, the FDA withdrew its approval of Makena and ordered the immediate withdrawal of Makena and several approved generic

versions of the drug, making it unlawful for the drug to be distributed in the US.

The FDA stated that in light of the unmet need for

a treatment for preventing preterm birth and improving neonatal outcomes, it is imperative that the medical and scientific communities

increase their efforts to find effective treatments and stated their hope that the decision to withdraw Makena will help galvanize further

The FDA further stated their commitment to working together with patients, researchers, and drug developers to advance the

development of safe and effective therapies that are urgently needed as a treatment for the prevention of preterm birth.

Operations Overview

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

licensing fees until one of our product candidates receives approval from the FDA.

Revenues to date have been generated

substantially from license fees, royalty and milestone payments and research support from our licensees.

Since our inception through

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, 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.

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

fees until one of our product candidates receives approval from the FDA.

Revenues to date have been generated substantially from license

fees, royalty and milestone payments and research support from our licensees.

Since our inception through March 31, 2023, we have generated

$44.8 million in revenue under our various license and collaboration arrangements and from government grants.

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 2022 due to a royalty payment received from Antares under

the terms of our license agreement, based on net sales of TLANDO in 2022.

We estimate that, in the second quarter of 2023, we will not

receive a payment for royalties based on estimated first quarter 2023 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

1 unchanged sentence

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

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

expenses associated with regulatory submissions.

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

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

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

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

and expenses associated with regulatory submissions.

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

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

development personnel to total direct labor hours for all personnel.

We expense research and development expenses as incurred.

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.

our inception, we have spent approximately $140.2 million in research and development expenses through March 31, 2023.

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 subjects with cirrhosis 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,

including, among others:

number of sites included in the trials;

length of time required to enroll suitable subjects;

duration of subject follow-ups;

length of time required to collect, analyze and report trial results;

cost, timing and outcome of regulatory review;

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

the number of sites included

in the trials;

the length of time required

to enroll suitable subjects;

the duration of subject

the length of time required

to collect, analyze and report trial results;

the cost, timing and outcome

of regulatory review;

potential changes by the

FDA in clinical trial and NDA filing requirements.

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

the timing and outcome

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

our dependence on third-party

manufacturers for the production of satisfactory finished product for registration and launch should regulatory approval be obtained

on any of our product candidates;

the potential for future

license or co-promote arrangements for our product candidates, when such arrangements will be secured, if at all, and to what degree

such arrangements would affect our future plans and capital requirements;

the effect on our product

development activities of actions taken by the FDA or other regulatory authorities.

change of outcome for any of these variables with respect to 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

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

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.

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.

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 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.

We will continue efforts to enter into partnership arrangements

for the continued development and/or marketing of LPCN 1144, LPCN 1148, LPCN 1111, LPCN 1107 and TLANDO outside of the U.S.

will continue to incur significant research and development expenses as we are conducting on-going clinical studies, including the studies

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

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

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

We 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, and administrative employees.

Other general and administrative expenses include rent and utilities, travel

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

finance, and administrative support functions.

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

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

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

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

Clarus in 2021.

enforcing and defending intellectual property-related claims.

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

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

as a going concern.

Expense (Income), Net

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

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.

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

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

if we are unable

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

a going concern.

Income and Expense

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

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

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

of Operations

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

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 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 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 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.

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 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.

of the Three Months Ended March 31, 2023 and 2022

following table summarizes our results of operations for the three months ended March 31, 2023 and 2022:

Three Months Ended March 31,

Research and development expenses

General and administrative expenses

Interest and investment income

Interest expense

(Gain) loss on warrant liability

Income tax expense

recognized license revenue for payments receivable from Spriaso, a related party.

under a licensing agreement in the cough and cold field

of approximately $55,000 during the three months ended March 31, 2023.

We did not recognize any revenue during the three months ended

March 31, 2022.

and Development Expenses

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.

increase in research and development expenses during the three months ended March 31, 2023, as compared to the three months ended March

31, 2022 consisted of a $680,000 increase in contract research organization expense related to the Phase 2 POC study in male subjects

with cirrhosis with LPCN 1148, a $513,000 increase in costs related to our LPCN 1154 clinical studies, a $158,000 increase in personnel

costs resulting from the recruiting and hiring of additional personnel, and $154,000 increase in lab supplies, small equipment and other

research and development costs.

These increases were offset by a $171,000 decrease in LPCN 1111 scale up costs, a $71,000 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 in 2022, and a $44,000 decrease as we completed our PK and food effect studies for LPCN 1107 and LPCN 1154 in

and Administrative Expenses

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.

increase in general and administrative expenses during the three months ended March 31, 2023 was primarily due to a $63,000 increase

in corporate legal fees partially due to strategic advice and planning, a $52,000 increase in business development consulting fees, a

$32,000 increase in director fees, and a $13,000 increase in other various professional fees, offset by $57,000 decrease in professional

fees related to the recruitment of additional directors to our Board in 2022, a $36,000 decrease in corporate insurance expense, and

a $23,000 decrease other general and administrative expenses.

and Investment Income

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 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 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 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

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 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.

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

counterclaims.

increase in interest and investment income during the three months ended March 31, 2023 compared to interest and investment income during

the three months ended March 31, 2022 was due to higher interest rates despite declining cash and marketable investment securities balances,

in addition to interest earned on the Antares licensing contract asset in 2023.

Loan and Security Agreement with SVB was paid in full in June of 2022, thus the Company did not recognize any interest expense during

the three months ended March 31, 2023.

Interest expense for the three months ended March 31, 2022 was entirely related to that Loan Agreement.

Loss on Warrant Liability

recorded a gain of $98,000 and a loss $378,000, respectively, on warrant liability during the three months ended March 31, 2023, and

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

The gain in 2023 was mainly attributable to a decrease in the value of warrants outstanding as of March 31, 2023 as compared to December

31, 2022, primarily due to the lower stock price, despite higher interest rates.

The loss in 2022 was mainly attributable to an increase

in the value of warrants outstanding as of March 31, 2022, due to significantly higher stock price on March 31, 2022 compared to the

stock price on December 31, 2021.

There were zero common stock warrants from the November 2019 Offering exercised during the three months

ended March 31, 2023, or March 31, 2022, 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.

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

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 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

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 efforts.

of March 31, 2023, we had $28.9 million of unrestricted cash, cash equivalents and marketable investment securities compared to $32.5

million at December 31, 2022.

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

the Securities Act of 1933, as amended (“January 2021 Offering”).

The gross proceeds from the January 2021 Offering were

approximately $28.7 million, before deducting underwriter fees and other offering expenses of $1.9 million.

In the January 2021 Offering,

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

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

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

to TRT in the U.S.

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

also agreed to make certain minimum royalty payments in the future and, since these future minimum royalties are variable consideration

deemed to be probable, $4.0 million in revenue was recognized in 2021 for the minimum royalties to be received in the future.

Antares will also make additional payments of $5.0 million to us on each of January 1, 2025 and January 1, 2026, provided that certain

conditions are satisfied.

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

achievement of certain sales milestones in a single calendar year with respect to all products licensed by Antares under the Antares

License Agreement.

In addition, we receive tiered royalty payments at rates ranging from percentages in the mid-teens to up to 20% of

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

Our ability to realize benefits from the Antares

License Agreement, including milestone and royalty payments, is subject to a number of risks.

We may not realize milestone or royalty

payments in anticipated amounts, or at all.

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

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Additionally, we made a final payment at maturity

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

The expense of the final payment charge had

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

March 6, 2017, we entered into the Sales Agreement with Cantor pursuant to which we may issue and sell, from time to time, shares of

our common stock having an aggregate offering price of up to the amount we have registered on an effective registration statement pursuant

to which the offering is being made.

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

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

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

Cantor may sell our common stock by

any method permitted by law deemed to be an “at the market offering” as defined in Rule 415(a)(4) of the Securities Act,

including sales made directly on or through the NASDAQ Capital Market or any other existing trade market for our common stock, in negotiated

transactions at market prices prevailing at the time of sale or at prices related to prevailing market prices, or any other method permitted

Cantor uses its commercially reasonable efforts consistent with its normal trading and sales practices and applicable law and

regulations to sell these shares.

equal to $650,000 (the “Final Payment Charge”).

The expense of the Final Payment Charge had been recognized over the term

of the facility using the effective interest method.

March 6, 2017, we entered into a sales agreement (“Sales Agreement”) with Cantor Fitzgerald & Co.

pursuant to which we may issue and sell, from time to time, shares of our common stock having an aggregate offering price of up to the

amount we have registered on an effective registration statement pursuant to which the offering is being made.

We currently have registered

up to $50.0 million for sale under the Sales Agreement, pursuant to our Registration Statement on Form S-3 (File No.

333-250072) (the

“Form S-3”), through Cantor as our sales agent.

Cantor may sell our common stock by any method permitted by law deemed to

be an “at the market offering” as defined in Rule 415(a)(4) of the Securities Act of 1933, as amended, including sales made

directly on or through the NASDAQ Capital Market or any other existing trade market for our common stock, in negotiated transactions

at market prices prevailing at the time of sale or at prices related to prevailing market prices, or any other method permitted by law.

Cantor uses its commercially reasonable efforts consistent with its normal trading and sales practices and applicable law and regulations

to sell these shares.

We pay Cantor 3.0% of the aggregate gross proceeds from each sale of shares under the Sales Agreement.

We have also provided Cantor with customary indemnification rights.

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

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

the related prospectus and one or more prospectus supplements.

also provided Cantor with customary indemnification rights.

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

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

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

The offering of our common stock pursuant to

the 2020 Sales Agreement will terminate upon the termination of the 2020 Sales Agreement as permitted therein.

We and Cantor may each

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

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 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.

The offering of our common stock pursuant to the Sales

Agreement will terminate upon the termination of the Sales Agreement as permitted therein.

We and Cantor may each terminate the Sales

Agreement at any time upon ten days’ prior notice.

the three months ended March 31, 2023, and 2022, we did not sell any shares of our common stock under the Sales Agreement.

31, 2023, we had sold $8,802,419 of our common stock pursuant to the Sales Agreement, and had approximately $41.2 million available for

sale under the Sales Agreement.

However, as of April 3, 2023, we are now subject to General Instruction I.B.6 of Form S-3 which limits

the amounts that we may sell under the registration statement.

As a result of such limitations, we have currently registered the offer

and sale of shares of our common stock pursuant to the Sales Agreement having an aggregate offering price of up to $15.7 million.

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.

requirements through at least the next twelve months which include on-going clinical studies for LPCN 1154, an on-going study for

LPCN 1148, and 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, and LPCN 1107.

While we believe

we have sufficient liquidity and capital resources to fund our projected operating requirements through at least the next twelve

months, we will need to raise additional capital at some point through the equity or debt markets or through additional

out-licensing 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 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

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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;

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

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.

operating expenditures associated with our anticipated or unanticipated clinical studies and ongoing development efforts.

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:

the scope, rate of progress,

results and cost of our clinical studies, pre-clinical testing and other related activities for all of our product candidates, including

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

the cost of manufacturing

clinical supplies and establishing commercial supplies of our product candidates and any products that we may develop;

the cost and timing of

establishing sales, marketing and distribution capabilities, if any;

the terms and timing of

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

the number and characteristics

of product candidates that we pursue;

the cost, timing and outcomes

of regulatory approvals;

the timing, receipt and

amount of sales, profit sharing, milestones or royalties, if any, from our potential products;

the cost of preparing,

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

the extent to which we

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

of these types of transactions;

the extent to which we

grow significantly in the number of employees or the scope of our operations.

may not be available to us on favorable terms, or at all.

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and Uses of Cash

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 )

following table provides a summary of our cash flows for the three months ended March 31, 2023, and 2022:

Three Months Ended March 31,

Cash used in operating activities

$ (3,928,057 )

provided by (used in) investing activities

$ (3,885,402 )

provided from (used in) financing activities

Cash Used In Operating Activities

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 the LPCN 1144 LiFT Phase 2 paired biopsy clinical study.

Cash Provided By (Used In) Investing Activities

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 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 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.

Cash provided by investing activities

Cash used in financing activities

Cash from Operating Activities

each of the three months ended March 31, 2023 and 2022 net cash used in operating activities was $3.9 million.

cash used in operating activities during the three months ended March 31, 2023, and 2022 was primarily attributable to cash outlays to

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

During 2023, we performed

activities primarily related to our Phase 2 POC study in male subjects with cirrhosis with LPCN 1148 and clinical studies related to

During 2022, we performed activities related mainly to the Phase 2 POC study in male subjects with cirrhosis with LPCN 1148,

PK and food effect studies with LPCN 1154 and LPCN 1107, and manufacturing scale up with LPCN 1111.

Cash from Investing Activities

the three months ended March 31, 2023, net cash provided by investing activities was $5.6 million compared to net cash used in investing

activities of $7.3 million during the three months ended March 31, 2022.

cash provided by investing activities during the three months ended March 31, 2023, was primarily the result of the maturity of marketable

investment securities of $12.0 million offset by purchase of marketable securities of $6.4 million.

Net cash provided by investing activities

during the three months ended March 31, 2022, was primarily the result of the net maturities of marketable investment securities of $7.3

There were $4,000 and $27,000 in capital expenditures during the three months ended March 31, 2023, and 2022, respectively.

Cash from Financing Activities

the three months ended March 31, 2023, net cash used in financing activities was approximately $6,000 and during the three months ended March

31, 2022, net cash provided by financing activities was $627,000.

cash used in financing activities during the three months ended March 31, 2022, was due to $833,000 in debt principal repayments under

the SVB Loan and Security Agreement, offset by $206,000 cash provided by proceeds from stock option exercises.

Commitments and Contingencies

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On January 16, 2023, we modified and extended the lease through February 28, 2024.

Accounting Estimates

Accounting Policies and Significant Judgments and 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 nine months ended September 30, 2022, as compared to those disclosed

and material changes in our critical accounting policies during the three months ended March 31, 2023, 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 10, 2023.

Accounting Standards

to Note 13, in “Notes to Unaudited Condensed Consolidated Financial Statements” for a discussion of accounting standards

not yet adopted.

Sheet Arrangements

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis