þ
|
QUARTERLY
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF
1934.
|
¨
|
TRANSACTION
REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
ACT OF
1934
|
New
York
|
11-0853640
|
|
(State
or other Jurisdiction of
incorporation
or organization)
|
(I.R.S.
Employer Identification
No.)
|
|
|
||
616
N. North Court, Suite 120
Palatine,
Illinois
|
60067
|
|
(Address
of Principal Executive
Offices)
|
(Zip
Code)
|
Large accelerated filer o | Accelerated filer o | |
Non-accelerated filer þ | Smaller reporting company o |
Page
No.
|
||
Item
1.
|
Financial
Statements (Unaudited)
|
|
Consolidated
Balance Sheets
|
||
September
30, 2008 and December 31, 2007
|
1
|
|
Consolidated
Statements of Operations
|
||
Three
months and nine months ended September 30, 2008 and September 30,
2007
|
2
|
|
Consolidated
Statement of Stockholders’ Equity
|
||
Nine
months ended September 30, 2008
|
3
|
|
Consolidated
Statements of Cash Flows
|
||
Nine
months ended September 30, 2008 and September 30, 2007
|
4
|
|
Notes
to Consolidated Financial Statements
|
6-11
|
|
Item
2.
|
Management's
Discussion and Analysis of Financial Condition and Results of
Operations
|
11
|
Item
4.
|
Controls
and Procedures
|
24
|
PART
II. OTHER INFORMATION
|
||
Item
1A.
|
Risk
Factors Relating to the Company
|
24
|
Item
6.
|
Exhibits
|
29
|
Signatures
|
30
|
September
30,
2008
|
December
31,
2007
|
||||||
ASSETS
|
|||||||
Current
Assets
|
|||||||
Cash
and cash equivalents
|
$
|
30,894
|
$
|
31,368
|
|||
Short-term
investments
|
5,039
|
-
|
|||||
Collaboration
revenue receivable
|
2,616
|
2,977
|
|||||
Prepaid
clinical study costs
|
-
|
388
|
|||||
Prepaid
insurance
|
488
|
202
|
|||||
Prepaid
expense and other current assets
|
148
|
47
|
|||||
Deferred
income taxes
|
2,866
|
9,600
|
|||||
Total
current assets
|
42,051
|
44,582
|
|||||
Non-Current
Assets
|
|||||||
Deferred
income taxes - non current portion
|
3,400
|
-
|
|||||
Property,
plant and equipment, net
|
1,102
|
1,046
|
|||||
Total
assets
|
$
|
46,553
|
$
|
45,628
|
|||
LIABILITIES
AND STOCKHOLDERS' EQUITY
|
|||||||
Current
Liabilities
|
|||||||
Accrued
expenses
|
$
|
2,084
|
$
|
334
|
|||
Deferred
program fee revenue - current portion
|
5,053
|
21,942
|
|||||
Total
current liabilities
|
7,137
|
22,276
|
|||||
Non-Current
Liabilities
|
|||||||
Deferred
program fee revenue - non current portion
|
842
|
4,632
|
|||||
Total
liabilities
|
7,979
|
26,908
|
|||||
Commitments
and contingencies (Note 9)
|
|||||||
Stockholders’
Equity
|
|||||||
Common
stock - $.01 par value; 650,000 shares authorized; 42,723 and 42,706
shares issued and outstanding at September 30, 2008 and December
31, 2007,
respectively
|
427
|
427
|
|||||
Additional
paid-in capital
|
342,540
|
340,153
|
|||||
Accumulated
deficit
|
(304,393
|
)
|
(321,860
|
)
|
|||
Total
stockholders’ equity
|
38,574
|
18,720
|
|||||
Total
liabilities and stockholders’ equity
|
$
|
46,553
|
$
|
45,628
|
Nine
Months
Ended
September 30,
|
Three
Months
Ended
September 30,
|
||||||||||||
2008
|
2007
|
2008
|
2007
|
||||||||||
Revenue
|
|||||||||||||
Program
fee revenue
|
$
|
23,678
|
$
|
-
|
$
|
1,263
|
$
|
-
|
|||||
Milestone
revenue
|
5,000
|
-
|
-
|
-
|
|||||||||
Collaboration
revenue
|
7,971
|
-
|
2,617
|
-
|
|||||||||
Total
revenue
|
36,649
|
-
|
3,880
|
-
|
|||||||||
Operating
Expenses
|
|||||||||||||
Research
and development expenses
|
10,859
|
2,775
|
3,693
|
827
|
|||||||||
Marketing,
general and administrative expenses
|
5,617
|
1,959
|
3,373
|
593
|
|||||||||
Total
operating expenses
|
16,476
|
4,734
|
7,066
|
1,420
|
|||||||||
Operating
income (loss)
|
20,173
|
(4,734
|
)
|
(3,186
|
)
|
(1,420
|
)
|
||||||
|
|||||||||||||
Other
Income (Expense)
|
|||||||||||||
Interest
income (expense), net
|
675
|
(1,033
|
)
|
171
|
(224
|
)
|
|||||||
Amortization
of debt discount
|
-
|
(2,700
|
)
|
-
|
(598
|
)
|
|||||||
Loss
on fair value change of conversion features
|
-
|
(3,483
|
)
|
-
|
-
|
||||||||
Loss
on fair value change of common stock warrants
|
-
|
(1,904
|
)
|
-
|
(236
|
)
|
|||||||
Gain
on asset disposals
|
1
|
22
|
-
|
2
|
|||||||||
Other
expense
|
-
|
(2
|
)
|
(17
|
)
|
-
|
|||||||
Total
other income (expense)
|
676
|
(9,100
|
)
|
154
|
(1,056
|
)
|
|||||||
Income
(loss) before income tax
|
20,849
|
(13,834
|
)
|
(3,032
|
)
|
(2,476
|
)
|
||||||
Income
tax expense (benefit)
|
3,382
|
|
-
|
(6,180
|
)
|
-
|
|||||||
Net
Income (Loss)
|
$
|
17,467
|
$
|
(13,834
|
)
|
$
|
3,148
|
$
|
(2,476
|
)
|
|||
Earnings
(loss) per share
|
|||||||||||||
Basic
|
$
|
0.38
|
$
|
(0.37
|
)
|
$
|
0.07
|
$
|
(0.06
|
)
|
|||
Diluted
|
$
|
0.35
|
$
|
(0.37
|
)
|
$
|
0.06
|
$
|
(0.06
|
)
|
|||
Weighted
average shares used in computation
|
|||||||||||||
Basic
|
45,670
|
36,998
|
45,680
|
40,155
|
|||||||||
Diluted
|
49,529
|
36,998
|
49,409
|
40,155
|
Common
Stock
$0.01
Par
Value
-
Shares
|
Common
Stock
$0.01
Par
Value
-
Amount
|
Additional
Paid-in
Capital
|
Accumulated
Deficit
|
Total
|
||||||||||||
Balance
at December 31, 2007
|
42,706
|
$
|
427
|
$
|
340,153
|
$
|
(321,860
|
)
|
$
|
18,720
|
||||||
Net
income
|
-
|
-
|
-
|
17,467
|
17,467
|
|||||||||||
Stock
based compensation
|
-
|
-
|
2,367
|
-
|
2,367
|
|||||||||||
Exercise
of warrant
|
17
|
-
|
20
|
-
|
20
|
|||||||||||
Balance
at September 30, 2008
|
42,723
|
$
|
427
|
$
|
342,540
|
$
|
(304,393
|
)
|
$
|
38,574
|
|
2008
|
2007
|
|||||
Cash
flows from Operating Activities
|
|||||||
Net
income (loss)
|
$
|
17,467
|
$
|
(13,834
|
)
|
||
Adjustments
to reconcile net income (loss) to net cash provided by (used in)
operating
activities
|
|||||||
Depreciation
and amortization
|
108
|
87
|
|||||
Amortization
of debt discount
|
-
|
2,700
|
|||||
Deferred
income taxes
|
3,334 |
-
|
|||||
Loss
on fair value change of conversion features
|
-
|
3,483
|
|||||
Loss
on fair value change of common stock warrants
|
-
|
1,904
|
|||||
Common
stock issued for interest
|
-
|
812
|
|||||
Non-cash
stock compensation expense
|
2,367
|
874
|
|||||
Gain
on asset disposals
|
(1
|
)
|
(22
|
)
|
|||
Impairment
reserve against fixed assets
|
(29
|
)
|
-
|
||||
Changes
in assets and liabilities
|
|||||||
Collaboration
revenue receivable
|
361
|
-
|
|||||
Prepaid
expenses and other current assets
|
1
|
(1,223
|
)
|
||||
Accounts
payable
|
-
|
-
|
|||||
Accrued
expenses
|
1,750
|
231
|
|||||
Deferred
program fee revenue
|
(20,679
|
)
|
-
|
||||
Net
cash provided by (used in) operating activities
|
4,679
|
(4,988
|
)
|
||||
Cash
flows from Investing Activities
|
|||||||
Purchase
of investments, net
|
(5,039
|
)
|
-
|
||||
Capital
expenditures
|
(135
|
)
|
(32
|
)
|
|||
Proceeds
from asset disposals
|
1
|
22
|
|||||
Net
cash used in investing activities
|
(5,173
|
)
|
(10
|
)
|
|||
Cash
flows from Financing Activities
|
|||||||
Proceeds
from issuance of senior secured term notes payable
|
-
|
2,696
|
|||||
Proceeds
from Unit Offering, net
|
-
|
14,146
|
|||||
Proceeds
from exercise of stock warrant
|
20
|
-
|
|||||
Repayments
of bridge loans
|
-
|
(8
|
)
|
||||
Payments
on capital lease obligations
|
-
|
(19
|
)
|
||||
Net
cash provided by financing activities
|
20
|
16,815
|
|||||
Decrease
in cash and cash equivalents
|
(474
|
)
|
11,817
|
||||
Cash
and cash equivalents at beginning of period
|
31,368
|
228
|
|||||
Cash
and cash equivalents at end of period
|
$
|
30,894
|
$
|
12,045
|
|||
Cash
paid for interest
|
$
|
-
|
$
|
156
|
|||
Cash
paid for income taxes
|
$
|
47
|
$
|
-
|
1.
|
Impaired
fixed assets with a $52,000 net book value were disposed and a
$29,000
reduction in the impairment allowance was favorably recognized.
|
2.
|
A
$5,022,000 valuation allowance against deferred income tax assets
was
removed which resulted in an equal amount recorded as a benefit
against
current income tax expense.
|
3.
|
Deferred
income tax assets of $8,356,000 were used to offset an equal amount
of
current income taxes payable.
|
1.
|
The
Company issued 47,552 shares of common stock as payment of $460,000
of
Senior Secured Convertible Bridge Term Notes Payable accrued
interest.
|
2.
|
The
Company issued 36,151 shares of common stock as payment of $352,000
of
Secured Term Note Payable accrued
interest.
|
3.
|
Warrants
to purchase an aggregate 58,009 shares of common stock were exercised
at
exercise prices between $1.20 and $6.60 per share in a series of
cashless
exercise transactions resulting in the issuance of an aggregate
31,362
shares of common stock.
|
4.
|
The
issuance of $896,000 Senior Secured Convertible Bridge Term Notes
during
the period January 1, 2007 through March 29, 2007 included conversion
features measured at $849,000, which resulted in the recording
of an equal
amount of debt discount and conversion feature liabilities.
|
5.
|
The
change in all separated conversion feature’s fair value through March 30,
2007 resulted in a loss of $3,483,000. Due to a debt agreement
modification on March 30, 2007, the then current conversion feature
fair
value of $21,086,000 was reclassified from liabilities to
equity.
|
6.
|
The
issuance of $1,800,000 of Senior Secured Bridge Term Notes included
conversion features measured at $1,552,000, which resulted in a
recording
of an equal amount of debt discount to
equity.
|
7.
|
The
change in the common stock warrants’ fair value through the earlier of
their exercise date or March 30, 2007 resulted in a loss of $1,668,000.
Due to a debt agreement modification on March 30, 2007, the then
current
$12,307,000 fair value of all 1,592,100 outstanding common stock
warrants
was reclassified from liabilities to equity, as was $146,000 of
such value
related to warrants exercised during the
period.
|
8.
|
Anti-dilution
provisions in certain warrant grants were triggered resulting in
a loss of
$236,000 with an equal amount recorded against
equity.
|
9.
|
Senior
Secured Convertible Bridge Term Notes Payable of $10,544,000, less
unamortized debt discount of $544,000 was converted into 3,905,184
shares
of common stock.
|
Sept
30,
|
Dec
31,
|
||||||
2008
|
2007
|
||||||
Payroll
and incentive compensation
|
$
|
1,085
|
$
|
63
|
|||
Legal
fees
|
102
|
35
|
|||||
Audit
examination and tax preparation fees
|
110
|
120
|
|||||
Franchise
taxes
|
60
|
15
|
|||||
Property
taxes
|
44
|
34
|
|||||
Clinical,
regulatory, trademark, and patent consulting fees
|
35
|
50
|
|||||
Clinical
studies
|
430
|
-
|
|||||
Other
accruals
|
218
|
17
|
|||||
$
|
2,084
|
$
|
334
|
Nine
Months Ended
September
30,
|
Three
Months Ended
September
30,
|
||||||||||||
(in
thousands, except per share data)
|
2008
|
2007
|
2008
|
2007
|
|||||||||
Basic
earnings (loss) per share
|
|||||||||||||
Numerator:
|
|||||||||||||
Net
income (loss)
|
$
|
17,467
|
$
|
(13,834
|
)
|
$
|
3,148
|
$
|
(2,476
|
)
|
|||
Deemed
dividend from modification of debt
|
-
|
(3
|
)
|
-
|
-
|
||||||||
Net
income (loss) allocable to common shareholder
|
$
|
17,467
|
$
|
(13,837
|
)
|
$
|
3,148
|
$
|
(2,476
|
)
|
|||
Denominator:
|
|||||||||||||
Common
shares (weighted)
|
42,717
|
34,620
|
42,723
|
37,534
|
|||||||||
Vested
restricted stock units (weighted)
|
2,953
|
2,378
|
2,957
|
2,621
|
|||||||||
Weighted
average shares used in computing basic earnings (loss) per share
allocable
to common
shareholder
|
45,670
|
36,998
|
45,680
|
40,155
|
|||||||||
Basic
earnings (loss) per share allocable
to common shareholder
|
$
|
0.38
|
$
|
(0.37
|
)
|
$
|
0.07
|
$
|
(0.06
|
)
|
|||
Diluted
earnings per share
|
|||||||||||||
Denominator:
|
|||||||||||||
Common
shares (weighted)
|
42,717
|
34,620
|
42,723
|
37,534
|
|||||||||
Vested
restricted stock units (weighted)
|
2,953
|
2,378
|
2,957
|
2,621
|
|||||||||
Stock
options
|
1,461
|
-
|
1,438
|
-
|
|||||||||
Common
stock warrants
|
2,398
|
-
|
2,291
|
-
|
|||||||||
Weighted
average shares used in computing diluted earnings per share allocable
to
common shareholder
|
49,529
|
36,998
|
49,409
|
40,155
|
|||||||||
Diluted
earnings (loss) per share allocable to common shareholder
|
$
|
0.35
|
$
|
(0.37
|
)
|
$
|
0.06
|
$
|
(0.06
|
)
|
|||
Excluded
potentially dilutive securities:
|
|||||||||||||
Common
stock issuable (see #1 below):
|
|||||||||||||
Stock
options (vested and nonvested)
|
1,173
|
1,899
|
1,173
|
1,899
|
|||||||||
Nonvested
restricted stock units
|
37
|
246
|
37
|
246
|
|||||||||
Common
stock warrants
|
-
|
3,972
|
-
|
3,972
|
|||||||||
Total
excluded dilutive common stock equivalents
|
1,210
|
6,117
|
1,210
|
6,117
|
|||||||||
(1)
Number of common shares issuable is based on maximum number of
common
shares issuable on exercise or conversion of the related securities
as of
period end. Such amounts have not been adjusted for the treasury
stock
method or weighted average outstanding calculations required if
the
securities were dilutive.
|
·
|
intravenous
injection of dissolved tablets or capsules;
|
·
|
nasal
snorting of crushed tablets or capsules;
and
|
·
|
intentional
swallowing of excess quantities of tablets or capsules.
|
Aversion®
Technology Product Candidates (1)
(All
Immediate Release Tablets)
|
Stage
of Development/Future Expectations
|
Acurox™
(oxycodone HCl/niacin) Tablets
|
Phase
III complete, New Drug Application (NDA) submission projected
12/2008
|
2nd
Undisclosed opioid analgesic
|
Active
Investigational New Drug Application (IND)
|
3rd
Undisclosed opioid analgesic
|
Proof
of concept complete(2)
|
4th
Undisclosed opioid analgesic
|
Formulation,
stability and bioavailability studies are complete. Proof of
concept2
projected Q4 2008
|
5th
Undisclosed opioid analgesic
|
Formulation,
stability and bioavailability studies are complete. Proof of
concept2
projected Q1 2009
|
(1) |
King
Pharmaceuticals Research and Development Inc., ("King") has either
licensed or has an option to licenses all opioid product candidates
listed
above in the U.S., Canada and Mexico. Refer to description of the
King
Agreement in this Report.
|
(2) |
Proof
of concept is attained upon demonstration of certain product stability
and
bioavailability parameters as defined in the King
Agreement.
|
·
|
intravenous
injection of dissolved tablets,
|
·
|
nasal
snorting of crushed tablets, and
|
·
|
intentional
swallowing of excess quantities of
tablets.
|
Product
Tested,
Oxycodone
HCl Strength
and
Product Supplier
|
Approximate
laboratory time required to produce a form suitable for intravenous
injection
|
Extraction
Scheme
and
Yield
|
Extraction
Difficulty Rating
1
= Easy to
10
= Difficult
|
|
OxyContin®Tablets
1x
40 mg tablet
Purdue
Pharma
|
3
minutes
|
3
steps
~92%
Yield
|
1
|
|
Oxycodone
HCl Tablets
8
x
5 mg tablets,
Mallinckrodt
|
6
minutes
|
3
Steps
~71%
Yield
|
2
|
|
Percocet
Tablets
8
x
5/325 mg tablets
Endo
Labs
|
<10
minutes
with
vacuum assisted filtration
|
3
Steps
~75%
Yield
|
3-4
|
|
Acurox™
Tablets
8
x
5/30 mg tablets
Acura
Pharmaceuticals
|
355
minutes
with
no success
|
23
Steps
~0%
Yield
|
10
|
Clinical
Studies Evaluating Niacin Dose Response in Healthy
Subjects
|
Study
Status
|
||
AP-ADF-101
|
Phase
I: Niacin dose-response (0-75 mg)
|
Final
study report complete
|
|
AP-ADF-103
|
Phase
II: Repeat dose safety and tolerability
|
Final
study report complete
|
|
AP-ADF-107
|
Phase
II: Niacin dose-response (0-600 mg)
|
Final
study report complete
|
Clinical
Studies to Evaluate Tolerability of Nasal Snorting and Excess
Oral
Doses in Subjects with a History of Opioid Abuse
|
Study
Status
|
||
AP-ADF-106
|
Phase
I: Evaluate relative safety, tolerability, pharmacokinetics, subjective
effects and potential abuse liability of intra-nasally administered
crushed Acurox™ Tablets, crushed generic oxycodone HCl tablets and pure
oxycodone HCl powder
|
Subject
enrollment complete. Final clinical study report expected Q4
2008
|
|
AP-ADF-102
|
Phase
II: Evaluate relative dislike of oxycodone HCl/niacin versus oxycodone
HCl
alone
|
Final
study report complete
|
|
AP-ADF-111
|
Phase
II: Evaluate potential abuse liability of Acurox™ Tablets versus oxycodone
HCl alone
|
Subject
enrollment complete and principal investigator’s report complete. Final
clinical study report expected Q4
2008
|
(1)
|
In
the fasting state, all three doses of niacin in combination with
oxycodone
40mg produced significant (p less than or equal to .05) Disliking
Scores
compared to oxycodone 40mg alone. No other subjective measure was
significantly affected by the niacin addition to
oxycodone.
|
(2)
|
The
high fat meal eliminated the niacin effect and also delayed the
time to
oxycodone peak blood levels.
|
(3)
|
The
addition of niacin to oxycodone alters the subjective response
to
oxycodone as indicated by the significant responses on the Disliking
Score. This observation in conjunction with the results from the
Treatment
Enjoyment Questionnaire indicates that the addition of niacin reduces
the
attractiveness of oxycodone to opiate
abusers.
|
(4)
|
There
were no serious adverse events. Niacin produced a dose related
attenuation
of pupillary constriction, diastolic blood pressure increase and
probably
systolic blood pressure increase produced by oxycodone. The alterations
by
niacin on the vital sign responses to oxycodone 40 mg were minimal,
were
seen primarily with the 600 mg niacin dose and were not clinically
significant.
|
Clinical
Study to Evaluate Efficacy and Safety in
Patients
with Moderate to Severe Pain
|
Study
Status
|
||
AP-ADF-105
|
Phase
III: Pivotal efficacy and safety
|
Final
study report complete
|
September
30,
|
Change
|
||||||||||||
($ in thousands):
|
2008
|
2007
|
Dollars
|
%
|
|||||||||
Revenue
|
|
||||||||||||
Program
fee revenue
|
$
|
23,678
|
$
|
-
|
$
|
23,678
|
*
|
%
|
|||||
Milestone
revenue
|
5,000
|
-
|
5,000
|
*
|
|||||||||
Collaboration
fee revenue
|
7,971
|
-
|
7,971
|
*
|
|||||||||
Revenue
|
36,649
|
-
|
36,649
|
*
|
|||||||||
Operating
Expenses
|
|||||||||||||
Research
and development expenses
|
10,859
|
2,775
|
8,084
|
291
|
|||||||||
Marketing,
general and administrative expenses
|
5,617
|
1,959
|
3,658
|
187
|
|||||||||
Total
operating expenses
|
16,476
|
4,734
|
11,472
|
242
|
|||||||||
Operating
income (loss)
|
20,173
|
(4,734
|
)
|
24,907
|
526
|
||||||||
|
|||||||||||||
Other
Income (Expense)
|
|||||||||||||
Interest
income (expense), net
|
675
|
(1,033
|
)
|
1,708
|
165
|
||||||||
Amortization
of debt discount
|
-
|
(2,700
|
)
|
(2,700
|
)
|
(100
|
)
|
||||||
Loss
on fair value change of conversion features
|
-
|
(3,483
|
)
|
(3,483
|
)
|
(100
|
)
|
||||||
Loss
on fair value change of common stock warrants
|
-
|
(1,904
|
)
|
(1,904
|
)
|
(100
|
)
|
||||||
Gain
on asset disposals
|
1
|
22
|
(21
|
)
|
(95
|
)
|
|||||||
Other
expense
|
-
|
(2
|
)
|
(2
|
)
|
(100
|
)
|
||||||
Total
other income (expense)
|
676
|
(9,100
|
)
|
9,776
|
107
|
||||||||
Income
(loss) before income tax expense
|
20,849
|
(13,834
|
)
|
34,683
|
251
|
||||||||
Income
tax expense (benefit)
|
3,382
|
|
-
|
(3,382
|
) |
*
|
|||||||
Net
income (loss)
|
$
|
17,467
|
$
|
(13,834
|
)
|
$
|
31,301
|
226
|
%
|
September
30,
|
Change
|
||||||||||||
($ in thousands):
|
2008
|
2007
|
Dollars
|
%
|
|||||||||
Revenue
|
|
|
|
||||||||||
Program
fee revenue
|
$
|
1,263
|
$
|
-
|
$
|
1,263
|
*
|
%
|
|||||
Collaboration
fee revenue
|
2,617
|
-
|
2,617
|
*
|
|||||||||
Revenue
|
3,880
|
-
|
3,880
|
*
|
|||||||||
Operating
Expenses
|
|||||||||||||
Research
and development expenses
|
3,693
|
827
|
2,866
|
347
|
|||||||||
Marketing,
general and administrative expenses
|
3,373
|
593
|
2,780
|
469
|
|||||||||
Total
operating expenses
|
7,066
|
1,420
|
5,646
|
398
|
|||||||||
Operating
loss
|
(3,186
|
)
|
(1,420
|
)
|
1,766
|
124
|
|||||||
|
|||||||||||||
Other
Income (Expense)
|
|||||||||||||
Interest
income (expense), net
|
171
|
(224
|
)
|
395
|
177
|
||||||||
Amortization
of debt discount
|
-
|
(598
|
)
|
(598
|
)
|
(100
|
)
|
||||||
Loss
on fair value change of common stock warrants
|
-
|
(236
|
)
|
(236
|
)
|
(100
|
)
|
||||||
Gain
on asset disposals
|
-
|
2
|
(2
|
)
|
(100
|
)
|
|||||||
Other
expense
|
(17
|
)
|
-
|
17
|
*
|
||||||||
Total
other income (expense)
|
154
|
(1,056
|
)
|
1,210
|
115
|
||||||||
Loss
before income tax benefit
|
(3,032
|
)
|
(2,476
|
)
|
556
|
23
|
|||||||
Income
tax benefit
|
(6,180
|
)
|
-
|
6,180
|
*
|
||||||||
Net
income (loss)
|
$
|
3,148
|
$
|
(2,476
|
)
|
$
|
5,624
|
227
|
%
|
Expected
cash payments under
contractual
obligations outstanding
at
September 30, 2008
|
Total
|
Due
in
2008
|
Due
in
2009
|
Due
in
2010
|
Due
Thereafter
|
|||||||||||
Clinical
trials and services
|
$
|
2,779
|
$
|
2,779
|
$
|
-
|
$
|
-
|
$
|
-
|
||||||
Operating
leases
|
14
|
7
|
7
|
-
|
-
|
|||||||||||
Employment
agreements
|
1,134
|
604
|
410
|
120
|
-
|
|||||||||||
Marketing
research studies
|
40
|
40
|
-
|
-
|
-
|
|||||||||||
Total
contractual cash obligations
|
$
|
3,967
|
$
|
3,430
|
$
|
417
|
$
|
120
|
$
|
-
|
· |
litigation
or other proceedings we may initiate against third parties to
enforce our
patent rights or other intellectual property rights;
|
· |
litigation
or other proceedings we may initiate against third parties seeking
to
invalidate the patents held by such third parties or to obtain
a judgment
that our products do not infringe such third parties’ patents;
|
· |
litigation
or other proceedings third parties may initiate against us to
seek to
invalidate our patents or to obtain a judgment that third party
products
do not infringe our patents;
|
· |
if
our competitors file patent applications that claim technology
also
claimed by us, we may be forced to participate in interference
or
opposition proceedings to determine the priority of invention
and whether
we are entitled to patent rights on such invention; and
|
· |
if
third parties initiate litigation claiming that our products
infringe
their patent or other intellectual property rights, we will need
to defend
against such proceedings.
|
31.1 |
Certification
of Periodic Report by Chief Executive Officer pursuant to Rule
13a-14 and
15d-14 of the Securities Exchange Act of
1934.
|
31.2 |
Certification
of Periodic Report by Chief Financial Officer pursuant to Rule
13a-14 and
15d-14 of the Securities Exchange Act of
1934.
|
32.1 |
Certification
of Periodic Report by the Chief Executive Officer and Chief Financial
Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant
to Section
906 of the Sarbanes-Oxley Act of
2002.
|
October 27, 2008 | ACURA PHARMACEUTICALS, INC. | |
|
|
|
/s/ Andrew D. Reddick | ||
Andrew
D. Reddick
President
& Chief Executive Officer
|
/s/ Peter A. Clemens | ||
Peter
A. Clemens
Senior
VP & Chief Financial Officer
|