UNITEDSTATES
SECURITIESAND EXCHANGE COMMISSION
WASHINGTON,D.C. 20549
FORM
| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Forthe quarterly period ended
or
| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Forthe transition period from to
CommissionFile Number:
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(Registrant’stelephone number, including area code)
Securitiesregistered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||
Indicateby check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities ExchangeAct of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2)has been subject to such filing requirements for the past 90 days.
Indicateby check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrantwas required to submit such files).
Indicateby check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reportingcompany, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,”“smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| Large accelerated filer | ☐ |
| Accelerated filer | ☐ |
| ☒ | |
| Smaller reporting company | |
| Emerging growth company |
Ifan emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complyingwith any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicateby check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No
OutstandingShares
Asof August 4, 2025 the registrant had shares of common stock outstanding.
TABLEOF CONTENTS
| Page | ||
| PART I—FINANCIAL INFORMATION | ||
| Item 1. | Financial Statements | 3 |
| Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations | 22 |
| Item 3. | Quantitative and Qualitative Disclosures About Market Risk | 41 |
| Item 4. | Controls and Procedures | 41 |
| ||
| Item 1. | Legal Proceedings | 41 |
| Item 1A. | Risk Factors | 41 |
| Item 5. | Other Information | 42 |
| Item 6. | Exhibits | 43 |
| 2 |
PARTI—FINANCIAL INFORMATION
| ITEM 1. | FINANCIAL STATEMENTS |
LIPOCINEINC. AND SUBSIDIARIES
CondensedConsolidated Balance Sheets
(Unaudited)
| June 30, | December 31, | |||||||
| 2025 | 2024 | |||||||
| Assets | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | $ | ||||||
| Marketable investment securities | ||||||||
| Accrued interest income | ||||||||
| Prepaid and other current assets | ||||||||
| Total current assets | ||||||||
| Property and equipment, net of accumulated depreciation of $ | ||||||||
| Other assets | ||||||||
| Total assets | $ | $ | ||||||
| Liabilities and Stockholders’ Equity | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | $ | ||||||
| Accrued expenses | ||||||||
| Deferred revenue | ||||||||
| Total current liabilities | ||||||||
| Total liabilities | ||||||||
| Commitments and contingencies (notes 8 and 11) | ||||||||
| Stockholders’ equity: | ||||||||
| Common stock, par value $ per share, shares authorized; and issued and and outstanding, respectively | ||||||||
| Additional paid-in capital | ||||||||
| Treasury stock at cost, shares | ( | ) | ( | ) | ||||
| Accumulated other comprehensive income | ( | ) | ||||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| Total stockholders’ equity | ||||||||
| Total liabilities and stockholders’ equity | $ | $ | ||||||
Seeaccompanying notes to consolidated financial statements
| 3 |
LIPOCINEINC. AND SUBSIDIARIES
CondensedConsolidated Statements of Operations and Comprehensive Income (Loss)
(Unaudited)
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
| 2025 | 2024 | 2025 | 2024 | |||||||||||||
| Revenues: | ||||||||||||||||
| License revenue | $ | $ | $ | $ | ||||||||||||
| Royalty revenue | ||||||||||||||||
| Total revenues | ||||||||||||||||
| Operating expenses: | ||||||||||||||||
| Research and development | ||||||||||||||||
| General and administrative | ||||||||||||||||
| Total operating expenses | ||||||||||||||||
| Operating loss | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Other income (loss): | ||||||||||||||||
| Interest and investment income | ||||||||||||||||
| Unrealized loss on warrant liability | ( | ) | ( | ) | ||||||||||||
| Total other income | ||||||||||||||||
| Income (loss) before income tax expense | ( | ) | ( | ) | ( | ) | ||||||||||
| Income tax expense | ( | ) | ( | ) | ( | ) | ||||||||||
| Net loss attributable to common shareholders Net income (loss) attributable to common shareholders | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ||||||
| Basic earnings (loss) per share attributable to common stock | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ||||||
| Weighted average common shares outstanding, basic | ||||||||||||||||
| Diluted earnings (loss) per share attributable to common stock | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ||||||
| Weighted average common shares outstanding, diluted | ||||||||||||||||
| Comprehensive income (loss): | ||||||||||||||||
| Net income (loss) | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ||||||
| Net unrealized income (loss) on marketable investment securities | ( | ) | ( | ) | ( | ) | ||||||||||
| Comprehensive income (loss) | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ||||||
Seeaccompanying notes to consolidated financial statements
| 4 |
LIPOCINEINC. AND SUBSIDIARIES
CondensedConsolidated Statements of Changes in Stockholders’ Equity
Forthe Three and Six Months Ended June 30, 2025 and 2024
(Unaudited)
| Stockholder’s Equity | ||||||||||||||||||||||||||||||||
| Common Stock | Treasury Stock | Accumulated | ||||||||||||||||||||||||||||||
| Number of Shares | Amount | Number of Shares | Amount | Additional Paid-In Capital | Other Comprehensive Income (Loss) | Accumulated Deficit | Total Stockholders’ Equity | |||||||||||||||||||||||||
| Balances at March 31, 2024 | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||||||
| Net loss | - | - | ( | ) | ( | ) | ||||||||||||||||||||||||||
| Unrealized net income on marketable investment securities | - | - | ||||||||||||||||||||||||||||||
| Stock-based compensation | - | - | ||||||||||||||||||||||||||||||
| Costs associated with ATM Offering | - | |||||||||||||||||||||||||||||||
| Balances at June 30, 2024 | $ | $ | ( | ) | $ | $ | ( | ) | $ | ( | ) | $ | ||||||||||||||||||||
| Common Stock | Treasury Stock | Accumulated | ||||||||||||||||||||||||||||||
| Number of Shares | Amount | Number of Shares | Amount | Additional Paid-In Capital | Other Comprehensive Income (Loss) | Accumulated Deficit | Total Stockholders’Equity | |||||||||||||||||||||||||
| Balances at December 31, 2023 | $ | $ | ( | ) | $ | $ | $ | ( | ) | $ | ||||||||||||||||||||||
| Net income | - | - | ||||||||||||||||||||||||||||||
| Unrealized net loss on marketable investment securities | - | - | ( | ) | ( | ) | ||||||||||||||||||||||||||
| Stock-based compensation | - | - | ||||||||||||||||||||||||||||||
| Common stock sold through ATM offering | - | |||||||||||||||||||||||||||||||
| Balances at June 30, 2024 | $ | $ | ( | ) | $ | $ | ( | ) | $ | ( | ) | $ | ||||||||||||||||||||
| 5 |
| Stockholder’s Equity | ||||||||||||||||||||||||||||||||
| Common Stock | Treasury Stock | Accumulated | ||||||||||||||||||||||||||||||
| Number of Shares | Amount | Number of Shares | Amount | Additional Paid-In Capital | Other Comprehensive Income (Loss) | Accumulated Deficit | Total Stockholders’ Equity | |||||||||||||||||||||||||
| Balances at March 31, 2025 | ( | ) | ( | ) | ||||||||||||||||||||||||||||
| Net loss | - | - | ( | ) | ( | ) | ||||||||||||||||||||||||||
| Unrealized net loss on marketable investment securities | - | - | ( | ) | ( | ) | ||||||||||||||||||||||||||
| Stock-based compensation | - | - | ||||||||||||||||||||||||||||||
| Common stock sold through ATM offering | - | |||||||||||||||||||||||||||||||
| Balances at June 30, 2025 | $ | $ | ( | ) | $ | $ | ( | ) | $ | ( | ) | $ | ||||||||||||||||||||
| Stockholder’s Equity | ||||||||||||||||||||||||||||||||
| Common Stock | Treasury Stock | Accumulated | Total | |||||||||||||||||||||||||||||
| Number of Shares | Amount | Number of Shares | Amount | Additional Paid-In Capital | Other Comprehensive Income (Loss) | Accumulated Deficit | Stockholders’ Equity | |||||||||||||||||||||||||
| Balances at December 31, 2024 | $ | $ | ( | ) | $ | $ | $ | ( | ) | $ | ||||||||||||||||||||||
| Net loss | - | - | ( | ) | ( | ) | ||||||||||||||||||||||||||
| Unrealized net loss on marketable investment securities | - | - | ( | ) | ( | ) | ||||||||||||||||||||||||||
| Stock-based compensation | - | - | ||||||||||||||||||||||||||||||
| Vesting of restricted stock units | - | |||||||||||||||||||||||||||||||
| Common stock sold through ATM offering | - | |||||||||||||||||||||||||||||||
| Balances at June 30, 2025 | $ | $ | ( | ) | $ | $ | ( | ) | $ | ( | ) | $ | ||||||||||||||||||||
Seeaccompanying notes to condensed consolidated financial statements
| 6 |
LIPOCINEINC. AND SUBSIDIARIES
CondensedConsolidated Statements of Cash Flows
(Unaudited)
| Six Months Ended June 30, | ||||||||
| 2025 | 2024 | |||||||
| Cash flows from operating activities: | ||||||||
| Net income (loss) | $ | ( | ) | $ | ||||
| Adjustments to reconcile net income (loss) to cash provided by (used in) operating activities: | ||||||||
| Depreciation expense | ||||||||
| Stock-based compensation expense | ||||||||
| Non-cash loss on change in fair value of warrant liability | ||||||||
| Amortization of discounts on marketable investment securities | ( | ) | ( | ) | ||||
| Changes in operating assets and liabilities: | ||||||||
| Accrued interest income | ( | ) | ( | ) | ||||
| Prepaid and other current assets | ||||||||
| Accounts payable | ( | ) | ||||||
| Accrued expenses | ( | ) | ||||||
| Cash used in operating activities | ( | ) | ( | ) | ||||
| Cash flows from investing activities: | ||||||||
| Purchases of marketable investment securities | ( | ) | ( | ) | ||||
| Maturities of marketable investment securities | ||||||||
| Net cash provided by investing activities | ||||||||
| Cash flows from financing activities: | ||||||||
| Net proceeds from sale of common stock through ATM | ||||||||
| Cash provided by financing activities | ||||||||
| Net increase (decrease) in cash and cash equivalents | ( | ) | ||||||
| Cash and cash equivalents at beginning of period | ||||||||
| Cash and cash equivalents at end of period | $ | $ | ||||||
| Supplemental disclosure of cash flow information: | ||||||||
| Income taxes paid | $ | |||||||
| Supplemental disclosure of non-cash investing and financing activity: | ||||||||
| Net unrealized loss on available-for-sale securities | $ | ( | ) | $ | ( | ) | ||
Seeaccompanying notes to consolidated financial statements
| 7 |
LIPOCINEINC.
Notesto Condensed Consolidated Financial Statements
(Unaudited)
| (1) | Basis of Presentation |
Theaccompanying unaudited condensed consolidated financial statements included herein have been prepared by Lipocine Inc. (“Lipocine”or the “Company”) in accordance with the rules and regulations of the United States Securities and Exchange Commission (“SEC”).The unaudited condensed consolidated financial statements are comprised of the financial statements of Lipocine and its subsidiaries,collectively referred to as the Company. In management’s opinion, the interim financial data presented includes all adjustments(consisting solely of normal recurring items) necessary for fair presentation. All intercompany accounts and transactions have been eliminated.Certain information required by U.S. generally accepted accounting principles (“U.S. GAAP”) has been condensed or omittedin accordance with rules and regulations of the SEC. Operating results for the three and six months ended June 30, 2025 are not necessarilyindicative of the results that may be expected for any future period or for the year ending December 31, 2025.
Theseunaudited condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financialstatements and the notes thereto for the year ended December 31, 2024.
Thepreparation of the unaudited condensed consolidated financial statements requires management to make estimates and assumptions relatingto reporting of the assets and liabilities and the disclosure of contingent assets and liabilities to prepare these condensed consolidatedfinancial statements and the reported amounts of revenues and expenses during the reporting period in conformity with U.S. GAAP. Actualresults could differ from these estimates.
TheCompany believes that its existing capital resources, together with interest thereon, will be sufficient to meet its projected operatingrequirements through at least August 5, 2026. The Company has based this estimate on assumptions that may prove to be wrong, and theCompany could utilize its available capital resources sooner than it currently expects. While the Company believes it has sufficientliquidity and capital resources to fund our projected operating requirements through at least August 5, 2026, the Company will need toraise additional capital through the equity or debt markets or via out-licensing activities to support its operations. If the Companyis unsuccessful in raising additional capital, its long-term ability to continue as a going concern will become a risk. Further, theCompany’s operating plan may change, and the Company may need additional funds to meet operational needs and capital requirementsfor product development, regulatory compliance and clinical trial activities sooner than planned. In addition, the Company’s capitalresources may be consumed more rapidly if it pursues additional clinical studies for LPCN 1154, LPCN 2401, LPCN 2101, LPCN 2203, LPCN1148, LPCN 1144, and/or LPCN 1107. Conversely, the Company’s capital resources could last longer if the Company reduces expenses,reduces the number of activities currently contemplated under its operating plan, or terminates, modifies the design of or suspends on-goingclinical studies.
OnJanuary 12, 2024, the Company entered into a License Agreement (the “Verity License Agreement”) with Gordon Silver Limited(“GSL”) and Verity Pharmaceuticals, Inc. (“Verity Pharma”), pursuant to which the Company granted to GSL (anaffiliate of Verity Pharma) an exclusive, royalty-bearing, sublicensable right and license to commercialize the TLANDO product with respectto testosterone replacement therapy in males for conditions associated with a deficiency or absence of endogenous testosterone, as indicatedin a New Drug Application (“NDA”) No. 208088, treatment of Klinefelter syndrome, and pediatric indications relating to testosteronereplacement therapy in males for conditions associated with a deficiency or absence of endogenous testosterone (the “Field”),in each case within the United States and Canada (the “Licensed Verity Territory”). The Verity License Agreement also providesGSL with a license to develop and commercialize TLANDO XR (LPCN 1111), the Company’s potential once-daily oral product candidatefor testosterone replacement therapy in the Licensed Verity Territory. The Company retains development and commercialization rights forTLANDO and TLANDO XR (LPCN 1111) outside of the Licensed Verity Territory, and with respect to applications outside of the Field insideor outside the Licensed Verity Territory.
Uponexecution of the Verity License Agreement, GSL agreed to pay the Company a license fee of $
| 8 |
Inaddition to the Verity License Agreement, the Company entered into a license agreement in the territories of South Korea, the Gulf CorporationCouncil, or GCC, and Brazil. The Company retains development and commercialization rights for TLANDO outside of the United States, Canada,South Korea, the GCC, and Brazil and retains the development and commercialization rights for TLANDO XR (LPCN 1111) outside the UnitedStates and Canada, and with respect to applications outside of the Field inside or outside the Licensed Verity Territory.
| (2) | Revenue |
TheCompany generates most of its revenue from license and royalty arrangements. At inception of each contract, the Company identifies thegoods and services that have been promised to the customer and each of those that represent a distinct performance obligation, determinesthe transaction price including any variable consideration, allocates the transaction price to the distinct performance obligations anddetermines whether control transfers to the customer at a point in time or over time. Variable consideration is included in the transactionprice to the extent that it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur whenthe uncertainty associated with the variable consideration is subsequently resolved. The Company reassesses its reserves for variableconsideration at each reporting date and makes adjustments, if necessary, which may affect revenue and earnings in periods in which anysuch changes become known.
SeeNote 7 for a description of the Verity License Agreement, the SPC License Agreement (as defined below), the Pharmalink Distribution Agreement(as defined below), and the Aché License Agreement (as defined below). See Note 11 for a description of the agreement with Spriaso,a related party.
LicenseFees
Fordistinct license performance obligations, upfront license fees are recognized when the Company satisfies the underlying performance obligation.Performance obligations under these licenses, which consist of the right to use the Company’s proprietary technology, are satisfiedat a point in time corresponding with delivery of the underlying technology rights to the licensee, which is generally upon transferof the licensed technology/product to the customer. In addition, license arrangements may include contingent milestone payments, whichare due following achievement by our licensee of specified sales or regulatory milestones and the licensee and/or Company will fulfillits performance obligation prior to achievement of these milestones. Because of the uncertainty of the milestone achievement, and/orthe dependence on sales of our licensee, variable consideration for contingent milestones is fully constrained and is not recognizedas revenue until the milestone is achieved by our licensee, to the extent collectability is reasonably certain.
Royalties
Royaltyrevenue consists of sales-based and minimum royalties earned under license agreements for our products. Sales-based royalty revenue representsvariable consideration under license agreements and is recognized in the period a customer sells products incorporating the Company’slicensed technologies/products. The Company estimates sales-based royalty revenue earned but unpaid at each reporting period using informationprovided by the licensee. The Company’s license arrangements may also provide for minimum royalties, which the Company recognizesupon the satisfaction of the underlying performance obligation, which generally occurs with delivery of the underlying technology rightsto the licensee. Sales-based and minimum royalties are generally due within 45 days after the end of each quarter in which they are earned.
RevenueConcentration
Amajor partner is considered to be one that comprises more than
| 9 |
| (3) | Earnings (Loss) per Share |
Basicearnings (loss) per share is calculated by dividing net income (loss) available to common shareholders by the weighted average numberof common shares outstanding during the period. Diluted earnings (loss) per share is based on the weighted average number of common sharesoutstanding plus, where applicable, the additional potential common shares that would have been outstanding related to dilutive options,warrants and unvested restricted stock units to the extent such shares are dilutive.
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
| 2025 | 2024 | 2025 | 2024 | |||||||||||||
| Basic earnings (loss) per share attributable to common stock: | ||||||||||||||||
| Numerator | ||||||||||||||||
| Net income (loss) | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ||||||
| Denominator | ||||||||||||||||
| Weighted avg. common shares outstanding | ||||||||||||||||
| Basic earnings (loss) per share attributable to common stock | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ||||||
| Diluted earnings (loss) per share attributable to common stock: | ||||||||||||||||
| Numerator | ||||||||||||||||
| Net income (loss) | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ||||||
| Effect of dilutive securities on net earnings (loss): | ||||||||||||||||
| Common stock warrants | ( | ) | ( | ) | ||||||||||||
| Total net income (loss) for purpose of calculating diluted net income | ||||||||||||||||
| (loss) per common share | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ||||||
| Denominator | ||||||||||||||||
| Weighted avg. common shares outstanding | ||||||||||||||||
| Weighted average effect of dilutive securities: | ||||||||||||||||
| Stock options | ||||||||||||||||
| Warrants | ||||||||||||||||
| Total shares for purpose of calculating diluted net earnings (loss) per common share | ||||||||||||||||
| Diluted earnings (loss) per share attributable to common stock | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ||||||
| For the Three Months Ended | For the Six Months Ended | |||||||||||||||
| June 30, | June 30, | |||||||||||||||
| 2025 | 2024 | 2025 | 2024 | |||||||||||||
| Stock options | ||||||||||||||||
| Unvested restricted stock units | ||||||||||||||||
| Warrants | ||||||||||||||||
| 10 |
| (4) Marketable Investment Securities |
TheCompany has classified its marketable investment securities as available-for-sale securities, all of which are debt securities. Thesesecurities are carried at fair value with unrealized holding gains and losses, net of the related tax effect, included in accumulatedother comprehensive income (loss) in stockholders’ equity until realized. Gains and losses on investment security transactionsare reported on the specific-identification method. Dividend income is recognized on the ex-dividend date and interest income is recognizedon an accrual basis. The amortized cost, gross unrealized holding gains, gross unrealized holding losses, and fair value for available-for-salesecurities by major security type and class of security as of June 30, 2025, and December 31, 2024, were as follows:
| June 30, 2025 | Amortized Cost | Gross Unrealized Holding Gains | Gross Unrealized Holding Losses | Aggregate Fair Value | ||||||||||||
| Government treasury bills | $ | $ | $ | ( | ) | $ | ||||||||||
| $ | $ | $ | ( | ) | $ | |||||||||||
| December 31, 2024 | Amortized Cost | Gross Unrealized Holding Gains | Gross Unrealized Holding Losses | Aggregate Fair Value | ||||||||||||
| Government treasury bills | $ | $ | $ | $ | ||||||||||||
| $ | $ | $ | $ | |||||||||||||
Maturitiesof debt securities classified as available-for-sale securities as of June 30, 2025 are as follows:
| June 30, 2025 | Amortized Cost | Aggregate Fair Value | ||||||
| Due within one year | $ | $ | ||||||
| $ | $ | |||||||
Therewere
| (5) | Fair Value |
TheCompany utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extentpossible. The Company determines fair value based on assumptions that market participants would use in pricing an asset or liabilityin the principal or most advantageous market. When considering market participant assumptions in fair value measurements, the followingfair value hierarchy distinguishes between observable and unobservable inputs, which are categorized in one of the following levels:
| ● | Level 1 Inputs: Quoted prices for identical instruments in active markets. |
| ● | Level 2 Inputs: Quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-derived valuation in which all significant inputs and significant value drivers are observable in active markets. |
| ● | Level 3 Inputs: Valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable. |
| 11 |
Allof the Company’s financial instruments are valued using quoted prices in active markets or based on other observable inputs. Foraccrued interest income, prepaid and other current assets, accounts payable, and accrued expenses, the carrying amounts approximate fairvalue because of the short maturity of these instruments. The following table presents the placement in the fair value hierarchy of assetsand liabilities that are measured at fair value on a recurring basis as of June 30, 2025 and December 31, 2024:
| Fair value measurements at reporting date using | ||||||||||||||||
| June 30, 2025 | Level 1 inputs | Level 2 inputs | Level 3 inputs | |||||||||||||
| Assets: | ||||||||||||||||
| Cash equivalents - money market funds | $ | $ | $ | $ | ||||||||||||
| Government treasury bills | ||||||||||||||||
| $ | $ | $ | $ | |||||||||||||
| Fair value measurements at reporting date using | ||||||||||||||||
| December 31, 2024 | Level 1 inputs | Level 2 inputs | Level 3 inputs | |||||||||||||
| Assets: | ||||||||||||||||
| Cash equivalents - money market funds | $ | $ | $ | $ | ||||||||||||
| Government treasury bills | ||||||||||||||||
| $ | $ | $ | $ | |||||||||||||
Thefollowing methods and assumptions were used to determine the fair value of each class of assets and liabilities recorded at fair valuein the balance sheets:
Cashequivalents: Cash equivalents primarily consist of highly rated money market funds and treasury bills with original maturities to theCompany of three months or less and are purchased daily at par value with specified yield rates. Cash equivalents related to money marketfunds and treasury bills are classified within Level 1 of the fair value hierarchy because they are valued using quoted market pricesor broker or dealer quotations for similar assets.
Governmenttreasury bills: The Company uses a third-party pricing service to value these investments. United States treasury bills are classifiedwithin Level 1 of the fair value hierarchy because they are valued using quoted market prices in active markets for identical assetsand reportable trades.
TheCompany’s accounting policy is to recognize transfers between levels of the fair value hierarchy on the date of the event or changesin circumstances that caused the transfer. There were no transfers into or out of Level 1, Level 2, or Level 3 for the three and sixmonths ended June 30, 2025.
| (6) | Income Taxes |
Thetax provision for interim periods is determined using an estimate of the Company’s effective tax rate for the full year adjustedfor discrete items, if any, that are taken into account in the relevant period. Each quarter the Company updates its estimate of theannual effective tax rate, and if the estimated tax rate changes, the Company makes a cumulative adjustment.
AtJune 30, 2025 and December 31, 2024, the Company had a full valuation allowance against its deferred tax assets, net of expected reversalsof existing deferred tax liabilities, as it believes it is more likely than not that these benefits will not be realized.
| 12 |
| (7) | Contractual Agreements |
| (a) | Verity Pharmaceuticals, Inc. |
OnJanuary 12, 2024, the Company entered into the Verity License Agreement with GSL and Verity Pharma, pursuant to which the Company grantedto GSL (an affiliate of Verity Pharma) an exclusive, royalty-bearing, sublicensable right and license to commercialize the Company’sTLANDO® product with respect to testosterone replacement therapy in males for conditions associated with a deficiencyor absence of endogenous testosterone, as indicated in NDA No. 208088, treatment of Klinefelter syndrome, and pediatric indications relatingto testosterone replacement therapy in males for conditions associated with a deficiency or absence of endogenous testosterone, in eachcase within the Licensed Verity Territory. In June 2025, Verity Pharma filed a New Drug Submission (“NDS”)for TLANDO in Canada. The Verity License Agreement also provides GSL with a license to develop and commercializeTLANDO XR (LPCN 1111), the Company’s potential once-daily oral product candidate for testosterone replacement therapy in the LicensedVerity Territory. Under the Verity License Agreement, the Company retains rights to TLANDO in applications outside of the Field and tothe development and commercialization rights outside of the United States and Canada. The Company retains rights to TLANDO XR in applicationsoutside of the Field and to development and commercialization rights in the field outside of the United States and Canada.
Uponexecution of the Verity License Agreement, GSL agreed to pay the Company a license fee of $
TheCompany concluded that licensing revenue recognized in conjunction with the Verity License Agreement met the requirements under ASC 606,Revenue from Contracts with Customers. The Company evaluates the measure of progress each reporting period and, if necessary, adjuststhe measure of performance and related revenue recognition. License revenue from payments to be received in the future will be recognizedwhen it is probable that we will receive license payments under the terms of the Verity License Agreement.
Underthe Verity License Agreement with Verity Pharma, during the three months ended June 30, 2025 and 2024, the Company recognized royaltyrevenue of $
| (b) | SPC Korea |
InSeptember 2024, the Company entered into a Distribution and License Agreement (the “SPC License Agreement”) with SPC KoreaLimited (“SPC”), pursuant to which the Company granted to SPC a non-transferable, exclusive, royalty-bearing license to commercializethe Company’s TLANDO product with respect to the Field, specific to the country of South Korea (the “SPC Territory”).SPC paid the Company a one-time non-refundable, non-creditable upfront fee in October 2024. The Company also received an additional paymentfor a non-refundable prepayment in consideration for TLANDO product inventory, and is eligible to receive additional payments for variousmarketing authorization and sales milestones, and the Company will supply TLANDO to SPC and receive a supply price. In addition, theCompany will receive royalties on net sales in the SPC Territory.
| (c) | Pharmalink |
InOctober 2024, the Company entered into a distribution and supply agreement (the “Pharmalink Distribution Agreement”) withPharmalink, pursuant to which the Company granted to Pharmalink a non-transferable, exclusive, license to commercialize the Company’sTLANDO product with respect to the Field, specific to the GCC, including Saudi Arabia, Kuwait, the United Arab Emirates (“UAE”),Qatar, Bahrain, and Oman (the “GCC Territory”). Pharmalink paid the Company a one-time non-refundable, non-creditable upfrontfee. The Company is eligible to receive additional payments in regulatory authorization milestones related to the marketing approvalin countries in the GCC Territory under the Pharmalink Distribution Agreement and the Company will supply TLANDO to Pharmalink at anagreed transfer price.
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| (d) | Aché Laboratórios Farmacêuticos S.A. |
InApril 2025, the Company entered into a License and Supply Agreement (the “Aché License Agreement”) with Aché,pursuant to which the Company granted to Aché an exclusive license to commercialize the Company’s TLANDO® productwith respect to the Field, specific to Brazil (the “Aché Territory”). Under the agreement, the Company is entitledto receive fees upon the achievement of certain regulatory milestones, royalties on net sales and will supply TLANDO to Aché atan agreed transfer price.
| (e) | Abbott Products, Inc. |
OnMarch 29, 2012, the Company terminated its collaborative agreement with Solvay Pharmaceuticals, Inc. (later acquired by Abbott Products,Inc. (“Abbott”)) for TLANDO. As part of the termination, the Company reacquired the rights to the intellectual property fromAbbott. All obligations under the prior license agreement have been completed except that the Company will owe Abbott a perpetual
| (f) | Contract Research and Development |
TheCompany has entered into agreements with various contract organizations that conduct pre-clinical, clinical, analytical and manufacturingdevelopment work on behalf of the Company as well as a number of independent contractors and primarily clinical researchers who serveas advisors to the Company. The Company incurred expenses of approximately $
| (8) | Leases |
TheCompany has a non-cancelable operating lease for office space and laboratory facilities in Salt Lake City, Utah. The term of the leasehas been extended through February 28, 2026.
Futureminimum lease payments under the non-cancelable operating lease as of June 30, 2025 are:
| Operating | ||||
| Lease | ||||
| 2025 | $ | |||
| 2026 | ||||
| Total minimum lease payments | $ | |||
TheCompany’s rent expense was $
| (9) | Stockholders’ Equity |
OnJune 4, 2025, the Company held its annual general meeting of shareholders, at which a proposal to amend the Company’s Amended andRestated Certificate of Incorporation (the “ Restated Certificate”) to reduce the number of authorized shares of the Company’scommon stock from to shares was approved. The Company filed the amendment to the Restated Certificate with theSecretary of State of the State of Delaware on June 4, 2025. The amendment to the Restated Certificate became effective upon filing withthe Secretary of State of the State of Delaware.
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| (a) | Issuance of Common Stock |
OnApril 26, 2024, the Company entered into a sales agreement with A.G.P./Alliance Global Partners (“A.G.P.”) (the “A.G.P.Sales Agreement”) pursuant to which the Company may issue and sell, from time to time, shares of its common stock having an aggregateoffering price of up to the amount the Company registered on an effective registration statement pursuant to which the offering is beingmade. The Company currently has registered $
Theshares of the Company’s common stock to be sold under the A.G.P. Sales Agreement will be sold and issued pursuant to the Form S-3,as amended, which was previously declared effective by the Securities and Exchange Commission, and the related prospectus and one ormore prospectus supplements.
TheCompany is not obligated to make any sales of its common stock under the A.G.P. Sales Agreement. The offering of common stock pursuantto the A.G.P. Sales Agreement will terminate upon the termination of the A.G.P. Sales Agreement as permitted therein. The Company andA.G.P. may each terminate the A.G.P. Sales Agreement at any time upon ten days’ prior notice.
Duringthe three and six month ended June 30, 2025, the Company sold shares of common stock pursuant to the A.G.P. Sales Agreement ata weighted average price of $ per share, for aggregate gross proceeds of $
Previously,on March 6, 2017, the Company entered into a sales agreement (the “Cantor Sales Agreement”) with Cantor Fitzgerald &Co. (“Cantor”) pursuant to which the Company could issue and sell, from time to time, shares of its common stock having anaggregate offering price of up to the amount the Company registered on an effective registration statement pursuant to which the offeringwas made. During the three months and six months ended June 30, 2024, the Company sold shares of its common stock pursuant tothe Cantor Sales Agreement. On April 24, 2024, the Cantor Sales Agreement was terminated.
| (b) | Rights Agreement |
OnNovember 13, 2015, the Company and American Stock Transfer & Trust Company, LLC, as Rights Agent, entered into a Rights Agreement(the “Rights Agreement”). Also on November 12, 2015, the Board of the Company authorized and the Company declared a dividendof one preferred stock purchase right (each a “Right” and collectively, the “Rights”) for each outstanding shareof common stock of the Company. The dividend was payable to stockholders of record as of the close of business on November 30, 2015 andentitles the registered holder to purchase from the Company one one-thousandth of a fully paid non-assessable share of Series A JuniorParticipating Preferred Stock of the Company at a price of $ per one-thousandth share (the “Purchase Price”). The Rightswill generally become exercisable upon the earlier to occur of (i) 10 business days following a public announcement that a person orgroup of affiliated or associated persons has become an Acquiring Person (as defined below) or (ii) 10 business days (or such later dateas may be determined by action of the Board prior to such time as any person or group of affiliated or associated persons becomes anAcquiring Person) following the commencement of, or announcement of an intention to make, a tender offer or exchange offer the consummationof which would result in the beneficial ownership by a person or group of 15% or more of the outstanding common stock of the Company.Except in certain situations, a person or group of affiliated or associated persons becomes an “Acquiring Person” upon acquiringbeneficial ownership of 15% or more of the outstanding shares of common stock of the Company.
Ingeneral, in the event a person becomes an Acquiring Person, then each Right not owned by such Acquiring Person will entitle its holderto purchase from the Company, at the Right’s then current exercise price, in lieu of shares of Series A Junior Participating PreferredStock, common stock of the Company with a market value of twice the Purchase Price. In addition, if after any person has become an AcquiringPerson, (a) the Company is acquired in a merger or other business combination, or (b) 50% or more of the Company’s assets, or assetsaccounting for 50% or more of its earning power, are sold, leased, exchanged or otherwise transferred (in one or more transactions),proper provision shall be made so that each holder of a Right (other than the Acquiring Person, its affiliates and associates and certaintransferees thereof, whose Rights became void) shall thereafter have the right to purchase from the acquiring corporation, for the PurchasePrice, that number of shares of common stock of the acquiring corporation which at the time of such transaction would have a market valueof twice the Purchase Price.
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TheCompany will be entitled to redeem the Rights at $ per Right at any time prior to the time an Acquiring Person becomes such. Theterms of the Rights are set forth in the Rights Agreement, which is summarized in the Company’s Current Report on Form 8-K datedNovember 13, 2015. The rights plan was originally set to expire on November 12, 2018; however, on November 5, 2018 our Board approvedan Amended and Restated Rights Agreement pursuant to which the expiration date was extended to November 5, 2021, and again on November2, 2021, the Company adopted a Second Amended and Restated Rights Agreement pursuant to which the expiration date was extended to November1, 2024. On October 22, 2024, the Company adopted a Third Amended and Restated Rights Agreement pursuant to which the expiration datewas extended to October 22, 2027, unless the rights are earlier redeemed or exchanged by the Company.
| (c) | Share-Based Payments |
TheCompany recognizes stock-based compensation expense for grants of stock option awards, restricted stock units and restricted stock underthe Company’s Incentive Plan to employees, nonemployees and nonemployee members of the Company’s Board based on the grant-datefair value of those awards. The grant-date fair value of an award is generally recognized as compensation expense over the award’srequisite service period. In addition, the Company has granted performance-based stock option awards and restricted stock units, whichvest based upon the Company satisfying certain performance conditions. Potential compensation cost, measured on the grant date, relatedto these performance options will be recognized only if, and when, the Company estimates that these options or units will vest, whichis based on whether the Company considers the performance conditions to be probable of attainment. The Company’s estimates of thenumber of performance-based options or units that will vest will be revised, if necessary, in subsequent periods.
TheCompany uses the Black-Scholes model to compute the estimated fair value of stock option awards. Using this model, fair value is calculatedbased on assumptions with respect to (i) expected volatility of the Company’s common stock price, (ii) the periods of time overwhich employees and members of the board of directors are expected to hold their options prior to exercise (expected term), (iii) expecteddividend yield on the common stock, and (iv) risk-free interest rates. Stock-based compensation expense also includes an estimate, whichis made at the time of grant, of the number of awards that are expected to be forfeited. This estimate is revised, if necessary, in subsequentperiods if actual forfeitures differ from those estimates. Stock-based compensation cost that has been expensed in the statements ofoperations amounted to approximately $ and $, respectively, for the three months ended June 30, 2025 and 2024, and approximately$ and $, respectively for the six months ended June 30, 2025 and 2024. The expense is allocated as follows:
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
| 2025 | 2024 | 2025 | 2024 | |||||||||||||
| Research and development | $ | $ | $ | $ | ||||||||||||
| General and administrative | ||||||||||||||||
| $ | $ | $ | $ | |||||||||||||
TheCompany issued stock options during each of the three months ended June 30, 2025 and 2024, and and stock optionsduring the six months ended June 30, 2025 and 2024, respectively.
Keyassumptions used in the determination of the fair value of stock options granted are as follows:
ExpectedTerm: The expected term represents the period that the stock-based awards are expected to be outstanding. The expected term was estimatedusing the average of the contractual term and the vesting period of the stock option. For awards with performance conditions, and thathave the contractual term to satisfy the performance condition, the contractual term was used.
Risk-FreeInterest Rate: The risk-free interest rate used was based on the implied yield currently available on U.S. Treasury issues with anequivalent remaining term.
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ExpectedDividend: The expected dividend assumption is based on management’s current expectation about the Company’s anticipateddividend policy. The Company does not anticipate declaring dividends in the foreseeable future.
ExpectedVolatility: The volatility factor is based solely on the Company’s trading history.
| 2025 | 2024 | |||||||
| Expected term | years | years | ||||||
| Risk-free interest rate | % | % | ||||||
| Expected dividend yield | ||||||||
| Expected volatility | % | % | ||||||
TheCompany recognizes compensation expense for the portion of options that are expected to vest. Therefore, the Company applied estimatedforfeiture rates that were derived from historical employee termination behavior. If the actual number of forfeitures differs from thoseestimated by management, additional adjustments to compensation expense may be required in future periods.
Asof June 30, 2025, there was approximately $ of total unrecognized compensation cost related to unvested stock option compensationgranted under the Company’s stock option plan. That cost is expected to be recognized over a weighted average period of yearsand will be adjusted for subsequent changes in estimated forfeitures. Additionally, as of June 30, 2025, there was $ of total unrecognizedcompensation costs related to unvested restricted stock units that have either time-based or performance vesting.
| (d) | Stock Option Plan |
InApril 2014, the Board adopted the 2014 Stock and Incentive Plan (“2014 Plan”) subject to shareholder approval which was receivedin June 2014. The 2014 Plan provides for the granting of nonqualified and incentive stock options, stock appreciation rights, restrictedstock units, restricted stock and dividend equivalents. An aggregate of shares were authorized for issuance under the 2014 Plan.Additionally, remaining authorized shares under the 2011 Equity Incentive Plan were issuable under the 2014 Plan at the time ofthe 2014 Plan adoption. Upon receiving shareholder approval in June 2016, the 2014 Plan was amended and restated to increase the authorizednumber of shares of common stock of the Company issuable under all awards granted under the 2014 Plan from to . Additionally,upon receiving shareholder approval in June 2018, the 2014 Plan was further amended and restated to increase the authorized number ofshares of common stock of the Company issuable under all awards granted under the 2014 Plan from to . Upon receiving shareholderapproval in June 2020, the 2014 Plan was further amended and restated to increase the authorized number of shares of common stock ofthe Company issuable under all awards granted under the 2014 Plan from to . In June 2024, the 2014 Plan was further amendedand restated to increase the authorized number of shares of common stock of the Company issuable under all awards granted from to . The Board, on an option-by-option basis, determines the number of shares, exercise price, term, and vesting period for optionsgranted. Options granted generally have a ten-year contractual life. The Company issues shares of common stock upon the exercise of optionswith the source of those shares of common stock being either newly issued shares or shares held in treasury. An aggregate of shares of common stock are authorized for issuance under the 2014 Plan, with shares remaining available for grant as of June30, 2025.
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| Outstanding stock options | ||||||||
| Number of shares | Weighted average exercise price | |||||||
| Balance at December 31, 2023 | $ | |||||||
| Options granted | ||||||||
| Options exercised | ||||||||
| Options forfeited | ( | ) | ||||||
| Options cancelled | ( | ) | ||||||
| Balance at December 31, 2024 | ||||||||
| Options granted | ||||||||
| Options exercised | ||||||||
| Options forfeited | ( | ) | ||||||
| Options cancelled | ||||||||
| Balance at June 30, 2025 | ||||||||
| Options exercisable at June 30, 2025 | ||||||||
| As of June 30, 2025 | ||||||||||||||||||||||||||||||
| Options outstanding | Options exercisable | |||||||||||||||||||||||||||||
| Number outstanding | Weighted average remaining contractual life (Years) | Weighted average exercise price | Aggregate intrinsic value | Number exerciseable | Weighted average remaining contractual life (Years) | Weighted average exercise price | Aggregate intrinsic value | |||||||||||||||||||||||
| $ | $ | $ | $ | |||||||||||||||||||||||||||
| As of June 30, 2024 | ||||||||||||||||||||||||||||||
| Options outstanding | Options exercisable | |||||||||||||||||||||||||||||
| Number outstanding | Weighted average remaining contractual life (Years) | Weighted average exercise price | Aggregate intrinsic value | Number exerciseable | Weighted average remaining contractual life (Years) | Weighted average exercise price | Aggregate intrinsic value | |||||||||||||||||||||||
| $ | $ | $ | $ | |||||||||||||||||||||||||||
Theintrinsic value for stock options is defined as the difference between the current market value and the exercise price.
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| (e) | Restricted Stock Units |
| Number of Unvested Restricted Stock Units | ||||
| Balance at December 31, 2024 | ||||
| Granted | ||||
| Vested | ( | ) | ||
| Cancelled | ||||
| Balance at June 30, 2025 | ||||
| Number of Unvested Restricted Stock Units | ||||
| Balance at December 31, 2023 | ||||
| Granted | ||||
| Vested | ||||
| Cancelled | ||||
| Balance at June 30, 2024 | ||||
Theweighted average grant date fair value of restricted stock units awarded during the six months ended June 30, 2024 was $ per share.
| (f) | Common Stock Warrants |
TheCompany accounts for its common stock warrants under ASC 480, Distinguishing Liabilities from Equity, which requires any financialinstrument, other than an outstanding share, that, at inception, embodies an obligation to repurchase the issuer’s equity shares,or is indexed to such an obligation, and requires or may require the issuer to settle the obligation by transferring assets, to be classifiedas a liability. In accordance with ASC 480, the Company’s outstanding warrants from an offering conducted in 2019 (the “November2019 Offering”) were classified as a liability. The liability was adjusted to fair value at each reporting period, with the changesin fair value recognized as gain (loss) on change in fair value of warrant liability in the Company’s consolidated statements ofoperations. The warrants issued in the November 2019 Offering allowed the warrant holder, if certain change in control events had occurred,the option to receive an amount of cash equal to the value of the warrants as determined in accordance with the Black-Scholes optionpricing model with certain defined assumptions upon a fundamental transaction. The warrants expired in November of 2024 and the relatedwarranty liability was extinguished.
Duringthe three and six months ended June 30, 2024, the Company recorded a non-cash loss of approximately $
Additionally,in an offering in February 2020, the Company issued common stock warrants. However, because these warrants did not provide thewarrant holder the option to put the warrant back to the Company, the warrants were classified as equity. The common stock warrants fromthe February 2020 offering expired in February 2025 and no warrants were exercised during 2025 prior to their expiration.
common stock warrants were exercised during either the three or six months ended June 30, 2025 or 2024. As of June 30, 2024, there were warrants outstanding, with a weighted average exercise price of $ per share and a remaining life of years, with an aggregateintrinsic value of $. As of June 30, 2025, there are warrants outstanding.
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| (10) | Commitments and Contingencies |
Litigation
TheCompany is involved in various lawsuits, claims and other legal matters from time to time that arise in the ordinary course of conductingbusiness. The Company records a liability when a particular contingency is probable and estimable.
TheCompany is not currently aware of any matter, individually or in the aggregate, that could have a material adverse effect on our financialcondition, liquidity, or results of operations.
Guaranteesand Indemnifications
Inthe ordinary course of business, the Company enters into agreements, such as lease agreements, licensing agreements, clinical trial agreements,and certain services agreements, containing standard guarantee and / or indemnification provisions. Additionally, the Company has indemnifiedits directors and officers to the maximum extent permitted under the laws of the State of Delaware.
| (11) | Agreement with Spriaso, LLC |
TheCompany has a license and a services agreement with Spriaso, a related-party that is majority-owned by certain current and former directorsof Lipocine Inc. and their affiliates. Under the license agreement, the Company assigned and transferred to Spriaso all of the Company’srights, title and interest in its intellectual property to develop products for the cough and cold field. In addition, Spriaso receivedall rights and obligations under the Company’s product development agreement with a third-party. In exchange, the Company willreceive a royalty of
| (12) | Segment Reporting |
Operatingsegments are defined as components of an entity for which separate financial information is available and that is regularly reviewedby the Chief Decision Maker (“CODM”) in deciding how to allocate resources to an individual segment and in assessing performance.The Company operates as a single reporting segment, focused on leveraging its proprietary technology platform to augment therapeuticsthrough effective oral delivery of products and product candidates. The Company’s measure of segment profit or loss is net income(loss). The CODM is the chief executive officer (“CEO”). The CODM manages and allocates resources to the operations of theCompany on a total company basis. Managing and allocating resources on a consolidated basis enables the CEO to assess the overall levelof resources available and how to best deploy these resources across functions, therapeutic target areas and research and developmentprojects that are in line with the Company’s long-term company-wide strategic goals. Consistent with this decision-making process,the CEO uses consolidated financial information for purposes of evaluating performance, forecasting future period financial results,allocating resources and setting incentive targets. Operating expenses are used to monitor budget versus actual results. The review ofbudgeted versus actual results is used in assessing performance of the segment. All the Company’s long-lived assets are held inthe United States and all the Company’s revenues are primarily related to TLANDO.
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Thefollowing table is representative of the significant expense categories regularly provided to the CODM when managing the Company’ssingle reporting segment. A reconciliation to the consolidated net income (loss) for the three and six months ended June 30, 2025 and2024 is included in the table below.
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
| 2025 | 2024 | 2025 | 2024 | |||||||||||||
| Total revenues | $ | $ | $ | $ | ||||||||||||
| Program expenses (1) | ||||||||||||||||
| LPCN 1154 | ||||||||||||||||
| Other research and development programs | ( | ) | ||||||||||||||
| Non-program expenses (2) | ||||||||||||||||
| Personnel costs | ||||||||||||||||
| Stock-based compensation | ||||||||||||||||
| Total segment operating income (loss) | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Other income (loss) (3) | ||||||||||||||||
| Net income (loss) | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ||||||
| (1) | ||
| (2) | ||
| (3) |
| (13) | Recent Accounting Pronouncements |
AccountingPronouncements Issued Not Yet Adopted
InNovember 2024, the FASB issued Accounting Standards Update (“ASU”) 2024-03, Income Statement – Reporting ComprehensiveIncome – Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses (“ASU 2024-03”).This guidance requires the disaggregation of certain expense captions into specified categories in disclosures within the notes of thefinancial statements to provide enhanced transparency into the expense captions presented on the statement of earnings. It is effectivefor annual reporting periods beginning after December 15, 2026, and interim periods beginning after December 15, 2027, with early adoptionpermitted. Adoption may be applied either prospectively to financial statements issued for reporting periods after the effective dateof ASU 2024-03 or retrospectively to any or all prior periods presented in financial statements.
TheCompany is evaluating the impact of this guidance on the Company’s related disclosures.
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ITEM2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Thefollowing discussion of our financial condition and results of operations should be read in conjunction with our unaudited condensedconsolidated financial statements and the related notes thereto and other financial information included elsewhere in this report. Foradditional context with which to understand our financial condition and results of operations, see management’s discussion andanalysis of financial condition and results of operations included in our annual report on Form 10-K for the year ended December 31,2024, filed with the SEC on March 13, 2025 (the “2024 Form 10-K”), our first quarter report on Form 10-Q filed with the SECon May 8, 2025, as well as the financial statements and related notes contained therein.
Asused in the discussion below, “we,” “our,” and “us” refers to Lipocine.
Forward-LookingStatements
Thissection and other parts of this report contain forward-looking statements within the meaning of Section 27A of the Securities Act of1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “ExchangeAct”), that involve risks and uncertainties. Forward-looking statements provide current expectations of future events based oncertain assumptions and include any statement that does not directly relate to any historical or current fact. Forward-looking statementsmay refer to such matters as products, product benefits, pre-clinical and clinical development timelines, clinical and regulatory expectationsand plans, expected responses to regulatory actions, anticipated financial performance, future revenues or earnings, business prospects,projected ventures, new products and services, anticipated market performance, expected research and development and other expenses,future expectations for liquidity and capital resources needs and similar matters. Such words as “may,” “will,”“expect,” “continue,” “estimate,” “project,” and “intend” and similar termsand expressions are intended to identify forward looking statements. Forward-looking statements are not guarantees of future performanceand our actual results may differ significantly from the results discussed in the forward-looking statements. Factors that might causesuch differences include, but are not limited to, those discussed in Part I, Item 1A (Risk Factors) of our 2024 Form 10-K and Item 1Aof our Form 10-Q for the quarter ended March 31, 2025 filed with the SEC on May 8, 2025. Except as required by applicable law, we assumeno obligation to revise or update any forward-looking statements for any reason.
Overviewof Our Business
Weare a biopharmaceutical company focused on leveraging our proprietary Lip’ral platform to develop differentiated products throughthe oral delivery of previously difficult to deliver molecules. Our proprietary delivery technologies are designed to improve patientcompliance and safety through orally available treatment options. Our primary development programs are based on oral delivery solutionsfor poorly bioavailable drugs. We have a portfolio of differentiated innovative product candidates that target high unmet needs for neurologicaland psychiatric CNS disorders, liver diseases, and hormone supplementation for men and women.
Weentered into our first license agreement for the development and commercialization of our product, TLANDO®, an oral testosteronereplacement therapy comprised of testosterone undecanoate in October 2021. On March 28, 2022, the FDA approved TLANDO as a testosteronereplacement therapy (“TRT”) in adult males for conditions associated with a deficiency of endogenous testosterone, also knownas hypogonadism and on June 7, 2022, our former commercial partner Antares (a wholly owned subsidiary of Halozyme) announced the commerciallaunch of TLANDO.
OnJanuary 12, 2024, we entered into the Verity License Agreement with Verity Pharma, pursuant to which we granted to Verity Pharma an exclusive,royalty-bearing, sublicensable right and license to develop and commercialize the TLANDO product for TRT in the Licensed Verity Territory.Any FDA post-marketing studies required will also be the responsibility of our licensee, Verity Pharma.
InSeptember 2024, we entered into the SPC License Agreement for the development and commercialization of TLANDO with SPC, pursuant to whichthe Company granted to SPC a non-transferable, exclusive, royalty-bearing license to commercialize our TLANDO product for TRT in theSPC Territory. In October 2024, we entered into the Pharmalink Distribution Agreement with Pharmalink, granting a non-transferable, exclusive,license to commercialize our TLANDO product specific to the GCC, including Saudi Arabia, Kuwait, UAE, Qatar, Bahrain, and Oman (the “PharmalinkTerritory”). In April 2025, we entered into the Aché License Agreement with Aché pursuant to which we granted toAché an exclusive license to commercialize our TLANDO product with respect to the Field, specific to the Aché Territory.Our ex-U.S. commercialization partners are planning to file marketing approval applications in Canada, one or more of the GCC countries,South Korea and Brazil in 2025 and/or 2026.
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Additionalclinical development pipeline candidates include: LPCN 1154 for postpartum depression (“PPD”); LPCN 2401 for improvedbody composition in GLP-1 agonist use such as obesity management; LPCN 2101 for epilepsy; and LPCN 2203 for essential tremor. Inaddition to our clinical development product candidates, we have assets for which we expect to seek partnerships to enable furtherdevelopment including TLANDO for territories outside of the United States, Canada, South Korea, the GCC and Brazil, LPCN 1148comprising a novel prodrug of testosterone and testosterone laurate (“TL”), for the management of decompensatedcirrhosis, LPCN 1144, an oral prodrug of androgen receptor modulator for the treatment of non-cirrhotic metabolicdysfunction-associated steatohepatitis (“MASH”) which has completed Phase 2 testing; and LPCN 1107, potentially thefirst 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 drugdesignation by the FDA.
Thefollowing chart summarizes the status of our product candidate development and partnering programs:
CorporateStrategy
Thekey components of our corporate strategy are to:
Continueto leverage our drug delivery technology platform. Our goal is to become a leading biopharmaceutical company focused on leveragingour Lip’ral drug delivery technology platform to develop and register differentiated products to treat conditions with large unmetmedical need through effective oral drug delivery. Our pipeline candidates are based on our Lip’ral drug delivery technology platform,validated through TLANDO, an approved commercial product. Lip’ral technology entails lipidic compositions which form an optimaldispersed phase in the gastrointestinal environment for improved absorption of highly water insoluble drugs. The drug loaded dispersedphase presents the drug efficiently at the absorption site (gastrointestinal tract membrane) thus improving or enabling portal and /or lymphatic absorption post oral administration.
AdvanceLPCN 1154 and other CNS product candidates. We intend to focus on the development of endogenous neuroactive steroids (“NASs”)which have broad applicability in treating various CNS conditions where we can leverage our technology platform to develop highly differentiatedoral therapeutics. Our priority is on the development of LPCN 1154, a fast-acting oral antidepressant for postpartum depression (“PPD”)with potential for outpatient use.
Supportour partners, Verity Pharma, SPC, Pharmalink, and Aché, in commercialization and/or development of our licensed oral TRT option.We believe the TRT market needs a differentiated, convenient oral option. We have exclusively licensed rights to TLANDO to VerityPharma for commercialization of TLANDO in the Licensed Verity Territory, to SPC for commercialization in the SPC Territory, to Pharmalinkthe Pharmalink Territory and to Aché in the Aché Territory. We plan to support Verity Pharma’s, SPC’s, Pharmalink’s,and Aché’s efforts to effectively enable the availability of TLANDO to patients in a timely manner, in addition to receivingmilestone and royalty payments associated with TLANDO commercialization as agreed to in the Verity License Agreement, the SPC LicenseAgreement, the Pharmalink Distribution Agreement and the Aché License Agreement.
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Developpartnership(s) to continue the advancement of pipeline assets. We continuously strive to prioritize our resources in seeking partnershipsfor our pipeline assets. We are currently exploring partnerships for our liver programs including LPCN 1144, our candidate for treatmentof non-cirrhotic MASH and LPCN 1148 for the management of decompensated cirrhosis including prevention of the recurrence of overt hepaticencephalopathy (“OHE”), and we are also exploring partnerships for LPCN 2401 for management of incretin mimetics use as an adjunct therapy to or as a monotherapy post cessation of incretin mimetics use and LPCN 1107, our candidatefor 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 of the Licensed Verity Territory, the SPC Territory, the Pharmalink Territory and the Aché Territory,although as of the date of this report, no licensing agreement has been entered into by the Company in any other territories.
OurPipeline Product Candidates
Ourpipeline of clinical development candidates includes LPCN 1154 for PPD, LPCN 2401 as an aid for improved body composition andfunctionality in the management of GLP-1 agonist use in obese patients, LPCN 2101 for epilepsy, and LPCN 2203 for essential tremor.We will continue to explore other product development candidates targeting CNS indications with a significant unmet need. We willalso continue efforts to enter into partnership arrangements for the continued development and/or marketing of all of our productsincluding but not limited to LPCN 1144, LPCN 1148, LPCN 2401, and LPCN 1107 as well as for the TRT assets outside of the LicensedVerity Territory, the SPC Territory, and the Pharmalink Territory.
TRTFranchise – TLANDO and LPCN 1111 (TLANDO XR)
TLANDO:An Oral Product for Testosterone Replacement Therapy
Aspreviously described, under the Verity License Agreement, in January 2024, we granted to Verity Pharma an exclusive,royalty-bearing, sublicensable right and license to develop and commercialize TLANDO, our product for TRT, in the U.S. and Canadaeffective February 1, 2024. TLANDO received FDA approval on March 28, 2022. Any FDA requirement to conduct certain post-marketingstudies will be the responsibility of Verity Pharma. Further, all future development and commercialization of LPCN 1111 in theLicensed Verity Territory will be the responsibility of Verity Pharma. In addition, in September 2024, we granted SPC an exclusive,royalty-bearing license to commercialize TLANDO in South Korea and in October 2024 we granted Pharmalink an exclusive license tocommercialize TLANDO in the GCC countries. In April 2025, we granted Aché an exclusive license to commercialize and supplyTLANDO in Brazil.
Proof-of-conceptfor TLANDO was initially established in 2006, and TLANDO was subsequently licensed in 2009 to Solvay Pharmaceuticals, Inc., which wasthen acquired by Abbott Products, Inc. (“Abbott”). Following a portfolio review associated with the spin-off of AbbVie Inc.by Abbott in 2011, the rights to TLANDO were reacquired by us. All obligations under the prior license agreement have been completedexcept that Lipocine will owe Abbott a perpetual 1% royalty on net sales of TLANDO. Such royalties are limited to $1 million in the firsttwo calendar years following product launch, after which period there is no cap on royalties and no maximum aggregate amount. If genericversions of any such product are introduced, then royalties are reduced by 50%. TLANDO was commercially launched on June 7, 2022. Duringthe three months ended June 30, 2025 and 2024, we incurred royalty expense of approximately $10,000 and $7,000, respectively, and duringthe six months ended June 30, 2025 and 2024, we incurred royalty expense of approximately $18,000 and $16,000, respectively.
SinceTLANDO received full FDA approval, under the terms of the Verity License Agreement, Verity Pharma will need to assess the safety andeffectiveness of TLANDO in pediatric patients, as required by the Pediatric Research Equity Act. The FDA may also require certain post-marketingstudies to be conducted which will also be the responsibility of Verity Pharma. Similarly, SPC, Pharmalink, and Aché are responsiblefor obtaining any regulatory/marketing approvals for TLANDO required for the SPC Territory, the Pharmalink Territory, and the AchéTerritory, respectively.
Uponexecution of the Verity License Agreement, Verity Pharma paid us an initial payment of $2.5 million which was received on signing ofthe License Agreement and $5 million which was received on February 1, 2024. Verity Pharma also paid an additional payment of $2.5 millionto us on December 30, 2024, and is required to make an additional payment of $1 million to us before January 1, 2026. We are also eligibleto receive milestone payments of up to $259 million in the aggregate, depending on the achievement of certain sales milestones in a singlecalendar year and/or development milestones with respect to products licensed by Verity Pharma under the Verity License Agreement. Inaddition, we will receive tiered royalty payments at rates ranging from 12% up to 18% of net sales of all products licensed under theVerity License Agreement in the Licensed Verity Territory.
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SPCpaid us a non-refundable, non-creditable upfront fee in October 2024. We also received additional payments including a non-refundablepayment in consideration for TLANDO product inventory, and we are eligible to receive additional payments for marketing authorizationand sales milestones, and we will supply TLANDO to SPC and receive a supply price. In addition, we will receive royalties on net salesin South Korea under the SPC License Agreement.
Uponexecution of the Pharmalink Distribution Agreement, Pharmalink paid us a non-refundable, non-creditable upfront fee in October 2024.Under the Pharmalink Distribution Agreement, we could receive additional payments in regulatory authorization milestones and we willsupply TLANDO to Pharmalink at an agreed transfer price.
Uponexecution of the Aché License Agreement, Aché paid us a non-refundable, non-creditable upfront fee in May 2025. Under theAché License Agreement, we may receive additional payments in regulatory authorization milestones, royalties on net sales andwill supply TLANDO to Aché at an agreed transfer price.
Weare exploring the possibility of licensing LPCN 1021 (known as TLANDO in the United States) to third parties outside the United States,Canada, South Korea, the GCC countries and Brazil, although no licensing agreement has been entered into by the Company in any otherterritories. If and when an agreement is made with a partner, the success of any such arrangement would likely be partially contingentupon obtaining local regulatory approval. No assurance can be given that any license agreement will be completed or, if an agreementis completed, that such an agreement would be on terms favorable to us.
OralPrograms for CNS Disorders
Somepreferred endogenous or naturally occurring NAS present in the central nervous system act as positive allosteric modulators (“PAMs”)of the GABAA receptor, the major biological target of the inhibitory neurotransmitter γ-aminobutyric acid (“GABAA”).To improve oral delivery of these modulators, several synthetic NAS derivatives of endogenous GABAA receptor PAMs have beendeveloped for therapeutic use in the past few decades.
InOctober 2024, we announced positive data from our qEEG study of our oral brexanolone with results indicating robust central nervous systemactivity of oral brexanolone, with concentration- and time-dependent post-dose changes in qEEG as follows:
| ● | Quantitative Electroencephalogram (“qEEG”) in healthy subjects administered single doses of oral brexanolone, a neuroactive steroid, confirmed GABAA modulation | |
| ● | Rapid and durable CNS target engagement confirms effective oral delivery of bioidentical brexanolone | |
| ● | Promising results support continued development of oral brexanolone for the treatment of neuropsychiatric disorders |
Webelieve through utilization of our proprietary technology we may have the ability to enable effective oral delivery of endogenous GABAAreceptor PAMs which historically had been deemed to be not orally bioavailable. As a novel drug class, NASs have received considerableattention because of their potential to treat various neuropsychiatric conditions including depression, movement disorders, epilepsy,anxiety, and neurodegenerative diseases. We have conducted Phase 1 pharmacokinetic (“PK”) studies for each of our three leadNAS candidates which have demonstrated promising PK results, safety, and tolerability and we are evaluating additional undisclosed CNS-focusedcandidates.
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LPCN1154: Product Candidate for PPD
Ourmost advanced NAS candidate is LPCN 1154, a non-invasive, rapid onset, oral formulation of the neuroactive steroid brexanolone whichwe are developing for the treatment of PPD. We have completed clinical oral PK studies including a pilot food effect study and a pilotPK bridge study. In addition, as a prelude to a LPCN 1154 definitive PK bridge study, a multi-dose study was done confirming the dosingregimen for the PK bridge study using the scaled up “to be marketed” formulation required for New Drug Application (“NDA”)filing. In June 2024, we announced results from the definitive PK study which demonstrated LPCN 1154 meets bioequivalence with comparator,IV brexanolone, meeting standard bioequivalence criteria and Ctrough criteria. LPCN 1154 treatment was well-tolerated withno sedation nor somnolence events observed in the definitive study.
Aftercompleting PK studies and labeling studies such as a food effect study and PK profiling in women with PPD, we met with the FDA inthe first quarter of 2025. In the meeting, we were advised that the FDA believes, in addition to the previously completed PK bridgedata, an efficacy and safety study of oral LPCN 1154 in the target population will be required for 505(b)(2) NDA submission. Basedon observed comparable exposure of LPCN 1154 and the reference drug in the PK bridge study, we have confirmed the target dosing regimen andinitiated a phase 3 safety and efficacy study and successfully dosed LPCN 1154 in the first patient in the second quarter of2025.
Weare exploring the possibility of partnering with a third party for the development and/or marketing of LPCN 1154, although no partneringagreement has been entered into by the Company. No assurance can be given that any partnering agreement will be completed, or, if anagreement is completed, that such an agreement would be on terms favorable to us.
PPD
PPD,a type of major depressive disorder with onset either during pregnancy or within four weeks of delivery, refers to depression persistingup to 12 months after childbirth. PPD can be clinically segmented by the severity of symptoms and presence of a comorbidity, includingepilepsy. Approximately 1 in 8 mothers suffers from PPD in the United States alone; this equates to approximately 600,000 women beingaffected by PPD annually.
DiseaseOverview - PPD
| ● | PPD is distinct from the “baby blues,” a condition that up to 70% of all new mother’s experience; “baby blues” tend to be short-lived emotional conditions that do not interfere with daily activities. | |
| ● | Symptoms 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. | |
| ● | During pregnancy, levels of endogenous NASs 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 approved treatment option for PPD was an injectable containing endogenous NASs. | |
| ● | Depression may persist long after child delivery. Additionally, approximately 40% of women relapse in subsequent pregnancies or on other occasions. | |
| ● | Psychiatric comorbidities are common in patients with epilepsy. Patients with epilepsy are at high risk for major depressive disorders and PPD. Reported PPD rates are higher among women with epilepsy than the general population. |
AssociatedRisk Factors
| ● | Genetic: family history and/or previous experience of depression or other mood disorders | |
| ● | Physiological: rapid changes in sex hormones, stress hormones, and thyroid hormone levels during and after delivery | |
| ● | Environmental: stressful life events, changes in relationships at home and at work, and/or lack of familial support |
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UnmetMedical Need
Webelieve there is considerable unmet need within women with PPD due to a lack of convenient and fast-acting oral therapies. SelectiveSerotonin Reuptake Inhibitors (“SSRIs”) have been the traditional first-line choice for women with severe PPD and requireweeks for onset of efficacy; therefore, a need for an oral treatment option with a faster onset of action remains a significant unmetneed in treating PPD, especially in mothers with moderate to severe depression prone to harmful actions.
Injectablebrexanolone (Zulresso®, Sage Therapeutics (“Sage”)) became the first FDA-approved treatment for postpartumdepression. However, numerous factors limited the utilization of injectable brexanolone such as method of administration, cost, and safetyconcerns and at the end of 2024, Sage withdrew Zulresso from the market. In addition to Zulresso, Sage received FDA approval forzuranolone (brand name ZURZUVAE®) in August 2023 and Zurzuvae was launched commercially in December 2023. Zuranolone,a synthetic neuroactive steroid derivative, is an oral, once daily 14-day treatment for postpartum depression and is the first oral medicationapproved by the FDA for the treatment of postpartum depression. Per label, besides a long terminal half-life of approximately 19.7 to24.6 hours and dosage modifications needed for concomitant use with CYP3A4 modulators, warnings and precautions include CNS depressanteffects, impaired ability to drive or engage in other potentially hazardous activities and embryo-fetal toxicity. In June 2025, Sage announced the acquisition of Sage by Supernus Pharmaceuticals and Supernus’ intention tostrengthen their leading presence in neuropsychiatric conditions with Sage’s innovative commercial product, ZURZUVAE. The transaction,which has been approved by the boards of directors of both companies, is expected to close in the third quarter of 2025, subject to customaryclosing conditions.
Webelieve LPCN 1154 targets the current unmet need for robust, rapid relief with 48-hour dosing duration through a convenient oral therapycandidate comprising bioidentical NASs with good tolerability.
LPCN2101: NAS for Epilepsy
Weare currently evaluating an additional NAS candidate, LPCN 2101, for epilepsy including women with epilepsy (“WWE”). We havecompleted pre-clinical and Phase 1 studies for LPCN 2101 which demonstrated promising PK results, safety and tolerability. In July 2022our 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-conceptstudy to evaluate the safety, tolerability, and efficacy of LPCN 2101, subject to resource prioritization.
DiseaseOverview – Epilepsy
Epilepsyis defined by the 1) occurrence of at least two unprovoked seizures more than 24 hours apart, 2) occurrence of one unprovoked seizureand a probability of further seizures occurring over the next 10 years, and/or 3) diagnosis of an epilepsy syndrome. Patients with epilepsyhave increased risk of mortality due to direct effects of seizures (e.g., status epilepticus, car accidents) and indirect effects ofseizures (e.g., suicide, cardiovascular effects).
Epilepsyis a disorder of the brain that causes seizures, affecting the physical, mental, and social well-being of persons, and is associatedwith a 2 to 3 times greater mortality rate compared with the general population. About 60-65% of epilepsy is idiopathic and about 30%of patients are refractory (i.e., epilepsy not well managed with currently available Anti-Seizure Medications (“ASMs”). Epilepsyis the most common neurological disorder during pregnancy.
Itis estimated that approximately 900,000 childbearing (“CB”) aged women suffer from active epilepsy in the U.S. Women of CBage with epilepsy face many additional challenges due to hormonal influences on seizure activity and endocrine function throughout thedifferent 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 controlof seizures, efficacy of oral contraceptives, any coexisting anxiety and/or depression and any associated sleep impairment. Epilepticpatients are 5-20 times more likely to develop depression.
Clinicalsegmentation can be categorized by epilepsy type, comorbidities and patient subgroups. Categorization of focal epilepsy, generalizedepilepsy, combined focal and generalized epilepsy, and unknown epilepsy can guide the choice of ASM. Special patient subgroups, includingWWE of CB age and elderly patients, require special care and management of epilepsy. Comorbidities such as depression and anxiety maybe co-treated with therapies that do not aggravate seizures and have no drug interaction with the ASM used for epilepsy. While lowesteffective dose and monotherapy are preferred, management of patients with epilepsy is focused on controlling seizures, avoiding adverseevents, and maintaining quality of life. Despite a wide range of ASMs available, about 30% of all people with epilepsy still fail torespond to treatment effectively. Women with epilepsy face specific challenges throughout their lifespan because of seizures, ASMs, andhormonal fluctuations.
Womenwith epilepsy were once counseled to avoid pregnancy, but epilepsy is no longer considered a contraindication to pregnancy. Caregiversfor WWE in the preconception phase either intending to start a family (planning pregnancy) or using contraception to prevent an unplannedpregnancy face significant challenges to balance seizure control efficacy with the selection and dosage of ASMs and ASM-related riskssuch as, among other risks, fetal-neonatal toxicity, contraception failure, and psychiatric side effects.
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SeveralASMs are known to have teratogenic effects on the developing fetus (converging evidence from registry studies indicates that teratogenicrisks are highest with valproate, followed by carbamazepine and topiramate). Other commonly prescribed ASMs, including older generationagents, such as phenobarbital and phenytoin, have been associated with higher risks as compared with lamotrigine, levetiracetam, clonazepamand gabapentin (Vajda et al., 2014; Voinescu and Pennell, 2015). Moreover, risks associated with ASMs are considerable early in pregnancy;therefore, it is necessary that WWE of CB age undergo counseling, monitoring, and adjustment to the most appropriate ASM prior to becomingpregnant. 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 thefetal toxicity of the ASM. Anxiety, depression, lack of adherence to ASM, and/or contraception failure may be experienced by women whoare worried about unplanned pregnancy or are late in confirming pregnancy, planned or unplanned. ASMs can reduce the efficacy of oralcontraceptives, compounding this problem.
Complex,multidirectional interactions between female hormones, seizures, and ASMs exist. Most hormones act as NASs and can thus modulate brainexcitability. Any changes in endogenous or exogenous hormone levels can affect the occurrence of seizures, either directly or via PKinteractions that modify the plasma levels of ASMs (Harden, 2008). The PK interactions between oral contraceptives and ASMs are bidirectional(Johnston and Crawford, 2014). The efficacy of hormonal contraception may be diminished for women taking CYP-P450 enzyme inducing ASMs.Epilepsy is not a medical condition in which contraceptives are contraindicated. Contraceptive failure, possibly related to ASMs, maybe 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.
Unmetneed to treat WWE in CB age
Itis estimated that approximately 900,000 CB aged women suffer from active epilepsy in the U.S. Women of CB age with epilepsy face manyadditional challenges such as hormonal influences on seizure activity and endocrine function throughout the different phases of theirreproductive cycles, and approximately 30% of patients with epilepsy cannot be efficiently controlled with available ASMs making considerationof newer pharmacological treatment development options important.
Managinguncontrolled seizures in WWE of CB age is the primary aim during preconception, pregnancy, and postpartum phases. Therefore, uncompromisedASM efficacy with acceptable variability and less or no drug-drug interactions achieved with lowest possible monotherapy dose to addressfetal toxicity concerns remain highly unmet needs. Moreover, control of seizures including prevention of breakthrough seizures is criticalwhen planning for pregnancy and also during pregnancy, as it can also lead to undesired falls or auto-accidents and compromise freedomto drive.
SelectASMs have the potential to induce contraception failures, reproductive hormone imbalance, anxiety, and depression. There remains an unmetneed for an ASM without the aforementioned downsides, with no to low fetal-neonatal toxicity and without breast-feeding concerns, aswell as the potential to treat associated comorbidities.
Whileover 30 molecules have been approved for the treatment of epilepsy in the U.S., no epilepsy drug has been specifically approved for WWEof CB age. We believe our endogenous NASs as GABAA PAMs, while targeting the goal of seizure control, also have the potentialfor additional benefits in psychiatric disorders comorbidities (e.g., anxiety and/or depression) and sleep impairment. Moreover, theseoral endogenous NASs could potentially address some of the fetal toxicity concerns related to unplanned or planned pregnancy in WWE.(1)
| (1) | Ref: S.Bangar et al. Functional Neurology 2016; 31(3): 127-134; Reimers et al. Seizure. 2015 May; 28: 66-70. |
LPCN2203: Oral Product for Management of Essential Tremor
LPCN2203 is an oral candidate for management of essential tremor comprising a bioidentical GABA modulating NAS. We have successfully completedoral pharmacokinetics with bioidentical GABA Modulating NAS and are planning to submit a protocol for a proof-of-concept phase 2 studyfor ET to the FDA.
DiseaseOverview - Essential Tremor
EssentialTremor (“ET”) is one of the most common movement disorders in the United States, affecting an estimated 7 million in theU.S. For ET patients, uncontrollable shaking of the hands, head, voice, or legs creates difficulty eating, dressing, writing, and pursuingother day-to-day tasks. The etiology of ET is largely unknown, but reduced GABAA receptor levels and decreased GABAergic activityhave been observed in ET.
WhileET is often associated with aging populations, ET can begin much earlier in life, with a progressive disease course that can eventuallynecessitate a care partner. Social anxiety and depressive symptoms can manifest in patients with ET as tremor severity increases, andmay negatively impact a patient’s ability to work and engage in hobbies. In an interview study of ET patients and care partners,the most common impacts on activities of daily living are pouring liquids and writing/typing (100%) and grooming/hygiene, drinking, dressing,eating, and reading (80-85%). Overall, 90% of participants noted the emotional impact of ET, with 75% reporting tremor-related worryor anxiety.
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Theonly FDA approved pharmacological treatment for ET was approved more than 50 years ago, and the majority of patients with ET experiencea sub-optimal response with standard-of-care treatments, highlighting numerous and compelling unmet needs in care such as daytime efficacyand improved tolerability, a PRN (pro re nata) or “as needed” option, and a superior benefit-to-risk profile.(1) (2)
| (1) | Ref: Louis ED, Ottman R. Tremor Other Kyperkinet Mov (NY). 2014;4:259. |
| (2) | Ref: Gerbasi et.al. Patient experiences in essential tremor: Mapping functional impacts to existing measures using qualitative research. MDS 2023. |
OtherPipeline Candidates
Wecontinue to pursue opportunities for partnering and/or development arrangements for the continued development and/or marketing of LPCN2401, LPCN 1148, LPCN 1144, and LPCN 1107. We are planning a POC study with LPCN 2401, but otherwise we do not currently anticipate conductingany further significant development activities with respect to these products and product candidates without the participation of a partner.There can be no guarantee that we will be able to identify or enter into partnering arrangements on terms that are beneficial to us orat all. Even if we do enter into partnering arrangements, such arrangements may not be sufficient to successfully develop and commercializethese products.
LPCN2401: Management of Incretin Mimetic Use in Obesity Management
LPCN2401 is targeted to be a once daily oral formulation comprising a proprietary anabolic androgen receptor agonist. LPCN 2401 isexpected to have a favorable benefit to risk profile as a non-invasive option for use as an adjunct to GLP-1 chronic weightmanagement therapies for quality weight loss and/or as a monotherapy post cessation of GLP-1 chronic weight management therapiesfor weight and glycemic status maintenance with demonstrated benefits to the liver.
LPCN2401 has potential for use as an adjunct to incretin mimetics (GLP-1/GIP agonists) including amplification of GLP-1 insulinotropic actionswhich is supported by studies demonstrating the role of androgen receptor agonist in regulation of GLP-1 through:
| ● | Enhancement of GLP-1-mediated insulin release from β cells through genomic- and non-genomic mechanisms | |
| ● | Increase in GLP-1 Receptor Expression in diabetics and non-diabetics | |
| ● | Promoting proliferation of β cells and improving insulin sensitivity |
Targetbenefits of LPCN 2401 in combination with GLP-1 agonists include inducing quality weight loss by attenuation of functionality lossthrough improved body composition, entailing majority of weight loss through fat mass loss, amplification/acceleration of fat massloss while lessening lean mass loss, a serious unmet need, especially for elderly and sarcopenic adult GLP-1 agonist users who aremost vulnerable to accelerated lean mass loss and functional decline. In a recent study with 16 weeks of GLP-1 agonist use forweight management in elderly (60 yr and above) patients, a rapid loss of lean mass was observed with a median percentage of totalbody weight loss that is due to lean mass of 32% in 16 weeks. In addition, 43% of GLP-1 users lost ≥10% Stair Climb Power frombaseline; the equivalent of almost eight years of expected age-related stair climb power loss was observed in just 4 months of GLP-1use.
Moreover,as an adjunct to incretin mimetics, LPCN 2401 may help maintain or increase weight loss, particularly in diabetics, through increasedexpression activity of GLP1R and increased effectiveness of GIP1 therapies secondary to actions at GLP1R (glucose lowering). LPCN 2401could also be potentially used as monotherapy post discontinuation of GLP-1 agonist to manage weight/fat regain and durability of diabetesremission.
Datafrom preclinical and clinical studies support the potential of LPCN 2401 and LPCN 2401+E in improving body composition. In April 2024,Lipocine announced results from a multi-center prospective, blinded Phase 2 study, which demonstrated increases in lean mass of 4.4%,decreases in fat mass of 6.7%, reduction in android fat of 4.1% and increased bone mineral content of 2.8% in a population consistentwith GLP-1 use for weight management. LPCN 2401 was well tolerated with minimal GI or androgenic adverse events and no reports of musclespasms.
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PerFDA Guidance (2025), for efficacy claims related to changes in body composition, trial design should include appropriate choice of populationand selection of endpoints that measure how a patient feels, functions, or survives, to potentially support such a claim. Consistentwith regulatory guidance, we plan to conduct a proof-of-concept phase 2 study for LPCN 2401 in elderly obese and overweight GLP-1 eligiblepatients, with appropriate body composition and functional end points such as stair climb performance measure
Weplan to initiate a proof-of-concept study evaluating LPCN 2401 as an adjunct to GLP-1 agonist use in the third quarter of 2025. Wemay explore the possibility of partnering LPCN 2401 with a third party, although no partnering agreement has been entered into byus. No assurance can be given that any license agreement will be completed, or, if an agreement is completed, that such an agreementwould be on terms favorable to us.
Diseaseand Market Overview – GLP-1 Agonist Use and Obesity Management
Approximately74% of U.S. adults aged 20 and older are either obese or overweight, and an estimated 30% of the U.S. adult population has a BMI ≥ 30kg/m2. Elderly and sarcopenic GLP-1 agonist users are the population of GLP-1 users who are most vulnerable to acceleratedlean mass loss and functional decline. Obesity is a chronic, relapsing health risk defined by excess body fat. Excess body fat increasesthe risk of death and major comorbidities such as type 2 diabetes, hypertension, dyslipidemia, cardiovascular disease, osteoarthritisof the knee, sleep apnea, and some cancers1. About 30% of overweight (BMI ≥ 25 kg/m2) adults 2 havetype 2 diabetes, 50%3 have dyslipidemia, and 67%4 have hypertension. In the US alone, ~34M older adults aged 60+years are obese (BMI at or above 30.0) and ~31M older adults aged 60+ years are overweight (BMI between 25.0 to 30).
Itis estimated that the total GLP-1 users in the U.S. may reach 30 million (around 9% of the overall population) by 20305.Reportedly, ~24M6 obese elderly are most vulnerable to losing muscle mass. The rapid weight loss observed with the currentlyapproved chronic weight management GLP-1 receptor agonist medications includes unwanted lean mass loss, up to 40% of the patient’stotal weight lost. Moreover, discontinuation of these therapies frequently results in a rapid regain in weight. Loss of lean mass hasmultiple negative health implications including weakness/fatigue, lowered metabolism which can cause a regain in fat mass, declines inneuromuscular function, potential effects on emotion and psychological states, and increased risk of injury.
Severalrecent studies showed that body composition, especially lean body mass (muscle) may play an independent role in survival of patientswith diseases such as cancer and cardiovascular diseases (DH Lee and EL Giovannucci, Exp Biol Med. 2018). Therefore, a focus on bodycomposition in obesity management to sustainably lose fat mass while maintaining lean mass should be an essential goal.
Thereis a significant unmet need for an oral, efficacious, muscle preserving/gaining option for chronic obesity/weight management that amelioratesthe loss of lean mass associated with GLP-1/GIP agonist treatment, resulting in a higher quality weight loss. Moreover, there is a needfor a chronic long-term pharmacotherapy option to maintain weight upon cessation of incretin mimetic therapy, prevent fat/weight rebound“overshoot” and minimize lag in muscle recovery to prevent collateral fattening as well as improve the durability of anyachieved diabetes remission while on GLP-1.
| (1) | Ref: Caterson and Hubbard et al. 2004; Calle and Thun et al. 1999 | |
| (2) | https://news.harvard.edu/gazette/story/2012/03/the-big-setup/ | |
| (3) | https://www.ncbi.nlm.nih.gov/books/NBK305895/ | |
| (4) | https://pmc.ncbi.nlm.nih.gov/articles/PMC6316192/#sec3-nutrients-10-01976 | |
| (5) | https://www.jpmorgan.com/insights/global-research/current-events/obesity-drugs | |
| (6) | Ref: Flynn et al. Morgan Stanley, February 27, 2024 |
LPCN1148: Oral Product Candidate for the Management of Decompensated Cirrhosis
Westudied LPCN 1148 comprising testosterone laurate (“TL”) for the management of decompensated cirrhosis. We believe LPCN 1148targets unmet needs for cirrhosis subjects including improvement in the quality of life of patients while on the liver transplant waitinglist, prevention or reduction in the occurrence of new decompensation events such as OHE, and improvement in post liver transplant survival,including outcomes and costs. We are exploring the possibility of partnering with a third party for the development and/or marketingof LPCN 1148, although no partnering agreement has been entered into by the Company. No assurance can be given that any partnering agreementwill be completed, or, if an agreement is completed, that such an agreement would be on terms favorable to us.
Weconducted a Phase 2 proof of concept (“POC”) study (NCT04874350) in male subjects with cirrhosis to evaluate the therapeuticpotential of LPCN 1148 for the management of sarcopenia. The Phase 2 POC study was a prospective, multi-center, randomized, placebo-controlledstudy in male sarcopenic cirrhotic patients. Subjects were initially randomized 1:1 to 1 of 2 arms.
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Thetreatment arm was an oral dose of LPCN 1148, and the second arm was a matching placebo. There were no restrictions on patients with respectto background therapies, including current standard of care, diet or exercise. The primary endpoint was a change in skeletal muscle indexat week 24 with key secondary endpoints including change in liver frailty index, rates of breakthrough OHE, and number of waitlist events,including all-cause mortality. Total treatment was 52 weeks, with 24-week placebo-controlled treatment subjects receiving LPCN 1148 inthe 28-week open-label extension (“OLE”) phase of the study for the duration of the study through week 52.
InJuly 2023 we announced that the Phase 2 study met the study primary endpoint, increased skeletal muscle index (L3-SMI) relative to placebo(P<.01), in patients with cirrhosis. The study also demonstrated improvements in clinical outcomes such as prevention of new decompensationevents including OHE, rates of hospitalizations, and patient reported outcomes (“PROs”). LPCN 1148 was well-tolerated, withadverse event (“AE”) rates and severities similar to placebo and no mortality was noted in the LPCN 1148 treatment group,nor were there any cases of drug-induced liver injury.
InMarch 2024 we announced that 24-week L3-SMI increases were maintained through 52 weeks of LPCN 1148 intervention and that placebo patientswho switched to LPCN 1148 in the open label extension period of the study had increases in L3-SMI. Furthermore, fewer OHE events wereobserved in LPCN 1148 treated patients and time to first recurrent OHE event was longer for treated patients. LPCN 1148 was well-tolerated,with AE rates and severities similar to placebo and fewer participants experienced serious or severe adverse events when switched fromplacebo to LPCN 1148 and patients on therapy were hospitalized for fewer days. We plan to request a Type C meeting with the FDA to discussthe clinical development plan for LPCN 1148.
DiseaseOverview – Cirrhosis
Annually,cirrhosis has caused more than 1 million deaths worldwide, and there are over 500,000 people living with decompensated cirrhosis inthe U.S. Non-alcoholic fatty liver disease is the most rapidly increasing indication for liver transplant. 62% of those on the livertransplant (“LT”) waitlist are male and the economic burden (approximately $812,500/transplant) is high and continues toincrease. Each year about half of the approximately 17,000 people in U.S. on the LT waitlist undergo transplant, while nearly 3,000patients either die or are removed from the list because they were “too sick to transplant.”
Livercirrhosis is defined as the histological development of regenerative nodules surrounded by fibrous bands. Patients with cirrhosis typicallyhave a year-long silent, asymptomatic phase (compensated cirrhosis) until decreasing liver function and increasing portal pressure movethe patient into the symptomatic phase (decompensated cirrhosis). Transition to decompensated cirrhosis is marked by clinical eventsincluding ascites, encephalopathy, jaundice, and/or variceal hemorrhage. Decompensated subjects survive on average less than 2 years.Common causes of liver cirrhosis include alcoholic liver disease, non-alcoholic fatty liver disease (“NAFLD”), chronic hepatitisB and C, primary biliary cirrhosis, and primary sclerosing cholangitis and some patients have liver disease of unknown cause (cryptogenic).
Commoncomplications in patients with cirrhosis may include: compromised liver function, portal hypertension, varices in GI tract with internalbleeding, edema, ascites, hepatic encephalopathy (“HE”), compromised immunity with post-transplant acute rejection risk,high sodium levels, increased bilirubin, low albumin level, insulin resistance with impaired peripheral uptake of glucose, depression,accelerated muscle disorder in the form of sarcopenia, myosteatosis, and frailty with compromised energetics, bone diseases (e.g., osteoporosis),high alkaline phosphatase, cachexia, malnutrition, weight loss (>5%), symptoms of hypogonadism such as abnormal hair distribution,anemia, sexual dysfunction, testicular atrophy, muscle wasting, fatigue, osteoporosis, gynecomastia, inflammation with elevated cytokines,and infection risk leading to hospital admissions and possibly death.
HE,a significant decompensation event in patients with cirrhosis, is a brain dysfunction caused by liver insufficiency and/or portal systemicshunting. Because the damaged liver cannot function normally (as in cirrhosis), neurotoxins such as ammonia are inadequately removedfrom systemic circulation and travel to the brain, where they affect neurotransmission. This can cause episodes of HE, which may presentas alterations in consciousness, cognition, and behavior that range from minimal to severe. Overt HE occurs in 30% to 40% of patientswith cirrhosis at some point during the clinical course of their disease. As the burden of chronic liver disease and cirrhosis is increasing,the frequency of HE is also increasing.
LPCN1144: An Oral Prodrug of Bioidentical Testosterone Product Candidate for the Treatment of MASH
Weare exploring the possibility of partnering with a third party for LPCN 1144, although no partnering agreement has been entered intoby the Company. No assurance can be given that any license agreement will be completed, or, if an agreement is completed, that such anagreement would be on terms favorable to us.
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DiseaseOverview – MASH
MASHis an advanced state of non-alcoholic fatty liver disease (“NAFLD”) that can progress to a cirrhotic liver or liver failure,require liver transplant, and can result in hepatocellular carcinoma/ liver cancer, and death. Progression of MASH to end stage liverdisease is one of the leading causes of liver failure requiring liver transplantation. Importantly, beyond these critical conditions,MASH and NAFLD patients additionally suffer heightened cardiovascular risk and die more frequently from cardiovascular events than fromliver disease. NAFLD/MASH is becoming more common due to its strong correlation with obesity and metabolic syndrome, including componentsof metabolic syndrome such as diabetes, cardiovascular disease and high blood pressure. 20% to 30% of the U.S. population is estimatedto suffer from NAFLD, with a large proportion of that group, 15% to 20%, progressing to MASH, which lacks an effective therapy. MASHis a silent killer that affects millions in the U.S. Diagnoses have been on the rise and are expected to increase dramatically in thenext decade. Approximately 50% of MASH patients are adult males. In men, especially with comorbidities associated with NAFLD/MASH, testosteronedeficiency has been associated with an increased accumulation of visceral adipose tissue and insulin resistance, which could be factorscontributing to NAFLD/MASH. There is currently no approved therapy for the treatment of MASH although there are several drug candidatescurrently under development with many having clinical failures to date.
Thecritical pathophysiologic mechanisms underlying the development and progression of MASH include reduced ability to handle lipids, increasedinsulin resistance, injury to hepatocytes and liver fibrosis in response to hepatocyte injury. MASH patients have an excessive accumulationof fat in the liver resulting primarily from a caloric intake above and beyond energy needs. A healthy liver contains less than 5% fat,but a liver in someone with MASH can contain more than 20% fat. This abnormal liver fat contributes to the progression to MASH, a livernecro-inflammatory state that can lead to scarring, also known as fibrosis, and, for some, can progress to cirrhosis and liver failure.
CurrentStatus
Wehave completed the LiFT Phase 2 clinical study in biopsy-confirmed non-cirrhotic MASH subjects. The LiFT clinical studywas a prospective, multi-center, randomized, double-blind, placebo-controlled multiple-arm study in biopsy-confirmed hypogonadal andeugonadal male MASH subjects with grade F1-F3 fibrosis and a target NAFLD Activity Score ≥ 4 with a 36-week treatment period. TheLiFT clinical study enrolled 56 biopsy confirmed MASH male subjects. Subjects were randomized 1:1:1 to one of three arms (TreatmentA was a twice daily oral dose of 142 mg testosterone equivalent, Treatment B was a twice daily oral dose of 142 mg testosterone equivalentformulated with 217 mg of d-alpha tocopherol equivalent, and the third arm was a twice daily matching placebo).
Theprimary endpoint of the LiFT clinical study was change in hepatic fat fraction via MRI-PDFF and exploratory liver fat/marker endpoints post 12 weeks of treatment. Additionally, key secondary endpoints post 36 weeks of treatment included assessment of histologicalchange for MASH resolution and/or fibrosis improvement (biopsy) as well as liver fat data (MRI-PDFF). The LiFT clinical studywas not powered to assess statistical significance of any of the secondary endpoints. Other important endpoints included the following:change in liver injury markers, anthropomorphic measurements, body composition including lean mass, fat mass, and bone mineral density,lipids, insulin resistance and inflammatory/fibrosis markers; as well as PROs.
Treatmentswith LPCN 1144 post 12 weeks of treatment in the LiFT study resulted in robust liver fat reduction, assessed by MRI-PDFF, andshowed improvement of liver injury markers with no observed tolerability issues.
Liverbiopsies were performed at baseline (“BL”) and after 36 weeks of treatment (“EOS”). Pre-specified biopsy analysesincluded MASH Clinical Research Network (“CRN”) scoring as well as a continuous paired and digital technique (“DigitalTechnique-Fibronest”). All biopsy analyses were performed on the same slides and the reads for the three techniques were done independently.Analysis sets included the MASH Resolution Set (all subjects that have BL and EOS biopsy with MASH at BL [NAS ≥4 with lobular inflammationscore ≥ 1 and hepatocyte ballooning score ≥1 at BL] (n=37)), the Biopsy Set (all subjects with baseline and EOS biopsies (n=44)),and the Safety Set (all randomized subjects (n=56)).
BothLPCN 1144 treatment arms met with statistical significance the pre-specified accelerated approval regulatory endpoint of MASH resolutionwith no worsening of fibrosis based on MASH CRN scoring. Additionally, both treatment arms showed substantial improvement of the observedMASH activity in steatosis, inflammation, and ballooning.
Duringthe 36 weeks of treatment, LPCN 1144 was well tolerated with an overall safety profile comparable to placebo. Additionally, subjectswere given the option to have access to LPCN 1144 through an open label extension (“OLE”) study.
Theextension study enabled the collection of additional data on LPCN 1144 for up to a total of 72 weeks of therapy, as well as data for36 weeks of therapy for those subjects on placebo in the LiFT study. Key results from the OLE study are as follows:
| ● | 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; and | |
| ● | Observed liver histology improvements support further development. |
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InNovember 2021, the FDA granted Fast Track Designation to LPCN 1144 as a treatment for non-cirrhotic MASH. The Fast Track program is designedto accelerate the development and expedite the review of products, such as LPCN 1144, which are intended to treat serious diseases andfor which there is an unmet medical need.
Wehad a written only response from the FDA for a LPCN 1144 Type C meeting with the FDA in January 2022 to discuss the development pathforward with LPCN 1144. The FDA acknowledged that the NDA submission of LPCN 1144 would be via the 505(b)2 regulatory pathway and agreedthat no additional non-clinical studies are needed to support an NDA submission. The FDA acknowledged that subjects in the LiFT studyachieved improvements in key components associated with MASH histopathology after 36-weeks of treatment with LPCN 1144 in adult malesand agreed that the proposed multicomponent primary surrogate endpoint is acceptable for seeking approval under the accelerated approvalpathway. The FDA agreed that the proposed primary multicomponent surrogate endpoint, MASH resolution with no worsening of fibrosis, isacceptable for seeking approval under the accelerated approval pathway and the FDA recommended a Phase 3 trial with a study durationof 72 weeks. In July 2022, Lipocine held an End of Phase 2 meeting with the FDA for LPCN 1144 for MASH. The FDA recommended a Phase 2dose ranging study be conducted to identify the optimal dose prior to conducting a pivotal study. The FDA agreed to the proposed uniquetestosterone ester, testosterone laurate, for future clinical studies.
LPCN1107: An Oral Product Candidate for the Prevention of Preterm Birth (“PTB”)
Weare exploring the possibility of partnering with a third party for the development and/or marketing of LPCN 1107, although no partneringagreement has been entered into by us. No assurance can be given that any partnering agreement will be completed, or, if an agreementis completed, that such an agreement would be on terms favorable to us.
Webelieve LPCN 1107 has the potential to become the first oral hydroxyprogesterone caproate (“HPC”) product indicated for thereduction of risk of PTB (delivery less than 37 weeks) in women with singleton pregnancy who have a history of singleton spontaneousPTB. Prevention of PTB is a significant unmet need as approximately 11% of all U.S. pregnancies result in PTB, a leading cause of neonatalmortality and morbidity.
CurrentStatus
Wehave completed a multi-dose PK dose selection study in pregnant women. The objective of the multi-dose PK selection study was to assessHPC blood levels in order to identify the appropriate LPCN 1107 Phase 3 dose. The multi-dose PK dose selection study was an open-label,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(Makena®). The study enrolled 12 healthy pregnant women (average age of 27 years) with a gestational age of approximately 16 to 19weeks. Subjects received three dose levels of LPCN 1107 (400 mg BID, 600 mg BID, or 800 mg BID) in a randomized, crossover manner duringthe first 3 treatment periods and then received 5 weekly injections of HPC during the fourth treatment period. During each of the LPCN1107 treatment periods, subjects received a single dose of LPCN 1107 on Day 1 followed by twice daily administration from Day 2 to Day8. 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 dosesthan for injectable HPC. Additionally, HPC levels as a function of daily dose were linear for the 3 LPCN 1107 doses. Also, unlike theinjectable HPC, steady state exposure was achieved for all 3 LPCN 1107 doses within 7 days.
Atraditional PK/PD based Phase 2 clinical study in the intended patient population is not expected to be required prior to entering intoPhase 3. Therefore, based on the results of our multi-dose PK study we had an End-of-Phase 2 meeting and subsequent guidance meetingswith the FDA to define a pivotal Phase 2b/3 development plan for LPCN 1107. We have completed a food effect study to characterize thedosing regimen for the pivotal study and we have submitted a pivotal clinical study protocol to the FDA.
TheFDA has granted orphan drug designation to LPCN 1107 based on a major contribution to patient care. Orphan designation qualifies Lipocinefor various development incentives, including tax credits for qualified clinical testing, and a waiver of the prescription drug userfee when we file our NDA.
RecentCompetition Update
OnOctober 5, 2020, the FDA’s Center for Drug Evaluation and Research (“CDER”) proposed that Makena be withdrawn fromthe market because the PROLONG trial failed to verify the clinical benefit of Makena and concluded that the available evidence does notshow Makena is effective for its approved use and on April 6, 2023, the FDA withdrew its approval of Makena and ordered the immediatewithdrawal of Makena and several approved generic versions of the drug, making it unlawful for the drug to be distributed in the U.S.The FDA stated that in light of the unmet need for a treatment for preventing preterm birth and improving neonatal outcomes, it is imperativethat the medical and scientific communities increase their efforts to find effective treatments and stated their hope that the decisionto withdraw Makena will help galvanize further research. 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 preventionof preterm birth.
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FinancialOperations Overview
Revenue
Todate, we have not generated any revenues from product sales and do not expect to do so until our FDA approved product receives regulatoryapproval outside the U.S. and Canada or until one of our product candidates receives approval from the FDA. Revenues to date have beengenerated substantially from license fees, royalty and milestone payments and research support from our licensees. Since our inceptionthrough June 30, 2025, we have generated $53.8 million in revenue under our various license and collaboration arrangements and from governmentgrants. We have entered into the Verity License Agreement, the SPC License Agreement, the Pharmalink Distribution Agreement, and theAché License Agreement with the potential for revenue from future milestones, royalties and/or product sales, but we may nevergenerate revenues from any of our clinical or preclinical development programs or licensed products as we may never succeed in obtainingregulatory approval or commercializing any of these product candidates.
Researchand Development Expenses
Researchand development expenses consist primarily of salaries, benefits, stock-based compensation and related personnel costs, fees paid toexternal service providers such as contract research organizations and contract manufacturing organizations, contractual obligationsfor 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 anddevelopment personnel to total direct labor hours for all personnel. We expense research and development expenses as incurred. Sinceour inception, we have spent approximately $157.8 million in research and development expenses through June 30, 2025.
Weexpect to continue to incur significant costs as we develop our other product candidates, including our CNS product candidates, as wellas the development of any future pipeline product candidates.
Ingeneral, 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:
| ● | the number of sites included in the trials; | |
| ● | the length of time required to enroll suitable subjects; | |
| ● | the duration of subject follow-ups; | |
| ● | the length of time required to collect, analyze and report trial results; | |
| ● | the cost, timing and outcome of regulatory review; and | |
| ● | potential changes by the FDA in clinical trial and NDA filing requirements. |
Futureresearch and development expenditures are subject to numerous uncertainties regarding timing and cost to completion, including, amongothers:
| ● | 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 products 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; and | |
| ● | the effect on our product development activities of actions taken by the FDA or other regulatory authorities. |
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Achange of outcome for any of these variables with respect to the development of our product development candidates could mean a substantialchange in the costs and timing associated with these efforts, could require us to raise additional capital, and may require us to reduceoperations.
Giventhe stage of clinical development and the significant risks and uncertainties inherent in the clinical development, manufacturing, andregulatory approval process, we are unable to estimate with any certainty the time or cost to complete the development of LPCN 1154,LPCN 2401, LPCN 2101, LPCN 2203, 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 notbe favorable. If we are successful in progressing LPCN 1154, LPCN 2401. LPCN 2101, LPCN 2203 or other future product candidates intolater stage development, we will require additional capital. The amount and timing of our future research and development expenses forthese product candidates will depend on the pre-clinical and clinical success of both our current development activities and potentialdevelopment of new product candidates, as well as ongoing assessments of the commercial potential of such activities. We will continueefforts to enter into partnership arrangements for the continued development and/or marketing of LPCN 1154, LPCN 1144, LPCN 1148, LPCN2401, LPCN 1107, for the development and commercialization of TLANDO outside of the United States, Canada, South Korea, the GCC countriesand Brazil, and LPCN 1111 outside of the United States and Canada.
Weexpect to continue to incur significant research and development expenses in the future as we complete on-going clinical studies, includingstudies for our CNS product candidates, including a Phase 3 study for LPCN 1154, and as we conduct future clinical studies, includingwhen and if we conduct Phase 2 clinical studies with LPCN 2401 or our development product candidates and when and if we conduct clinicalstudies for LPCN 2101 or LPCN 2203 and/or Phase 3 clinical studies with LPCN 1144, LPCN 1148, and LPCN 1107. We are also exploring thepossibility of licensing all of our product candidates, although we have not entered into a licensing agreement and no assurance canbe given that any license agreement will be completed, or, if an agreement is completed, that such agreement would be on terms favorableto us. If we are unable to raise additional capital or obtain non-dilutive financing, we may need to reduce research and developmentexpenses in order to extend our ability to continue as a going concern.
Generaland Administrative Expenses
Generaland administrative expenses consist primarily of salaries and related benefits, including stock-based compensation, and outside consultingservices related to our executive, finance, business development and administrative support functions. Other general and administrativeexpenses include rent and utilities, travel expenses, and professional fees for auditing, tax, legal, and various other services.
Generaland administrative expenses also include expenses for the cost of preparing, filling and prosecuting patent applications and maintaining,enforcing and defending intellectual property-related claims.
Weexpect that general and administrative expenses will increase in the future as we continue as a public company. These fees include legaland consulting fees, accounting and audit fees, director fees, directors’ and officers’ insurance premiums, fees for investorrelations services and enhanced business and accounting systems, litigation costs, professional fees and other costs. However, if weare unable to raise additional capital, we may need to reduce general and administrative expenses in order to extend our ability to continueas a going concern.
OtherIncome and Expense
Otherincome and expense consists primarily of interest income earned on our cash, cash equivalents and marketable investment securities andlosses on our warrant liability in 2024.
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Resultsof Operations
Comparisonof the Three Months Ended June 30, 2025 and 2024
Thefollowing table summarizes our results of operations for the three months ended June 30, 2025 and 2024:
Three Months Ended June 30, | ||||||||||||
| 2025 | 2024 | Variance | ||||||||||
| Revenue | $ | 622,849 | $ | 89,565 | $ | 533,284 | ||||||
| Research and development expenses | 2,136,769 | 1,874,721 | 262,048 | |||||||||
| General and administrative expenses | 890,433 | 1,507,412 | (616,979 | ) | ||||||||
| Interest and investment income | 198,637 | 308,845 | (110,208 | ) | ||||||||
| Unrealized loss on warrant liability | - | (84,430 | ) | 84,430 | ||||||||
| Income tax expense | - | (481 | ) | 481 | ||||||||
Revenue
Werecognized royalty revenue from TLANDO sales of $123,000 during the three months ended June 30, 2025, compared to royalty revenue of$90,000 during the three months ended June 30, 2024. License revenue of $500,000 and $0 was recognized in the three months ended June30, 2025, and 2024, respectively.
Researchand Development Expenses
Theincrease in research and development expenses during the three months ended June 30, 2025, as compared to the three months ended June30, 2024 consists of a $153,000 increase in costs related to the initiation of our LPCN 2401 clinical studies, an $81,000 increase inother research and development costs, and a $28,000 increase in personnel related costs.
Generaland Administrative Expenses
Thedecrease in general and administrative expenses during the three months ended June 30, 2025 as compared to the three months ended June30, 2024 primarily consists of a $350,000 decrease in business development fees and consulting expenses incurred in 2024, a $184,000decrease in legal fees, a $40,000 decrease in Delaware franchise tax as a result of the reduction in authorized common stock from 200,000,000down to 75,000,000 shares, a $25,000 decrease in other professional fees and general and administrative related costs, and an $18,000decrease in corporate insurance premiums.
Interestand Investment Income
Thedecrease in interest and investment income during the three months ended June 30, 2025 compared to interest and investment income duringthe three months ended June 30, 2024 was due to lower interest rates and lower cash and marketable investment securities balances in2025 as compared to 2024.
Gain(Loss) on Warrant Liability
Therewere no outstanding common stock warrants from the November 2019 Offering in 2025 as the liability was extinguished when the November2019 warrants expired in November 2024.
Werecorded a loss of approximately $84,000 on warrant liability during the three months ended June 30, 2024, related to the change in thefair value of outstanding common stock warrants issued in the November 2019 Offering. The loss in 2024 resulted from an increase in thefair value of warrants mainly due to a higher stock price at the end of the second quarter of 2024 compared to the stock price at theend of the first quarter of 2024. There were also no warrants exercised during the three months ended June 30, 2024. The warrants wereclassified as a liability due to a provision contained within the warrant agreement which allowed the warrant holder the option to electto receive an amount of cash equal to the value of the warrants as determined in accordance with the Black-Scholes option pricing modelwith certain defined assumptions upon a change of control.
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Comparisonof the Six Months Ended June 30, 2025 and 2024
Thefollowing table summarizes our results of operations for the six months ended June 30, 2025 and 2024:
Six Months Ended June 30, | ||||||||||||
| 2025 | 2024 | Variance | ||||||||||
| Revenue | $ | 716,713 | $ | 7,706,738 | $ | (6,990,025 | ) | |||||
| Research and development expenses | 3,198,341 | 4,693,646 | (1,495,305 | ) | ||||||||
| General and administrative expenses | 2,012,910 | 3,083,131 | (1,070,221 | ) | ||||||||
| Interest and investment income | 424,149 | 640,209 | (216,060 | ) | ||||||||
| Unrealized loss on warrant liability | - | (124,502 | ) | 124,502 | ||||||||
| Income tax expense | (200 | ) | (681 | ) | 481 | |||||||
Revenue
Werecognized revenue of $717,000 and $7.7 million during the six months ended June 30, 2025 and 2024, respectively. Revenue during thesix months ended June 30, 2025, consists of license revenue of $500,000 compared to license revenue of $7.5 million resulting from ourVerity Licensing Agreement during the same period in 2024. During the six months ended June 30, 2025, and 2024, we recognized royaltyrevenue from TLANDO sales of $217,000 and $207,000, respectively.
Researchand Development Expenses
Thedecrease in research and development expenses during the six months ended June 30, 2025, as compared to the six months ended June 30,2024 consists of a $1.6 million decrease resulting from lower costs related to our LPCN 1154 Phase III clinical study in 2025 as comparedto LPCN 1154 studies which occurred in 2024 and a $22,000 decrease in other research and development related costs and supplies in 2025,offset by a $126,000 increase in costs related to the initiation of our LPCN 2401 clinical studies and a $28,000 increase in personnelrelated costs.
Generaland Administrative Expenses
Thedecrease in general and administrative expenses during the six months ended June 30, 2025 as compared to the six months ended June 30,2024 primarily consists of a $512,000 decrease related to the one-time business development fees incurred in 2024 in conjunction withthe Verity License Agreement, a $410,000 decrease in other business development expense, a $110,000 decrease in legal fees, a $36,000decrease in corporate insurance premiums, and a $22,000 decrease in professional fees and other general and administrative costs, offsetby a $20,000 increase in personnel related costs.
Interestand Investment Income
Thedecrease in interest and investment income during the six months ended June 30, 2025 compared to interest and investment income duringthe six months ended June 30, 2024 was due to lower interest rates and lower cash and marketable investment securities balances in 2025as compared to 2024.
Gain(Loss) on Warrant Liability
Therewere no outstanding common stock warrants from the November 2019 Offering in 2025 as the liability had been extinguished when the November2019 warrants expired in November 2024.
Werecorded a loss of approximately $125,000 on warrant liability during the six months ended June 30, 2024, related to the change in thefair value of outstanding common stock warrants issued in the November 2019 Offering. The loss in 2024 resulted from an increase in thefair value of warrants mainly due to a higher stock price at the end of the second quarter of 2024 compared to the stock price at theend of the fourth quarter of 2023. No warrants were exercised during the six months ended June 30, 2024. The warrants were classifiedas a liability due to a provision contained within the warrant agreement which allowed the warrant holder the option to elect to receivean amount of cash equal to the value of the warrants as determined in accordance with the Black-Scholes option pricing model with certaindefined assumptions upon a change of control.
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Liquidityand Capital Resources
Sinceour inception, our operations have been primarily financed through sales of our equity securities, issuances of debt and payments receivedunder our license and collaboration arrangements. We have devoted our resources to funding research and development programs, includingdiscovery research, and preclinical and clinical development activities. We have incurred operating losses in most years since our inceptionand we expect to continue to incur operating losses into the foreseeable future as we advance the clinical development of LPCN 1154,LPCN 2401, LPCN 2101, LPCN 2203, and any other future product candidates, including continued research efforts.
Asof June 30, 2025, we had $17.9 million of unrestricted cash, cash equivalents and marketable investment securities compared to $21.6million at December 31, 2024.
InApril 2025, we entered into the Aché License and Supply Agreement with Aché pursuant to which we granted to Achéan exclusive license to commercialize our TLANDO® product with respect to the Field, specific to Brazil. Under the agreement, weare entitled to receive fees upon the achievement of certain regulatory milestones, royalties on net sales and will supply TLANDO toAché at an agreed transfer price.
InOctober 2024, we entered into the Pharmalink Distribution Agreement with Pharmalink, pursuant to which we granted to Pharmalink a non-transferable,exclusive, license to commercialize our TLANDO product in the Pharmalink Territory. Pharmalink paid us a one-time non-refundable, non-creditableupfront fee. We are eligible to receive additional payments in regulatory authorization milestones related to the marketing approvalin countries in the Pharmalink Territory under the Pharmalink Distribution Agreement and we have agreed to supply TLANDO to Pharmalinkat a specified transfer price.
InSeptember 2024, we entered into the SPC License Agreement with SPC, pursuant to which we granted to SPC a non-transferable, exclusive,royalty-bearing license to develop and commercialize our TLANDO product with respect to TRT in South Korea. Under the terms of the SPCLicense Agreement, SPC paid us a non-refundable, non-creditable upfront fee in October 2024. We also received a non-refundable paymentin consideration for certain TLANDO product inventory, and are eligible to receive additional payments upon the receipt of marketingauthorization and achievement of sales milestones, and we will supply TLANDO to SPC and receive a supply price. In addition, we willreceive royalties on net sales in the SPC Territory under the SPC License Agreement. Our ability to realize benefits from the SPC LicenseAgreement, including milestone, product sale and royalty payments, is subject to a number of risks. We may not realize milestone, productsale or royalty payments in anticipated amounts, or at all.
OnJanuary 12, 2024, we entered into the Verity License Agreement with Verity Pharma, pursuant to which we granted to Verity Pharma an exclusive,royalty-bearing, sublicensable right and license to develop and commercialize our TLANDO product with respect to TRT in the LicensedVerity Territory. Upon execution of the Verity License Agreement in January 2024 and upon transition of the commercialization of TLANDOfrom Antares to Verity Pharma in February 2024, Verity Pharma paid us initial payments of $2.5 million and $5 million, respectively.Verity Pharma also paid us of $2.5 million on December 30, 2024, has agreed to make additional payments to us of $1 million before January1, 2026. The Verity License Agreement also provides Verity Pharma with a license to develop and commercialize TLANDO XR (LPCN 1111),our potential next generation, once daily oral product candidate for testosterone replacement therapy comprised of TT in the U.S. andCanada. We are eligible to receive milestone payments of up to $259 million in the aggregate, depending on the achievement of certaindevelopment milestones and sales milestones in a single calendar year with respect to all products licensed by Verity Pharma under theVerity License Agreement. In addition, we receive tiered royalty payments at rates ranging from 12% up to 18% of net sales of all productslicensed to Verity Pharma in the Licensed Verity Territory. Our ability to realize benefits from the Verity License Agreement, includingmilestone and royalty payments, is subject to a number of risks. We may not realize milestone or royalty payments in anticipated amounts,or at all.
Previouslyon March 6, 2017, we entered into the Cantor Sales Agreement with Cantor under which we agreed to sell shares of our common stock, havingregistered up to $50.0 million for sale under the Cantor Sales Agreement. During the year ended December 31, 2024, we sold 32,110 sharesof our common stock under the Cantor Sales Agreement at a weighted-average sales price of $6.77 per share, resulting in net proceedsof approximately $209,000, which is net of approximately $8,000 in expenses. On April 24, 2024, we terminated the Cantor Sales Agreement.From the inception to the termination of the Cantor Sales Agreement, we sold, in aggregate, 996,821 shares of our common stock for $33.5million.
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OnApril 26, 2024, we entered into the A.G.P. Sales Agreement with A.G.P. pursuant to which we may issue and sell, from time to time, sharesof our common stock having an aggregate offering price of up to the amount we registered on an effective registration statement pursuantto which the offering is being made. We currently have registered up to $10,616,169 of shares of common stock for sale under the A.G.P.Sales Agreement, pursuant to the Form S-3, through A.G.P. as sales agent. A.G.P. may sell our common stock by any method permitted bylaw deemed to be an ATM offering as defined in Rule 415(a)(4) of the Securities Act, including sales made directly on or through theNasdaq Capital Market or any other existing trade market for our common stock, in negotiated transactions at market prices prevailingat the time of sale or at prices related to prevailing market prices, or any other method permitted by law. A.G.P. will use its commerciallyreasonable efforts consistent with its normal trading and sales practices and applicable law and regulations to sell shares under theA.G.P. Sales Agreement. We will pay A.G.P. 3.0% of the aggregate gross proceeds from each sale of shares under the A.G.P. Sales Agreement.In addition, we have also provided A.G.P. with customary indemnification rights.
Ourshares of common stock to be sold under the A.G.P. Sales Agreement will be sold and issued pursuant to the Form S-3, as amended, whichwas previously declared effective by the SEC, and the related prospectus and one or more prospectus supplements.
Weare not obligated to make any sales of our common stock under the A.G.P. Sales Agreement. The offering of common stock pursuant to theA.G.P. Sales Agreement will terminate upon the termination of the A.G.P. Sales Agreement as permitted therein. We and A.G.P. may eachterminate the A.G.P. Sales Agreement at any time upon ten days’ prior notice.
Duringthe three and six months ended June 30, 2025, we sold 23,739 shares of common stock at a weighted average price of $3.29 per share pursuantto the A.G.P. Sales Agreement for aggregate net proceeds of approximately $76,000, after paying commissions of approximately $2,000 toA.G.P, as sales agent.
Webelieve that our existing capital resources, together with interest thereon, will be sufficient to meet our projected operating requirementsthrough at least August 5, 2026, which include a Phase 3 clinical study for LPCN 1154 and a POC study for LPCN 2401, research and developmentactivities, and compliance with regulatory requirements. We have based this estimate on assumptions that may prove to be wrong, and wecould utilize our available capital resources sooner than we currently expect if additional activities are performed by us includingnew clinical studies for LPCN 2401, LPCN 2101, LPCN 2203, LPCN 1148, LPCN 1144, and/or LPCN 1107. While we believe we have sufficientliquidity and capital resources to fund our projected operating requirements through at least August 5, 2026, we will need to raise additionalcapital at some point through the equity or debt markets or through additional out-licensing activities, either before or after August5, 2026, to support our operations. If we are unsuccessful in raising additional capital as necessary, our ability to continue as a goingconcern will be limited. Further, our operating plan may change, and we may need additional funds to meet operational needs and capitalrequirements for product development, regulatory compliance and clinical trial activities sooner than planned. In addition, our capitalresources may be consumed more rapidly if we pursue additional clinical studies for LPCN 1154, LPCN 2401, LPCN 2101, LPCN 2203, LPCN1148, LPCN 1144, and/or LPCN 1107. Conversely, our capital resources could last longer if we reduce expenses, reduce the number of activitiescurrently contemplated under our operating plan or if we terminate, modify or suspend on-going clinical studies. We can raise capitalpursuant to the A.G.P. Sales Agreement but may choose not to issue common stock if our market price is too low to justify such salesin our discretion. There are numerous risks and uncertainties associated with the development and, subject to approval by the FDA, commercializationof our product candidates. There are numerous risks and uncertainties impacting our ability to enter into collaborations with third partiesto participate in the development and potential commercialization of our product candidates. We are unable to precisely estimate theamounts of increased capital outlays and operating expenditures associated with our anticipated or unanticipated clinical studies andongoing development efforts. All of these factors affect our need for additional capital resources. To fund future operations, we willneed 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, LPCN 2401, LPCN 2101, LPCN 2203, LPCN 1148, LPCN 1144, and LPCN 1107; | |
| ● | 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; and | |
| ● | the extent to which we grow significantly in the number of employees or the scope of our operations. |
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Fundingmay not be available to us on favorable terms, or at all. Also, market conditions may prevent us from accessing the debt and equity capitalmarkets, including sales of our common stock through the A.G.P. Sales Agreement. If we are unable to obtain adequate financing when needed,we may have to delay, reduce the scope of or suspend one or more of our clinical studies, research and development programs or, if anyof our product candidates receive approval from the FDA, commercialization efforts. We may seek to raise any necessary additional capitalthrough a combination of public or private equity offerings, including the Sales Agreement, debt financings, collaborations, strategicalliances, licensing arrangements and other marketing and distribution arrangements. These arrangements may not be available to us oravailable on terms favorable to us. To the extent that we raise additional capital through marketing and distribution arrangements, othercollaborations, strategic alliances or licensing arrangements with third parties, we may have to relinquish valuable rights to our productcandidates, future revenue streams, research programs or product candidates or grant licenses on terms that may not be favorable to us.If we do raise additional capital through public or private equity offerings, the ownership interest of our existing stockholders willbe diluted, and the terms of these securities may include liquidation or other preferences, warrants or other terms that adversely affectour stockholders’ rights or further complicate raising additional capital in the future. If we raise additional capital throughdebt financing, we may be subject to covenants limiting or restricting our ability to take specific actions, such as incurring additionaldebt, making capital expenditures or declaring dividends. If we are unable, for any reason, to raise needed capital, we will have toreduce costs, delay research and development programs, liquidate assets, dispose of rights, commercialize products or product candidatesearlier than planned or on less favorable terms than desired or reduce or cease operations.
Sourcesand Uses of Cash
Thefollowing table provides a summary of our cash flows for the six months ended June 30, 2025 and 2024:
| Six Months Ended June 30, | ||||||||
| 2025 | 2024 | |||||||
| Cash used in operating activities | $ | (3,855,491 | ) | $ | (90,258 | ) | ||
| Cash used in investing activities | 3,617,927 | 662,531 | ||||||
| Cash used in financing activities | 75,618 | 209,340 | ||||||
NetCash from Operating Activities
Duringthe six months ended June 30, 2025 and 2024, net cash used in operating activities was $3.9 million and $90,000, respectively.
Netcash used in operating activities during the six months ended June 30, 2025, was primarily attributable to cash required to support ongoingoperations, including research and development activities related to the commencement of our LPCN 1154 Phase III clinical trial, offsetby the licensing fee received. Net cash used in operating activities during the six months ended June 30, 2024, was primarily attributableto cash outlays to support ongoing operations, including research and development expenses and general and administrative expenses, offsetby the cash provided by the Verity License Agreement of $7.5 million.
NetCash from Investing Activities
Duringthe six months ended June 30, 2025 and 2024, net cash provided by investing activities was $3.6 million and $663,000, respectively.
Netcash provided by investing activities during the six months ended June 30, 2025 and 2024, was primarily the result of the maturitiesof marketable investments securities, net. There were no capital expenditures during either the six months ended June 30, 2025 or 2024.
NetCash from Financing Activities
Duringthe six months ended June 30, 2025 and 2024, net cash provided by financing activities was approximately $76,000 and $209,000, respectively.
Netcash provided by financing activities during the six months ended June 30, 2025 primarily resulted from the sale of 23,739 shares ofcommon stock at a weighted average price of $3.29 per share pursuant to the A.G.P. Sales Agreement. Net cash provided by financing activitiesduring the six months ended June 30, 2024, primarily resulted from the sale of 32,110 shares of common stock at a weighted average priceof $6.77 per share pursuant to the Cantor Sales Agreement.
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ContractualCommitments and Contingencies
PurchaseObligations
Weenter into contracts and issue purchase orders in the normal course of business with clinical research organizations for clinical trialsand clinical and commercial supply manufacturing and with vendors for pre-clinical research studies, research supplies and other servicesand products for operating purposes. These contracts generally provide for termination on notice and are cancellable obligations.
OperatingLeases
InAugust 2004, we entered into an agreement to lease our facility in Salt Lake City, Utah consisting of office and laboratory space whichserves as our corporate headquarters. On December 2, 2024, we modified and extended the lease through February 28, 2026.
CriticalAccounting Policies and Significant Judgments and Estimates
Ourmanagement’s discussion and analysis of our financial condition and results of operations is based on our financial statementswhich we have prepared in accordance with U.S. GAAP. In preparing our financial statements, we are required to make estimates and assumptionsthat affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financialstatements and the reported amounts of revenues and expenses during the reporting periods. Our estimates are based on our historicalexperience and on various other factors that we believe are reasonable under the circumstances, the results of which form the basis formaking judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual resultsmay differ from these estimates under different assumptions or conditions. We concluded that licensing revenue recognized in conjunctionwith the Verity License Agreement met the requirements under ASC 606, Revenue from Contracts with Customers. We evaluate the measureof progress each reporting period and, if necessary, adjust the measure of performance and related revenue recognition. License revenuefrom payments to be received in the future will be recognized when it is probable that we will receive license payments under the termsof the Verity License Agreement, the SPC License Agreement or the Pharmalink Distribution Agreement (see Footnote 7 – ContractualAgreements for disclosure regarding the SPC License Agreement and the Pharmalink Distribution Agreement).
Therehave been no significant and material changes in our critical accounting policies during the six months ended June 30, 2025, as comparedto those disclosed in “Management’s Discussion and Analysis of Financial Condition and Results of Operations-Critical AccountingPolicies and Significant Judgments and Estimates” in our 2024 Form 10-K.
| ITEM3. | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK |
Weare exposed to various market risks, which include potential losses arising from adverse changes in market rates and prices, such asinterest rates. We do not enter into derivatives or other financial instruments for trading or speculative purposes.
Therehave been no material changes to the Company’s market risk during the first six months of 2025. For a discussion of the Company’sexposure to market risk, refer to the Company’s market risk disclosures set forth in Part II, Item 7A, “Quantitative andQualitative Disclosures About Market Risk” of the 2024 Form 10-K.
| ITEM4. | CONTROLS AND PROCEDURES |
Evaluationof Disclosure Controls and Procedures
Wemaintain “disclosure controls and procedures” within the meaning of Rule 13a-15(e) of the Exchange Act. Our disclosure controlsand procedures, (“Disclosure Controls”) are designed to ensure that information required to be disclosed by us in the reportswe file or submit under the Exchange Act, such as this Quarterly Report on Form 10-Q, is recorded, processed, summarized and reportedwithin the time periods specified in the SEC’s rules and forms. Our Disclosure Controls include, without limitation, controls andprocedures designed to ensure that such information is accumulated and communicated to our management, including our Chief ExecutiveOfficer and Principal Financial Officer, as appropriate to allow timely decisions regarding required disclosure.
Asof the end of the period covered by this Quarterly Report on Form 10-Q, we evaluated the effectiveness of the design and operation ofour Disclosure Controls, which was done under the supervision and with the participation of our management, including our Chief ExecutiveOfficer and our Principal Financial Officer. Based on the controls evaluation, our Chief Executive Officer and Principal Financial Officerhave concluded that our Disclosure Controls were effective as of June 30, 2025.
Changesin Internal Control over Financial Reporting
Therehave been no changes in our internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act) during themost recent fiscal quarter covered by this report that have materially affected, or are reasonably likely to materially affect, our internalcontrol over financial reporting.
PARTII—OTHER INFORMATION
| ITEM1. | LEGAL PROCEEDINGS |
Pleaserefer to Note 10 – Commitments and Contingences to the unaudited condensed consolidated financial statements contained inthis report for certain information regarding our legal proceedings. We are not currently a party to any material litigation or othermaterial legal proceedings. We may, from time to time, be involved in various legal proceedings arising from the normal course of businessactivities, and, while the Company has insurance that covers claims of this nature, unfavorable resolution of any of these matters couldmaterially affect our future results of operations, cash flows, or financial position.
| ITEM1A. | RISK FACTORS |
Inaddition to the other information set forth in this Quarterly Report on Form 10-Q, consider the risk factors discussed in Part 1, “Item1A. Risk Factors” in the Company’s 2024 Form 10-K, filed with the SEC on March 13, 2025, and the risk factors discussed in Item 1A of the Quarterly Report on Form10-Q for the quarter ended March 31, 2025, filed with the SEC on May 8, 2025, and in this Quarterly Report on Form 10-Q, which couldmaterially affect our business, financial condition or future results. The risks described in the aforementioned reports are not theonly risks facing the Company. Additional risks and uncertainties not currently known to the Company or that it currently deems to benot material also may materially adversely affect the Company’s business, financial condition, and/or operating results.
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Thefollowing are the risk factors that have materially changed from our risk factors included in our 2024 Form 10-K:
RisksRelated to Our Business and Industry
LPCN1154 is in development and an NDA submission may not be filed, or if filed, may not be accepted by the FDA.
LPCN1154 is currently in development. There can be no assurance as to whether the results of the clinical trials in LPCN 1154 for postpartumdepression will support an NDA submission or whether an NDA submission will be accepted for review or approved by the FDA, includingthe oral route related brexanolone or its metabolites exposure profile relative to injectable brexanolone. A safety and efficacy studyin the patient population is ongoing, however there can be no assurance that the safety and efficacy study will be completed, or thatthe results from the study will meet the primary endpoint. Further, there can be no assurance that additional studies will not be required,and if they are required that we will have sufficient resources to conduct such additional studies to enable an NDA submission.
LPCN1154 may not achieve planned commercialization or commercialization objectives for a variety of reasons.
Commercializationof LPCN 1154 is likely dependent on us finding a partner to market and sell LPCN 1154, if approved. We are exploring the possibilityof partnering LPCN 1154 to a third party for commercialization, however we may not be able to identify potential partners or successfullyenter into partnership arrangements on terms favorable to us, if at all. We cannot be certain as to whether label language required bythe FDA will require warnings, blackbox or otherwise, as to the safety or efficacy of LPCN 1154 which could negatively affect the commercializationof LPCN 1154, if approved. If we are unable to successfully partner or otherwise develop and get regulatory approval for LPCN 1154,LPCN 1154 may never be commercialized.
Therecan be no assurance there will not be any third-party patent infringement proceedings against us. Such proceedings could delay or preventfurther development of LPCN 1154.
Inaddition, we rely on third party vendors for our supply of brexanolone, the active pharmaceutical in LPCN 1154. If our third party suppliersare not able to supply brexanolone on a timely basis, or if the cost of obtaining brexanolone increases, our ability to successfullydevelop and commercialize LPCN 1154 will be adversely affected.
RisksRelated to Ownership of Our Common Stock
Ourmanagement and directors will be able to exert influence over our affairs.
Asof June 30, 2025, our executive officers and directors beneficially owned approximately 6.5% of our common stock. These stockholders,if they act together, may be able to influence our management and affairs and all matters requiring stockholder approval, including significantcorporate transactions. This concentration of ownership may have the effect of delaying or preventing a change in control and might affectthe market price of our common stock.
Themarket price of our common stock has been volatile over the past year and may continue to be volatile.
Themarket price and trading volume of our common stock has been volatile over the past year and it may continue to be volatile. Over thepast year, our common stock has traded as low as $2.83 and as high as $7.83 per share. We cannot predict the price at which our commonstock will trade in the future and it may decline. The price at which our common stock trades may fluctuate significantly and may beinfluenced by many factors, including our financial results; developments generally affecting our industry; general economic, industryand market conditions, and our customers; the depth and liquidity of the market for our common stock; investor perceptions of our business;reports by industry analysts; announcements by other market participants, including, among others, investors, our competitors, and ourcustomers; regulatory action affecting our business; and the impact of other “Risk Factors” discussed herein and in our 2024Form 10-K. In addition, changes in the trading price of our common stock may be inconsistent with our operating results and outlook.The volatility of the market price of our common stock may be inconsistent with our operating results and outlook. The volatility ofthe market price of our common stock may adversely affect investors’ ability to purchase or sell shares of our common stock.
RisksRelating to Our Financial Position and Capital Requirements
Wehave incurred significant operating losses in most years since our inception and anticipate that we will incur continued losses for theforeseeable future.
Wehave focused a significant portion of our efforts on developing TLANDO and more recently on LPCN 1154, LPCN 1148, and LPCN 1144. We havefunded our operations to date through sales of our equity securities, debt and payments received under our license and collaborationarrangements. We have incurred losses in most years since our inception. As of June 30, 2025, we had an accumulated deficit of approximately$203.8 million. Substantially all of our operating losses resulted from costs incurred in connection with our research and developmentprograms and from general and administrative costs associated with our operations. These losses, combined with expected future losses,have had and will continue to have an adverse effect on our stockholders’ equity. We expect to continue to incur significant researchand development expenses in connection with clinical trials associated with LPCN 1154 and LPCN 2401, and potentially with LPCN 2101,LPCN 2203, LPCN 1148, LPCN 1144 and LPCN 1107, if further clinical trials are initiated. As a result, we expect to continue to incursignificant operating losses for the foreseeable future as we evaluate further clinical development of LPCN 1154, LPCN 2401, LPCN 2101,LPCN 2203, and possibly LPCN 1148, LPCN 1144, and LPCN 1107, in addition to our other programs and continued research efforts. Becauseof the numerous risks and uncertainties associated with developing pharmaceutical products, we are unable to predict the extent of anyfuture losses or when we will become profitable, if at all.
| ITEM5. | OTHER INFORMATION |
10b5-1Trading Plans
Duringthe second quarter of 2025, none of our directors or executive officers (as defined in Rule 16a-1(f) under the Exchange Act)
| 42 |
| ITEM6. | EXHIBITS |
INDEXTO EXHIBITS
| Exhibit | Incorporation By Reference | |||||||||
| Number | Exhibit Description | Form | SEC File No. | Exhibit | Filing Date | |||||
| 3.1 | Amended and Restated Certificate of Incorporation | 8-K | 333-178230 | 3.2 | 7/25/2013 | |||||
| 3.2 | Certificate of Amendment to the Amended and Restated Certificate of Incorporation of Lipocine Inc. | 8-K | 333-178230 | 3.4 | 6/28/2022 | |||||
| 3.3 | Certificate of Amendment to the Amended and Restated Certificate of Incorporation of Lipocine Inc. | 8-K | 333-178230 | 3.2 | 5/11/2023 | |||||
| 3.4 | Certificate of Amendment to the Amended and Restated Certificate of Incorporation of Lipocine Inc. | 8-K | 333-178230 | 3.4 | 6/4/2025 | |||||
| 3.5 | Certificate of Designation of Series A Junior Participating Preferred Stock. | 8-K | 333-178230 | 3.1 | 12/1/2015 | |||||
| 3.6 | Certificate of Increase of Series A Junior Participating Preferred Stock | 8-K | 333-178230 | 3.1 | 11/1/2021 | |||||
| 3.7 | Certificate of Amendment to Certificate of Designation of Series A Junior Participating Preferred Stock. | 8-K | 333-178230 | 3.1 | 10/22/2024 | |||||
| 3.8 | Certificate of Designation of Series B Preferred Stock | 8-K | 333-178230 | 3.2 | 3/10/2023 | |||||
| 31.1* | ||||||||||
| 31.2* | ||||||||||
| 32.1** | Certification of Principal Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. 1350 (1) | |||||||||
| 32.2** | Certification of Principal Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. 1350 (1) | |||||||||
101.INS* | XBRLInstance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within theInline XBRL document. | |||||||||
| 101.SCH* | InlineXBRL Taxonomy Extension Schema Document | |||||||||
| 101.CAL* | InlineXBRL Taxonomy Extension Calculation Linkbase Document | |||||||||
| 101.DEF* | InlineXBRL Taxonomy Extension Definition Linkbase Document | |||||||||
| 101.LAB* | InlineXBRL Taxonomy Extension Labels Linkbase Document | |||||||||
| 101.PRE* | InlineXBRL Taxonomy Extension Presentation Linkbase Document | |||||||||
| 104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) | |||||||||
| * | Filed herewith | |||||||||
| ** | Furnished herewith | |||||||||
| (1) | This certification accompanies the Form 10-Q to which it relates, is not deemed filed with the Securities and Exchange Commission and is not to be incorporated by reference into any filing of the Registrant under the Securities Act, or the Exchange Act (whether made before or after the date of the Form 10-Q), irrespective of any general incorporation language contained in such filing. |
| 43 |
SIGNATURES
Pursuantto the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf bythe undersigned thereunto duly authorized.
| Lipocine Inc. | ||
| (Registrant) | ||
| Dated: August 5, 2025 | /s/ Mahesh V. Patel | |
Mahesh V. Patel, President and Chief Executive Officer (Principal Executive Officer and Principal Financial Officer) | ||
| Dated: August 5, 2025 | /s/ Krista Fogarty | |
Krista Fogarty, Corporate Controller (Principal Accounting Officer) |
| 44 |
EXHIBIT31.1
CERTIFICATIONS
I,Mahesh V. Patel, certify that:
| 1. | I have reviewed this quarterly report on Form 10-Q of Lipocine Inc.; |
| 2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
| 3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
| 4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
| a) | designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; | |
| b) | designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; | |
| c) | evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and | |
| d) | disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
| 5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
| a) | all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and | |
| b) | any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
| Dated: August 5, 2025 | /s/ Mahesh V. Patel |
| Mahesh V. Patel, President and Chief Executive Officer | |
| (Principal Executive Officer) |
EXHIBIT31.2
CERTIFICATIONS
I,Mahesh V. Patel, certify that:
| 1. | I have reviewed this quarterly report on Form 10-Q of Lipocine Inc.; |
| 2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
| 3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
| 4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
| a) | designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; | |
| b) | designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; | |
| c) | evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and | |
| d) | disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
| 5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
| a) | all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and | |
| b) | any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
| Dated: August 5, 2025 | /s/ Mahesh V. Patel |
Mahesh V. Patel (Principal Financial Officer) |
EXHIBIT32.1
CERTIFICATION
Inconnection with the Quarterly Report on Form 10-Q of Lipocine Inc. (the “Corporation”) for the quarter ended June 30, 2025as filed with the Securities and Exchange Commission on the date hereof (the “Report”), the undersigned, Mahesh V. Patel,President and Chief Executive Officer of the Corporation, hereby certifies, pursuant to Rule 13a-14(b) or Rule 15d-14(b) and 18 U.S.C.Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to his knowledge:
(1)The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended, and
(2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operationsof the Corporation.
| Dated: August 5, 2025 | /s/ Mahesh V. Patel |
Mahesh V. Patel, President and Chief Executive Officer (Principal Executive Officer) |
EXHIBIT32.2
CERTIFICATION
Inconnection with the Quarterly Report on Form 10-Q of Lipocine Inc. (the “Corporation”) for the quarter ended June 30, 2025as filed with the Securities and Exchange Commission on the date hereof (the “Report”), the undersigned, Mahesh V. Patel,Principal Financial Officer of the Corporation, hereby certifies, pursuant to Rule 13a-14(b) or Rule 15d-14(b) and 18 U.S.C. Section1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to his knowledge:
(1)The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended, and
(2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operationsof the Corporation.
| Dated: August 5, 2025 | /s/ Mahesh V. Patel |
Mahesh V. Patel (Principal Financial Officer) |