Note C- Glaxosmithkline Agreement	9 Months Ended
Sep. 30, 2011
Glaxosmithkline Agreement [Text Block]	NOTE C- GLAXOSMITHKLINE AGREEMENT In April 2002, we signed a licensing agreement with GSK for a value before royalties, PTH sales and reimbursement of development expenses, of up to $150,000,000 to develop an oral formulation of an analog of PTH currently in clinical development for the treatment of osteoporosis. Under the terms of the agreement, GSK received an exclusive worldwide license to develop and commercialize the product. In addition, GSK will reimburse us for certain development activities during the program, including our activities in the production of raw material for development and clinical supplies, and will pay us a royalty at a rate in the low to mid-teens based on its worldwide sales of the product, subject to a reduction under certain circumstances as described in the agreement. The royalty rate will be increased if certain sales milestones are achieved. A Phase I human trial, which commenced in 2004, demonstrated positive preliminary results. As agreed with GSK, we conducted further development including a small Phase I study, which we initiated in 2008 and successfully completed in 2009. An aggregate of $16,000,000 in up-front and milestone payments has been received from inception through September 30, 2011, including the two $4,000,000 payments received in December 2010 and May 2011, described below. We have also received an additional $5,600,000 from GSK for PTH sales and in support of our PTH development activities from inception through September 30, 2011. In December 2010, we entered into an amended and restated exclusive worldwide license agreement with GSK (the “Amended License Agreement”) and we received $4,000,000 for Phase 2 development costs. This revenue is being recognized through November 2018, revised from 2014, the updated estimated performance period under the Amended License Agreement. Due to this change in accounting estimate our revenue decreased, and our net loss increased, by $155,000 and $240,000, respectively, for the three months and nine months ended September 30, 2011. This payment was considered substantive due to its reasonableness relative to all of the deliverables and payment terms in the agreement; commensurate with our level of effort; and commensurate with the enhanced value of the deliverables. We received an additional $4,000,000 in May 2011 due to the completion of Phase 2 patient enrollment in April 2011. This milestone is also being recognized through November 2018, revised from 2014. We recognized $1,010,000 of revenue under these milestones in the first nine months of 2011. Phase 2 results are expected before year-end. Bulk product sales to licensees, prior to product approval, are unpredictable and subject to the needs of the licensee. GSK could make additional milestone payments in the aggregate amount of up to approximately $140,000,000 subject to the progress of the compound through clinical development and through to the market. The Amended License Agreement is subject to certain termination provisions. Either party may terminate the Amended License Agreement if the other party (i) materially breaches the Amended License Agreement, which breach is not cured within 60 days (or 30 days for a payment default), (ii) voluntarily files, or has served against it involuntarily, a petition in bankruptcy or insolvency, which, in the case of involuntary proceedings, remains undismissed for 60 days, or (iii) makes an assignment for the benefit of creditors. Additionally, GSK may terminate the Amended License Agreement at any time for various reasons including safety or efficacy concerns of the PTH product, significant increases in development timelines or costs, or significant changes in the osteoporosis market or in government regulations. On August 3, 2011, we entered into a Development Services and Clinical Supply Agreement (the “Development Agreement”) with GSK. Under the terms of the Development Agreement, we will receive up to approximately $2.2 million in payments from GSK to undertake certain development and manufacturing activities related to the active pharmaceutical ingredient and finished drug product of an oral formulation of a recombinantly produced investigational PTH analog for the treatment of osteoporosis in postmenopausal women in advance of GSK’s potential decision to study the molecule in a Phase 3 study. The Development Agreement will continue for two years, subject to early termination under certain circumstances, including that either party may terminate the Development Agreement for the other party’s uncured material breach of the agreement or the Amended License Agreement. In addition, GSK may terminate the Development Agreement in its sole discretion by providing us with five days written notice, subject to our receipt of payment for services performed through the date of termination.

Note C- Glaxosmithkline Agreement

9 Months Ended

Sep. 30, 2011

NOTE C- GLAXOSMITHKLINE AGREEMENT

In April 2002, we signed a licensing agreement with GSK for a value before royalties, PTH sales and reimbursement of development expenses, of up to $150,000,000 to develop an oral formulation of an analog of PTH currently in clinical development for the treatment of osteoporosis. Under the terms of the agreement, GSK received an exclusive worldwide license to develop and commercialize the product. In addition, GSK will reimburse us for certain development activities during the program, including our activities in the production of raw material for development and clinical supplies, and will pay us a royalty at a rate in the low to mid-teens based on its worldwide sales of the product, subject to a reduction under certain circumstances as described in the agreement. The royalty rate will be increased if certain sales milestones are achieved. A Phase I human trial, which commenced in 2004, demonstrated positive preliminary results. As agreed with GSK, we conducted further development including a small Phase I study, which we initiated in 2008 and successfully completed in 2009. An aggregate of $16,000,000 in up-front and milestone payments has been received from inception through September 30, 2011, including the two $4,000,000 payments received in December 2010 and May 2011, described below. We have also received an additional $5,600,000 from GSK for PTH sales and in support of our PTH development activities from inception through September 30, 2011.

In December 2010, we entered into an amended and restated exclusive worldwide license agreement with GSK (the “Amended License Agreement”) and we received $4,000,000 for Phase 2 development costs. This revenue is being recognized through November 2018, revised from 2014, the updated estimated performance period under the Amended License Agreement. Due to this change in accounting estimate our revenue decreased, and our net loss increased, by $155,000 and $240,000, respectively, for the three months and nine months ended September 30, 2011. This payment was considered substantive due to its reasonableness relative to all of the deliverables and payment terms in the agreement; commensurate with our level of effort; and commensurate with the enhanced value of the deliverables. We received an additional $4,000,000 in May 2011 due to the completion of Phase 2 patient enrollment in April 2011. This milestone is also being recognized through November 2018, revised from 2014. We recognized $1,010,000 of revenue under these milestones in the first nine months of 2011. Phase 2 results are expected before year-end. Bulk product sales to licensees, prior to product approval, are unpredictable and subject to the needs of the licensee. GSK could make additional milestone payments in the aggregate amount of up to approximately $140,000,000 subject to the progress of the compound through clinical development and through to the market. The Amended License Agreement is subject to certain termination provisions. Either party may terminate the Amended License Agreement if the other party (i) materially breaches the Amended License Agreement, which breach is not cured within 60 days (or 30 days for a payment default), (ii) voluntarily files, or has served against it involuntarily, a petition in bankruptcy or insolvency, which, in the case of involuntary proceedings, remains undismissed for 60 days, or (iii) makes an assignment for the benefit of creditors. Additionally, GSK may terminate the Amended License Agreement at any time for various reasons including safety or efficacy concerns of the PTH product, significant increases in development timelines or costs, or significant changes in the osteoporosis market or in government regulations.

On August 3, 2011, we entered into a Development Services and Clinical Supply Agreement (the “Development Agreement”) with GSK. Under the terms of the Development Agreement, we will receive up to approximately $2.2 million in payments from GSK to undertake certain development and manufacturing activities related to the active pharmaceutical ingredient and finished drug product of an oral formulation of a recombinantly produced investigational PTH analog for the treatment of osteoporosis in postmenopausal women in advance of GSK’s potential decision to study the molecule in a Phase 3 study. The Development Agreement will continue for two years, subject to early termination under certain circumstances, including that either party may terminate the Development Agreement for the other party’s uncured material breach of the agreement or the Amended License Agreement. In addition, GSK may terminate the Development Agreement in its sole discretion by providing us with five days written notice, subject to our receipt of payment for services performed through the date of termination.