Liquidity And Management's Plans

9 Months Ended

Sep. 30, 2011

Liquidity And Management's Plans: [Abstract]

Liquidity And Management's Plans:

2. Liquidity and management's plans:

Since inception, the Company has financed its operations principally from the sale of equity securities, proceeds from short-term borrowings or convertible notes, funded research arrangements and revenue generated as a result of its agreements with Meda AB ("Meda") regarding the Company's one approved product, ONSOLIS^® (see Note 3). The Company intends to finance its research and development and commercialization efforts and its working capital needs from one or more (or combinations) of the following: existing cash, royalty revenue, debt and/or equity financings, licensing and commercial partnership agreements and, potentially, through the exercise of outstanding Common Stock options and warrants to purchase Common Stock.

Significant financing and revenue for the nine months ended September 30, 2011 consisted of:

• $14 million in net proceeds from a private placement offering of Common Stock in March 2011;

• Approximately $1.3 million in net royalties;

• Approximately $1.7 million from the exercise of Common Stock warrants;

• Approximately $0.2 million in research revenues from various contractor agreements; and

• Approximately $0.3 million from the exercise of Common Stock options.

Significant financing and revenue for the fiscal year ended December 31, 2010 consisted of:

• $9.7 million in net proceeds from registered direct offering of Common Stock and warrants in April 2010;

• Approximately $1 million in net royalties;

• Approximately $0.7 million in research revenues from various contractor agreements;

• Approximately $0.5 million in contract revenue from licensing and supply agreements;

• Approximately $0.2 million in sponsored research revenue from the U.S. Government's Qualifying Therapeutic Discovery Project; and

• Approximately $0.1 million from the exercise of Common Stock options.

Company management believes that the Company's existing cash and cash equivalents are sufficient to finance planned operations into the second quarter of 2012, including budgeted development costs of BEMA^® Buprenorphine/Naloxone. However, current cash will not support the required new clinical trials for BEMA^® Buprenorphine for chronic pain, for which additional funding will need to be obtained.

The Company believes that it will be able to secure outside funding or loans at levels sufficient to support planned operations. However, there can be no assurance that additional capital or loans (including, without limitation, via new commercial partnerships) will be available on favorable terms, if at all. If adequate outside funds are not available, the Company would likely be required to significantly reduce or refocus its planned operations or to obtain funds through arrangements that may require it to relinquish rights to certain technologies and drug formulations or potential markets, any or all of which could have a material adverse effect on the Company's financial condition and viability.

In addition, if the Company is faced with disruptions or crises in the worldwide financial markets as occurred since 2008, the Company's future ability to raise funds (and the cost of raising such funds) through the debt or equity markets could be materially more expensive or could make such markets unavailable at a time when the Company desires or requires additional financial investment. If the Company is unable to attract additional funds, it may adversely affect the Company's ability to achieve its development and commercialization goals, which could have a material and adverse effect on the Company's business, results of operations, financial condition and stock price.