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<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

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    <B><FONT style="font-family: 'Times New Roman', Times">As filed
    with the Securities and Exchange Commission on May&#160;14,
    2010</FONT></B>
</DIV>

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    <!-- /XBRL,dc --><B>Registration
    <FONT style="white-space: nowrap">No.&#160;333-&#160;&#160;&#160;&#160;&#160;&#160;</FONT></B>
</DIV>

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    <B><FONT style="font-size: 14pt">UNITED STATES<BR>
    SECURITIES AND EXCHANGE COMMISSION<BR>
    </FONT><FONT style="font-size: 12pt">Washington,&#160;D.C.
    20549</FONT></B>
</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

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<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

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    <B><FONT style="font-size: 18pt"><FONT style="white-space: nowrap">Form&#160;S-1</FONT></FONT></B>
</DIV>

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    <B><FONT style="font-size: 12pt">REGISTRATION
    STATEMENT</FONT></B>
</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B><FONT style="font-size: 12pt">UNDER</FONT></B>
</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B><FONT style="font-size: 12pt">THE SECURITIES ACT OF
    1933</FONT></B>
</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV style="margin-top: 1pt; font-size: 1pt">&nbsp;</DIV>

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    <B><FONT style="font-size: 24pt; font-variant: SMALL-CAPS">NuPathe
    Inc</FONT><FONT style="font-size: 15pt; font-variant: SMALL-CAPS">.</FONT></B>
</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I><FONT style="font-size: 8pt">(Exact name of registrant as
    specified in its charter)</FONT></I>
</DIV>

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    <B>Delaware<BR>
    </B><I><FONT style="font-size: 8pt">(State or other jurisdiction
    of<BR>
    incorporation or organization)</FONT></I>
</TD>
<TD>
&nbsp;
</TD>
<TD align="center" valign="top">
    <B>2834<BR>
    </B><I><FONT style="font-size: 8pt">(Primary Standard
    Industrial<BR>
    Classification Code Number)</FONT></I>
</TD>
<TD>
&nbsp;
</TD>
<TD align="center" valign="top">
    <B>20-2218246<BR>
    </B><I><FONT style="font-size: 8pt">(I.R.S. Employer<BR>
    Identification Number)</FONT></I><FONT style="font-size: 8pt">
    </FONT>
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B>227 Washington Street, Suite&#160;200</B>
</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B>Conshohocken, Pennsylvania 19428</B>
</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B><FONT style="white-space: nowrap">(484)&#160;567-0130</FONT></B>
</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I><FONT style="font-size: 8pt">(Address, including zip code and
    telephone number, including area code, of registrant&#146;s
    principal executive offices)</FONT></I>
</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

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<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

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<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B>Jane H. Hollingsworth</B>
</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B>Chief Executive Officer</B>
</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B>NuPathe Inc.</B>
</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B>227 Washington Street, Suite&#160;200</B>
</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B>Conshohocken, Pennsylvania 19428</B>
</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B><FONT style="white-space: nowrap">(484)&#160;567-0130</FONT></B>
</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I><FONT style="font-size: 8pt">(Name, address, including zip
    code and telephone number, including area code, of agent for
    service)</FONT></I>
</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

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<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Copies
    to:</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 8pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
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    <B>Michael N. Peterson,&#160;Esq.<BR>
    James W. McKenzie, Jr.,&#160;Esq.<BR>
    Morgan, Lewis&#160;&#038; Bockius LLP<BR>
    1701 Market Street<BR>
    Philadelphia, Pennsylvania 19103<BR>
    <FONT style="white-space: nowrap">(215)&#160;963-5000</FONT></B>
</TD>
<TD>
&nbsp;
</TD>
<TD align="center" valign="top">
    <B>Suzanne M. Hanlon,&#160;Esq.<BR>
    V.P. Administration, General Counsel, Secretary<BR>
    NuPathe Inc.<BR>
    227 Washington Street, Suite 200<BR>
    Conshohocken, Pennsylvania 19428<BR>
    (484) 567-0130</B>
</TD>
<TD>
&nbsp;
</TD>
<TD align="center" valign="top">
    <B>David E. Redlick,&#160;Esq.<BR>
    Brian A. Johnson,&#160;Esq.<BR>
    Wilmer Cutler Pickering Hale and Dorr LLP<BR>
    399 Park Avenue<BR>
    New York, New York 10022<BR>
    (212) 230-8800</B>
</TD>
</TR>
</TABLE>

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</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<CENTER style="font-size: 1pt; width: 15%; border-bottom: 1pt solid #000000"></CENTER>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 2%; font-size: 8pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B>Approximate date of commencement of proposed sale to the
    public:</B>&#160;&#160;As soon as practicable after the
    effective date of this registration statement.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 2%; font-size: 8pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    If any of the securities being registered on this form are to be
    offered on a delayed or continuous basis pursuant to
    Rule&#160;415 under the Securities Act of 1933, check the
    following
    box.&#160;&#160;<FONT style="font-family: Wingdings; font-variant: normal">&#111;
    </FONT>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 2%; font-size: 8pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    If this Form is filed to register additional securities for an
    offering pursuant to Rule&#160;462(b) under the Securities Act,
    check the following box and list the Securities Act registration
    statement number of the earlier effective registration statement
    for the same
    offering.&#160;&#160;<FONT style="font-family: Wingdings; font-variant: normal">&#111;
    </FONT>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 2%; font-size: 8pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    If this Form is a post-effective amendment filed pursuant to
    Rule&#160;462(c) under the Securities Act, check the following
    box and list the Securities Act registration statement number of
    the earlier effective registration statement for the same
    offering.&#160;&#160;<FONT style="font-family: Wingdings; font-variant: normal">&#111;
    </FONT>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 2%; font-size: 8pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    If this Form is a post-effective amendment filed pursuant to
    Rule&#160;462(d) under the Securities Act, check the following
    box and list the Securities Act registration statement number of
    the earlier effective registration statement for the same
    offering.&#160;&#160;<FONT style="font-family: Wingdings; font-variant: normal">&#111;
    </FONT>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 2%; font-size: 8pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Indicate by check mark whether the registrant is a large
    accelerated filer, an accelerated filer, a non-accelerated
    filer, or a smaller reporting company. See the definitions of
    &#147;large accelerated filer,&#148; &#147;accelerated
    filer&#148; and &#147;smaller reporting company&#148; in
    <FONT style="white-space: nowrap">Rule&#160;12b-2</FONT>
    of the Exchange Act. (Check one):
</DIV>

<DIV style="margin-top: 5pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

<TR>
    <TD width="25%"></TD>
    <TD width="25%"></TD>
    <TD width="25%"></TD>
    <TD width="25%"></TD>
</TR>

<TR valign="top">
    <TD nowrap align="left">    <FONT style="font-size: 8pt; font-family: 'Times New Roman', Times">Large
    accelerated
    filer&#160;<FONT style="font-family: Wingdings; font-variant: normal">&#111;</FONT>
    </FONT></TD>
    <TD nowrap align="center">    <FONT style="font-size: 8pt; font-family: 'Times New Roman', Times">
    Accelerated
    filer&#160;<FONT style="font-family: Wingdings; font-variant: normal">&#111;</FONT>
    </FONT></TD>
    <TD nowrap align="center">    <FONT style="font-size: 8pt; font-family: 'Times New Roman', Times">
    <FONT style="white-space: nowrap">Non-accelerated</FONT>
    filer&#160;<FONT style="font-family: Wingdings; font-variant: normal">&#254;</FONT>
    </FONT></TD>
    <TD nowrap align="right">    <FONT style="font-size: 8pt; font-family: 'Times New Roman', Times">
    Smaller reporting
    company&#160;<FONT style="font-family: Wingdings; font-variant: normal">&#111;</FONT>
    </FONT></TD>
</TR>

</TABLE>



<DIV align="center" style="margin-left: 22%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <FONT style="font-size: 8pt">(Do not check if a smaller
    reporting company)
    </FONT>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<CENTER style="font-size: 1pt; width: 15%; border-bottom: 1pt solid #000000"></CENTER>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">CALCULATION
    OF REGISTRATION FEE</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 8pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="78%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=02 type=gutterleft -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=02 type=gutterright -->
    <TD width="5%" align="right">&nbsp;</TD>	<!-- colindex=02 type=lead -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=02 type=body -->
    <TD width="5%" align="left">&nbsp;</TD>	<!-- colindex=02 type=hang1 -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=03 type=gutterleft -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=03 type=gutterright -->
    <TD width="3%" align="right">&nbsp;</TD>	<!-- colindex=03 type=lead -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=03 type=body -->
    <TD width="3%" align="left">&nbsp;</TD>	<!-- colindex=03 type=hang1 -->
</TR>
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<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom" style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-right: 1px solid #000000; padding-right: 2pt; border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom" style="border-top: 3px double #000000">
    <B>Proposed Maximum<BR>
    </B>
</TD>
<TD style="border-right: 1px solid #000000; padding-right: 2pt; border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom" style="border-top: 3px double #000000">
    <B>Amount of<BR>
    </B>
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
    <B>Title of Each Class of<BR>
    </B>
</TD>
<TD style="border-right: 1px solid #000000; padding-right: 2pt">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
    <B>Aggregate<BR>
    </B>
</TD>
<TD style="border-right: 1px solid #000000; padding-right: 2pt">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
    <B>Registration<BR>
    </B>
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
    <B>Securities to be Registered</B>
</TD>
<TD style="border-right: 1px solid #000000; padding-right: 2pt">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
    <B>Offering Price(1)</B>
</TD>
<TD style="border-right: 1px solid #000000; padding-right: 2pt">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
    <B>Fee(2)</B>
</TD>
</TR>
<!-- TableOutputBody -->
<TR valign="bottom">
<TD align="left" valign="bottom" style="border-top: 1px solid #000000">
<DIV style="text-indent: -8pt; margin-left: 8pt">
    Common Stock, $0.001&#160;par value per share
</DIV>
</TD>
<TD style="border-right: 1px solid #000000; padding-right: 2pt; border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom" style="border-top: 1px solid #000000">
    $
</TD>
<TD nowrap align="right" valign="bottom" style="border-top: 1px solid #000000">
    86,250,000
</TD>
<TD nowrap align="left" valign="bottom" style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-right: 1px solid #000000; padding-right: 2pt; border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom" style="border-top: 1px solid #000000">
    $
</TD>
<TD nowrap align="right" valign="bottom" style="border-top: 1px solid #000000">
    6,150
</TD>
<TD nowrap align="left" valign="bottom" style="border-top: 1px solid #000000">
&nbsp;
</TD>
</TR>
<TR style="font-size: 1pt">
<TD nowrap align="left" valign="bottom" style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom" style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom" style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom" style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom" style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom" style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom" style="border-top: 3px double #000000">
&nbsp;
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

<TR>
    <TD width="1%"></TD>
    <TD width="1%"></TD>
    <TD width="98%"></TD>
</TR>

<TR>
    <TD align="right" valign="top">
    <FONT style="font-size: 8pt">(1)
    </FONT></TD>
    <TD></TD>
    <TD valign="bottom">
    <FONT style="font-size: 8pt">Estimated solely for the purpose of
    calculating the amount of the registration fee in accordance
    with Rule&#160;457(o) under the Securities Act of 1933, as
    amended, and includes share of common stock that the
    underwriters have an option to purchase to cover
    over-allotments, if any.
    </FONT></TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD align="right" valign="top">
    <FONT style="font-size: 8pt">(2)
    </FONT></TD>
    <TD></TD>
    <TD valign="bottom">
    <FONT style="font-size: 8pt">Calculated pursuant to
    Rule&#160;457(o) based on an estimate of the proposed maximum
    aggregate offering price.
    </FONT></TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 2%; font-size: 8pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B>The Registrant hereby amends this Registration Statement on
    such date or dates as may be necessary to delay its effective
    date until the Registrant shall file a further amendment which
    specifically states that this Registration Statement shall
    thereafter become effective in accordance with Section&#160;8(a)
    of the Securities Act of 1933 or until the Registration
    Statement shall become effective on such date as the Commission,
    acting pursuant to said Section&#160;8(a), may determine.</B>
</DIV>

<DIV style="margin-top: 8pt; font-size: 1pt">&nbsp;</DIV>

<CENTER style="font-size: 1pt; width: 100%; border-bottom: 1pt solid #000000"></CENTER>

<CENTER style="font-size: 1pt; width: 100%; border-bottom: 2pt solid #000000"></CENTER>
<!-- XBRL Pagebreak Begin -->

<P align="left" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 94%; margin-left: 3%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL Pagebreak End -->

<TABLE style="color: #FF0000" width="100%" border="1" cellpadding="5"><TR><TD>
<FONT style="font-size: 8pt; font-family: Arial, Helvetica; color: #E8112D">The
information in this preliminary prospectus is not complete and
may be changed. We may not sell these securities until the
registration statement filed with the Securities and Exchange
Commission is declared effective. This preliminary prospectus is
not an offer to sell these securities and it is not soliciting
an offer to buy these securities in any jurisdiction where the
offer or sale is not permitted.<BR>
</FONT>
</TD></TR></TABLE>

<DIV style="margin-top: 1pt; font-size: 1pt">&nbsp;</DIV>
</DIV><!-- END PAGE WIDTH -->
<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <FONT style="color: #E8112D">SUBJECT TO COMPLETION, DATED
    MAY&#160;14, 2010
    </FONT>
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B>PROSPECTUS</B>
</DIV>

<DIV style="margin-top: 24pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B><FONT style="font-size: 16pt">Shares</FONT></B>
</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <IMG src="w78367w7836700.gif" alt="(NUPATHE LOGO)"><B><FONT style="font-size: 16pt">
    </FONT></B>
</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B><FONT style="font-size: 12pt">Common Stock</FONT></B>
</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<CENTER style="font-size: 1pt; width: 28%; border-bottom: 1pt solid #000000"></CENTER>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 11pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    NuPathe Inc. is offering <B>&#160;&#160;</B>&#160;shares of
    common stock. This is our initial public offering, and no public
    market currently exists for our common stock. We anticipate that
    the initial public offering price will be between
    $<B>&#160;&#160; </B>and $<B>&#160;&#160; </B>per share.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 11pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We are applying to list our common stock on The NASDAQ Global
    Market under the symbol &#147;PATH.&#148;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 11pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B>Investing in our common stock involves risks. See &#147;Risk
    Factors&#148; beginning on page&#160;8.</B>
</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="83%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="4%" align="right">&nbsp;</TD>	<!-- colindex=02 type=lead -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=02 type=body -->
    <TD width="4%" align="left">&nbsp;</TD>	<!-- colindex=02 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=03 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=03 type=lead -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=03 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=03 type=hang1 -->
</TR>
<!-- Table Width Row END -->
<!-- TableOutputHead -->
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B><FONT style="font-size: 9pt">Per Share</FONT></B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B><FONT style="font-size: 9pt">Total</FONT></B>
</DIV>
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<!-- TableOutputBody -->
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Initial public offering price
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    &#160;&#160;&#160;&#160;&#160;&#160;&#160;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    &#160;&#160;&#160;&#160;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Underwriting discounts and commissions
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Proceeds, before expenses, to us
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">

</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We have granted the underwriters an option for 30&#160;days from
    the date of this prospectus to purchase up to <B>&#160;&#160;
    </B>additional shares of our common stock at the initial public
    offering price, less underwriting discounts and commissions, to
    cover over-allotments.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B>Neither the Securities and Exchange Commission nor any state
    securities commission has approved or disapproved of these
    securities or determined if this prospectus is truthful or
    complete. Any representation to the contrary is a criminal
    offense.</B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The underwriters expect to deliver the shares of common stock on
    or about <B>&#160;&#160;</B>, 2010.
</DIV>

<DIV style="margin-top: 9pt; font-size: 1pt">&nbsp;</DIV>

<CENTER style="font-size: 1pt; width: 28%; border-bottom: 1pt solid #000000"></CENTER>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 19pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="49%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="4%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="47%">&nbsp;</TD>	<!-- colindex=02 type=maindata -->
</TR>
<!-- Table Width Row END -->
<!-- TableOutputHead -->
<!-- TableOutputBody -->
<TR valign="bottom">
<TD nowrap align="center" valign="bottom">
<DIV style="text-indent: -19pt; margin-left: 19pt">
    <B>Leerink Swann</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="center" valign="bottom">
    <B>Lazard Capital Markets </B>
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B><I><FONT style="font-size: 9pt">Joint Book-Running
    Managers</FONT></I></B>
</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<CENTER style="font-size: 1pt; width: 28%; border-bottom: 1pt solid #000000"></CENTER>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 12pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="50%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="48%">&nbsp;</TD>	<!-- colindex=02 type=maindata -->
</TR>
<!-- Table Width Row END -->
<!-- TableOutputHead -->
<!-- TableOutputBody -->
<TR valign="bottom">
<TD align="center" valign="bottom">
<DIV style="text-indent: -12pt; margin-left: 12pt">
    <B>Thomas Weisel Partners LLC</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="center" valign="bottom">
    <B>Needham&#160;&#038; Company, LLC </B>
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The date of this prospectus is&#160;&#160;, 2010.
</DIV>
<!-- XBRL Pagebreak Begin -->

<P align="left" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL Pagebreak End -->

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">TABLE OF
    CONTENTS</FONT></B>
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>
<DIV align="left">
<!-- TOC -->
</DIV>

<DIV align="left">
<A name="tocpage"></A>
</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="95%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=02 type=quadleft -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=02 type=maindata -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=02 type=quadright -->
</TR>
<!-- Table Width Row END -->
<!-- TableOutputHead -->
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Page</B>
</TD>
</TR>
<!-- TableOutputBody -->
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#101'>PROSPECTUS SUMMARY</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    1
</TD>
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#102'>RISK FACTORS</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    8
</TD>
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#103'>SPECIAL NOTE&#160;REGARDING FORWARD-LOOKING
    STATEMENTS</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    33
</TD>
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#104'>USE OF PROCEEDS</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    34
</TD>
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#105'>DIVIDEND POLICY</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    35
</TD>
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#106'>CAPITALIZATION</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    36
</TD>
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#107'>DILUTION</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    38
</TD>
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#108'>SELECTED FINANCIAL DATA</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    40
</TD>
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#109'>MANAGEMENT&#146;S DISCUSSION AND ANALYSIS OF
    FINANCIAL CONDITION AND RESULTS OF OPERATIONS</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    41
</TD>
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#110'>BUSINESS</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    56
</TD>
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#111'>MANAGEMENT</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    78
</TD>
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#112'>EXECUTIVE COMPENSATION</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    84
</TD>
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#113'>TRANSACTIONS WITH RELATED PERSONS</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    102
</TD>
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#114'>PRINCIPAL STOCKHOLDERS</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    106
</TD>
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#115'>DESCRIPTION OF CAPITAL STOCK</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    111
</TD>
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</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#116'>SHARES&#160;ELIGIBLE FOR FUTURE SALE</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
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    114
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</TR>
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<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#117'>UNDERWRITING</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
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<TD nowrap align="right" valign="bottom">
    116
</TD>
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#118'>LEGAL MATTERS</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
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    121
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<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#119'>EXPERTS</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
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    121
</TD>
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<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#120'>WHERE YOU CAN FIND MORE INFORMATION</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
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    121
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</TD>
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<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#121'>INDEX TO FINANCIAL STATEMENTS</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    F-1
</TD>
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#121'>EXHIBITS</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD>&nbsp;
</TD>
</TR>
<TR><TD colspan="9"><FONT size="2">&nbsp;<A HREF="w78367exv23w1.htm">EX-23.1</A></FONT></TD></TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<DIV align="left">
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</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<CENTER style="font-size: 1pt; width: 18%; border-bottom: 1pt solid #000000"></CENTER>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B>You should rely only on the information contained in this
    prospectus and any free writing prospectus prepared by or on
    behalf of us or to which we have referred you. We have not
    authorized anyone to provide you with information that is
    different. We are offering to sell shares of our common stock,
    and seeking offers to buy shares of our common stock, only in
    jurisdictions where offers and sales are permitted. The
    information in this prospectus is accurate only as of the date
    of this prospectus, regardless of the time of delivery of this
    prospectus or any sale of our common stock.</B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Until
    <B>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</B>,
    2010, 25&#160;days after the date of this prospectus, all
    dealers that buy, sell or trade our common stock, whether or not
    participating in this offering, may be required to deliver a
    prospectus. This is in addition to the dealer&#146;s obligation
    to deliver a prospectus when acting as an underwriter and with
    respect to unsold allotments or subscriptions.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    For investors outside the United States: Neither we nor any of
    the underwriters have taken any action to permit a public
    offering of the shares of our common stock or the possession or
    distribution of this prospectus in any jurisdiction where action
    for that purpose is required, other than the United States. You
    are required to inform yourselves about and to observe any
    restrictions relating to this offering and the distribution of
    this prospectus.
</DIV>
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</DIV><!-- END PAGE WIDTH -->
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<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
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<DIV style="width: 100%; height: 9in; border-top: 1px solid #000000; padding-top: 12pt; border-right: 1px solid #000000; padding-right: 12pt; border-bottom: 1px solid #000000; padding-bottom: 12pt; border-left: 1px solid #000000; padding-left: 12pt"><!-- Begin box 1 -->

<A name='101'>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">PROSPECTUS
    SUMMARY</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>This summary highlights information contained elsewhere in
    this prospectus. This summary does not contain all of the
    information you should consider before investing in our common
    stock. Before you decide to invest in our common stock, you
    should read the entire prospectus carefully, including the
    &#147;Risk Factors&#148; section and the financial statements
    and related notes appearing at the end of this prospectus.</I>
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Our
    Company</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We are a specialty pharmaceutical company focused on the
    development and commercialization of branded therapeutics for
    diseases of the central nervous system, including neurological
    and psychiatric disorders. Our most advanced product candidate,
    Zelrix, is a single-use patch applied to the arm or thigh for
    the treatment of migraine. Zelrix actively delivers sumatriptan
    through the skin in a controlled manner using our proprietary
    SmartRelief technology. Sumatriptan, currently available in
    oral, nasal and injectable formulations, is the most widely
    prescribed migraine medication. We designed Zelrix for patients
    who suffer from nausea or vomiting with migraines and for those
    who experience inconsistent relief or adverse events from their
    current treatment.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We successfully completed a pivotal Phase&#160;III clinical
    trial for Zelrix in July 2009 and expect to submit a New Drug
    Application, or NDA, to the United States Food and Drug
    Administration, or FDA, in the fourth quarter of 2010. Subject
    to FDA approval of our NDA, we plan to build our own specialty
    sales force in the U.S.&#160;to launch Zelrix in the first half
    of 2012.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We have two other proprietary product candidates in preclinical
    development that address large market opportunities: NP201 for
    the continuous symptomatic treatment of Parkinson&#146;s
    disease, and NP202 for the long-term treatment of schizophrenia
    and bipolar disorder. We expect to submit an Investigational New
    Drug Application, or IND, to the FDA in the first half of 2011
    for NP201 and in 2012 for NP202 in order to initiate human
    clinical trials of these product candidates.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Our
    Product Candidates</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Zelrix
    for the treatment of acute migraine</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Migraine is a debilitating neurological disease that affects
    approximately 28&#160;million people in the U.S.&#160;Symptoms
    of migraine include moderate to severe headache pain, nausea and
    vomiting, photophobia, or abnormal sensitivity to light, and
    phonophobia, or abnormal sensitivity to sound. Most migraines
    last between four and 24&#160;hours. Symptoms other than
    headache pain contribute significantly to the disability caused
    by acute migraine. In particular, nausea and vomiting during a
    migraine can be severe and incapacitating and prevent or
    discourage migraine patients, or migraineurs, from taking their
    migraine medication.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    According to IMS Health Inc., or IMS, over 13&#160;million
    prescriptions for the treatment of acute migraine were filled in
    the U.S.&#160;in 2009, with more than 90% of these prescriptions
    for triptans. Triptan sales in the U.S.&#160;in 2009 exceeded
    $2.0&#160;billion, with approximately 123&#160;million
    individual units sold. Currently, triptans constitute the most
    prescribed class of medication for the treatment of acute
    migraine, and sumatriptan is the most widely prescribed triptan.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We believe that most marketed migraine therapies have
    significant limitations. Zelrix is a transdermal patch designed
    to provide migraineurs fast onset and sustained relief through a
    tolerable, non-oral route of administration. We believe Zelrix
    offers a better alternative to migraineurs by providing the
    following benefits:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

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    <TD width="4%"></TD>
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    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    <I>Circumventing nausea and vomiting.</I>&#160;&#160;According
    to a survey of over 500 respondents conducted by the National
    Headache Foundation in 2008, 90% of migraineurs have experienced
    nausea with a migraine and 59% of migraineurs have experienced
    vomiting with a migraine. In this survey, 48% of respondents who
    ever experienced nausea or vomiting with a migraine reported
    that the nausea or vomiting had a moderate to major impact on
    when or how they take migraine medications. The American Academy
    of Neurology guidelines recommend non-oral therapies for
    migraineurs who experience nausea or vomiting as significant
    migraine symptoms. Because Zelrix is administered transdermally,
    we believe<BR>
</TD>
</TR>

</TABLE>
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    1
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<DIV style="width: 100%; height: 9in; border-top: 1px solid #000000; padding-top: 12pt; border-right: 1px solid #000000; padding-right: 12pt; border-bottom: 1px solid #000000; padding-bottom: 12pt; border-left: 1px solid #000000; padding-left: 12pt"><!-- Begin box 1 -->
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<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>
</TD>
    <TD align="left">
    that it will be attractive to migraineurs suffering from nausea
    or vomiting who might otherwise delay or avoid taking medication.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
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<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    <I>Increasing consistency of response.</I>&#160;&#160;According
    to a 2001 article by Dr.&#160;Michel Ferrari published in <I>The
    Lancet</I>, a peer-reviewed medical journal, clinical trials
    have demonstrated that at least 40% of migraineurs fail to
    respond consistently to oral triptans. We believe this results
    from a variety of causes, including low and inconsistent
    absorption of oral medication because of a compromised ability
    to digest, or decreased gastric motility. Because Zelrix does
    not depend on gastrointestinal absorption, we believe that it
    will provide more consistent relief than oral triptans.
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    <I>Minimizing triptan adverse events.</I>&#160;&#160;According
    to a 2003 article by Dr.&#160;R. Michael Gallagher published in
    <I>Headache</I>, a peer-reviewed medical journal, 67% of
    migraineurs who use prescription migraine medication reported
    that they had delayed or avoided taking a prescription migraine
    medication due to concerns about adverse events. In our clinical
    trials, treatment with Zelrix resulted in a low incidence of
    triptan adverse events while effectively treating migraine.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We plan to develop marketing, sales and distribution
    capabilities for the commercial launch of Zelrix in the U.S.,
    including the hiring of a specialty sales force of approximately
    100&#160;people after marketing approval. We expect to direct
    our marketing efforts to high potential prescribers of Zelrix,
    including neurologists, headache specialists and select other
    physicians. We may seek to further penetrate the
    U.S.&#160;market in the future by expanding our sales force or
    through collaborations with other pharmaceutical and
    biotechnology companies. We may also seek to commercialize
    Zelrix outside the U.S., although we currently plan to do so
    only with a partner.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">NP201
    for the continuous symptomatic treatment of Parkinson&#146;s
    disease</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    According to the Parkinson&#146;s Disease Foundation,
    Parkinson&#146;s disease affects about one&#160;million people
    in the U.S.&#160;and more than four&#160;million people
    worldwide. Symptoms of Parkinson&#146;s disease can appear at
    any age, but the average age of onset is 60. According to IMS,
    2009 sales of Parkinson&#146;s disease therapies in the U.S.,
    European Union and Japan totaled approximately $3.6&#160;billion.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We designed NP201 to provide continuous delivery of
    Parkinson&#146;s disease medication in an easy to administer and
    tolerable dose formulation. After administration, NP201 is
    designed to slowly release ropinirole, an FDA approved
    medication. Based on data from our preclinical studies, we
    believe that NP201 has the potential to provide continuous
    symptomatic relief for up to two months per dose and to
    significantly decrease the incidence of adverse events
    associated with current treatments. We plan to submit an IND to
    the FDA in the first half of 2011.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">NP202
    for the long-term treatment of schizophrenia and bipolar
    disorder</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    According to the National Alliance on Mental Illness, in the
    U.S., schizophrenia affects over two&#160;million adults and
    bipolar disorder affects over ten&#160;million adults. In an
    attempt to improve patient compliance, physicians currently
    administer antipsychotic drugs through depot injections, which
    release medication over a longer period than conventional
    injections or oral medications.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We designed NP202 to provide continuous delivery of an FDA
    approved atypical antipsychotic medication in an easy to
    administer and tolerable dose formulation. We believe that NP202
    will provide a significant improvement over existing treatment
    options because we are designing and developing it to deliver up
    to three months of continuous medication with a single
    dose&#160;and be an easy to administer, pre-loaded, injectable
    product that can be stored at room temperature. We have
    developed NP202 prototype products, initiated pre-IND activities
    and plan to submit an IND to the FDA in 2012.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Our
    Proprietary Delivery Technologies</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We hold exclusive worldwide rights to two proprietary drug
    delivery technologies: SmartRelief and LAD. Zelrix uses
    SmartRelief, while NP201 and NP202 both use our long-acting
    delivery, or LAD, technology.
</DIV>
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    <BR>
    2
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<DIV style="width: 100%; height: 9in; border-top: 1px solid #000000; padding-top: 12pt; border-right: 1px solid #000000; padding-right: 12pt; border-bottom: 1px solid #000000; padding-bottom: 12pt; border-left: 1px solid #000000; padding-left: 12pt"><!-- Begin box 1 -->
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<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    SmartRelief is our proprietary transdermal delivery technology
    based on iontophoresis, a non-invasive method of transporting a
    molecule through the skin by applying a mild electrical current.
    Unlike passive transdermal technologies, which rely on diffusion
    for medication delivery, SmartRelief controls the amount and
    rate of medication delivery. The SmartRelief technology
    facilitates active transdermal delivery, which is important for
    molecules, such as sumatriptan, that are not able to be
    delivered passively through the skin.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    LAD is comprised of a biodegradable polymer matrix using
    commonly available medical polymers and an active drug. It is
    formed into a small implant for injection just below the skin.
    We designed LAD to improve the control, consistency and
    convenience of medication delivery.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Risks
    Associated with Our Business</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Our business is subject to a number of risks of which you should
    be aware before making an investment decision. These risks are
    described in more detail in the &#147;Risk Factors&#148; section
    of this prospectus immediately following this prospectus
    summary. These risks include the following:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

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    <TD width="4%"></TD>
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    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    We have not received, and we may not receive, marketing approval
    for, or commercial revenues from, Zelrix or any other product
    candidate;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    The commercial success of Zelrix and any other product candidate
    that we develop, if approved, will depend upon significant
    market acceptance among physicians and patients and the
    availability of adequate reimbursement from third party payors;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    If we are unable to establish effective marketing and sales
    capabilities or enter into agreements with third parties to
    perform these functions, we will not be able to commercialize
    Zelrix or any other product candidate that we develop, if
    approved;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    We have incurred significant operating losses since inception,
    which has raised substantial doubt regarding our ability to
    continue as a going concern;&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    We use third parties to manufacture all of our product
    candidates, including Zelrix, and the machinery to produce the
    commercial supply of Zelrix must be designed, built and
    validated.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Our
    Corporate Information</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We were incorporated under the laws of the State of Delaware in
    January 2005. Our principal executive offices are located at 227
    Washington Street, Suite&#160;200, Conshohocken, Pennsylvania
    19428 and our telephone number is
    <FONT style="white-space: nowrap">(484)&#160;567-0130.</FONT>
    Our website address is www.nupathe.com. The information
    contained on, or that can be accessed through, our website is
    not part of this prospectus. We have included our website
    address in this prospectus solely as an inactive textual
    reference.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In this prospectus, unless otherwise stated or the context
    otherwise indicates, references to &#147;NuPathe,&#148;
    &#147;we,&#148; &#147;us,&#148; &#147;our&#148; and similar
    references refer to NuPathe Inc. The name
    NuPathe<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP>

    is our registered trademark.
    Zelrix<SUP style="font-size: 85%; vertical-align: top"><FONT style="font-variant: SMALL-CAPS">tm</FONT></SUP>,

    SmartRelief<SUP style="font-size: 85%; vertical-align: top"><FONT style="font-variant: SMALL-CAPS">tm</FONT></SUP>

    and
    LAD<SUP style="font-size: 85%; vertical-align: top"><FONT style="font-variant: SMALL-CAPS">tm</FONT></SUP>

    are our trademarks. All other trademarks, trade names and
    service marks appearing in this prospectus are the property of
    their respective owners.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    This prospectus includes statistical and other industry and
    market data that we obtained from industry publications and
    research, surveys and studies conducted by third parties.
    Industry publications and third party research, surveys and
    studies generally indicate that their information has been
    obtained from sources believed to be reliable, although they do
    not guarantee the accuracy or completeness of such information.
    While we believe these industry publications and third party
    research, surveys and studies are reliable, we have not
    independently verified such data.
</DIV>
<!-- XBRL Pagebreak Begin -->
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<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    3
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<DIV style="width: 100%; height: 9in; border-top: 1px solid #000000; padding-top: 12pt; border-right: 1px solid #000000; padding-right: 12pt; border-bottom: 1px solid #000000; padding-bottom: 12pt; border-left: 1px solid #000000; padding-left: 12pt"><!-- Begin box 1 -->
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<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">THE
    OFFERING</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

<TR>
    <TD width="36%"></TD>
    <TD width="1%"></TD>
    <TD width="63%"></TD>
</TR>

<TR>
    <TD valign="top">
    Common stock offered by us</TD>
    <TD></TD>
    <TD valign="bottom">
    &#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;shares</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD valign="top">
    Common stock to be outstanding after this offering</TD>
    <TD></TD>
    <TD valign="bottom">
    &#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;shares</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD valign="top">
    Over-allotment option</TD>
    <TD></TD>
    <TD valign="bottom">
    We have granted the underwriters an option for 30&#160;days from
    the date of this prospectus to purchase up
    to&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;additional
    shares of common stock to cover over-allotments.</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD valign="top">
    Use of proceeds</TD>
    <TD></TD>
    <TD valign="bottom">
    We intend to use the net proceeds from this offering to complete
    the clinical development of, seek marketing approval for and, if
    approved, commercially launch Zelrix in the U.S., to continue
    preclinical and clinical development of NP201 and NP202 and for
    working capital and other general corporate purposes. See
    &#147;Use of Proceeds&#148; on page&#160;34.</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD valign="top">
    Proposed NASDAQ Global Market symbol</TD>
    <TD></TD>
    <TD valign="bottom">
    &#147;PATH&#148;</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD valign="top">
    Risk factors</TD>
    <TD></TD>
    <TD valign="bottom">
    You should read the &#147;Risk Factors&#148; section of this
    prospectus for a discussion of factors to consider carefully
    before deciding to invest in shares of our common stock.</TD>
</TR>

</TABLE>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<CENTER style="font-size: 1pt; width: 18%; border-bottom: 1pt solid #000000"></CENTER>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The number of shares of common stock to be outstanding after
    this offering is based on 3,143,905&#160;shares of common stock
    outstanding as of April&#160;30, 2010 and also includes:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    61,824,121&#160;shares of common stock issuable upon the
    automatic conversion of all outstanding shares of our preferred
    stock, including accrued dividends, upon the closing of this
    offering, assuming that the closing occurred on April&#160;30,
    2010;&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    &#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;shares
    of common stock issuable upon the automatic conversion of all
    principal and accrued interest outstanding under secured
    subordinated promissory notes that we issued and sold to
    investors in April 2010, or the April 2010 Convertible Notes,
    upon the closing of this offering, assuming an initial public
    offering price of $&#160;&#160;&#160;&#160;&#160; per share, the
    midpoint of the price range set forth on the cover page of this
    prospectus, and that the closing occurred on April&#160;30, 2010.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The number of shares of common stock to be outstanding after
    this offering excludes:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    7,520,075&#160;shares of common stock issuable upon the exercise
    of options outstanding as of April&#160;30, 2010 at a weighted
    average exercise price of $0.23 per share;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    1,126,298&#160;shares of common stock issuable upon the exercise
    of warrants outstanding as of May&#160;14, 2010 at a weighted
    average exercise price of $0.93 per share;&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    846,020 additional shares of common stock available for future
    issuance as of April&#160;30, 2010 under our 2005 Equity
    Compensation Plan, or our 2005 Plan.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Unless otherwise indicated, all information in this prospectus
    assumes:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    No exercise of the outstanding options or warrants described
    above;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    No exercise by the underwriters of their option to purchase up
    to&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;shares
    of common stock to cover over-allotments;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    The automatic conversion of all outstanding shares of our
    preferred stock, including accrued dividends, into an aggregate
    of 61,824,121&#160;shares of common stock upon the closing of
    this offering, assuming that the closing occurred on
    April&#160;30, 2010;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    The automatic conversion of all principal and accrued interest
    outstanding under the April 2010 Convertible Notes into an
    aggregate
    of&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;shares
    of common stock upon the closing of this
</TD>
</TR>
<!-- XBRL Paragraph Pagebreak -->

</TABLE>
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</DIV><!-- End box 1 -->

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    4
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<DIV style="width: 100%; height: 9in; border-top: 1px solid #000000; padding-top: 12pt; border-right: 1px solid #000000; padding-right: 12pt; border-bottom: 1px solid #000000; padding-bottom: 12pt; border-left: 1px solid #000000; padding-left: 12pt"><!-- Begin box 1 -->
<!-- XBRL Pagebreak End -->

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>
</TD>
    <TD align="left">
    offering, assuming an initial public offering price of
    $&#160;&#160;&#160;&#160;&#160; per share, the midpoint of the
    price range set forth on the cover page of this prospectus, and
    that the closing occurred on April&#160;30, 2010;
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    The warrants outstanding as of May&#160;14, 2010 to purchase an
    aggregate of 1,126,298&#160;shares of preferred stock have
    become, in accordance with their terms, warrants to purchase
    1,126,298&#160;shares of common stock at an exercise price of
    $0.93 per share of common stock upon the closing of this
    offering;&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    The restatement of our amended and restated certificate of
    incorporation and our bylaws upon the closing of this offering.
</TD>
</TR>

</TABLE>
<!-- XBRL Pagebreak Begin -->
</DIV><!-- End box 1 -->

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    5
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<DIV style="width: 100%; height: 9in; border-top: 1px solid #000000; padding-top: 12pt; border-right: 1px solid #000000; padding-right: 12pt; border-bottom: 1px solid #000000; padding-bottom: 12pt; border-left: 1px solid #000000; padding-left: 12pt"><!-- Begin box 1 -->
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<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">SUMMARY
    FINANCIAL DATA</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    You should read the following summary financial data together
    with the &#147;Capitalization,&#148; &#147;Selected Financial
    Data&#148; and &#147;Management&#146;s Discussion and Analysis
    of Financial Condition and Results of Operations&#148; sections
    of this prospectus and our financial statements and the related
    notes appearing at the end of this prospectus. We have derived
    the statement of operations data for the years ended
    December&#160;31, 2007, 2008 and 2009 and for the period from
    January&#160;7, 2005 (inception) through December&#160;31, 2009
    and the balance sheet data as of December&#160;31, 2009 from our
    audited financial statements appearing at the end of this
    prospectus. Our historical results for any prior period are not
    necessarily indicative of results to be expected in any future
    period.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    See note&#160;3(i) to our financial statements appearing at the
    end of this prospectus for information regarding computation of
    basic and diluted net loss per common share, unaudited pro forma
    basic and diluted net loss per common share and the unaudited
    pro forma weighted average basic and diluted common shares
    outstanding used in computing pro forma basic and diluted net
    loss per common share.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The unaudited pro forma balance sheet data set forth below give
    effect to:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    The automatic conversion of all outstanding shares of our
    preferred stock, including accrued dividends, into an aggregate
    of 61,824,121&#160;shares of common stock upon the closing of
    this offering, assuming that the closing occurred on
    April&#160;30, 2010;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    The receipt in April 2010 of gross proceeds of $10,062,500 upon
    the issuance of the April 2010 Convertible Notes and the
    automatic conversion of all principal and accrued interest
    outstanding under the April 2010 Convertible Notes into an
    aggregate
    of&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;shares
    of common stock upon the closing of this offering, assuming an
    initial public offering price of $&#160;&#160;&#160;&#160;&#160;
    per share, the midpoint of the price range set forth on the
    cover page of this prospectus, and that the closing occurred on
    April&#160;30, 2010;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    The receipt in May 2010 of gross proceeds of $5,000,000 upon
    entering into a secured term loan facility, or the May 2010 Loan
    Facility, the issuance of warrants to purchase
    255,376&#160;shares of Series&#160;B preferred stock, with an
    estimated fair value of $203,255, to the lenders under such
    facility and the repayment in full of the $782,000 outstanding
    as of December&#160;31, 2009 under a term loan that we entered
    into in 2007;&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    The warrants outstanding as of May&#160;14, 2010 to purchase an
    aggregate of 1,126,298&#160;shares of our preferred stock
    becoming, in accordance with their terms, warrants to purchase
    1,126,298&#160;shares of common stock at an exercise price of
    $0.93 per share of common stock upon the closing of this
    offering and the reclassification of the warrant liability with
    respect to warrants outstanding as of December&#160;31, 2009 to
    additional paid-in capital.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The pro forma as adjusted balance sheet data set forth below
    give further effect to the issuance and sale
    of&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;shares
    of common stock in this offering at an assumed initial public
    offering price of $&#160;&#160;&#160;&#160;&#160; per share, the
    midpoint of the price range set forth on the cover page of this
    prospectus, after deducting estimated underwriting discounts and
    commissions and estimated offering expenses payable by us.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>
<!-- XBRL Pagebreak Begin -->
</DIV><!-- End box 1 -->

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    6
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<DIV style="width: 100%; height: 9in; border-top: 1px solid #000000; padding-top: 12pt; border-right: 1px solid #000000; padding-right: 12pt; border-bottom: 1px solid #000000; padding-bottom: 12pt; border-left: 1px solid #000000; padding-left: 12pt"><!-- Begin box 1 -->
<!-- XBRL Pagebreak End -->

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="53%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=02 type=lead -->
    <TD width="7%" align="right">&nbsp;</TD>	<!-- colindex=02 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=02 type=hang1 -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=03 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=03 type=lead -->
    <TD width="7%" align="right">&nbsp;</TD>	<!-- colindex=03 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=03 type=hang1 -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=04 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=04 type=lead -->
    <TD width="7%" align="right">&nbsp;</TD>	<!-- colindex=04 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=04 type=hang1 -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=05 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=05 type=lead -->
    <TD width="10%" align="right">&nbsp;</TD>	<!-- colindex=05 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=05 type=hang1 -->
</TR>
<!-- Table Width Row END -->
<!-- TableOutputHead -->
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>January&#160;7, 2005<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>(inception)<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>through<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="10" align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Year Ended December&#160;31,</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>December&#160;31,<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>2007</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>2008</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>2009</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>2009</B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="14" align="center" valign="bottom">
    <B>(In thousands, except share and per share data)</B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<!-- TableOutputBody -->
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <B>Statement of Operations Data:</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Operating expenses:
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 30pt">
    Research and development
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    7,761
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    8,815
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    11,310
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    31,788
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 30pt">
    Acquired in-process research and development
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    5,500
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    5,500
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 30pt">
    General and administrative
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    1,884
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    3,075
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    3,142
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    9,827
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 40pt">
    Total operating expenses
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (9,645
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (17,390
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (14,452
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (47,115
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Interest income (expense), net
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (30
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (121
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (1,289
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (2,096
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 40pt">
    Loss before tax benefit
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (9,675
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (17,511
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (15,741
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (49,211
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Income tax benefit
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    151
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    151
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 40pt">
    Net loss
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (9,675
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (17,511
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (15,590
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    &#160;(49,060
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Accretion of redeemable convertible preferred stock
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (1,126
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (2,330
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (3,617
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 40pt">
    Net loss applicable to common stockholders
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    (10,801
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    (19,841
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    (19,207
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Basic and diluted net loss per common share
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    (3.67
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    (6.49
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    (6.28
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Weighted average basic and diluted common shares&#160;outstanding
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    2,947,005
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    3,059,137
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    3,060,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 30pt">
    Unaudited pro forma net loss
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    (15,590
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 30pt">
    Unaudited pro forma basic and diluted net loss per common share
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 30pt">
    Unaudited pro forma weighted average basic and diluted common
    shares outstanding
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="67%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=02 type=lead -->
    <TD width="5%" align="right">&nbsp;</TD>	<!-- colindex=02 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=02 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=03 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=03 type=lead -->
    <TD width="6%" align="right">&nbsp;</TD>	<!-- colindex=03 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=03 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=04 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=04 type=lead -->
    <TD width="8%" align="right">&nbsp;</TD>	<!-- colindex=04 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=04 type=hang1 -->
</TR>
<!-- Table Width Row END -->
<!-- TableOutputHead -->
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="10" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>As of December&#160;31, 2009</B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Pro Forma as<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Actual</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Pro Forma</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Adjusted</B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="10" nowrap align="center" valign="bottom">
    <B>(Unaudited)<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="10" nowrap align="center" valign="bottom">
    <B>(In thousands)</B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<!-- TableOutputBody -->
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <B>Balance Sheet Data:</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Cash and cash equivalents
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    3,927
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    18,207
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Working capital
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    1,527
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    16,590
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Total assets
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    5,009
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    19,493
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Long-term debt
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    5,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Redeemable convertible preferred stock
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    55,538
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Total stockholders&#146; equity (deficit)
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (54,474
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    11,957
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Each $1.00 increase or decrease in the assumed initial public
    offering price of $&#160;&#160;&#160;&#160;&#160; per share
    would increase or decrease each of cash and cash equivalents,
    working capital, total assets and total stockholders&#146;
    equity on a pro forma as adjusted basis by approximately
    $&#160;&#160;&#160;&#160;&#160;&#160;million, assuming that the
    number of shares of common stock offered by us, as set forth on
    the cover page of this prospectus, remains the same and after
    deducting estimated underwriting discounts and commissions and
    estimated offering expenses payable by us.
</DIV>
</DIV><!-- End box 1 -->
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    7
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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL Pagebreak End -->

<A name='102'>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">RISK
    FACTORS</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Investing in our common stock involves a high degree of risk.
    Before you decide to invest in our common stock, you should
    consider carefully the risks described below, together with the
    other information contained in this prospectus, including our
    financial statements and the related notes appearing at the end
    of this prospectus. We believe the risks described below are the
    risks that are material to us as of the date of this prospectus.
    If any of the following risks actually occur, our business,
    financial condition, results of operations and future growth
    prospects would likely be materially and adversely affected. In
    these circumstances, the market price of our common stock could
    decline, and you may lose all or part of your investment.</I>
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Risks
    Related to Development and Commercialization of Our Product
    Candidates</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">We are
    heavily dependent on the success of Zelrix. If we fail to obtain
    marketing approval for and commercialize Zelrix, or experience
    delays in doing so, our business will be materially
    harmed.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We have invested a significant portion of our efforts and
    financial resources in the development of our most advanced
    product candidate, Zelrix. Zelrix is the only product candidate
    for which we have conducted clinical trials, and to date we have
    not marketed, distributed or sold any products. Our ability to
    generate revenues in the near term is substantially dependent on
    our ability to develop and commercialize Zelrix. In the fourth
    quarter of 2010, we plan to submit a new drug application, or
    NDA, seeking approval to commercialize Zelrix for treatment of
    acute migraine. We cannot commercialize Zelrix prior to
    obtaining FDA approval. Even though Zelrix has completed its
    pivotal Phase&#160;III clinical trial with positive results,
    Zelrix is still, nonetheless, susceptible to the risks of
    failure inherent at any stage of drug development, including the
    appearance of unexpected adverse events and the FDA&#146;s
    determination Zelrix is not approvable. If we do not receive FDA
    approval for and commercialize Zelrix, we will not be able to
    generate product revenues in the foreseeable future, or at all.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    As a company, we have never obtained marketing approval for or
    commercialized a drug. It is possible that the FDA may refuse to
    accept our NDA for substantive review or may review our data and
    conclude that our application is insufficient to obtain
    marketing approval of Zelrix. Before we submit our NDA, we must:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Complete two ongoing pharmacokinetic trials in healthy subjects
    and submit interim safety data from our two ongoing open label
    Phase&#160;III long-term safety trials, or our Phase&#160;III
    safety trials;&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Obtain a waiver from the FDA with respect to the conduct of a
    separate skin sensitization study or complete such a study.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In addition, the FDA has requested that we provide data in our
    NDA regarding an <I>in&#160;vitro</I> analytical testing method
    for Zelrix. However, to date, for technical reasons we have not
    been able to develop an appropriate <I>in&#160;vitro
    </I>analytical testing method for Zelrix, and we are working
    with the FDA to develop acceptable alternatives. Any
    difficulties or delays we experience in obtaining the data from
    our pharmacokinetic and Phase&#160;III safety trials will delay
    the submission of our NDA and the FDA&#146;s review of the NDA.
    In addition, delay or failure to develop an <I>in&#160;vitro</I>
    analytical testing method for Zelrix or reach agreement with the
    FDA on an alternative may delay marketing approval of Zelrix.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    If, following submission, our NDA is not accepted for
    substantive review or approved, the FDA may require that we
    conduct additional clinical or preclinical trials, manufacture
    additional validation batches or develop additional analytical
    test methods before it will reconsider our application. If the
    FDA requires additional studies or data, we would incur
    increased costs and delays in the marketing approval process,
    which may require us to expend more resources than we have
    available. In addition, the FDA may not consider sufficient any
    additional required trials that we perform and complete.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Even if we believe that the data from our clinical trials and
    analytical testing methods support marketing approval of Zelrix
    in the U.S., the FDA may not agree with our analysis and approve
    our NDA. Any delay in obtaining, or an inability to obtain,
    marketing approvals would prevent us from commercializing
    Zelrix, generating revenues and achieving profitability.
</DIV>
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    <BR>
    8
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<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL Pagebreak End -->

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">The
    commercial success of Zelrix and any other product candidates
    that we develop, if approved in the future, will depend upon
    significant market acceptance of these products among
    physicians, patients and third party payors.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    As a company, we have never commercialized a product candidate
    for any indication. Even if any product candidate that we
    develop, including Zelrix, is approved by the appropriate
    regulatory authorities for marketing and sale, it may not gain
    acceptance among physicians, patients and third party payors. If
    our products for which we obtain marketing approval do not gain
    an adequate level of acceptance, we may not generate significant
    product revenues or become profitable. Market acceptance of
    Zelrix, and any other product candidates that we develop, by
    physicians, patients and third party payors will depend on a
    number of factors, some of which are beyond our control,
    including:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    The efficacy, safety and other potential advantages in relation
    to alternative treatments;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    The relative convenience and ease of administration;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    The availability of adequate coverage or reimbursement by third
    parties, such as insurance companies and other healthcare
    payors, and by government healthcare programs, including
    Medicare and Medicaid;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    The prevalence and severity of adverse events;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    The cost of treatment in relation to alternative treatments,
    including generic products;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    The extent and strength of marketing and distribution support;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    The limitations or warnings contained in a product&#146;s FDA
    approved labeling;&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Distribution and use restrictions imposed by the FDA or to which
    we agree as part of a mandatory risk evaluation and mitigation
    strategy or voluntary risk management plan.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    For example, even if the medical community accepts that Zelrix
    is safe and effective for its approved indications, physicians
    and patients may not immediately be receptive to Zelrix and may
    be slow to adopt it as an accepted treatment for acute migraine.
    In addition, even though we believe Zelrix has significant
    advantages, because no head-to-head trials comparing Zelrix to
    competing products have been conducted, it is unlikely that any
    labeling approved by the FDA will contain claims that Zelrix is
    safer or more effective than competitive products or will permit
    us to promote Zelrix as being superior to competing products.
    Further, the availability of numerous inexpensive generic forms
    of migraine therapy products may also limit acceptance of Zelrix
    among physicians, patients and third party payors. If Zelrix is
    approved but does not achieve an adequate level of acceptance
    among physicians, patients and third party payors, we may not
    generate meaningful revenues from Zelrix and we may not become
    profitable.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">It
    will be difficult for us to profitably sell any of our product
    candidates that the FDA approves, including Zelrix, if
    reimbursement for such product candidate is
    limited.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Market acceptance and sales of Zelrix or any other product
    candidates that we develop will depend on reimbursement policies
    and may be affected by future healthcare reform measures.
    Government authorities and third party payors, such as private
    health insurers and health maintenance organizations, decide
    which medications they will pay for and establish reimbursement
    levels. A primary trend in the U.S.&#160;healthcare industry and
    elsewhere is cost containment. Government authorities and these
    third party payors have attempted to control costs by limiting
    coverage and the amount of reimbursement for particular
    medications. We cannot be sure that reimbursement will be
    available for Zelrix or any other product candidates that we
    develop and, if reimbursement is available, the level of
    reimbursement. Reimbursement may impact the demand for, or the
    price of, our products for which we obtain marketing approval.
    Numerous generic products may be available at lower prices than
    branded therapy products, such as Zelrix, if it is approved,
    which may also reduce the likelihood and level of reimbursement
    for our product candidates, including Zelrix. If reimbursement
    is not available or is available only to limited levels, we may
    not be able to successfully commercialize Zelrix or any other
    product candidates that we develop.
</DIV>
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    <BR>
    9
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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL Pagebreak End -->

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">If we
    are unable to establish effective marketing and sales
    capabilities or enter into agreements with third parties to
    market and sell our product candidates after they are approved,
    we may be unable to generate product revenues.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We currently do not have a commercial infrastructure for the
    marketing, sales and distribution of pharmaceutical products. In
    order to commercialize our products, we must build our
    marketing, sales and distribution capabilities or make
    arrangements with third parties to perform these services. If
    Zelrix is approved by the FDA, we plan to build a commercial
    infrastructure to launch Zelrix in the U.S., including a
    specialty sales force of approximately 100&#160;people. We may
    seek to further penetrate the U.S.&#160;market in the future by
    expanding our sales force or through collaborations with other
    pharmaceutical or biotechnology companies. We may also seek to
    commercialize Zelrix outside the U.S., although we currently
    plan to do so only with a collaborator.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The establishment and development of our own sales force and
    related compliance plans to market any products we may develop
    will be expensive and time consuming and could delay any product
    launch, and we may not be able to successfully develop this
    capability. We, or our future collaborators, will have to
    compete with other pharmaceutical and biotechnology companies to
    recruit, hire, train and retain marketing and sales personnel.
    In the event we are unable to develop a marketing and sales
    infrastructure, we would not be able to commercialize Zelrix or
    any other product candidates that we develop, which would limit
    our ability to generate product revenues.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Companies such as ours often expand their sales force and
    marketing capabilities for a product prior to it being approved
    by the FDA so that the drug can be commercialized upon approval.
    Although our current plan is to hire most of our sales and
    marketing personnel only if Zelrix is approved by the FDA, we
    will incur expenses prior to product launch in recruiting this
    sales force and developing a marketing and sales infrastructure.
    If the commercial launch of Zelrix is delayed as a result of FDA
    requirements or other reasons, we would incur these expenses
    prior to being able to realize any revenue from product sales.
    Even if we are able to effectively hire a sales force and
    develop a marketing and sales infrastructure, our sales force
    and marketing teams may not be successful in commercializing
    Zelrix or any other product candidates that we develop.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    To the extent we rely on third parties to commercialize any
    products for which we obtain marketing approval, we may receive
    less revenues than if we commercialized these products
    ourselves. In addition, we would have less control over the
    sales efforts of any other third parties involved in our
    commercialization efforts. In the event we are unable to
    collaborate with a third party marketing and sales organization,
    our ability to generate product revenues may be limited either
    in the U.S.&#160;or internationally.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">We
    face significant competition from other pharmaceutical and
    biotechnology companies. Our operating results will suffer if we
    fail to compete effectively.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The pharmaceutical and biotechnology industries are intensely
    competitive and subject to rapid and significant technological
    change. Our major competitors include organizations such as
    major multinational pharmaceutical companies, established
    biotechnology companies and specialty pharmaceutical and generic
    drug companies. Many of our competitors have greater financial
    and other resources than we have, such as larger research and
    development staff and more extensive marketing and manufacturing
    organizations. As a result, these companies may obtain marketing
    approval more rapidly than we are able to and may be more
    effective in selling and marketing their products. Smaller or
    early stage companies may also prove to be significant
    competitors, particularly through collaborative arrangements
    with large, established companies.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Our competitors may succeed in developing, acquiring or
    licensing on an exclusive basis technologies and drug products
    that are more effective or less costly than Zelrix or any other
    drug candidate that we are currently developing or that we may
    develop, which could render our products obsolete and
    noncompetitive. We expect any products that we develop and
    commercialize to compete on the basis of, among other things,
    efficacy, safety, convenience of administration and delivery,
    price, the level of generic competition and the availability of
    reimbursement from government and other third party payors. We
    also expect to face
</DIV>
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    <BR>
    10
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    competition in our efforts to identify appropriate collaborators
    or partners to help commercialize our product candidates in our
    target commercial markets.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The competition in the market for acute migraine medication is
    intense. The majority of marketed prescription products for
    treatment of acute migraine in the U.S.&#160;are in the triptan
    class in tablet, orally-disintegrating tablet, nasal spray and
    injectable therapies. The largest selling triptan is
    sumatriptan, with 2009 sales of approximately $800&#160;million
    in the U.S., including approximately $200&#160;million
    attributable to GlaxoSmithKline plc&#146;s, or GlaxoSmithKline,
    branded sumatriptan, Imitrex. There are at least eight other
    branded triptan therapies being sold by pharmaceutical and
    biotechnology companies, including Maxalt from Merck&#160;&#038;
    Co., Inc., or Merck, and Treximet from GlaxoSmithKline. In July
    2009, the FDA approved Zogenix, Inc.&#146;s Sumavel DosePro
    needle-free sumatriptan injection for the treatment of acute
    migraine and cluster headache.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    If approved, Zelrix will face competition from inexpensive
    generic versions of sumatriptan and generic versions of other
    branded products of competitors that have lost or will lose
    their patent exclusivity. For example, we expect Amerge, the
    branded version of naratriptan, to lose patent protection in
    July 2010. In addition, we expect other triptan patents to
    expire between 2012 and 2025. Many of these products are
    manufactured and marketed by large pharmaceutical companies and
    are well accepted by physicians, patients and third party
    payors. Because of the low cost, health insurers likely would
    require or encourage use of, and consumers likely would use, a
    generic triptan prior to trying Zelrix.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In addition to marketed migraine medications, if approved,
    Zelrix may face competition from migraine product candidates in
    various stages of clinical development by both large and small
    companies. These include Merck&#146;s telcagepant, an orally
    administered calcitonin gene related peptide antagonist, and
    Levadex from MAP Pharmaceuticals, Inc., an inhaled formulation
    of dihydroergotamine, both for acute migraine, and Allergan,
    Inc.&#146;s Botox for chronic migraine. Each of these has either
    completed or is in Phase&#160;III clinical development. Zelrix
    may also compete with other drug candidates that receive
    marketing approval before Zelrix. If we are unable to
    demonstrate the advantages of Zelrix over competing drugs and
    drug candidates, we will not be able to successfully
    commercialize Zelrix and our results of operations will suffer.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    As with Zelrix, if approved, each of NP201 and NP202 will face
    competition from generic and branded products. Specifically,
    NP201, a biodegradable, subcutaneous, injectable polymer implant
    combined with ropinirole, will face competition from generic
    immediate release and extended release versions of ropinirole
    and the dopamine agonist pramiprexole, as well as from two
    continuous delivery medications, a levadopa gel and an
    injectable apomorphine. NP202, a biodegradable, subcutaneous,
    injectable polymer implant combined with an atypical
    antipsychotic medication, will face competition from a variety
    of branded and generic versions of antipsychotic medications, in
    addition to several other sustained delivery depot formulations
    of atypical antipsychotics.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    As a result of all of these factors, our competitors may succeed
    in obtaining patent protection or FDA approval or discovering,
    developing and commercializing migraine and other therapies
    before we do.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Any
    failure or delay in preclinical studies or clinical trials for
    our product candidates may cause us to incur additional costs or
    delay or prevent the commercialization of our product candidates
    and could severely harm our business.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Before obtaining marketing approval for the sale of our product
    candidates, we must conduct, at our own expense, extensive
    preclinical tests and then clinical trials to demonstrate the
    safety and efficacy of our product candidates in humans.
    Clinical testing, in particular, is expensive, difficult to
    design and implement, can take many years to complete and is
    uncertain as to outcome. The outcome of preclinical studies and
    early clinical trials may not be predictive of the success of
    later clinical trials, and interim results of a clinical trial
    do not necessarily predict final results. Even if preclinical
    studies and early phase clinical trials succeed, it is necessary
    to conduct additional clinical trials in larger numbers of
    subjects taking the medication for longer periods before seeking
    FDA approval to market and sell a medication in the
    U.S.&#160;Clinical data is often susceptible to varying
    interpretations and analyses, and many companies that have
    believed their product candidates performed satisfactorily in
    clinical trials have nonetheless failed to obtain FDA approval
    for their products. A failure of one or more of our clinical
    trials can occur at any stage of testing.
</DIV>
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<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We may experience numerous unforeseen events during, or as a
    result of, the clinical trial process, which could delay or
    prevent us from receiving marketing approval or commercializing
    our product candidates, including the following:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Regulators or institutional review boards may not authorize us
    to commence a clinical trial or conduct a clinical trial at a
    prospective trial site;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Our clinical trials may produce negative or inconclusive
    results, and we may decide, or regulators may require us, to
    conduct additional clinical trials or we may abandon projects
    that we expect to be promising;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    The number of subjects required for our clinical trials may be
    larger than we anticipate, enrollment in our clinical trials may
    be slower than we anticipate, or participants may drop out of
    our clinical trials at a higher rate than we anticipate;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    We might have to suspend or terminate our clinical trials if the
    participants are being exposed to unacceptable health risks;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Regulators or institutional review boards may require that we
    hold, suspend or terminate clinical research for various
    reasons, including noncompliance with regulatory requirements or
    our clinical protocols;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Regulators may refuse to accept or consider data from clinical
    trials for various reasons, including noncompliance with
    regulatory requirements or our clinical protocols;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    The cost of our clinical trials may be greater than we
    anticipate;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    The supply or quality of our product candidates or other
    materials necessary to conduct our clinical trials may be
    insufficient or inadequate;&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    The effects of our product candidates may not be the desired
    effects or the desired level of effect or may include
    undesirable side effects or the product candidates may have
    other unexpected characteristics.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    A number of these risks remain applicable to our pharmacokinetic
    and Phase&#160;III safety trials required for our NDA submission
    for Zelrix.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Subject enrollment, which is a significant factor in the timing
    of clinical trials, is affected by a variety of factors,
    including the following:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    The size and nature of the subject population;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    The proximity of subjects to clinical sites;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    The eligibility criteria for the trial;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    The design of the clinical trial;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Competing clinical trials;&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Clinicians&#146; and subjects&#146; perceptions as to the
    potential advantages of the medication being studied in relation
    to other available therapies, including any new medications that
    may be approved for the indications we are investigating.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Furthermore, we plan to rely on clinical trial sites to ensure
    the proper and timely conduct of our clinical trials, and while
    we have agreements governing their committed activities, we have
    limited influence over their actual performance. Any delays or
    unanticipated problems during clinical testing, such as
    enrollment in our clinical trials being slower than we
    anticipate or participants dropping out of our clinical trials
    at a higher rate than we anticipate, could increase our costs,
    slow down our product development and approval process and
    jeopardize our ability to commence product sales and generate
    revenues.
</DIV>
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    <B><I><FONT style="font-family: 'Times New Roman', Times">Serious
    adverse events or other safety risks could require us to abandon
    development and preclude or limit approval of our product
    candidates.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We may voluntarily suspend or terminate our clinical trials if
    at any time we believe that they present an unacceptable risk to
    participants. In addition, regulatory agencies or institutional
    review boards may at any time order the temporary or permanent
    discontinuation of our clinical trials or of investigators in
    the clinical trials if they believe that the clinical trials are
    not being conducted in accordance with applicable regulatory
    requirements, or that they present an unacceptable safety risk
    to participants. If we elect or are forced to suspend or
    terminate a clinical trial of any product candidates, the
    commercial prospects of such product candidates will be harmed
    and our ability to generate product revenues from any of these
    product candidates, if at all, will be delayed or eliminated.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Clinical trials for our product candidates involve testing in
    large subject populations, which could reveal a high prevalence
    of adverse events. If these effects include undesirable serious
    adverse events or have unexpected characteristics, we may need
    to abandon our development of these product candidates.
    Alternatively, the identification of serious adverse events or
    other significant safety risks could result in the imposition of
    approval requirements, such as labeling or distribution and use
    restrictions that limit the available market for our product
    candidates.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Even
    if Zelrix receives FDA marketing approval, we may not be able to
    secure marketing exclusivity in the U.S.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Although we plan to seek three years marketing exclusivity in
    the U.S.&#160;if we receive FDA approval for Zelrix, we may not
    be entitled to such marketing exclusivity if the FDA determines
    that our clinical investigations were not essential to the
    approval of the Zelrix NDA. This three year marketing
    exclusivity period, if granted, would be coterminous with any
    patent coverage for Zelrix. We also intend to seek an additional
    period of six months pediatric exclusivity in the U.S., but may
    not be able to secure such exclusivity if the FDA does not
    request pediatric trials for Zelrix or we are unable to complete
    the trials that the FDA requests. The six month pediatric
    exclusivity period, if granted, would be in addition to the term
    of any existing regulatory exclusivity or listed patent term. If
    we are unable to secure marketing exclusivity and any patents
    that we are issued do not provide sufficient protection, our
    business and ability to generate revenues may be harmed
    significantly.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">If we
    fail to acquire, develop and commercialize product candidates
    other than Zelrix, our prospects for future growth and our
    ability to sustain profitability may be limited.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    A key element of our strategy is to develop and commercialize a
    portfolio of product candidates in addition to Zelrix. To do so,
    we plan to obtain additional product candidates or technologies
    primarily through acquisitions or licenses. We may not be
    successful in our efforts to identify and develop additional
    product candidates, and any product candidates we do identify
    may not produce commercially viable drugs that safely and
    effectively treat their indicated conditions. To date, our
    efforts have yielded two product candidates in addition to
    Zelrix, both of which are currently in preclinical development.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Our development programs may initially show promise in
    identifying potential product leads, yet fail to produce product
    candidates for clinical development. In addition, identifying
    new treatment needs and product candidates requires substantial
    technical, financial and human resources on our part. If we are
    unable to maintain or secure additional development program
    funding or continue to devote substantial technical and human
    resources to such programs, we may have to delay or abandon
    these programs. Any product candidate that we successfully
    identify may require substantial additional development efforts
    prior to commercial sale, including preclinical studies,
    extensive clinical testing and approval by the FDA and
    applicable foreign regulatory authorities. All product
    candidates are susceptible to the risks of failure that are
    inherent in pharmaceutical product development.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We may be unable to license or acquire suitable product
    candidates or technologies from third parties for a number of
    reasons. In particular, the licensing and acquisition of
    pharmaceutical products is competitive. A number of more
    established companies are also pursuing strategies to license or
    acquire products. These
</DIV>
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<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    established companies may have a competitive advantage over us
    due to their size, cash resources or greater clinical
    development and commercialization capabilities. In addition, we
    expect competition in acquiring product candidates to increase,
    which may lead to fewer suitable acquisition opportunities for
    us as well as higher acquisition prices.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Other factors that may prevent us from licensing or otherwise
    acquiring suitable product candidates include the following:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    We may be unable to license or acquire the relevant technology
    on terms that would allow us to make an appropriate return from
    such product;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Companies that perceive us to be their competitors may be
    unwilling to assign or license their product rights to
    us;&#160;or
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    We may be unable to identify suitable products or product
    candidates within our areas of expertise.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Product
    liability lawsuits could divert our resources, result in
    substantial liabilities and reduce the commercial potential of
    any products that we may successfully develop.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The risk that we may be sued on product liability claims is
    inherent in the development of pharmaceutical products. We will
    face an even greater risk if we commercially sell any products
    that we develop. If we cannot successfully defend ourselves
    against claims that our product candidates, or any products we
    may commercialize, cause injuries, we will incur substantial
    liabilities. Regardless of merit or eventual outcome, these
    lawsuits may:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Expose us to adverse publicity;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Decrease demand for any products that we successfully develop;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Cause clinical trial participants to withdraw from clinical
    trials or be reluctant to enroll;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Divert our management from pursuing our business strategy;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Increase warnings on our product label;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Be costly to defend;&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Force us to limit or forgo further development and
    commercialization of these products.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Although we maintain general liability and product liability
    insurance with limits, subject to deductibles, of
    $2.0&#160;million in the aggregate for general liability,
    $1.0&#160;million in the aggregate for umbrella liability
    coverage for payments that exceed the general liability limits
    and $2.0&#160;million in the aggregate for product liability,
    this insurance may not fully cover potential liabilities. The
    cost of any products liability litigation or other proceedings,
    even if resolved in our favor, could be substantial. In
    addition, inability to obtain or maintain sufficient insurance
    coverage at an acceptable cost or to otherwise protect against
    potential product liability claims could prevent or inhibit the
    development and commercial production and sale of our products,
    which could adversely affect our business, operating results and
    financial condition.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">A
    variety of risks associated with our planned international
    business relationships could materially adversely affect our
    business.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We may enter into agreements with third parties for the
    development and commercialization of Zelrix and possibly other
    products in international markets. If we do so, we would be
    subject to additional risks related to entering into
    international business relationships, including:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Differing regulatory requirements for drug approvals in foreign
    countries;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Potentially reduced protection for intellectual property rights;
</TD>
</TR>

</TABLE>
<!-- XBRL Pagebreak Begin -->

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    14
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL Pagebreak End -->

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    The potential for so-called parallel importing, which is what
    happens when a local seller, faced with high or higher local
    prices, opts to import goods from a foreign market, with low or
    lower prices, rather than buying them locally;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Unexpected changes in tariffs, trade barriers and regulatory
    requirements;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Economic weakness, including inflation, or political instability
    in particular foreign economies and markets;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Compliance with tax, employment, immigration and labor laws for
    employees traveling abroad;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Foreign taxes;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Foreign currency fluctuations, which could result in increased
    operating expenses and reduced revenues, and other obligations
    incident to doing business in another country;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Workforce uncertainty in countries where labor unrest is more
    common than in the U.S.;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Production shortages resulting from any events affecting raw
    material supply or manufacturing capabilities abroad;&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Business interruptions resulting from geo-political actions,
    including war and terrorism, or natural disasters, including
    earthquakes, volcanoes, typhoons, floods, hurricanes and fires.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    These and other risks may materially adversely affect our
    ability to attain or sustain profitable operations.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Risks
    Related to Our Financial Condition and Capital
    Requirements</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">We
    have incurred significant operating losses since inception and
    anticipate that we will incur continued losses for the
    foreseeable future. We may never become
    profitable.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    As of December&#160;31, 2009, we had an accumulated deficit of
    approximately $54.5&#160;million. We are a development stage
    specialty pharmaceutical company with no products approved for
    commercial sale and, to date, have not generated any revenues.
    We have funded our operations to date primarily with the
    proceeds of the sale of convertible preferred stock, convertible
    notes and borrowings under debt facilities. We expect to
    continue to incur substantial additional operating losses for at
    least the next several years as we continue to develop our
    product candidates and seek marketing approval and, subject to
    obtaining such approval, the eventual commercialization of
    Zelrix and our other product candidates. In addition, we will
    incur additional costs of operating as a public company and, if
    we obtain marketing approval for Zelrix, will incur significant
    sales, marketing and outsourced manufacturing expenses. As a
    result, we expect to continue to incur significant and
    increasing losses for the foreseeable future.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    To achieve and maintain profitability, we need to generate
    significant revenues from future product sales. This will
    require us to be successful in a range of challenging
    activities, including:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Obtaining marketing approval for the marketing of Zelrix and
    possibly other product candidates;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Commercializing Zelrix and any other product candidates for
    which we obtain marketing approval;&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Achieving market acceptance of Zelrix and any other product
    candidates for which we obtain marketing approval in the medical
    community and with patients and third party payors.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Zelrix will require additional clinical trials and evaluation,
    marketing approval, substantial investment and significant
    marketing efforts before its product sales generate any revenues
    for us. Because of the numerous risks and uncertainties
    associated with drug development and commercialization, we are
    unable to predict the extent of any future losses. We may never
    successfully commercialize any products, generate significant
    future revenues or achieve and sustain profitability.
</DIV>
<!-- XBRL Pagebreak Begin -->

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    15
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL Pagebreak End -->

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">If we
    fail to obtain additional financing, we may not be able to
    complete development of and commercialize Zelrix or any other
    product candidates.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Our operations have consumed substantial amounts of cash since
    inception. We expect to continue to spend substantial amounts to:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Complete development of and seek marketing approval for Zelrix;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Launch and commercialize Zelrix and any other product candidates
    for which we obtain marketing approval;&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Continue our development programs to advance our internal
    product pipeline, which currently consists of two preclinical
    product candidates.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We will need substantial additional funding and may be unable to
    raise capital when needed or on attractive terms, which would
    force us to significantly delay, scale back or discontinue the
    development or commercialization of Zelrix or our other product
    candidates.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We expect that the net proceeds from this offering and our
    existing cash and cash equivalents will be sufficient to fund
    our operations and capital requirements for at least the
    next&#160;&#160;&#160;months. We believe that these available
    funds will be sufficient to complete the development of Zelrix
    through FDA approval and to fund the expected commercial launch
    of Zelrix in the U.S.&#160;in the first half of 2012. However,
    changing circumstances may cause us to consume capital
    significantly faster than we currently anticipate, and we may
    need to spend more money than currently expected because of
    circumstances beyond our control.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Our future capital requirements will depend on many factors,
    including the following:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    The timing of our submission to the FDA and outcome of the
    FDA&#146;s review of the NDA for Zelrix;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    The extent to which the FDA may require us to perform additional
    clinical trials for Zelrix;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    The timing and success of this offering;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    The costs of our commercialization activities for Zelrix, if it
    is approved by the FDA;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    The cost of purchasing manufacturing and other capital equipment
    for our potential products;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    The scope, progress, results and costs of development for our
    other product candidates;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    The cost, timing and outcome of regulatory review of our other
    product candidates;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    The extent to which we acquire or invest in products, businesses
    and technologies;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    The extent to which we choose to establish collaboration,
    co-promotion, distribution or other similar agreements for
    product candidates;&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    The costs of preparing, submitting and prosecuting patent
    applications and maintaining, enforcing and defending
    intellectual property claims.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    To the extent that our capital resources are insufficient to
    meet our future operating and capital requirements, we will need
    to finance our cash needs through public or private equity
    offerings, debt financings, corporate collaboration and
    licensing arrangements or other financing alternatives. The
    covenants under the May 2010 Loan Facility and the pledge of our
    assets as collateral limit our ability to obtain additional debt
    financing. We have no committed external sources of funds.
    Additional equity or debt financing or corporate collaboration
    and licensing arrangements may not be available on acceptable
    terms, if at all. If we are unable to raise additional capital
    in sufficient amounts or on terms acceptable to us, we will be
    prevented from pursuing acquisition, licensing, development and
    commercialization efforts and our ability to generate revenues
    and achieve or sustain profitability will be substantially
    harmed.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    If we raise additional funds by issuing equity securities, our
    stockholders will experience dilution. Debt financing, if
    available, would result in increased fixed payment obligations
    and may involve agreements that include covenants limiting or
    restricting our ability to take specific actions, such as
    incurring additional debt,
</DIV>
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<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    making capital expenditures or declaring dividends. Any debt
    financing or additional equity that we raise may contain terms,
    such as liquidation and other preferences, that are not
    favorable to us or our stockholders. If we raise additional
    funds through collaboration and licensing arrangements with
    third parties, it may be necessary to relinquish valuable rights
    to our technologies, future revenue streams or product
    candidates or to grant licenses on terms that may not be
    favorable to us.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Our
    recurring operating losses have raised substantial doubt
    regarding our ability to continue as a going
    concern.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Our recurring operating losses raise substantial doubt about our
    ability to continue as a going concern. As a result, our
    independent registered public accounting firm included an
    explanatory paragraph in its report on our financial statements
    as of and for the year ended December&#160;31, 2009 with respect
    to this uncertainty. We have no current source of revenues to
    sustain our present activities, and we do not expect to generate
    revenues until, and unless, the FDA or other regulatory
    authorities approve Zelrix or our other product candidates and
    we successfully commercialize any such product candidates.
    Accordingly, our ability to continue as a going concern will
    require us to obtain additional financing to fund our
    operations. The perception of our ability to continue as a going
    concern may make it more difficult for us to obtain financing
    for the continuation of our operations and could result in the
    loss of confidence by investors, suppliers and employees.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Our
    indebtedness may limit cash flow available to invest in the
    ongoing needs of our business.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Upon closing of this offering, we will have $5.0&#160;million
    principal amount of indebtedness outstanding under the May 2010
    Loan Facility. We may incur additional indebtedness beyond this
    amount, including, subject to our satisfaction of specified
    conditions and approval by the lenders in their sole discretion,
    up to $6.0&#160;million under the May 2010 Loan Facility. Our
    indebtedness combined with our other financial obligations and
    contractual commitments could have significant adverse
    consequences, including:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Requiring us to dedicate a substantial portion of our cash
    resources to the payment of interest on, and principal of, our
    debt, which will reduce the amounts available to fund working
    capital, capital expenditures, product development efforts and
    other general corporate purposes;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Increasing our vulnerability to adverse changes in general
    economic, industry and competitive conditions and adverse
    changes in government regulation;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Limiting our flexibility in planning for, or reacting to,
    changes in our business and our industry;&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Placing us at a competitive disadvantage compared to our
    competitors that have less debt.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In addition, we are vulnerable to increases in the market rate
    of interest because amounts outstanding under the May 2010 Loan
    Facility bear interest at a variable rate. If the market rate of
    interest increases, we may have to pay additional interest on
    our outstanding debt, which would reduce cash available for our
    other business needs.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We may need external sources of funds to repay our indebtedness
    as it matures. We may not have sufficient funds or may be unable
    to arrange for additional financing to pay the amounts due under
    the May&#160;2010 Loan Facility or any other borrowings. Funds
    from external sources may not be available on acceptable terms,
    if at all. In addition, a failure to comply with the covenants
    under the May 2010 Loan Facility or future indebtedness could
    result in an event of default. In the event of an acceleration
    of amounts due under our debt instruments as a result of an
    event of default or the occurrence of a mandatory prepayment
    event, we may not have sufficient funds or may be unable to
    arrange for additional financing to repay our indebtedness or to
    make any accelerated payments, and the lenders could seek to
    enforce security interests in the collateral securing such
    indebtedness. Because of the covenants under our existing debt
    instruments and the pledge of our assets as collateral, we have
    a limited ability to obtain additional debt financing.
</DIV>
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    <BR>
    17
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
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<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">We
    have a limited operating history, which makes it difficult to
    evaluate our business and growth prospects.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We were incorporated in Delaware in January 2005. Our operations
    to date have been limited to organizing and staffing our
    company, conducting product development activities for Zelrix
    and performing preclinical development of our other product
    candidates. As a company, we have not yet demonstrated an
    ability to obtain marketing approval for or commercialize a
    product candidate. Consequently, any predictions about our
    future performance may not be as accurate as they could be if we
    had a history of successfully developing and commercializing
    pharmaceutical products as a company.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In addition, as a new business, we may encounter unforeseen
    expenses, difficulties, complications, delays and other known
    and unknown factors. We will need to transition from a company
    with a development focus to a company capable of supporting
    commercial activities. We may not be successful in such a
    transition.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Risks
    Related to Our Dependence on Third Parties</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">We use
    third parties to manufacture all of our product candidates,
    including Zelrix, and the machinery to produce the commercial
    supply of Zelrix must be designed, built and validated. This may
    increase the risk that we will not have sufficient quantities of
    our product candidates or such quantities at an acceptable cost,
    which could result in clinical development and commercialization
    of our product candidates being delayed, prevented or
    impaired.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We do not own or operate, and have no plans to establish, any
    manufacturing facilities for our product candidates. We have
    limited personnel with experience in drug manufacturing and we
    lack the resources and the capabilities to manufacture any of
    our product candidates on a clinical or commercial scale.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We currently outsource all manufacturing of our preclinical and
    clinical product candidates to third parties, including
    sumatriptan and key components of Zelrix, typically without any
    guarantee that there will be sufficient supplies to fulfill our
    requirements or that we may obtain such supplies on acceptable
    terms. Any delays in obtaining adequate supplies with respect to
    our preclinical and clinical product candidates may delay the
    development or commercialization of Zelrix or our other product
    candidates.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In addition, we do not currently have any agreements with third
    party manufacturers for the long-term commercial supply of our
    product candidates. We may be unable to enter agreements for
    commercial supply with third party manufacturers, or may be
    unable to do so on acceptable terms. Even if we enter into these
    agreements, the various manufacturers of each product candidate
    will likely be single source suppliers to us for a significant
    period of time.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In particular, LTS Lohmann Therapie&#150;Systeme AG, or LTS,
    manufactures Zelrix using sumatriptan and components that we
    purchase from third parties. Although LTS has considerable
    experience in the manufacturer of passive transdermal drug
    patches, it does not have such experience in manufacturing
    active transdermal patches such as Zelrix. In order for LTS to
    produce our commercial supply of Zelrix, LTS must successfully
    complete the following:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Transfer technology and production capabilities from its German
    facility where our clinical supply has been produced to its
    manufacturing facility in New Jersey;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Assemble the commercial scale manufacturing equipment for Zelrix
    using components purchased from third party suppliers;&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Test and validate the newly-assembled machinery and production
    process.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The machinery that LTS will use to produce the commercial supply
    of Zelrix will be customized to the particular manufacturing
    specifications of Zelrix and does not exist currently. If LTS is
    unable to assemble and validate this equipment, or to validate
    the production process at its New Jersey facility, in each case
    in a timely manner, our ability to launch and commercialize
    Zelrix will be compromised significantly. If this customized
    equipment malfunctions at any time during the production
    process, the time it may take LTS to
</DIV>
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<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    secure replacement parts, to undertake repairs and to revalidate
    the equipment and process could limit our ability to meet the
    commercial demand for Zelrix.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Reliance on third party manufacturers subjects us to risks that
    would not affect us if we manufactured the product candidates
    ourselves, including:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Reliance on the third parties for regulatory compliance and
    quality assurance;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    The possible breach of the manufacturing agreements by the third
    parties because of factors beyond our control;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    The possibility of termination or nonrenewal of the agreements
    by the third parties because of our breach of the manufacturing
    agreement or based on their own business priorities;&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    The disruption and costs associated with changing suppliers.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Our product candidates may compete with other products and
    product candidates for access to manufacturing facilities. There
    are a limited number of manufacturers that operate under current
    good manufacturing practice, or cGMP, regulations and that are
    both capable of manufacturing for us and willing to do so. If
    our existing third party manufacturers, or the third parties
    that we engage in the future to manufacture a product for
    commercial sale or for our clinical trials, should cease to
    continue to do so for any reason, we likely would experience
    delays in obtaining sufficient quantities of our product
    candidates for us to meet commercial demand or to advance our
    clinical trials while we identify and qualify replacement
    suppliers. If for any reason we are unable to obtain adequate
    supplies of our product candidates or the drug substances used
    to manufacture them, it will be more difficult for us to develop
    our product candidates and compete effectively.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Our suppliers are subject to regulatory requirements, covering
    manufacturing, testing, quality control, manufacturing, and
    record keeping relating to our product candidates, and subject
    to ongoing inspections by the regulatory agencies. Failure by
    any of our suppliers to comply with applicable regulations may
    result in long delays and interruptions to our manufacturing
    capacity while we seek to secure another supplier that meets all
    regulatory requirements.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">We may
    rely on third parties to conduct aspects of our clinical trials.
    If these third parties do not successfully carry out their
    contractual duties or meet expected deadlines, we may be delayed
    in obtaining or ultimately not be able to obtain marketing
    approval to commercialize Zelrix or any other product
    candidates.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We currently rely on contract research organizations, or CROs,
    for some aspects of our clinical trials, including data
    management, statistical analysis and electronic compilation of
    our NDA. We may enter into additional agreements with CROs to
    obtain additional resources and expertise in an attempt to
    accelerate our progress with regard to ongoing clinical and
    preclinical programs. Entering into relationships with CROs
    involves substantial cost and requires extensive management time
    and focus. In addition, typically there is a transition period
    when a CRO commences work. As a result, delays may occur, which
    may materially impact our ability to meet our desired clinical
    development timelines and ultimately have a material adverse
    impact on our operating results, financial condition or future
    prospects.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    As CROs are not our employees, we cannot control whether or not
    they devote sufficient time and resources to our ongoing
    clinical and preclinical programs in which they are engaged to
    perform. If the CROs we engage do not successfully carry out
    their contractual duties or obligations or meet expected
    deadlines, if they need to be replaced, or if the quality or
    accuracy of the data they provide is compromised due to the
    failure to adhere to regulatory requirements, or for other
    reasons, our development programs may be extended, delayed or
    terminated, and we may not be able to obtain marketing approval
    for or successfully commercialize Zelrix or any other product
    candidates that we develop. As a result, our financial results
    and the commercial prospects for Zelrix and any other product
    candidates that we develop would be harmed, our costs could
    increase and our ability to generate revenues could be delayed.
</DIV>
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
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<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Any
    collaboration arrangements that we may enter into in the future
    may not be successful, which could adversely affect our ability
    to develop and commercialize our product
    candidates.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We may seek collaboration arrangements with pharmaceutical or
    biotechnology companies for the development or commercialization
    of our product candidates in the future. We may enter into such
    arrangements on a selective basis depending on the merits of
    retaining commercialization rights for ourselves as compared to
    entering into selective collaboration arrangements with leading
    pharmaceutical or biotechnology companies for each product
    candidate, both in the U.S.&#160;and internationally. We will
    face, to the extent that we decide to enter into collaboration
    agreements, significant competition in seeking appropriate
    collaborators. Moreover, collaboration arrangements are complex
    and time consuming to negotiate, document and implement. We may
    not be successful in our efforts to establish and implement
    collaborations or other alternative arrangements should we so
    chose to enter into such arrangements. The terms of any
    collaborations or other arrangements that we may establish may
    not be favorable to us.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Any future collaborations that we enter into may not be
    successful. The success of our collaboration arrangements will
    depend heavily on the efforts and activities of our
    collaborators. Collaborators generally have significant
    discretion in determining the efforts and resources that they
    will apply to these collaborations.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Disagreements between parties to a collaboration arrangement
    regarding clinical development and commercialization matters can
    lead to delays in the development process or commercializing the
    applicable product candidate and, in some cases, termination of
    the collaboration arrangement. These disagreements can be
    difficult to resolve if neither of the parties has final
    decision making authority.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Collaborations with pharmaceutical or biotechnology companies
    and other third parties often are terminated or allowed to
    expire by the other party. Any such termination or expiration
    would adversely affect us financially and could harm our
    business reputation.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Risks
    Related to Regulatory Matters</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">If we
    are unable to obtain marketing approval for Zelrix or our other
    product candidates, we will not be able to commercialize our
    product candidates and our business will be substantially
    harmed.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Our product candidates and the activities associated with their
    development and commercialization, including their testing,
    manufacture, safety, efficacy, recordkeeping, labeling, storage,
    approval, advertising, promotion, sale and distribution, are
    subject to comprehensive regulation by the FDA and other
    regulatory agencies in the U.S.&#160;and by comparable
    authorities in other countries. Failure to obtain marketing
    approval for a product candidate will prevent us from
    commercializing the product candidate. As a company, we have not
    received approval from the FDA or demonstrated our ability to
    obtain marketing approval for any drugs that we have developed
    or are developing. Securing FDA approval requires the submission
    of extensive preclinical and clinical data and supporting
    information to the FDA for each therapeutic indication to
    establish the product candidate&#146;s safety and efficacy.
    Securing FDA approval also requires the submission of
    information about the product manufacturing process to, and
    inspection of manufacturing facilities by, the FDA. Our other
    product candidates may not be effective, may be only moderately
    effective or may prove to have undesirable or unintended side
    effects, toxicities or other characteristics that may preclude
    our obtaining marketing approval or prevent or limit commercial
    use.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The process of obtaining marketing approvals is expensive and
    often takes many years, if approval is obtained at all, and can
    vary substantially based upon a variety of factors, including
    the type, complexity and novelty of the product candidates
    involved and the nature of the disease or condition to be
    treated. We intend to seek approval of Zelrix and likely other
    product candidates pursuant to Section&#160;505(b)(2) of the
    Federal Food, Drug, and Cosmetic Act, or FDCA, in the U.S.,
    which enables an NDA applicant to rely in part on findings of
    safety and efficacy of a product already approved by the FDA. We
    may fail to obtain marketing approval for Zelrix or any other
    product candidates for many reasons, including the following:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    We may not be able to demonstrate to the satisfaction of the FDA
    or comparable foreign regulatory authorities that a product
    candidate is safe and effective for any indication;
</TD>
</TR>

</TABLE>
<!-- XBRL Pagebreak Begin -->

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    20
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL Pagebreak End -->

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    The results of clinical trials may not meet the level of
    statistical or clinical significance required by the FDA or
    comparable foreign regulatory authorities for approval;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    The FDA or comparable foreign regulatory authorities may
    disagree with the number, design, conduct or implementation of
    our clinical trials;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    We may not be able to demonstrate that a product
    candidate&#146;s clinical and other benefits outweigh its safety
    risks;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    We may not be able to demonstrate that a product candidate
    provides an advantage over current standard of care or future
    competitive therapies in development;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    The FDA or comparable foreign regulatory authorities may
    disagree with our interpretation of data from preclinical
    studies or clinical trials;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    The FDA or comparable foreign regulatory authorities may not
    accept data generated at our clinical trial sites;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    The data collected from clinical trials of any product
    candidates that we develop may not be sufficient to support the
    submission of an NDA or other submission or to obtain marketing
    approval in the U.S.&#160;or elsewhere;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    The FDA may determine that we have identified the wrong
    reference listed drug or drugs or that approval of our 505(b)(2)
    application for Zelrix or any other product candidate is blocked
    by patent or non-patent exclusivity of the reference listed drug
    or drugs;&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    The FDA or comparable foreign regulatory authorities may
    identify deficiencies in the manufacturing processes or
    facilities of third party manufacturers with which we enter into
    agreements for clinical and commercial supplies.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    This lengthy approval process, as well as the unpredictability
    of future clinical trial results, may result in our failing to
    obtain marketing approval to market Zelrix or any future product
    candidates, which would significantly harm our business, results
    of operations and prospects.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Even
    if we obtain marketing approval for Zelrix or any of our other
    product candidates, we will continue to face extensive
    regulatory requirements and our products may face future
    development and regulatory difficulties.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Even if marketing approval in the U.S.&#160;is obtained, the FDA
    may still impose significant restrictions on a product&#146;s
    indicated uses or marketing, including risk evaluation and
    mitigation strategies, or impose ongoing requirements, including
    with respect to:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Post-market surveillance, post-market studies or post-market
    clinical trials;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Labeling, packaging, storage, distribution, safety surveillance,
    advertising, promotion, recordkeeping and reporting of safety
    and other post-market information;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Monitoring and reporting adverse events and instances of the
    failure of a product to meet the specifications in the NDA;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Changes to the approved product, product labeling or
    manufacturing process;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Advertising and other promotional material;&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Disclosure of clinical trial results on publicly available
    databases.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In addition, manufacturers of drug products and their facilities
    are subject to continual review and periodic inspections by the
    FDA and other regulatory authorities for compliance with cGMP
    regulations. The distribution, sale and marketing of our
    products are subject to a number of additional requirements,
    including:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    State wholesale drug distribution laws and the distribution of
    our product samples to physicians must comply with the
    requirements of the Prescription Drug Marketing Act;
</TD>
</TR>

</TABLE>
<!-- XBRL Pagebreak Begin -->

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    21
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL Pagebreak End -->

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Sales, marketing and scientific or educational grant programs
    must comply with the anti-kickback and fraud and abuse
    provisions of the Social Security Act, the transparency
    provision of the Patient Protection and Affordable Care Act and
    an associated reconciliation bill that became law in
    March&#160;2010, which we refer to collectively as the Health
    Care Reform Law, the False Claims Act and similar state laws;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Pricing and rebate programs must comply with the Medicaid rebate
    requirements of the Omnibus Budget Reconciliation Act of 1990
    and the Veteran&#146;s Health Care Act of 1992;&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    If products are made available to authorized users of the
    Federal Supply Schedule of the General Services Administration,
    additional laws and requirements apply.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    All of these activities are also potentially subject to federal
    and state consumer protection and unfair competition laws.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    If we or any third parties involved in our commercialization
    efforts fail to comply with applicable regulatory requirements,
    a regulatory agency may:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Issue warning letters or untitled letters asserting that we are
    in violation of the law;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Seek an injunction or impose civil or criminal penalties or
    monetary fines;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Suspend or withdraw marketing approval;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Suspend any ongoing clinical trials;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Refuse to approve pending applications or supplements to
    applications submitted by us;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Suspend or impose restrictions on operations, including costly
    new manufacturing requirements;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Seize or detain products, refuse to permit the import or export
    of products, or require us to initiate a product recall;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Refuse to allow us to enter into supply contracts, including
    government contracts;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Impose civil monetary penalties;&#160;or
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Pursue civil or criminal prosecutions and fines against our
    company or responsible officers.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Any government investigation of alleged violations of law could
    require us to expend significant time and resources in response,
    and could generate negative publicity. The occurrence of any
    event or penalty described above may inhibit our ability to
    commercialize our product candidates and generate revenues.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Even
    if we obtain marketing approval for Zelrix or any of our other
    product candidates, adverse effects discovered after approval
    could limit the commercial profile of any approved
    product.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    If we obtain marketing approval for Zelrix or any other product
    candidate that we develop, we or others may later discover,
    after use in a larger number of subjects for longer periods of
    time than in clinical trials, that our products could have
    adverse effect profiles that limit their usefulness or require
    their withdrawal. This discovery could have a number of
    potentially significant negative consequences, including:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Regulatory authorities may withdraw their approval of the
    product;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Regulatory authorities may require the addition of labeling
    statements, such as black box or other warnings or
    contraindications;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Regulatory authorities may require us to issue specific
    communications to healthcare professionals, such as &#147;Dear
    Doctor Letters;&#148;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Regulatory authorities may impose additional restrictions on
    marketing and distribution of the products;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Regulatory authorities may issue negative publicity regarding
    the product, including safety communications;
</TD>
</TR>

</TABLE>
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    22
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
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<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    We may be required to change the way the product is
    administered, conduct additional clinical studies or restrict
    the distribution of the product;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    We could be sued and held liable for harm caused to
    subjects;&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Our reputation may suffer.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Any of these events could prevent us from maintaining market
    acceptance of the affected product candidate and could
    substantially increase the costs of commercializing our product
    candidates.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">We
    will need FDA approval of our proposed trade name, Zelrix, and
    any failure or delay associated with such approval may delay the
    commercialization of Zelrix.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Any trade name we intend to use for our product candidates will
    require approval from the FDA regardless of whether we have
    secured a formal trademark registration from the
    U.S.&#160;Patent and Trademark Office, or USPTO. The FDA
    typically conducts a rigorous review of proposed trade names,
    including an evaluation of potential for confusion with other
    trade names and medical error. The FDA may also object to a
    trade name if it believes the name inappropriately implies
    medical claims. We intend to submit the proposed trade name
    Zelrix to the FDA for approval. If the FDA objects to our
    proposed trade name, we may be required to adopt an alternative
    name for our product candidate. Even after approval, the FDA may
    request that we adopt an alternative name for the product if
    adverse event reports indicate a potential for confusion with
    other trade names and medical error. If we are required to adopt
    an alternative name, the commercialization of Zelrix could be
    delayed or interrupted, which would limit our ability to
    commercialize Zelrix and generate revenues.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">If the
    FDA does not approve the manufacturing facilities of LTS or any
    future third party manufacturers for commercial production, we
    may not be able to commercialize Zelrix or any of our other
    product candidates.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The facilities used by LTS and any of our future manufacturers
    to manufacture Zelrix must be approved by the FDA after we
    submit our NDA to the FDA and before approval of Zelrix. We do
    not control the manufacturing process of Zelrix and are
    completely dependent on third party manufacturers for compliance
    with the FDA&#146;s requirements for manufacture of Zelrix. If
    our manufacturers cannot successfully manufacture material
    components and finished products that conform to our
    specifications and the FDA&#146;s strict regulatory
    requirements, they will not be able to secure FDA approval for
    their manufacturing facilities. If the FDA does not approve
    these facilities for the commercial manufacture of Zelrix, or
    the facilities of any of our other product candidates, we may
    need to find alternative manufacturing facilities, which would
    result in significant delays of up to several years in obtaining
    FDA approval for Zelrix, or any of our other product candidates.
    We would incur substantial additional costs as a result of any
    such delays, including with respect to finding alternative
    manufacturing facilities.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Even
    if our product candidates receive marketing approval in the
    U.S., we may never receive marketing approval or commercialize
    our products outside the U.S.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In order to market Zelrix or any other product candidate outside
    the U.S., we must obtain separate marketing approvals and comply
    with numerous and varying regulatory requirements of other
    countries regarding safety and efficacy and governing, among
    other things, clinical trials and commercial sales, pricing and
    distribution of our product candidates. The time required to
    obtain approval in other countries might differ from and be
    longer than that required to obtain FDA approval. The marketing
    approval process in other countries may include all of the risks
    associated with obtaining FDA approval in the U.S., as well as
    other risks. For example, legislation analogous to
    Section&#160;505(b)(2) of the FDCA in the U.S., which relates to
    the ability of an NDA applicant to use published data not
    developed by such applicant, does not exist in other countries.
    In territories where data is not freely available, we may not
    have the ability to commercialize our products without
    negotiating rights from third parties to refer to their clinical
    data in our regulatory applications, which could require the
    expenditure of significant additional funds. Further, we may be
    unable to obtain rights to the necessary clinical data and may
    be required to develop our own proprietary safety and
</DIV>
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    <BR>
    23
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
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<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    effectiveness dossiers. In addition, in many countries outside
    the U.S., it is required that a product receives pricing and
    reimbursement approval before the product can be commercialized.
    This can result in substantial delays in such countries.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Marketing approval in one country does not ensure marketing
    approval in another, but a failure or delay in obtaining
    marketing approval in one country may have a negative effect on
    the regulatory process in others. In addition, we may be subject
    to fines, suspension or withdrawal of marketing approvals,
    product recalls, seizure of products, operating restrictions and
    criminal prosecution if we fail to comply with applicable
    foreign regulatory requirements. If we fail to comply with
    regulatory requirements in international markets or to obtain
    and maintain required approvals, our target market will be
    reduced and our ability to realize the full market potential of
    our product candidates will be harmed.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Our
    relationships with customers and payors will be subject to
    applicable anti-kickback, fraud and abuse and other healthcare
    laws and regulations, which could expose us to criminal
    sanctions, civil penalties, contractual damages, reputational
    harm and diminished profits and future earnings.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Healthcare providers, physicians and others play a primary role
    in the recommendation and prescription of any products for which
    we obtain marketing approval. Our future arrangements with third
    party payors and customers will expose us to broadly applicable
    fraud and abuse and other healthcare laws and regulations that
    may constrain the business or financial arrangements and
    relationships through which we market, sell and distribute our
    products for which we obtain marketing approval. Restrictions
    under applicable federal and state healthcare laws and
    regulations, include the following:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    The federal healthcare anti-kickback statute prohibits, among
    other things, persons from knowingly and willfully soliciting,
    offering, receiving or providing remuneration, directly or
    indirectly, in cash or in kind, to induce or reward either the
    referral of an individual for, or the purchase, order or
    recommendation of, any good or service, for which payment may be
    made under federal healthcare programs such as Medicare and
    Medicaid;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    The federal False Claims Act imposes criminal and civil
    penalties, including civil whistleblower or qui tam actions,
    against individuals or entities for knowingly presenting, or
    causing to be presented, to the federal government, claims for
    payment that are false or fraudulent or making a false statement
    to avoid, decrease, or conceal an obligation to pay money to the
    federal government;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    The federal Health Insurance Portability and Accountability Act
    of 1996, as amended by the Health Information Technology for
    Economic and Clinical Health Act, imposes criminal and civil
    liability for executing a scheme to defraud any healthcare
    benefit program and also imposes obligations, including
    mandatory contractual terms, with respect to safeguarding the
    privacy, security and transmission of individually identifiable
    health information;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    The federal false statements statute prohibits knowingly and
    willfully falsifying, concealing or covering up a material fact
    or making any materially false statement in connection with the
    delivery of or payment for healthcare benefits, items or
    services;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    The federal transparency requirements under the Health Care
    Reform Law requires manufacturers of drugs, devices, biologics,
    and medical supplies to report to the Department of Health and
    Human Services information related to physician payments and
    other transfers of value and physician ownership and investment
    interests;&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Analogous state laws and regulations, such as state
    anti-kickback and false claims laws and transparency laws, may
    apply to sales or marketing arrangements and claims involving
    healthcare items or services reimbursed by non-governmental
    third party payors, including private insurers, and some state
    laws require pharmaceutical companies to comply with the
    pharmaceutical industry&#146;s voluntary compliance guidelines
    and the relevant compliance guidance promulgated by the federal
    government in addition to requiring drug manufacturers to report
    information related to payments to physicians and other health
    care providers or marketing expenditures and drug pricing.
</TD>
</TR>

</TABLE>
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    <BR>
    24
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
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<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Efforts to ensure that our business arrangements with third
    parties will comply with applicable healthcare laws and
    regulations could be costly. It is possible that governmental
    authorities will conclude that our business practices may not
    comply with current or future statutes, regulations or case law
    involving applicable fraud and abuse or other healthcare laws
    and regulations. If our operations, including anticipated
    activities conducted by our sales team in the sale of Zelrix,
    are found to be in violation of any of these laws or any other
    governmental regulations that may apply to us, we may be subject
    to significant civil, criminal and administrative penalties,
    damages, fines, exclusion from government funded healthcare
    programs, such as Medicare and Medicaid, and the curtailment or
    restructuring of our operations. If any of the physicians or
    other providers or entities with whom we expect to do business
    are found to be not in compliance with applicable laws, they may
    be subject to criminal, civil or administrative sanctions,
    including exclusions from government funded healthcare programs.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Recently
    enacted and future legislation may increase the difficulty and
    cost for us to obtain marketing approval of and commercialize
    our product candidates and affect the prices we may
    obtain.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In the U.S.&#160;and some foreign jurisdictions, there have been
    a number of legislative and regulatory changes and proposed
    changes regarding the healthcare system that could prevent or
    delay marketing approval of our product candidates, restrict or
    regulate post-approval activities and affect our ability to
    profitably sell our products for which we obtain marketing
    approval.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In the U.S., the Medicare Prescription Drug, Improvement, and
    Modernization Act of 2003, or Medicare Modernization Act,
    changed the way Medicare covers and pays for pharmaceutical
    products. The legislation expanded Medicare coverage for drug
    purchases by the elderly and introduced a new reimbursement
    methodology based on average sales prices for physician
    administered drugs. In addition, this legislation provided
    authority for limiting the number of drugs that will be covered
    in any therapeutic class. Cost reduction initiatives and other
    provisions of this legislation could decrease the coverage and
    price that we receive for any approved products. While the
    Medicare Modernization Act applies only to drug benefits for
    Medicare beneficiaries, private payors often follow Medicare
    coverage policy and payment limitations in setting their own
    reimbursement rates. Therefore, any reduction in reimbursement
    that results from the Medicare Modernization Act may result in a
    similar reduction in payments from private payors.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    More recently, in March 2010, President Obama signed into law
    the Health Care Reform Law, a sweeping law intended to broaden
    access to health insurance, reduce or constrain the growth of
    healthcare spending, enhance remedies against fraud and abuse,
    add new transparency requirements for health care and health
    insurance industries, impose new taxes and fees on the health
    industry and impose additional health policy reforms. Effective
    October&#160;1, 2010, the Health Care Reform Law revises the
    definition of &#147;average manufacturer price&#148; for
    reporting purposes, which could increase the amount of Medicaid
    drug rebates to states once the provision is effective. Further,
    beginning in 2011, the new law imposes a significant annual fee
    on companies that manufacture or import branded prescription
    drug products. Substantial new provisions affecting compliance
    have also been enacted, which may require us to modify our
    business practices with health care practitioners. We will not
    know the full effects of the Health Care Reform Law until
    applicable federal and state agencies issue regulations or
    guidance under the new law. Although it is too early to
    determine the effect of the Health Care Reform Law, the new law
    appears likely to continue the pressure on pharmaceutical
    pricing, especially under the Medicare program, and may also
    increase our regulatory burdens and operating costs.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Legislative and regulatory proposals have been made to expand
    post-approval requirements and restrict sales and promotional
    activities for pharmaceutical products. We are not sure whether
    additional legislative changes will be enacted, or whether the
    FDA regulations, guidance or interpretations will be changed, or
    what the impact of such changes on the marketing approvals of
    our product candidates, if any, may be. In addition, increased
    scrutiny by the United States Congress of the FDA&#146;s
    approval process may significantly delay or prevent marketing
    approval, as well as subject us to more stringent product
    labeling and post-marketing testing and other requirements.
</DIV>
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    <BR>
    25
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
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<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Risks
    Related to Intellectual Property</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">We may
    not be able to rely on our intellectual property to protect our
    products in the marketplace.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Our success depends, in large part, on our ability to protect
    our competitive position through patents, trade secrets,
    trademarks and other intellectual property rights. The patent
    positions of pharmaceutical and biotechnology companies,
    including our company, are uncertain and involve complex
    questions of law and fact for which important legal issues
    remain unresolved or may change. As a result of recent court
    decisions, the requirements for patentability of inventions in
    the U.S.&#160;have become more stringent, including stricter
    requirements that inventions be non-obvious and that patent
    applications provide an adequate written description of the
    invention. These court decisions may have the effect of
    narrowing the types of medical treatments that are patentable.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The patent we have licensed and patents that may be licensed by
    or issued to us in the future may not provide us with any
    competitive advantage. Our patents may be challenged by third
    parties in patent litigation, or in patent reexamination or
    opposition proceedings, which are becoming widespread in the
    pharmaceutical industry. In particular, it is not uncommon for
    potential competitors to challenge the validity of patents
    protecting new pharmaceutical products shortly after the
    products receive FDA approval. Alternatively, it is possible
    that third parties with products that are very similar to ours
    will circumvent our issued patents by purposely developing
    products or processes that avoid our patent claims. Our patent
    protection may be limited because of any of the following:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Our patents may not be broad or strong enough to prevent
    competition from identical or similar products;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    We may be required to disclaim part of the term of some patents;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    There may be prior art of which we are not aware that may affect
    the validity or enforceability of a patent claim;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    There may be prior art of which we are aware, which we do not
    believe affects the validity or enforceability of a claim, but
    which, nonetheless ultimately may be found to affect the
    validity or enforceability of a claim;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    If challenged, a court could determine that our issued patents
    are not valid or enforceable;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    A court could determine that a competitor&#146;s technology or
    product does not infringe our patents;&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Our patents and patent applications could irretrievably lapse
    due to failure to pay fees or otherwise comply with regulations,
    or could be subject to compulsory licensing.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We do not currently own any issued U.S.&#160;or foreign patents
    covering any of our product candidates or technology. We have
    licensed one issued U.S.&#160;patent that relates to an
    iontophoresis drug delivery system. We and our licensors have
    filed and are actively pursuing applications for patents in the
    U.S.&#160;and in foreign jurisdictions. However, pending patent
    applications may not result in the issuance of patents or the
    scope of patent protection that we have requested, and we may
    not develop additional proprietary products which are
    patentable. Further, if we encounter delays in our development
    or clinical trials, the period of time during which we could
    market our products under patent protection would be reduced.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Because the composition of matter patent covering the active
    pharmaceutical ingredient of Zelrix has expired, competitors
    will be able to offer and sell products with the same active
    pharmaceutical ingredient as Zelrix so long as these competitors
    do not infringe any other patents that may be issued to or
    licensed by us, including any product, formulation and method of
    use patents, or violate any marketing exclusivity period that
    may be granted. Similarly, the composition of matter patents
    covering the active ingredients of our NP201 and NP202 product
    candidates have expired, and competitors will be able to offer
    and sell products with the same active pharmaceutical
    ingredients as these product candidates products so long as
    these competitors do not infringe any other patents that we hold
    or may obtain in the future, including any product, formulation
    and method of use patents, or violate any marketing exclusivity
    period that may be granted.
</DIV>
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<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Patents covering new products or formulations incorporating a
    generic active pharmaceutical ingredient cannot prevent
    competitors from commercializing the original products and
    formulations. In addition, method of use patents, in particular,
    are more difficult to enforce than composition of matter patents
    because of the risk of off label sale or use of the subject
    compounds. Physicians are permitted to prescribe an approved
    product for uses that are not described in the product&#146;s
    labeling. Although off label prescriptions may infringe our
    method of use patents, if issued, the practice is common across
    medical specialties and such infringement is difficult to
    prevent or prosecute. Off label sales would limit our ability to
    generate revenue from the sale of our product candidates, if
    approved for commercial sale. In addition, if a third party were
    able to design around any issued product, method, formulation or
    other patent and create a different product not covered by our
    patents, if issued, we would likely be unable to prevent that
    third party from manufacturing and marketing its product.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We rely on third parties to protect the intellectual property we
    license, including trade secrets, patents, and know-how, and we
    may not have any input or control over the filing, prosecution
    or enforcement of such intellectual property rights. Any
    resulting patents may be invalid or unenforceable. Any
    enforcement of intellectual property rights, or defense of any
    claims asserting the invalidity thereof, may be subject to the
    cooperation of the third parties.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">If we
    fail to comply with our obligations in our intellectual property
    licenses with third parties, we could lose license rights that
    are important to our business.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We are a party to a number of license agreements and may enter
    into additional licenses in the future. If we fail to comply
    with the obligations under a license agreement or otherwise
    breach the license agreement, the licensor may have the right to
    terminate the license, in which event we might not be able to
    market any product that is covered by any previously licensed
    patents.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    For example, we are party to a license agreement with the
    University of Pennsylvania, or Penn, pursuant to which we
    license from Penn patent applications and other intellectual
    property related to the LAD technology to develop and
    commercialize licensed products, including NP201 and NP202, and
    a license agreement with SurModics Pharmaceuticals, Inc., or
    SurModics, pursuant to which we license from SurModics
    intellectual property to make, have made, use, sell, import and
    export NP201. We are obligated to pay milestone and royalty
    payments under each agreement in addition to other obligations.
    The triggering of milestone payments to Penn or SurModics
    depends on factors relating to the clinical and regulatory
    development and commercialization of NP201 and NP202, many of
    which are beyond our control. We may become obligated to make a
    milestone payment when we do not have the cash on hand to make
    such payment, which could require us to delay our clinical
    trials, curtail our operations, scale back our commercialization
    and marketing efforts or seek additional capital to meet these
    obligations on terms unfavorable to us.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Our failure to comply with the requirements of these license
    agreements, including our milestone payment obligations, could
    result in the termination of such agreements, in which case we
    might not be able to develop or market any product that is
    covered by the license. Even if we contest any such termination
    and are ultimately successful, our results of operations and
    stock price could suffer.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Our
    ability to pursue the development and commercialization of
    Zelrix is significantly dependent upon obtaining a license of
    LTS&#146;s intellectual property.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Our development and license agreement with LTS provides that if
    we enter into a commercial manufacturing agreement with LTS, LTS
    will have the exclusive right to manufacture Zelrix and LTS will
    grant us an exclusive, worldwide, royalty-free license under
    LTS&#146;s intellectual property to use, import, sell, market
    and distribute Zelrix. We may not enter into a commercial
    manufacturing agreement with LTS on commercially reasonable
    terms, if at all. If we do not enter into a commercial
    manufacturing agreement with LTS, we may not have access to
    LTS&#146;s proprietary technology and know-how to manufacturer
    Zelrix. In this situation, we would need to develop equivalent
    or alternative intellectual property, which will significantly
    delay our commercialization of Zelrix and entail significant
    additional cost.
</DIV>
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    27
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
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<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">We may
    infringe the intellectual property rights of others, which may
    prevent or delay our product development efforts and stop us
    from commercializing or increase the costs of commercializing
    our products.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Our commercial success depends significantly on our ability to
    operate without infringing the patents and other intellectual
    property rights of third parties. There could be issued patents
    of which we are not aware that our products infringe. There also
    could be patents that we believe we do not infringe, but that we
    may ultimately be found to infringe. Moreover, patent
    applications are in some cases maintained in secrecy until
    patents are issued. The publication of discoveries in the
    scientific or patent literature frequently occurs substantially
    later than the date on which the underlying discoveries were
    made and patent applications were filed. Because patents can
    take many years to issue, there may be currently pending
    applications of which we are unaware that may later result in
    issued patents that our products infringe. For example, pending
    applications may exist that provide support or can be amended to
    provide support for a claim that results in an issued patent
    that our product infringes.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Third parties may assert that we are employing their proprietary
    technology without authorization. If a court held that any third
    party patents cover our products, the holders of any such
    patents may be able to block our ability to commercialize our
    products unless we obtained a license under the applicable
    patent or patents, or until such patents expire. We may not be
    able to enter into licensing arrangements or make other
    arrangements at a reasonable cost or on reasonable terms. Any
    inability to secure licenses or alternative technology could
    result in delays in the introduction of our products or lead to
    prohibition of the manufacture or sale of products by us.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">If we
    are unable to protect the confidentiality of our proprietary
    information and know-how, the value of our technology and
    products could be significantly diminished.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In addition to patents, we rely on trade secrets and proprietary
    know-how to protect our intellectual property. We generally
    require our employees, consultants, outside scientific
    collaborators and sponsored researchers and other advisors to
    enter into confidentiality agreements. These agreements provide
    that all confidential information developed or made known to the
    individual during the course of the individual&#146;s
    relationship with us is to be kept confidential and not
    disclosed to third parties except in specific circumstances. In
    the case of our employees, the agreements also typically provide
    that all inventions resulting from work performed for us,
    utilizing our property or relating to our business and conceived
    or completed during employment are our exclusive property to the
    extent permitted by law. Where appropriate, agreements we obtain
    with our consultants also typically contain similar assignment
    of invention provisions.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    These agreements may not provide meaningful protection or
    adequate remedies in the event of unauthorized use or disclosure
    of our proprietary information. Involuntary disclosure or
    misappropriation by third parties of our confidential
    proprietary information could enable competitors to quickly
    duplicate or surpass our technological achievements, thus
    eroding our competitive position. In addition, it is possible
    that third parties could independently develop proprietary
    information and techniques substantially similar to ours or
    otherwise gain access to our trade secrets.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Risks
    Related to Employee Matters and Managing Growth</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">If we
    are not successful in attracting and retaining highly qualified
    personnel, including our current senior executive team, we may
    not be able to successfully implement our business
    strategy.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Our ability to compete in the highly competitive pharmaceutical
    and biotechnology industries depends in large part upon our
    ability to attract and retain highly qualified managerial,
    scientific and medical personnel. Competition for skilled
    personnel in our market is very intense because of the numerous
    pharmaceutical and biotechnology companies that seek similar
    personnel. These companies may have greater financial and other
    resources, offer a greater opportunity for career advancement
    and have a longer history in the industry than we do. We also
    experience competition for the hiring of our scientific and
    clinical personnel from universities and research institutions.
</DIV>
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
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<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
     We are highly dependent on Jane H. Hollingsworth, our Chief
    Executive Officer, and Terri B. Sebree, our President. Despite
    our efforts to retain valuable employees, members of our
    management, scientific and medical teams may terminate their
    employment with us on short notice. We have formal employment
    agreements with Ms.&#160;Hollingsworth and Ms.&#160;Sebree that
    include reasonable notice periods for terminations of
    employment. Besides these agreements, all other employees&#146;
    employment is at-will, which means that any of these employees
    could leave our employment at any time. We maintain &#147;key
    person&#148; insurance for each of Ms.&#160;Hollingsworth and
    Ms.&#160;Sebree. The total death benefit under each policy is
    $2.0&#160;million and we are the only named beneficiary and
    owner of the policies. The policies have an initial term of
    ten&#160;years and are subject to renewal annually thereafter.
    We do not maintain &#147;key person&#148; insurance for any of
    our other employees. The loss of the services of any of our
    executive officers or other key employees could potentially harm
    our business, operating results or financial condition.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">We
    will need to grow our organization, and we may experience
    difficulties in managing this growth, which could disrupt our
    operations.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    As of April&#160;30, 2010, we employed 21&#160;full-time
    employees. We expect to expand our employee base for managerial,
    operational, sales, marketing, financial and other resources.
    Future growth would impose significant added responsibilities on
    members of management, including the need to identify, recruit,
    maintain, motivate and integrate additional employees. Also, our
    management may need to divert a disproportionate amount of its
    attention away from our
    <FONT style="white-space: nowrap">day-to-day</FONT>
    activities and devote a substantial amount of time to managing
    these growth activities. We may not be able to effectively
    manage the expansion of our operations which may result in
    weaknesses in our infrastructure, give rise to operational
    mistakes, loss of business opportunities, loss of employees and
    reduced productivity among remaining employees. Our expected
    growth could require significant capital expenditures and may
    divert financial resources from other projects, such as the
    anticipated commercialization of Zelrix or development of
    additional product candidates. If our management is unable to
    effectively manage our expected growth, our expenses may
    increase more than expected, our ability to generate or increase
    our revenues could be reduced and we may not be able to
    implement our business strategy. Our future financial
    performance and our ability to commercialize Zelrix and our
    other product candidates and compete effectively will depend, in
    part, on our ability to effectively manage any future growth.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Risks
    Related to this Offering and Ownership of Our Common
    Stock</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">The
    market price of our common stock may be highly volatile, and you
    may not be able to resell your shares at or above the initial
    public offering price.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Prior to this offering, there has not been a public market for
    our common stock. If an active trading market for our common
    stock does not develop following this offering, you may not be
    able to sell your shares quickly or at the market price. The
    initial public offering price for the shares will be determined
    by negotiations between us and representatives of the
    underwriters and may not be indicative of prices that will
    prevail in the subsequent trading market.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The trading price of our common stock is likely to be volatile.
    Our stock price could be subject to wide fluctuations in
    response to a variety of factors, including the following:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Any delay in submitting our NDA for Zelrix and any adverse
    development or perceived adverse development with respect to the
    FDA&#146;s review of such NDA, including the FDA&#146;s refusal
    to accept the NDA for substantive review or a request for
    additional information;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    The commercial success of Zelrix, if approved by the FDA;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Results of clinical trials of our product candidates or those of
    our competitors;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Changes or developments in laws or regulations applicable to our
    product candidates;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Introduction of competitive products or technologies;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Failure to meet or exceed financial projections we provide to
    the public;
</TD>
</TR>

</TABLE>
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    <BR>
    29
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL Pagebreak End -->

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Actual or anticipated variations in quarterly operating results;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Failure to meet or exceed the estimates and projections of the
    investment community;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    The perception of the pharmaceutical industry by the public,
    legislatures, regulators and the investment community;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    General economic and market conditions and overall fluctuations
    in U.S.&#160;equity markets;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Developments concerning our sources of manufacturing supply;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Disputes or other developments relating to patents or other
    proprietary rights;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Additions or departures of key scientific or management
    personnel;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Issuances of debt, equity or convertible securities;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Changes in the market valuations of similar companies;&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    The other factors described in this &#147;Risk Factors&#148;
    section.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In addition, the stock market in general, and the market for
    small pharmaceutical and biotechnology companies in particular,
    have experienced extreme price and volume fluctuations that have
    often been unrelated or disproportionate to the operating
    performance of these companies. Broad market and industry
    factors may negatively affect the market price of our common
    stock, regardless of our actual operating performance.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Our
    principal stockholders and management own a significant
    percentage of our stock and will be able to exert significant
    control over matters subject to stockholder
    approval.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Upon closing of this offering, our executive officers, directors
    and 5% stockholders and their affiliates will beneficially own
    approximately <B>&#160;&#160;&#160;&#160;&#160;</B>% of our
    outstanding voting stock. As a result, these stockholders will
    have significant influence and may be able to determine all
    matters requiring stockholder approval. For example, these
    stockholders may be able to control elections of directors,
    amendments of our organizational documents, or approval of any
    merger, sale of assets, or other major corporate transaction.
    This concentration of ownership could delay or prevent any
    acquisition of our company on terms that other stockholders may
    desire.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">If you
    purchase our common stock in this offering, you will incur
    immediate and substantial dilution in the book value of your
    shares.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The initial public offering price is substantially higher than
    the net tangible book value per share of our common stock.
    Investors purchasing common stock in this offering will pay a
    price per share that substantially exceeds the book value of our
    tangible assets after subtracting our liabilities. As a result,
    investors purchasing common stock in this offering will incur
    immediate dilution of $<B>&#160;&#160;&#160;&#160;&#160; </B>per
    share, assuming an initial public offering price of
    $<B>&#160;&#160;&#160;&#160;&#160; </B>per share, the midpoint
    of the price range set forth on the cover page of this
    prospectus. Further, investors purchasing common stock in this
    offering will contribute approximately
    <B>&#160;&#160;&#160;&#160;&#160;</B>% of the total amount
    invested by stockholders since our inception, but will own only
    approximately <B>&#160;&#160;&#160;&#160;&#160;</B>% of the
    shares of our common stock outstanding.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    This dilution is due to the substantially lower price paid by
    our investors who purchased shares prior to this offering as
    compared to the price offered to the public in this offering,
    and the exercise of stock options granted to our employees. In
    addition, as of April&#160;30, 2010, options to purchase
    7,520,075&#160;shares of our common stock at a weighted average
    exercise price of $0.23 per share and warrants exercisable for
    up to 870,922&#160;shares of our preferred stock at an exercise
    price of $0.93 per share were outstanding. The exercise of any
    of these options or warrants would result in additional
    dilution. As a result of the dilution to investors purchasing
    shares in this offering, investors may receive significantly
    less than the purchase price paid in this offering, if anything,
    in the event of a liquidation or sale of our company.
</DIV>
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    <BR>
    30
</DIV><!-- END PAGE WIDTH -->
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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL Pagebreak End -->

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Sales
    of a substantial number of shares of our common stock in the
    public market by our existing stockholders could cause our stock
    price to fall.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Sales of a substantial number of shares of our common stock in
    the public market or the perception that these sales might
    occur, could depress the market price of our common stock and
    could impair our ability to raise adequate capital through the
    sale of additional equity securities. We are unable to predict
    the effect that sales may have on the prevailing market price of
    our common stock.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Substantially all of our existing stockholders are subject to
    <FONT style="white-space: nowrap">lock-up</FONT>
    agreements with the underwriters of this offering that restrict
    the stockholders&#146; ability to transfer shares of our common
    stock for at least 180&#160;days from the date of this
    prospectus, subject to certain exceptions. The
    <FONT style="white-space: nowrap">lock-up</FONT>
    agreements limit the number of shares of common stock that may
    be sold immediately following the public offering. Subject to
    certain limitations, approximately
    <B>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</B>&#160;shares
    will become eligible for sale upon expiration of the
    <FONT style="white-space: nowrap">lock-up</FONT>
    period. In addition, shares issued or issuable upon exercise of
    options and warrants vested as of the expiration of the
    <FONT style="white-space: nowrap">lock-up</FONT>
    period will be eligible for sale at that time. Sales of stock by
    these stockholders could have a material adverse effect on the
    market price of our common stock.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Certain holders of shares of our common stock are entitled to
    rights with respect to the registration of their shares under
    the Securities Act of 1933, as amended, or the Securities Act,
    subject to the
    <FONT style="white-space: nowrap">180-day</FONT>
    <FONT style="white-space: nowrap">lock-up</FONT>
    arrangement described above. Registration of these shares under
    the Securities Act would result in the shares becoming freely
    tradable without restriction under the Securities Act, except
    for shares held by our affiliates as defined in Rule&#160;144
    under the Securities Act. Any sales of securities by these
    stockholders could have a material adverse effect on the trading
    price of our common stock.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Our
    management will have broad discretion in the use of the net
    proceeds from this offering and may not use them
    effectively.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Our management will have broad discretion in the application of
    the net proceeds from this offering and our stockholders will
    not have the opportunity as part of their investment decision to
    assess whether the net proceeds are being used appropriately.
    Because of the number and variability of factors that will
    determine our use of the net proceeds from this offering, their
    ultimate use may vary substantially from their currently
    intended use. The failure by our management to apply these funds
    effectively could harm our business. Pending their use, we may
    invest the net proceeds from this offering in short-term,
    investment-grade, interest-bearing instruments and U.S.
    government securities. These investments may not yield a
    favorable return to our stockholders.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Our
    ability to use our net operating loss carryforwards and certain
    other tax attributes may be limited.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Under Section&#160;382 of the Internal Revenue Code of 1986, as
    amended, or the Code, if a corporation undergoes an
    &#147;ownership change,&#148; generally defined as a greater
    than 50% change by value in its equity ownership over a three
    year period, the corporation&#146;s ability to use its
    pre-change net operating loss carryforwards and other pre-change
    tax attributes, such as research tax credits, to offset its
    post-change income may be limited. We believe that, with our
    initial public offering, our most recent private placement and
    other transactions that have occurred over the past three years,
    we may have triggered an ownership change limitation. We may
    also experience ownership changes in the future as a result of
    subsequent shifts in our stock ownership. As a result, if we
    generate taxable income, our ability to use our pre-change net
    operating loss carryforwards to offset U.S.&#160;federal taxable
    income may be subject to limitations, which could result in
    increased future tax liability to us.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Because
    we do not intend to pay dividends on our common stock, your
    returns will be limited to any increase in the value of our
    stock.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We have never declared or paid any cash dividends on our capital
    stock. We currently intend to retain all available funds and any
    future earnings to support our operations and finance the growth
    and development of our business and do not anticipate declaring
    or paying any cash dividends on our common stock for the
    foreseeable future. Any return to stockholders will therefore be
    limited to the appreciation of their stock.
</DIV>
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<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    31
</DIV><!-- END PAGE WIDTH -->
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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL Pagebreak End -->

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Some
    provisions of our charter documents and Delaware law may have
    anti-takeover effects that could discourage an acquisition of us
    by others, even if an acquisition would be beneficial to our
    stockholders, and may prevent attempts by our stockholders to
    replace or remove our current management.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Provisions in our restated certificate of incorporation and our
    bylaws that will become effective following the closing of this
    offering, as well as provisions of the Delaware General
    Corporation Law, or DGCL, could make it more difficult for a
    third party to acquire us or increase the cost of acquiring us,
    even if doing so would benefit our stockholders, including
    transactions in which stockholders might otherwise receive a
    premium for their shares. These provisions include:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Authorizing the issuance of &#147;blank check&#148; preferred
    stock, the terms of which may be established and shares of which
    may be issued without stockholder approval;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Prohibiting stockholder action by written consent, thereby
    requiring all stockholder actions to be taken at a meeting of
    our stockholders;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Eliminating the ability of stockholders to call a special
    meeting of stockholders;&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Establishing advance notice requirements for nominations for
    election to the board of directors or for proposing matters that
    can be acted upon at stockholder meetings.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    These provisions may frustrate or prevent any attempts by our
    stockholders to replace or remove our current management by
    making it more difficult for stockholders to replace members of
    our board of directors, which is responsible for appointing the
    members of our management. In addition, we are subject to
    Section&#160;203 of the DGCL, which generally prohibits a
    Delaware corporation from engaging in any of a broad range of
    business combinations with an interested stockholder for a
    period of three years following the date on which the
    stockholder became an interested stockholder, unless such
    transactions are approved by our board of directors. This
    provision could have the effect of delaying or preventing a
    change of control, whether or not it is desired by or beneficial
    to our stockholders.
</DIV>
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<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    32
</DIV><!-- END PAGE WIDTH -->
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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL Pagebreak End -->

<A name='103'>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">SPECIAL
    NOTE&#160;REGARDING FORWARD-LOOKING STATEMENTS</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    This prospectus contains forward-looking statements that involve
    substantial risks and uncertainties. All statements, other than
    statements of historical facts, contained in this prospectus,
    including statements regarding our strategy, future operations,
    future financial position, future revenue, projected costs,
    prospects, plans and objectives of management, are
    forward-looking statements. The words &#147;may,&#148;
    &#147;will,&#148; &#147;could,&#148; &#147;would,&#148;
    &#147;should,&#148; &#147;expect,&#148; &#147;intend,&#148;
    &#147;plan,&#148; &#147;anticipate,&#148; &#147;believe,&#148;
    &#147;estimate,&#148; &#147;predict,&#148; &#147;project,&#148;
    &#147;potential,&#148; &#147;continue,&#148; &#147;ongoing&#148;
    and similar expressions are intended to identify forward-looking
    statements, although not all forward-looking statements contain
    these identifying words.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The forward-looking statements in this prospectus include, among
    other things, statements about:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Our plans to develop and commercialize Zelrix and our other
    product candidates;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    The timing of, and our ability to obtain, marketing approval of
    Zelrix and our other product candidates;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Our ongoing and planned preclinical studies and clinical trials;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    The rate and degree of market acceptance of Zelrix and any other
    future products;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    The size and growth of the potential markets for Zelrix and our
    other product candidates and our ability to serve those markets;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Our commercialization and marketing capabilities;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Our ability to obtain and maintain intellectual property
    protection;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Regulatory developments in the U.S.&#160;and foreign countries;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    The performance of third party manufacturers;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Our ability to acquire or license suitable product candidates or
    technologies from third parties;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    The accuracy of our estimates regarding expenses and capital
    requirements;&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    The loss of key scientific or management personnel.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We may not actually achieve the plans, intentions or
    expectations described in our forward-looking statements and you
    should not place undue reliance on our forward-looking
    statements. Actual results or events could differ materially
    from the plans, intentions and expectations described in the
    forward-looking statements we make. We have included important
    factors in the cautionary statements included in this
    prospectus, particularly in the &#147;Risk Factors&#148;
    section, that we believe could cause actual results or events to
    differ materially from those expressed or implied by our
    forward-looking statements. Furthermore, if our forward-looking
    statements prove to be inaccurate, the inaccuracy may be
    material. In light of the significant uncertainties in these
    forward-looking statements, you should not regard these
    statements as a representation or warranty by us or any other
    person that we will achieve our objectives and plans in any
    specified timeframe, or at all.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    You should read this prospectus and the documents that we
    reference in this prospectus and have filed as exhibits to the
    registration statement of which this prospectus is a part
    completely and with the understanding that our actual future
    results may be materially different from what we expect. The
    information contained in this prospectus is accurate only as of
    the date of this prospectus, regardless of the time of delivery
    of this prospectus or any sale of our common stock. We do not
    assume any obligation to update any forward-looking statements.
</DIV>
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    <BR>
    33
</DIV><!-- END PAGE WIDTH -->
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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL Pagebreak End -->

<A name='104'>
<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">USE OF
    PROCEEDS</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 4pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We estimate that the net proceeds from our issuance and sale of
    <B>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</B>&#160;shares
    of common stock in this offering will be approximately
    $<B>&#160;&#160;&#160;&#160;&#160; </B>million, assuming an
    initial public offering price of
    $<B>&#160;&#160;&#160;&#160;&#160; </B>per share, the midpoint
    of the price range set forth on the cover page of this
    prospectus, after deducting estimated underwriting discounts and
    commissions and estimated offering expenses payable by us. If
    the underwriters exercise their over-allotment option in full,
    we estimate that our net proceeds from this offering will be
    approximately $<B>&#160;&#160;&#160;&#160;&#160; </B>million.
</DIV>

<DIV style="margin-top: 4pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Each $1.00 increase or decrease in the assumed initial public
    offering price of $<B>&#160;&#160;&#160;&#160;&#160; </B>per
    share would increase or decrease the net proceeds to us from
    this offering by approximately
    $<B>&#160;&#160;&#160;&#160;&#160;</B>&#160;million, assuming
    that the number of shares of common stock offered by us, as set
    forth on the cover page of this prospectus, remains the same and
    after deducting estimated underwriting discounts and commissions
    and estimated offering expenses payable by us.
</DIV>

<DIV style="margin-top: 4pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We anticipate using the net proceeds from this offering as
    follows:
</DIV>

<DIV style="margin-top: 4pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Approximately $<B>&#160;&#160;&#160;&#160;&#160; </B>million to
    complete the clinical development of, seek marketing approval
    for and, if approved, commercially launch Zelrix in the U.S.;
</TD>
</TR>


<TR style="line-height: 4pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Approximately $<B>&#160;&#160;&#160;&#160;&#160; </B>million to
    continue preclinical and clinical development of NP201 and
    NP202;&#160;and
</TD>
</TR>


<TR style="line-height: 4pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    The balance for working capital and other general corporate
    purposes, which may include the acquisition or licensing of
    other products or technologies or the acquisition of other
    businesses in the biotechnology or specialty pharmaceuticals
    industry.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 4pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    This anticipated use of net proceeds from this offering
    represents our intentions based upon our current plans and
    business conditions. The amounts and timing of our actual
    expenditures may vary significantly depending on numerous
    factors, including: the timing of our NDA submission to the FDA
    for Zelrix; the extent to which the FDA may require us to
    perform additional clinical trials for Zelrix; the costs of our
    commercialization activities for Zelrix, if it is approved by
    the FDA; the cost, timing and outcome of the development of our
    other product candidates; the extent to which we acquire or
    invest in products, businesses and technologies; the extent to
    which we establish collaboration or other similar agreements;
    the cost of preparing and prosecuting patent applications and
    enforcing and defending intellectual property claims; and any
    unforeseen or underestimated cash needs. As a result, our
    management will retain broad discretion over the allocation of
    the net proceeds from this offering. In addition, our
    anticipated use of proceeds does not reflect the potential
    impact of any future acquisitions, mergers, dispositions, joint
    ventures or investments that we may make. We have no current
    understandings, agreements or commitments for any material
    acquisitions or licenses of any products, businesses or
    technologies.
</DIV>

<DIV style="margin-top: 4pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Following this offering, we believe that our available funds
    will be sufficient to complete the development of Zelrix through
    FDA approval and to fund the expected commercial launch of
    Zelrix in the U.S.&#160;in the first half of 2012. It is
    possible that we will not achieve the progress that we expect
    with respect to Zelrix because the actual costs and timing of
    development and marketing approval are difficult to predict and
    are subject to substantial risks and delays. We have no
    committed external sources of funds. To the extent that the net
    proceeds from this offering and our other capital resources are
    insufficient to complete clinical development of, obtain
    marketing approval for and, if approved, commercially launch
    Zelrix, we will need to finance our cash needs through public or
    private equity offerings, debt financings, corporate
    collaboration and licensing arrangements or other financing
    alternatives.
</DIV>

<DIV style="margin-top: 4pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Pending our use of the net proceeds from this offering, we
    intend to invest the net proceeds in a variety of capital
    preservation investments, including short-term,
    investment-grade, interest-bearing instruments and
    U.S.&#160;government securities.
</DIV>
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<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    34
</DIV><!-- END PAGE WIDTH -->
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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL Pagebreak End -->

<A name='105'>
<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">DIVIDEND
    POLICY</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 4pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We have never declared or paid any cash dividends on our capital
    stock. We currently intend to retain all available funds and any
    future earnings to support our operations and finance the growth
    and development of our business. We do not intend to pay cash
    dividends on our common stock for the foreseeable future.
</DIV>
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<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    35
</DIV><!-- END PAGE WIDTH -->
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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL Pagebreak End -->

<A name='106'>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">CAPITALIZATION</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The following table sets forth our cash and cash equivalents and
    our capitalization as of December&#160;31, 2009:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    On an actual basis;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    On a pro forma basis to give effect to:
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="6%"></TD>
    <TD width="2%"></TD>
    <TD width="92%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the automatic conversion of all outstanding shares of our
    preferred stock, including accrued dividends, into an aggregate
    of 61,824,121&#160;shares of common stock upon the closing of
    this offering, assuming that the closing occurred on
    April&#160;30, 2010;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the receipt in April 2010 of gross proceeds of $10,062,500 upon
    the issuance of the April 2010 Convertible Notes and the
    automatic conversion of all principal and accrued interest
    outstanding under the April 2010 Convertible Notes into an
    aggregate
    of&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;shares
    of common stock upon the closing this offering, assuming an
    initial public offering price of $&#160;&#160;&#160;&#160;&#160;
    per share, the midpoint of the price range set forth on the
    cover page of this prospectus, and that the closing occurred on
    April&#160;30, 2010;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the receipt in May 2010 of gross proceeds of $5,000,000 upon
    entering into the May 2010 Loan Facility, the issuance of
    warrants to purchase 255,376&#160;shares of Series&#160;B
    preferred stock, with an estimated fair value of $203,255, to
    the lenders under such facility and the repayment in full of the
    $782,000 outstanding as of December&#160;31, 2009 under a term
    loan that we entered into in 2007;&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the warrants outstanding as of May&#160;14, 2010 to purchase an
    aggregate of 1,126,298&#160;shares of our preferred stock
    becoming, in accordance with their terms, warrants to purchase
    1,126,298 shares of common stock at an exercise price of $0.93
    per share of common stock upon the closing of this offering and
    the reclassification of the warrant liability with respect to
    warrants outstanding as of December&#160;31, 2009 to additional
    paid-in capital;&#160;and
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    On a pro forma as adjusted basis to give further effect to the
    issuance and sale
    of&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;shares
    of common stock in this offering at an assumed initial public
    offering price of $&#160;&#160;&#160;&#160;&#160; per share, the
    midpoint of the price range set forth on the cover page of this
    prospectus, after deducting estimated underwriting discounts and
    commissions and estimated offering expenses payable by us.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The pro forma as adjusted information set forth below is
    illustrative only and our capitalization following the closing
    of this offering will be adjusted based on the actual initial
    public offering price and other terms of this offering
    determined at pricing. You should read this table together with
    the &#147;Management&#146;s Discussion and Analysis of Financial
    Condition and Results of Operations&#148; section of this
    prospectus and our financial statements and the related notes
    appearing at the end of this prospectus.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>
<!-- XBRL Pagebreak Begin -->

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    36
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL Pagebreak End -->

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="67%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=02 type=lead -->
    <TD width="6%" align="right">&nbsp;</TD>	<!-- colindex=02 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=02 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=03 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=03 type=lead -->
    <TD width="6%" align="right">&nbsp;</TD>	<!-- colindex=03 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=03 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=04 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=04 type=lead -->
    <TD width="7%" align="right">&nbsp;</TD>	<!-- colindex=04 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=04 type=hang1 -->
</TR>
<!-- Table Width Row END -->
<!-- TableOutputHead -->
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="10" align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>As of December&#160;31, 2009</B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Pro Forma<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Actual</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Pro Forma</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>as Adjusted</B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="10" align="center" valign="bottom">
    <B>(In thousands, except share data)</B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<!-- TableOutputBody -->
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Cash and cash equivalents
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    3,927
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    18,207
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    &#160;&#160;&#160;&#160;&#160;&#160;&#160;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Debt outstanding
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    818
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    5,036
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Warrant liability
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    626
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Redeemable convertible preferred stock, $0.001&#160;par value;
    71,745,055&#160;shares authorized and 53,096,340&#160;shares
    issued and outstanding, actual; none, pro forma and pro forma as
    adjusted
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    55,538
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Stockholder&#146;s equity (deficit):
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Common stock, $0.001&#160;par value; 90,830,376&#160;shares
    authorized and 3,131,250&#160;shares issued and outstanding,
    actual; 90,830,376 shares authorized
    and&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;shares
    issued and outstanding, pro forma; 90,830,376 shares authorized
    and&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;shares
    issued and outstanding, pro forma as adjusted
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    3
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    64
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Additional paid-in capital
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    66,370
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Deficit accumulated during the development stage
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (54,477
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (54,477
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 30pt">
    Total stockholders&#146; equity (deficit)
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (54,474
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    11,957
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 40pt">
    Total capitalization
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    2,508
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    16,993
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">

</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Each $1.00 increase or decrease in the assumed initial public
    offering price of
    $&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;
    per share would increase or decrease each of cash and cash
    equivalents, additional paid-in capital, total
    stockholders&#146; equity and total capitalization on a pro
    forma as adjusted basis by approximately
    $&#160;&#160;&#160;&#160;&#160;&#160;million, assuming that the
    number of shares of common stock offered by us, as set forth on
    the cover page of this prospectus, remains the same and after
    deducting estimated underwriting discounts and commissions and
    estimated offering expenses payable by us.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The table above does not include:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    7,620,042&#160;shares of common stock issuable upon the exercise
    of options outstanding as of December&#160;31, 2009 at a
    weighted average exercise price of $0.23 per share;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    1,126,298&#160;shares of common stock issuable upon the exercise
    of warrants outstanding as of May&#160;14, 2010 at a weighted
    average exercise price of $0.93 per share; and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    758,708 additional shares of common stock available for future
    issuance as of December&#160;31, 2009 under our 2005 Plan.
</TD>
</TR>

</TABLE>
<!-- XBRL Pagebreak Begin -->

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    37
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL Pagebreak End -->

<A name='107'>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">DILUTION</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    If you invest in our common stock in this offering, your
    ownership interest will be diluted immediately to the extent of
    the difference between the public offering price per share of
    common stock and the pro forma net tangible book value per share
    of common stock after this offering.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Our historical net tangible book value of common stock as of
    December&#160;31, 2009 was $1.1&#160;million, or $0.34 per share
    of common stock. Historical net tangible book value per share
    represents the amount of our total tangible assets less total
    liabilities, divided by the total number of shares of common
    stock outstanding.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    After giving effect, upon the closing of this offering, to the
    automatic conversion of all outstanding shares of our preferred
    stock, including accrued dividends, into an aggregate of
    61,824,121&#160;shares of common stock and the automatic
    conversion of all principal and accrued interest outstanding
    under the April 2010 Convertible Notes into an aggregate
    of&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;shares
    of common stock, assuming an initial public offering price of
    $&#160;&#160;&#160;&#160;&#160; per share, the midpoint of the
    price range set forth on the cover page of this prospectus, and
    that the closing occurred on April&#160;30, 2010, our pro forma
    net tangible book value as of December&#160;31, 2009 would have
    been
    $&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;million,
    or $&#160;&#160;&#160;&#160;&#160; per share of common stock.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    After giving effect to our issuance and sale
    of&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;shares
    of common stock in this offering at an assumed initial public
    offering price of $&#160;&#160;&#160;&#160;&#160; per share, the
    midpoint of the price range set forth on the cover page of this
    prospectus, and after deducting estimated underwriting discounts
    and commissions and estimated offering expenses payable by us,
    our pro forma as adjusted net tangible book value as of
    December&#160;31, 2009 would have been
    $&#160;&#160;&#160;&#160;&#160;&#160;million, or
    $&#160;&#160;&#160;&#160;&#160; per share of common stock. This
    represents an immediate increase in pro forma net tangible book
    value of $&#160;&#160;&#160;&#160;&#160; per share to our
    existing stockholders and an immediate dilution of
    $&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; in
    pro forma net tangible book value per share to new investors
    purchasing shares of common stock in this offering.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Dilution per share to new investors purchasing shares of common
    stock in this offering is determined by subtracting pro forma as
    adjusted net tangible book value per share after this offering
    from the initial public offering price per share paid by new
    investors. The following table illustrates this dilution on a
    per share basis:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="87%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=02 type=lead -->
    <TD width="3%" align="right">&nbsp;</TD>	<!-- colindex=02 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=02 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=03 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=03 type=lead -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=03 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=03 type=hang1 -->
</TR>
<!-- Table Width Row END -->
<!-- TableOutputHead -->
<!-- TableOutputBody -->
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Assumed initial public offering price per share of common stock
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Historical net tangible book value per share as of
    December&#160;31, 2009
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    0.34
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Decrease in net tangible book value per share attributable to
    the conversion of outstanding preferred stock and April 2010
    Convertible Notes
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Pro forma net tangible book value per share as of
    December&#160;31, 2009
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Increase in net tangible book value per share attributable to
    new investors
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Pro forma as adjusted net tangible book value after this offering
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Dilution per share to new investors
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    &#160;&#160;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Each $1.00 increase or decrease in the assumed initial public
    offering price of $&#160;&#160;&#160;&#160;&#160; per share
    would increase or decrease our pro forma as adjusted net
    tangible book value by approximately
    $&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;,
    our pro forma as adjusted net tangible book value per share by
    $&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;
    and dilution per share to new investors purchasing shares of
    common stock in this offering by
    $&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;,
    assuming that the number of shares of common stock offered by
    us, as set forth on the cover page of this prospectus, remains
    the same and after deducting estimated underwriting discounts
    and commissions and estimated offering expenses payable by us.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    If the underwriters exercise their over-allotment option in
    full, the pro forma as adjusted net tangible book value per
    share after giving effect to this offering would be
    $&#160;&#160;&#160;&#160;&#160; per share and the dilution in
    pro forma as adjusted net tangible book value per share to new
    investors would be $&#160;&#160;&#160;&#160;&#160; per share.
</DIV>
<!-- XBRL Pagebreak Begin -->

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    38
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL Pagebreak End -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The following table summarizes, on a pro forma basis as
    described above as of December&#160;31, 2009, the differences
    between the number of shares of common stock purchased from us,
    the total effective cash consideration paid and the average
    price per share paid by our existing stockholders and by new
    investors purchasing shares of common stock in this offering at
    an assumed initial public offering price of
    $&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;
    per share, the midpoint of the price range set forth on the
    cover page of this prospectus, before deducting estimated
    underwriting discounts and commissions and estimated offering
    expenses payable by us:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="39%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=02 type=lead -->
    <TD width="7%" align="right">&nbsp;</TD>	<!-- colindex=02 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=02 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=03 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=03 type=lead -->
    <TD width="7%" align="right">&nbsp;</TD>	<!-- colindex=03 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=03 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=04 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=04 type=lead -->
    <TD width="8%" align="right">&nbsp;</TD>	<!-- colindex=04 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=04 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=05 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=05 type=lead -->
    <TD width="7%" align="right">&nbsp;</TD>	<!-- colindex=05 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=05 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=06 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=06 type=lead -->
    <TD width="8%" align="right">&nbsp;</TD>	<!-- colindex=06 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=06 type=hang1 -->
</TR>
<!-- Table Width Row END -->
<!-- TableOutputHead -->
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Average<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="6" align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Shares Purchased</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="6" align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Total Consideration</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Price per<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Number</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Percent</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Amount</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Percent</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Share</B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<!-- TableOutputBody -->
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Existing stockholders
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;
</TD>
<TD nowrap align="left" valign="bottom">
    %
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    &#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;
</TD>
<TD nowrap align="left" valign="bottom">
    %
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    &#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    New investors
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Total
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">

</TD>
<TD nowrap align="left" valign="bottom">
    %
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">

</TD>
<TD nowrap align="left" valign="bottom">
    %
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Each $1.00 increase or decrease in the assumed initial public
    offering price of $&#160;&#160;&#160;&#160;&#160; per share
    would increase or decrease the total consideration paid by new
    investors by $&#160;&#160;&#160;&#160;&#160;&#160;million and
    increase or decrease the percentage of total consideration paid
    by new investors purchasing shares of common stock in this
    offering by approximately&#160;&#160;&#160;&#160;&#160;%,
    assuming that the number of shares offered by us, as set forth
    on the cover page of this prospectus, remains the same.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    If the underwriters exercise their over-allotment option in
    full, our existing stockholders would
    own&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;%
    and new investors would own&#160;&#160;&#160;&#160;&#160;% of
    the total number of shares of common stock outstanding after
    this offering.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The tables and calculations set forth above are based on the
    number of shares of common stock outstanding after the closing
    of this offering and assumes no exercise of any outstanding
    options or warrants. To the extent that options or warrants are
    exercised, there will be further dilution to new investors.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The above information excludes:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    7,620,042&#160;shares of common stock issuable upon the exercise
    of options outstanding as of December&#160;31, 2009 at a
    weighted average exercise price of $0.23 per share;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    1,126,298&#160;shares of common stock issuable upon the exercise
    of warrants outstanding as of May&#160;14, 2010 at a weighted
    average exercise price of $0.93 per share; and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    758,708&#160;additional shares of common stock available for
    future issuance as of December&#160;31, 2009 under our 2005 Plan.
</TD>
</TR>

</TABLE>
<!-- XBRL Pagebreak Begin -->

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    39
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL Pagebreak End -->

<A name='108'>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">SELECTED
    FINANCIAL DATA</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    You should read the following selected financial data together
    with the &#147;Capitalization&#148; and &#147;Management&#146;s
    Discussion and Analysis of Financial Condition and Results of
    Operations&#148; sections of this prospectus and our financial
    statements and the related notes appearing at the end of this
    prospectus. We have derived the statement of operations data for
    the years ended December&#160;31, 2007, 2008 and 2009 and the
    balance sheet data as of December&#160;31, 2008 and 2009 from
    our audited financial statements appearing at the end of this
    prospectus. We have derived the statement of operations data for
    the period from January&#160;7, 2005 (inception) through
    December&#160;31, 2005 and year ended December&#160;31, 2006 and
    the balance sheet data as of December 2005, 2006 and 2007 from
    our audited financial statements not included in this
    prospectus. Our historical results for any prior period are not
    necessarily indicative of results to be expected in any future
    period.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    See note&#160;3(i) to our financial statements appearing at the
    end of this prospectus for information regarding computation of
    basic and diluted net loss per common share, unaudited pro forma
    basic and diluted net loss per common share and the unaudited
    pro forma weighted average basic and diluted common shares
    outstanding used in computing pro forma basic and diluted net
    loss per common share.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 9pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="51%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=02 type=lead -->
    <TD width="10%" align="right">&nbsp;</TD>	<!-- colindex=02 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=02 type=hang1 -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=03 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=03 type=lead -->
    <TD width="6%" align="right">&nbsp;</TD>	<!-- colindex=03 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=03 type=hang1 -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=04 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=04 type=lead -->
    <TD width="6%" align="right">&nbsp;</TD>	<!-- colindex=04 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=04 type=hang1 -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=05 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=05 type=lead -->
    <TD width="6%" align="right">&nbsp;</TD>	<!-- colindex=05 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=05 type=hang1 -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=06 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=06 type=lead -->
    <TD width="6%" align="right">&nbsp;</TD>	<!-- colindex=06 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=06 type=hang1 -->
</TR>
<!-- Table Width Row END -->
<!-- TableOutputHead -->
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>January&#160;7, 2005<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>(inception) to<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>December&#160;31,<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="14" align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Year Ended December&#160;31,</B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>2005</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>2006</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>2007</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>2008</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>2009</B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="18" align="center" valign="bottom">
    <B>(In thousands, except share and per share data)</B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<!-- TableOutputBody -->
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -9pt; margin-left: 9pt">
    <B>Statement of Operations Data:</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -9pt; margin-left: 18pt">
    Operating expenses:
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -9pt; margin-left: 27pt">
    Research and development
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    692
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    3,209
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    7,761
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    8,815
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    11,310
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -9pt; margin-left: 27pt">
    Acquired in-process research and development
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    5,500
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -9pt; margin-left: 27pt">
    General and administrative
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    364
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    1,363
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    1,884
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    3,075
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    3,142
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -9pt; margin-left: 36pt">
    Total operating expenses
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (1,056
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (4,572
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (9,645
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (17,390
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (14,452
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -9pt; margin-left: 18pt">
    Interest income (expense), net
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (12
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (644
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (30
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (121
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (1,289
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -9pt; margin-left: 36pt">
    Loss before tax benefit
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (1,068
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (5,216
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (9,675
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (17,511
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (15,741
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -9pt; margin-left: 18pt">
    Income tax benefit
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    151
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -9pt; margin-left: 36pt">
    Net loss
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (1,068
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (5,216
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (9,675
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (17,511
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (15,590
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -9pt; margin-left: 18pt">
    Accretion of redeemable convertible preferred stock
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (341
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (1,126
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (2,330
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (3,617
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -9pt; margin-left: 36pt">
    Net loss applicable to common stockholders
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    (1,068
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    (5,557
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    (10,801
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    (19,841
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    (19,207
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -9pt; margin-left: 9pt">
    Basic and diluted net loss per common share
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    (0.44
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    (2.03
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    (3.67
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    (6.49
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    (6.28
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -9pt; margin-left: 9pt">
    Weighted average basic and diluted common shares outstanding
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    2,445,342
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    2,740,927
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    2,947,005
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    3,059,137
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    3,060,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -9pt; margin-left: 9pt">
    Unaudited pro forma net loss
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    (15,590
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -9pt; margin-left: 9pt">
    Unaudited pro forma basic and diluted net loss per common share
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -9pt; margin-left: 9pt">
    Unaudited pro forma weighted average basic and diluted common
    shares outstanding
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 9pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="64%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="2%" align="right">&nbsp;</TD>	<!-- colindex=02 type=lead -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=02 type=body -->
    <TD width="2%" align="left">&nbsp;</TD>	<!-- colindex=02 type=hang1 -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=03 type=gutter -->
    <TD width="2%" align="right">&nbsp;</TD>	<!-- colindex=03 type=lead -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=03 type=body -->
    <TD width="2%" align="left">&nbsp;</TD>	<!-- colindex=03 type=hang1 -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=04 type=gutter -->
    <TD width="3%" align="right">&nbsp;</TD>	<!-- colindex=04 type=lead -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=04 type=body -->
    <TD width="3%" align="left">&nbsp;</TD>	<!-- colindex=04 type=hang1 -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=05 type=gutter -->
    <TD width="3%" align="right">&nbsp;</TD>	<!-- colindex=05 type=lead -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=05 type=body -->
    <TD width="3%" align="left">&nbsp;</TD>	<!-- colindex=05 type=hang1 -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=06 type=gutter -->
    <TD width="3%" align="right">&nbsp;</TD>	<!-- colindex=06 type=lead -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=06 type=body -->
    <TD width="3%" align="left">&nbsp;</TD>	<!-- colindex=06 type=hang1 -->
</TR>
<!-- Table Width Row END -->
<!-- TableOutputHead -->
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="19" align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>As of December&#160;31,</B>
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>2005</B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>2006</B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>2007</B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>2008</B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>2009</B>
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="19" align="center" valign="bottom">
    <B>(In thousands)</B>
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<!-- TableOutputBody -->
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -9pt; margin-left: 9pt">
    <B>Balance Sheet Data:</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -9pt; margin-left: 18pt">
    Cash and cash equivalents
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    1,003
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    5,211
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    3,830
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    8,368
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    3,927
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -9pt; margin-left: 18pt">
    Working capital
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    652
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    4,347
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    1,304
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    6,285
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    1,527
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -9pt; margin-left: 18pt">
    Total assets
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    1,109
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    5,400
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    4,462
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    9,776
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    5,009
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -9pt; margin-left: 18pt">
    Long-term debt
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    1,600
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    1,628
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    782
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -9pt; margin-left: 18pt">
    Redeemable convertible preferred stock
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    10,164
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    16,270
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    41,809
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    55,538
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -9pt; margin-left: 18pt">
    Total stockholders&#146; deficit
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (851
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (5,716
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (16,458
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (36,141
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (54,474
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>
<!-- XBRL Pagebreak Begin -->

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    40
</DIV><!-- END PAGE WIDTH -->
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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL Pagebreak End -->

<A name='109'>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">MANAGEMENT&#146;S
    DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND<BR>
    RESULTS OF OPERATIONS</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>You should read the following discussion and analysis of our
    financial condition and results of operations together with our
    financial statements and related notes appearing at the end of
    prospectus. In addition to historical information, some of the
    information contained in this discussion and analysis or set
    forth elsewhere in this prospectus, including information with
    respect to our plans and strategy for our business and related
    financing, contains forward-looking statements that involve
    risks, uncertainties and assumptions. Our actual results may
    differ materially from those anticipated or implied in these
    forward-looking statements as a result of important factors
    described in the cautionary statements included in this
    prospectus, particularly in the &#147;Risk Factors&#148;
    section.</I>
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Overview</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We are a specialty pharmaceutical company focused on the
    development and commercialization of branded therapeutics for
    diseases of the central nervous system, including neurological
    and psychiatric disorders. Our most advanced product candidate,
    Zelrix, is an active, single-use transdermal sumatriptan patch
    that we are developing for the treatment of acute migraine.
    Zelrix uses our proprietary SmartRelief technology. We
    successfully completed a pivotal Phase&#160;III clinical trial
    for Zelrix in July 2009 and expect to submit an NDA to the FDA
    in the fourth quarter of 2010. Before we submit our NDA, we must
    complete two ongoing pharmacokinetic trials in healthy subjects
    and obtain interim data from two Phase&#160;III safety trials.
    Subject to the approval of our NDA, we plan to build our own
    specialty sales force in the U.S.&#160;to launch Zelrix. We have
    two other proprietary product candidates in preclinical
    development that address large market opportunities, NP201 for
    the continuous symptomatic treatment of Parkinson&#146;s disease
    and NP202 for the long-term treatment of schizophrenia and
    bipolar disorder.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We were incorporated in the State of Delaware in January 2005
    and are a development stage company. Since our inception, we
    have invested a significant portion of our efforts and financial
    resources in the development of Zelrix. Zelrix is the only
    product candidate for which we have conducted clinical trials,
    and to date we have not marketed, distributed or sold any
    products. As a result, we have generated no revenue and have
    never been profitable. Our net loss was $15.6&#160;million for
    the year ended December&#160;31, 2009 and $17.5&#160;million for
    the year ended December&#160;31, 2008. As of December&#160;31,
    2009, we had an accumulated deficit of $54.5&#160;million.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We expect to continue to incur substantial additional operating
    losses for at least the next several years as we continue to
    develop our product candidates and seek marketing approval and,
    subject to obtaining such approval, the eventual
    commercialization of Zelrix and our other products candidates.
    If we obtain marketing approval for Zelrix, we will incur
    significant sales, marketing and outsourced manufacturing
    expenses. In addition, we expect to incur additional expenses to
    add operational, financial and information systems and
    personnel, including personnel to support our planned product
    commercialization efforts. We also expect to incur significant
    costs to comply with corporate governance, internal controls and
    similar requirements applicable to us as a public company
    following the closing of this offering. Our results may vary
    depending on many factors, including the progress and results of
    our preclinical studies and clinical trials, our ability to
    obtain marketing approval of Zelrix and our other product
    candidates and, if approved, our ability to commercialize these
    products and achieve market acceptance of these products among
    physicians, patients and third party payors.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We have funded our operations to date primarily with the
    proceeds of the sale of convertible preferred stock, convertible
    notes and borrowings under debt facilities. From inception
    through December&#160;31, 2009, we have received net proceeds of
    $48.0&#160;million from the sale of convertible preferred stock
    and convertible notes. As of December&#160;31, 2009, we had
    $0.8&#160;million of debt outstanding under a term loan that we
    entered into in 2007.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In April 2010, we received gross proceeds of $10.1&#160;million
    from the sale of the April 2010 Convertible Notes. Further, in
    May 2010, we entered into the May 2010 Loan Facility under which
    $5.0&#160;million was advanced on the closing date. We used a
    portion of the proceeds that we received on the closing date of
    the
</DIV>
<!-- XBRL Paragraph Pagebreak -->
<!-- XBRL Pagebreak Begin -->

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    41
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL Pagebreak End -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    May 2010 Loan Facility to repay all outstanding amounts under
    the term loan that we entered into in 2007. The April 2010
    Convertible Notes and the May 2010 Loan Facility are described
    in more detail under &#147;&#151;&#160;Liquidity and Capital
    Resources.&#148;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Our recurring losses and negative cash flows from operations
    raise substantial doubt about our ability to continue as a going
    concern. As a result, our independent registered public
    accounting firm included an explanatory paragraph regarding this
    uncertainty in its report on our financial statements as of and
    for the year ended December&#160;31, 2009. We have no current
    source of revenues to sustain our present activities, and we do
    not expect to generate revenues until, and unless, the FDA or
    other regulatory agencies approve Zelrix or any other of our
    product candidates and we successfully commercialize any such
    product candidates. Accordingly, our ability to continue as a
    going concern will require us to obtain additional financing to
    fund our operations.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Financial
    Overview</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Research
    and Development Expenses</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Our research and development expenses consist of expenses
    incurred in developing, testing and seeking marketing approval
    of our product candidates, including:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Expenses associated with regulatory submissions, preclinical
    development, clinical trials and manufacturing;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Personnel related expenses, such as salaries, benefits, travel
    and other related expenses, including stock-based compensation;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Payments made to third party investigators who perform research
    and development on our behalf;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Payments to third party contract research organizations,
    contractor laboratories and independent contractors;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Expenses incurred to obtain technology licenses if the
    technology licensed has not reached technological feasibility
    and has no alternative future use;&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Facility, maintenance and other related expenses.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We expense all research and development costs as incurred.
    Preclinical development expenses and clinical trial expenses for
    our product candidates are a significant component of our
    current research and development expenses. Product candidates in
    later stage clinical development, such as Zelrix, generally have
    higher research and development expenses than those in earlier
    stages of development, primarily due to the increased size and
    duration of the clinical trials. We track and record information
    regarding external research and development expenses for each
    study or trial that we conduct. From time to time, we use third
    party contract research organizations, contractor laboratories
    and independent contractors in preclinical studies. We recognize
    the expenses associated with third parties performing these
    services for us in our preclinical studies based on the
    percentage of each study completed at the end of each reporting
    period. We coordinate clinical trials through a number of
    contracted investigational sites and recognize the associated
    expense based on a number of factors, including actual and
    estimated subject enrollment and visits, direct pass-through
    costs and other clinical site fees.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    From our inception in January 2005 through December&#160;31,
    2009, we incurred research and development expenses of
    $31.8&#160;million, of which $22.4&#160;million related to the
    development of Zelrix. We incurred research and development
    expenses associated with the development of Zelrix of
    $8.2&#160;million in 2009 and $5.6&#160;million in 2008.
    Additionally, in 2008 we incurred $5.5&#160;million of acquired
    in-process research and development expenses in connection with
    our acquisition of a patent application utilized in Zelrix. In
    addition, pursuant to this transaction, we obtained a perpetual,
    worldwide, exclusive, royalty-free license, with the right to
    grant sublicenses, including issued U.S.&#160;Patent
    No.&#160;6,745,071, as described in more detail under
    &#147;Business&#160;&#151; Intellectual Property and
    Exclusivity.&#148; Salaries and related expenses included in
    research and development expenses were $2.4&#160;million in 2009
    and $6.0&#160;million since our inception. We do not allocate
    salaries and related expenses to individual projects, trials or
    studies or to specific product candidates.
</DIV>
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    <BR>
    42
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL Pagebreak End -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We expect that our research and development expenses in 2010
    will be higher than in 2009 as a result of the full enrollment
    of the Phase&#160;III safety trials for Zelrix and the increased
    regulatory work related to the NDA that we expect to submit for
    Zelrix during the fourth quarter of 2010. We also expect to
    incur additional research and development expenses in 2010 as we
    accelerate the development of NP201 and NP202. These
    expenditures are subject to numerous uncertainties regarding
    timing and cost to completion. Completion of our preclinical
    development and clinical trials may take several years or more
    and the length of time generally varies according to the type,
    complexity, novelty and intended use of a product candidate. The
    cost of clinical trials may vary significantly over the life of
    a project as a result of differences arising during clinical
    development, including, among others:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    The number of sites included in the trials;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    The length of time required to enroll suitable subjects;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    The size of subject populations participating in the trials;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    The duration of subject
    <FONT style="white-space: nowrap">follow-ups;</FONT>
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    The development stage of the product candidates;&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    The efficacy and safety profile of the product candidates.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Neither Zelrix nor any of our other product candidates has
    received FDA approval. In order for the FDA to approve a product
    candidate, the FDA must conclude that clinical data establishes
    the safety and efficacy of such product candidate. We currently
    anticipate submitting an NDA for Zelrix in the fourth quarter of
    2010. As a result of the uncertainties discussed above, we are
    unable to determine the duration and completion costs of our
    development projects or when and to what extent we will generate
    revenues from the commercialization and sale of an approved
    product candidate.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">General
    and Administrative Expenses</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    General and administrative expenses consist primarily of
    salaries, benefits and other related costs, including
    stock-based compensation, for personnel serving in our
    executive, finance, accounting, legal, market research and human
    resource functions. Our general and administrative expenses also
    include facility and related costs not included in research and
    development expenses, professional fees for legal, including
    patent-related expenses, consulting, tax and accounting
    services, insurance, depreciation and general corporate
    expenses. We expect that our general and administrative expenses
    will increase with the continued development and potential
    commercialization of our product candidates.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We expect that our general and administrative expenses in 2010
    will be higher than in 2009 as a result of greater expenses
    relating to our operations as a public company, including
    increased costs for the hiring of additional personnel, and for
    payment to outside consultants, including lawyers and
    accountants, to comply with additional regulations, corporate
    governance, internal control and similar requirements applicable
    to public companies, as well as increased costs for insurance.
    Additionally, we plan to increase spending related to building a
    commercial infrastructure for the anticipated launch of Zelrix
    in the U.S.&#160;in the first half of 2012. However, in an
    effort to control our spending related to commercialization
    efforts, we currently plan to hire most of our sales and
    marketing personnel only if Zelrix is approved by the FDA.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Interest
    Income and Interest Expense</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Interest income consists of interest earned on our cash and cash
    equivalents. Interest expense consists primarily of cash and
    non-cash interest costs related to our outstanding debt.
    Additionally, in connection with some of our debt financings, we
    issued warrants, the fair value of which we recorded as deferred
    financing costs. We amortize these deferred financing costs over
    the lives of the loans as interest expense in our statement of
    operations. Excluding the impact of non-cash interest costs, we
    expect interest expense to increase in 2010 compared with 2009
    as a result of the April 2010 Convertible Notes and the May 2010
    Loan Facility.
</DIV>
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    <BR>
    43
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL Pagebreak End -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <I><FONT style="font-family: 'Times New Roman', Times">Net
    Operating Losses and Tax Loss Carryforwards</FONT></I>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    For the year ended December&#160;31, 2009, our net loss was
    $15.6&#160;million. We have incurred cumulative net losses of
    $49.1&#160;million from inception through December&#160;31,
    2009. As of December&#160;31, 2009, we had approximately
    $43.4&#160;million of federal and state net operating loss
    carryforwards available to offset future taxable income. These
    federal and state net operating loss carryforwards will begin to
    expire in 2024. Due to the uncertainty of our ability to realize
    the benefit of any net operating loss carryforwards, the
    deferred tax asset related to these carryforwards has been fully
    offset by a valuation allowance at December&#160;31, 2009.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The closing of this offering, together with private placements
    and other transactions that have occurred since our inception,
    may trigger, or may have already triggered, an &#147;ownership
    change&#148; pursuant to Section&#160;382 of the Code. If an
    ownership change is triggered, it will limit our ability to use
    some of our net operating loss carryforwards. In addition, since
    we will need to raise substantial additional funding to finance
    our operations, we may undergo further ownership changes in the
    future, which could further limit our ability to use net
    operating loss carryforwards. As a result, if we generate
    taxable income, our ability to use some of our net operating
    loss carryforwards to offset U.S. federal taxable income may be
    subject to limitations, which could result in increased future
    tax liability to us.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Critical
    Accounting Policies and Use of Estimates</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We have based our management&#146;s discussion and analysis of
    our financial condition and results of operations on our
    financial statements, which have been prepared in accordance
    with accounting principles generally accepted in the
    U.S.&#160;The preparation of these financial statements requires
    us to make estimates that affect the reported amounts of assets
    and liabilities and the disclosure of contingent assets and
    liabilities at the date of the financial statements as well as
    the reported expenses during the reporting periods. On an
    ongoing basis, we evaluate our estimates and judgments,
    including those related to clinical trial expenses and
    stock-based compensation. We base our estimates on historical
    experience and on various other factors that we believe to be
    appropriate under the circumstances. Actual results may differ
    from these estimates under different assumptions or conditions.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    While our significant accounting policies are more fully
    discussed in note&#160;3 to our financial statements appearing
    at the end of this prospectus, we believe that the following
    accounting policies are critical to the process of making
    significant judgments and estimates in the preparation of our
    financial statements. We have reviewed these critical accounting
    policies and estimates with the audit committee of our board of
    directors.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Research
    and Development Expenses</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We rely heavily on third parties to conduct preclinical and
    clinical trials, as well as for the manufacture of our clinical
    trial supplies. At the end of each reporting period, we compare
    the payments made to each service provider to the estimated
    progress towards completion of the related project. Factors that
    we consider in preparing these estimates include the number of
    subjects enrolled in studies, milestones achieved and other
    criteria related to the efforts of our vendors. These estimates
    are subject to change as additional information becomes
    available. Depending on the timing of payments to vendors and
    estimated services provided, we record net prepaid or accrued
    expenses related to these costs. We calculate expenses incurred
    for the manufacture of our clinical supplies using our estimate
    of costs and capitalize these expenses on our balance sheet to
    the extent we hold clinical supply materials on hand to be
    distributed for use in our clinical trials. We expense these
    costs as the supplies are consumed in the trials.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Stock-Based
    Compensation</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We use the Black-Scholes option-pricing model to value our stock
    option awards. The Black-Scholes option-pricing model requires
    the input of subjective assumptions, including the expected life
    of stock options and stock price volatility. As a private
    company, we do not have sufficient history to estimate the
    expected life of our options or the volatility of our common
    stock price. We use the &#147;simplified method,&#148; as
    allowed under the Securities and Exchange Commission&#146;s, or
    SEC, accounting guidance, to determine the expected life, which
    is the midpoint between an option&#146;s vesting date and
    contractual term. We use comparable public
</DIV>
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    <BR>
    44
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL Pagebreak End -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    companies as a basis for our expected volatility to calculate
    the fair value of our option grants. We intend to continue to
    consistently apply this process using comparable companies until
    a sufficient amount of historical information regarding the
    volatility of our own share price becomes available. The
    risk-free interest rate is based on U.S.&#160;Treasury
    instruments with a remaining term equal to the expected term of
    the option. The assumptions used in calculating the fair value
    of stock options represent our best estimate and involve
    inherent uncertainties and the application of our judgment. As a
    result, if factors change and we use different assumptions,
    stock-based compensation could be materially different in the
    future.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The fair value of our common stock underlying grants of common
    stock options and restricted stock was determined by our board
    of directors or compensation committee pursuant to authority
    delegated by our board of directors and represents the most
    important factor in determining the value of our stock-based
    compensation. In the absence of a public trading market for our
    common stock, our board of directors or compensation committee
    was required to estimate the fair value of our common stock at
    the grant date of our stock-based awards.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Prior to December 2006, our board of directors or our
    compensation committee estimated the fair value of our common
    stock considering the following factors:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    The nature and history of our business;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    The general economic outlook and the outlook for the life
    sciences industry;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Our financial condition and results of operations, including
    important developments in our operations, most significantly
    relating to the clinical development of our most advanced
    product candidate, Zelrix;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Our ability to pay dividends;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Whether or not we had goodwill or other intangible value;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Our past transactions in common stock and preferred
    stock;&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    The stock prices of other publicly traded companies engaged in
    lines of business that are the same or similar to ours.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Beginning in December 2006, our compensation committee obtained
    independent third party valuations to assist it in estimating
    the fair value of our common stock. These valuations took into
    account clinical and other notable milestones with respect to
    Zelrix. The first independent third party valuation of our
    common stock took place following the sale of Series&#160;A
    preferred stock in August 2006 when we engaged an independent
    third party valuation firm to assist our compensation committee
    in determining the fair value of our common stock as of
    December&#160;31, 2006. In connection with the sale of
    Series&#160;B preferred stock in July 2008, and in anticipation
    of the grant of a significant number of stock options covering
    our common stock in the third quarter of 2008, we again engaged
    an independent third party valuation firm to assist our
    compensation committee in determining the fair value of our
    common stock as of July&#160;8, 2008.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The following table summarizes the proceeds from the issuance of
    our preferred stock through April&#160;30, 2010:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="47%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="25%">&nbsp;</TD>	<!-- colindex=02 type=maindata -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=03 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=03 type=lead -->
    <TD width="8%" align="right">&nbsp;</TD>	<!-- colindex=03 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=03 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=04 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=04 type=lead -->
    <TD width="8%" align="right">&nbsp;</TD>	<!-- colindex=04 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=04 type=hang1 -->
</TR>
<!-- Table Width Row END -->
<!-- TableOutputHead -->
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Number<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>Issuance</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Date</B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>of Shares</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Net Proceeds</B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>(In millions)</B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<!-- TableOutputBody -->
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Series&#160;A preferred stock
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="center" valign="top">
    August and October 2006
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    11,546,161
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    9.7
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Series&#160;A preferred stock
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="top">
    October 2007
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    5,376,345
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    5.0
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Series&#160;B preferred stock
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="center" valign="top">
    April and July 2008
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    25,282,556
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    23.2
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Series&#160;B preferred stock
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="top">
    August 2009
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    10,891,278
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    10.1
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="top">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    53,096,340
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    48.0
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Although we sold all of the shares of Series&#160;A and
    Series&#160;B preferred stock at a price of $0.93 per share, our
    compensation committee did not believe that the value placed on
    these shares of preferred stock provided a direct indication of
    the fair value of our common stock because the preferred stock
    is entitled to preferences, rights and protections that are not
    applicable to our common stock. As of December&#160;31, 2009,
    because of
</DIV>
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<!-- XBRL Pagebreak Begin -->

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    45
</DIV><!-- END PAGE WIDTH -->
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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL Pagebreak End -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    these preferences, the holders of the Series&#160;A and
    Series&#160;B preferred stock were entitled to receive a
    liquidation preference of $56.2&#160;million and to participate
    with the common stockholders on an as-converted basis in the
    remaining value of our company.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In order to estimate the fair value of our common stock, we
    estimated the aggregate fair value of our common stock and
    preferred stock, which we refer to as our aggregate equity
    value, and then allocated this value between our preferred stock
    and common stock using a Black-Scholes call option method, as
    described in more detail below. In addition, we applied an
    illiquidity discount to our estimate of the fair value of our
    common stock to account for the heightened level of risk of our
    shares compared to shares of comparable, publicly traded
    companies.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In estimating our aggregate equity value, we used methodologies
    and assumptions consistent with the American Institute of
    Certified Public Accountants Practice Guide, or the AICPA
    Practice Guide, <I>Valuation of Privately-Held-Company Equity
    Securities Issued as Compensation</I>. The primary methodologies
    that we used to determine our aggregate equity value were a
    market-based approach and an asset-based approach.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Under the market-based approach, we calculated the valuation
    multiples relative to the total assets, equity and
    <FONT style="white-space: nowrap">cash-on-hand</FONT>
    for comparable, publicly traded companies. We then applied those
    multiples to our assets, equity and
    <FONT style="white-space: nowrap">cash-on-hand</FONT>
    as of the valuation date.
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Under the asset-based approach, we calculated the fair value of
    our assets based on an estimate of how much it might cost a
    third party to replace or replicate our assets. This approach is
    based on the concept that a prudent investor would pay no more
    for an asset than the amount it would cost the investor to
    replace the asset with a new asset. In addition, this method
    assumes that a buyer of our company would be willing to pay us
    for the cost that the buyer would incur to replicate our
    investment in our product candidates. Accordingly, under this
    method, we estimated our aggregate equity value as the sum of
    the market value of our net tangible assets and the cumulative
    research and development cost that we incurred on Zelrix and our
    other product candidates through the valuation date.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We then allocated the aggregate equity value between the common
    stock and the preferred stock using a Black-Scholes call option
    pricing method. Under this method, we estimated the fair value
    of our common stock as the net value of a series of call
    options, representing the present value of the expected future
    returns to the common stockholders. We considered the rights of
    the common stockholders to be equivalent to a call option on our
    future value in excess of the aggregate liquidation preferences
    payable on Series&#160;A and Series&#160;B preferred stock, with
    adjustments to account for the rights retained by the preferred
    stockholders related to any value in excess of the applicable
    liquidation preferences. Using this method, we valued the common
    stock by estimating the value of a share of common stock in each
    of these call option rights.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    As discussed above, we then reduced the value of the common
    stock using this approach by applying an illiquidity discount to
    account for the heightened level of risk associated with our
    shares compared to that of comparable, publicly traded companies.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The December&#160;31, 2006 valuation of our common stock was
    based on an aggregate equity value of $8.5&#160;million. The
    value allocated to the common stock after applying the call
    option allocation methodology and a 35% illiquidity discount was
    $0.18 per share. Our compensation committee believed the
    increase in the estimated fair value of common stock from $0.12
    per share prior to December 2006 to $0.18 per share was
    appropriate in light of the continued progress of Zelrix in its
    preclinical development program as of December 2006, coupled
    with the initial sale of Series&#160;A preferred stock in August
    2006 at $0.93 per share.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The July&#160;8, 2008 valuation of our common stock was based on
    an aggregate equity value of $30.2&#160;million. The value
    allocated to the common stock after applying the call option
    allocation methodology and a 35% illiquidity discount was $0.24
    per share. The increase in the aggregate equity value compared
    to the December&#160;31, 2006 valuation reflected our sale of
    additional Series&#160;A preferred stock in October 2007, the
    initial sale of Series&#160;B preferred stock in July 2008 and
    the continued investment in, and advancement of, our product
    candidates. In particular, in the first quarter of 2008, we
    successfully completed a Phase I proof of concept study for
    Zelrix that provided encouraging pharmacokinetic data that was a
    predicate for continued development.
</DIV>
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<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    46
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL Pagebreak End -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    On each grant date subsequent to December&#160;31, 2006, our
    compensation committee considered the most current independent
    valuation that had been completed and the continued validity of
    that valuation given the progress, if any, that we had made in
    the development of Zelrix and our other product candidates,
    external market factors and other conditions, as discussed
    above. The following table summarizes our stock-based awards
    issued since our inception to December&#160;31, 2009. We have
    not issued any stock-based awards since December&#160;31, 2009.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="35%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=02 type=lead -->
    <TD width="9%" align="right">&nbsp;</TD>	<!-- colindex=02 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=02 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=03 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=03 type=lead -->
    <TD width="11%" align="right">&nbsp;</TD>	<!-- colindex=03 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=03 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=04 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=04 type=lead -->
    <TD width="9%" align="right">&nbsp;</TD>	<!-- colindex=04 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=04 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=05 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=05 type=lead -->
    <TD width="6%" align="right">&nbsp;</TD>	<!-- colindex=05 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=05 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=06 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=06 type=lead -->
    <TD width="6%" align="right">&nbsp;</TD>	<!-- colindex=06 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=06 type=hang1 -->
</TR>
<!-- Table Width Row END -->
<!-- TableOutputHead -->
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Per Share Fair<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Per Share<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Value of<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Fair Value of<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="10" align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Number of Awards</B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>Issuance Date</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Preferred Stock</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Common
    Stock<SUP style="font-size: 85%; vertical-align: top">(1)</SUP></B>

</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Common Stock</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Options<SUP style="font-size: 85%; vertical-align: top">(2)</SUP></B>

</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Total</B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<!-- TableOutputBody -->
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    1/1/2005 - 6/30/2005
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    0.08
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    110,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    110,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    7/1/2005 - 12/31/2005
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    0.10
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    277,710
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    277,710
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    1/1/2006 - 6/30/2006
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    0.12
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    420,000
</TD>
<TD nowrap align="left" valign="bottom">
    <SUP style="font-size: 85%; vertical-align: top">(3)</SUP>

</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    130,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    550,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    7/1/2006 - 12/31/2006
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="center" valign="bottom">
    0.93
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    0.18
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    495,000
</TD>
<TD nowrap align="left" valign="bottom">
    <SUP style="font-size: 85%; vertical-align: top">(3)</SUP>

</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    375,847
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    870,847
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    1/1/2007 - 6/30/2007
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
    0.93
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    0.18
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    170,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    170,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    7/1/2007 - 12/31/2007
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
    0.93
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    0.18
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    377,500
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    377,500
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    1/1/2008 - 6/30/2008
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
    0.93
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    0.18
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    115,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    115,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    7/1/2008 - 12/31/2008
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
    0.93
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    0.24
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    5,889,569
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    5,889,569
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    1/1/2009 - 6/30/2009
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
    0.93
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    0.24
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    464,700
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    464,700
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    7/1/2009 - 12/31/2009
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
    0.93
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    0.24
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    84,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    84,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    1,025,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    7,884,326
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    8,909,326
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV style="font-size: 1pt; margin-left: 0%; width: 13%;  align: left; border-bottom: 1pt solid #000000"></DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>



<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

<TR>
    <TD width="2%"></TD>
    <TD width="1%"></TD>
    <TD width="97%"></TD>
</TR>

<TR>
    <TD align="right" valign="top">
    (1) </TD>
    <TD></TD>
    <TD valign="bottom">
    The per share estimated fair value of our common stock as
    determined by our compensation committee as of the date of the
    grant, taking into account various factors and including the
    results, if applicable, of independent third party valuations of
    our common stock as discussed above.</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD align="right" valign="top">
    (2) </TD>
    <TD></TD>
    <TD valign="bottom">
    All options were granted with an exercise price equal to the
    then fair value of our common stock.</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD align="right" valign="top">
    (3) </TD>
    <TD></TD>
    <TD valign="bottom">
    Represents restricted common stock awards subject to vesting
    criteria.</TD>
</TR>

</TABLE>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Results
    of Operations</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Comparison
    of Years Ended December&#160;31, 2008 and 2009</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <I><FONT style="font-family: 'Times New Roman', Times">Research
    and Development Expenses</FONT></I>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Research and development expenses for the years ended
    December&#160;31, 2008 and 2009 were comprised of the following:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="69%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=02 type=lead -->
    <TD width="4%" align="right">&nbsp;</TD>	<!-- colindex=02 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=02 type=hang1 -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=03 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=03 type=lead -->
    <TD width="5%" align="right">&nbsp;</TD>	<!-- colindex=03 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=03 type=hang1 -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=04 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=04 type=lead -->
    <TD width="4%" align="right">&nbsp;</TD>	<!-- colindex=04 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=04 type=hang1 -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=05 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=05 type=lead -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=05 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=05 type=hang1 -->
</TR>
<!-- Table Width Row END -->
<!-- TableOutputHead -->
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="6" nowrap align="center" valign="bottom">
    <B>Year Ended<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="6" nowrap align="center" valign="bottom">
    <B>Increase<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="6" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>December&#160;31,</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="6" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>(Decrease)</B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>2008</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>2009</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>$</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>%</B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="14" nowrap align="center" valign="bottom">
    <B>(In thousands)</B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<!-- TableOutputBody -->
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Clinical development, regulatory and manufacturing expenses
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    4,257
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    7,081
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    2,824
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    66
</TD>
<TD nowrap align="left" valign="bottom">
    %
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Research and preclinical expenses
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    2,172
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    1,385
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (787
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (36
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Compensation and related expenses
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    1,950
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    2,388
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    438
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    22
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Facilities and related expenses
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    436
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    456
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    20
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    5
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    8,815
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    11,310
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    2,495
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    28
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Research and development expenses increased by
    $2.5&#160;million, or 28%, to $11.3&#160;million in 2009 from
    $8.8&#160;million in 2008. This increase resulted primarily from
    a $3.2&#160;million increase in costs related to our pivotal
    Phase&#160;III clinical trial and our Phase&#160;III safety
    trials for Zelrix and a $0.4&#160;million increase in
    compensation costs, offset by a $0.6&#160;million decrease in
    preclinical expenses, reflecting our focus on our Phase&#160;III
    clinical program for Zelrix, and a $0.6&#160;million decrease in
    manufacturing expenses. The increase in compensation costs in
    2009 primarily reflected our addition of research and
    development personnel,
</DIV>
<!-- XBRL Paragraph Pagebreak -->
<!-- XBRL Pagebreak Begin -->

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    47
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL Pagebreak End -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    particularly in the areas of quality assurance, regulatory and
    medical, throughout 2008. The costs of these additional
    personnel were reflected as a full year of expense in 2009. The
    decrease in preclinical expense in 2009 primarily reflected the
    completion of our preclinical NP201 study in the first half of
    2009, which had been ongoing throughout 2008. The decrease in
    manufacturing expenses in 2009 primarily reflected prototype
    development work in 2008 for NP201 that did not recur in 2009.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Research and development expenses by program for the years ended
    December&#160;31, 2008 and 2009 are presented below:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="67%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=02 type=lead -->
    <TD width="4%" align="right">&nbsp;</TD>	<!-- colindex=02 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=02 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=03 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=03 type=lead -->
    <TD width="5%" align="right">&nbsp;</TD>	<!-- colindex=03 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=03 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=04 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=04 type=lead -->
    <TD width="4%" align="right">&nbsp;</TD>	<!-- colindex=04 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=04 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=05 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=05 type=lead -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=05 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=05 type=hang1 -->
</TR>
<!-- Table Width Row END -->
<!-- TableOutputHead -->
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="6" nowrap align="center" valign="bottom">
    <B>Year Ended<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="6" nowrap align="center" valign="bottom">
    <B>Increase<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="6" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>December&#160;31,</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="6" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>(Decrease)</B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>2008</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>2009</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>$</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>%</B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="14" nowrap align="center" valign="bottom">
    <B>(In thousands)</B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<!-- TableOutputBody -->
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Zelrix
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    5,590
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    8,183
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    2,593
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    46
</TD>
<TD nowrap align="left" valign="bottom">
    %
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    NP201
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    743
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    244
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (499
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (67
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Development expenses&#160;&#151; general
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    2,482
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    2,883
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    401
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    16
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    8,815
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    11,310
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    2,495
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    28
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The significant increase in spending on Zelrix in 2009 was
    primarily due to the continuation of our Phase&#160;III clinical
    program. As we completed and analyzed the results of our
    preclinical trial for NP201, our spending on NP201 declined by
    67% in 2009. Personnel related expenses, including salaries and
    benefits, are included in the table above as general development
    expenses as we do not allocate these costs to specific product
    candidates.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <I><FONT style="font-family: 'Times New Roman', Times">Acquired
    In-Process Research and Development Expenses</FONT></I>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In July 2008, we entered into an asset purchase and license
    agreement with Travanti Pharma Inc., or Travanti. Pursuant to
    the terms of the Travanti agreement, we paid $5.5&#160;million
    to Travanti for the purchase of a patent application, and a
    worldwide license in the field of migraine to additional
    intellectual property, directed to transdermal delivery of
    anti-migraine medications using an active delivery patch. We
    recognized the purchase price in our statement of operations for
    the year ended December&#160;31, 2008 as acquired in-process
    research and development because additional research and
    development efforts and marketing approval in the U.S.&#160;is
    required in order to commercialize Zelrix, which utilizes this
    patent application.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <I><FONT style="font-family: 'Times New Roman', Times">General
    and Administrative Expenses</FONT></I>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    General and administrative expenses were $3.1&#160;million in
    both 2009 and 2008. Although general and administrative
    compensation expenses increased by $0.4&#160;million in 2009
    due, in part, to the hiring of a chief financial officer in the
    fourth quarter of 2008, this increase was offset by decreases of
    $0.2&#160;million in legal expenses, $0.1&#160;million in market
    research expenses and $0.1&#160;million in other general
    expenses.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <I><FONT style="font-family: 'Times New Roman', Times">Interest
    Income/Expense</FONT></I>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Interest income decreased to $30,000 in 2009 from $158,000 in
    2008 due to lower average cash and cash equivalent balances,
    consisting primarily of bank deposits and money market mutual
    funds invested in short-term corporate and government
    obligations, and lower yields on investments.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Interest expense increased to $1.3&#160;million in 2009 from
    $0.3&#160;million in 2008 primarily as a result of the non-cash
    beneficial conversion feature and the fair value of the warrants
    issued in connection with the issuance of convertible debt in
    July 2009. This convertible debt converted into shares of
    Series&#160;B preferred stock in August 2009.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <I><FONT style="font-family: 'Times New Roman', Times">Income
    Tax Benefit</FONT></I>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In 2009, we recognized an income tax benefit of $151,000 related
    to the sale of Pennsylvania research and development tax credits
    to a third party buyer.
</DIV>
<!-- XBRL Pagebreak Begin -->

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    48
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL Pagebreak End -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <I><FONT style="font-family: 'Times New Roman', Times">Comparison
    of Years Ended December&#160;31, 2007 and 2008</FONT></I>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <I><FONT style="font-family: 'Times New Roman', Times">Research
    and Development Expenses</FONT></I>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Research and development expenses for the years ended
    December&#160;31, 2007 and 2008 were comprised of the following:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="68%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=02 type=lead -->
    <TD width="4%" align="right">&nbsp;</TD>	<!-- colindex=02 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=02 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=03 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=03 type=lead -->
    <TD width="4%" align="right">&nbsp;</TD>	<!-- colindex=03 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=03 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=04 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=04 type=lead -->
    <TD width="4%" align="right">&nbsp;</TD>	<!-- colindex=04 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=04 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=05 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=05 type=lead -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=05 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=05 type=hang1 -->
</TR>
<!-- Table Width Row END -->
<!-- TableOutputHead -->
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="6" nowrap align="center" valign="bottom">
    <B>Year Ended<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="6" nowrap align="center" valign="bottom">
    <B>Increase<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="6" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>December&#160;31,</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="6" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>(Decrease)</B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>2007</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>2008</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>$</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>%</B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="14" nowrap align="center" valign="bottom">
    <B>(In thousands)</B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<!-- TableOutputBody -->
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Clinical development, regulatory and manufacturing expenses
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    5,063
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    4,257
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    (806
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (16
</TD>
<TD nowrap align="left" valign="bottom">
    )%
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Research and preclinical expenses
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    1,347
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    2,172
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    825
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    61
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Compensation and related expenses
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    1,098
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    1,950
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    852
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    78
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Facilities and related expenses
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    253
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    436
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    183
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    72
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    7,761
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    8,815
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    1,054
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    14
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Research and development expenses increased by
    $1.1&#160;million, or 14%, to $8.8&#160;million in 2008 from
    $7.8&#160;million in 2007. This increase resulted primarily from
    a $0.7&#160;million increase in preclinical expenses related to
    toxicology studies for Zelrix and preclinical studies for NP201
    that were initiated in 2008, a $0.9&#160;million increase in
    compensation costs and a $0.2&#160;million increase in
    facilities and related expenses, offset by a $0.6&#160;million
    decrease in manufacturing expenses and a $0.2&#160;million
    decrease in regulatory costs due to the submission of our IND
    for Zelrix in 2007. The increase in compensation costs in 2008
    primarily reflected our addition of research and development
    personnel, particularly in the areas of quality assurance,
    regulatory and medical, throughout 2008. The increase in
    facilities and related expenses in 2008 resulted from the
    leasing of our new corporate headquarters in Conshohocken,
    Pennsylvania in March 2008. The decrease in manufacturing
    expenses in 2008 primarily reflected our substantial completion
    of the formulation and test method development for Zelrix in
    2007.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Research and development expenses by program for the years ended
    December&#160;31, 2007 and 2008 are presented below:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="69%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=02 type=lead -->
    <TD width="4%" align="right">&nbsp;</TD>	<!-- colindex=02 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=02 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=03 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=03 type=lead -->
    <TD width="4%" align="right">&nbsp;</TD>	<!-- colindex=03 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=03 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=04 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=04 type=lead -->
    <TD width="4%" align="right">&nbsp;</TD>	<!-- colindex=04 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=04 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=05 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=05 type=lead -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=05 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=05 type=hang1 -->
</TR>
<!-- Table Width Row END -->
<!-- TableOutputHead -->
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="6" nowrap align="center" valign="bottom">
    <B>Year Ended<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="6" nowrap align="center" valign="bottom">
    <B>Increase<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="6" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>December&#160;31,</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="6" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>(Decrease)</B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>2007</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>2008</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>$</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>%</B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="14" nowrap align="center" valign="bottom">
    <B>(In thousands)</B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<!-- TableOutputBody -->
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Zelrix
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    5,837
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    5,590
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    (247
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (4
</TD>
<TD nowrap align="left" valign="bottom">
    )%
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    NP201
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    559
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    743
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    184
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    33
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Development expenses&#160;&#151; general
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    1,365
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    2,482
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    1,117
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    82
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    7,761
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    8,815
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    1,054
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    14
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The decrease in spending on Zelrix in 2008 is described in more
    detail above. The increase in spending on NP201 in 2008
    specifically related to a preclinical study that we initiated in
    2008. As also described above, our increased research and
    development headcount in 2008 was the primary reason for the
    increase in general research and development expenses in 2008.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <I><FONT style="font-family: 'Times New Roman', Times">General
    and Administrative Expenses</FONT></I>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    General and administrative expenses increased by
    $1.2&#160;million, or 63%, to $3.1&#160;million in 2008 from
    $1.9&#160;million in 2007. This increase resulted primarily from
    a $0.5&#160;million increase in compensation expenses associated
    with additional headcount, a $0.2&#160;million increase in
    market research expenses, a $0.2&#160;million increase in legal
    expenses and a $0.3&#160;million increase in facility related
    expenses due to the leasing of our new corporate headquarters in
    March 2008.
</DIV>
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    <BR>
    49
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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL Pagebreak End -->

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <I><FONT style="font-family: 'Times New Roman', Times">Interest
    Income/Expense</FONT></I>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Interest income decreased to $158,000 in 2008 from $223,000 in
    2007 due to lower average cash and cash equivalent balances and
    lower yields on investments.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Interest expense increased to $278,000 in 2008 from $253,000 in
    2007 due to a full year of expense related to a term loan
    entered into in March 2007 for $2.5&#160;million.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Liquidity
    and Capital Resources</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Since our inception in 2005, we have devoted most of our cash
    resources to research and development and general and
    administrative activities primarily related to the development
    of Zelrix. We have financed our operations primarily with the
    proceeds of the sale of convertible preferred stock and
    convertible notes and borrowings under debt facilities. To date,
    we have not generated any revenues from the sale of products,
    and we do not anticipate generating any revenues from the sale
    of Zelrix until at least 2012. We have incurred losses and
    generated negative cash flows from operations since inception.
    As of December&#160;31, 2009, our principal sources of liquidity
    were our cash and cash equivalents, which totaled
    $3.9&#160;million. Our working capital was $1.5&#160;million as
    of December&#160;31, 2009.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Equity
    Financings</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    From inception through December&#160;31, 2009, we have received
    net proceeds of $48.0&#160;million from the sale of convertible
    preferred stock and convertible notes. The various issuances of
    our preferred stock are described in more detail under
    &#147;&#151;&#160;Critical Accounting Policies and Use of
    Estimates&#160;&#151; Stock-Based Compensation.&#148;
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Debt
    Facilities</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    As of December&#160;31, 2009, we had $0.8&#160;million of debt
    outstanding under a term loan that we entered into in 2007. In
    April 2010, we received gross proceeds of $10.1&#160;million
    from the sale of the April 2010 Convertible Notes. These notes
    bear interest at 8% per year and are due on December&#160;31,
    2010, if not converted prior to such date. The outstanding
    principal balance and accrued interest on the April 2010
    Convertible Notes will convert into shares of common stock upon
    the closing of this offering at a conversion price equal to 80%
    of the price to the public in this offering.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In May 2010, we entered into the May 2010 Loan Facility to fund
    our working capital requirements. Under the May 2010 Loan
    Facility, $5.0&#160;million was advanced on the closing date,
    which we refer to as the Term A Loan, and, upon our receipt of
    at least $30.0&#160;million in unrestricted net cash proceeds
    from the sale of equity securities, including pursuant to this
    offering, the private sale of equity or convertible debt
    securities, or upfront payments from a joint venture or
    partnership, we will have a
    <FONT style="white-space: nowrap">12-month</FONT>
    period during which we may request an additional
    $6.0&#160;million in funding, which we refer to as the Term B
    Loan. We refer to the Term A and Term B Loans together as the
    Term Loans. The funding of the Term B Loan is subject to our
    compliance with the terms of the May 2010 Loan Facility,
    including the continued accuracy of our representations and
    warranties contained therein, and is at the lenders&#146; sole
    discretion. The Term Loans have a scheduled maturity date in
    August 2013. The May 2010 Loan Facility is secured by
    substantially all of our assets, excluding intellectual
    property, which is subject to a negative pledge prohibiting the
    granting of liens thereon to any third party.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We used $0.4&#160;million of the proceeds from the Term A Loan
    to repay all outstanding amounts owed under the term loan that
    we entered into in 2007. Amounts outstanding under the May 2010
    Loan Facility bear interest at LIBOR plus 8.75% per year, with a
    LIBOR floor of 3%. Until June 2011, the Term Loans only require
    monthly payments of interest. Thereafter, the Term Loans will
    amortize on a straight line basis, and we will be required to
    pay 27 equal monthly installments of principal and interest
    through the maturity date.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The May 2010 Loan Facility does not contain any financial
    covenants, although it does contain operating covenants,
    including covenants restricting our ability to incur additional
    indebtedness, pay dividends or other distributions, effect a
    sale of any part of our business and merge with or acquire
    another company. The May
</DIV>
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    <BR>
    50
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
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<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    2010 Loan Facility also includes customary events of default,
    including upon the occurrence of a payment default, a covenant
    default, a material adverse change and our insolvency. Further,
    the May 2010 Loan Facility provides for a three day cure period
    for a breach of payment obligations other than payment of
    principal and interest, for which no cure period is provided. A
    ten day cure period, which may be extended to up to 30&#160;days
    in certain circumstances, is also provided for defaults that do
    not (1)&#160;constitute an event of default under the May 2010
    Loan Facility, (2)&#160;breach specified affirmative covenants
    or (3)&#160;breach a negative covenant.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In connection with the Term&#160;A Loan, we issued the lenders
    warrants to purchase 255,376&#160;shares of Series&#160;B
    preferred stock at an exercise price of $0.93&#160;per share.
    The number of shares exercisable under the warrant will
    automatically increase by up to an additional
    306,452&#160;shares of Series&#160;B preferred stock if the Term
    B Loan is funded in full. The warrants have a ten year exercise
    period and include a put option right in favor of the lenders in
    connection with certain major corporate events, events of
    default and maturity of the May 2010 Loan Facility. Upon the
    closing of this offering, in accordance with their terms, the
    put option right will terminate and the outstanding warrants
    will automatically become exercisable for 255,376&#160;shares of
    common stock at an exercise price of $0.93 per share of common
    stock.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Future
    Capital Requirements</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We expect that the net proceeds from this offering and our
    existing cash and cash equivalents will be sufficient to fund
    our operations and capital requirements, including payment
    obligations under our outstanding debt, for at least the next
    <B>&#160;&#160; </B>months. We believe that these available
    funds will be sufficient to complete the development of Zelrix
    through FDA approval and to fund the expected commercial launch
    of Zelrix in the U.S.&#160;in the first half of 2012. However,
    it is difficult to predict our spending relative to Zelrix and
    our other product candidates prior to obtaining FDA approval.
    Moreover, changing circumstances may cause us to expend cash
    significantly faster than we currently anticipate, and we may
    need to spend more cash than currently expected because of
    circumstances beyond our control.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Our expectations regarding future cash requirements do not
    reflect the potential impact of any future acquisitions,
    mergers, dispositions, joint ventures or investments that we
    make in the future. We have no current understandings,
    agreements or commitments for any material acquisitions or
    licenses of any products, businesses or technologies. We may
    need to raise substantial additional capital in order to engage
    in any of these types of transactions.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We expect to continue to incur substantial additional operating
    losses for at least the next several years as we continue to
    develop our product candidates and seek marketing approval and,
    subject to obtaining such approval, the eventual
    commercialization of Zelrix and our other products candidates.
    If we obtain marketing approval for Zelrix, we will incur
    significant sales, marketing and outsourced manufacturing
    expenses. In addition, we expect to incur additional expenses to
    add operational, financial and information systems and
    personnel, including personnel to support our planned product
    commercialization efforts. We also expect to incur significant
    costs to comply with corporate governance, internal controls and
    similar requirements applicable to us as a public company
    following the closing of this offering.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Our future use of operating cash and capital requirements will
    depend on many forward-looking factors, including the following:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    The timing of our submission to the FDA, and outcome of the
    FDA&#146;s review, of the NDA for Zelrix;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    The extent to which the FDA may require us to perform additional
    clinical trials for Zelrix;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    The timing and success of this offering;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    The costs of our commercialization activities for Zelrix, if it
    is approved by the FDA;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    The cost of purchasing manufacturing and other capital equipment
    for our potential products;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    The scope, progress, results and costs of development for our
    other product candidates;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    The cost, timing and outcome of regulatory review of our other
    product candidates;
</TD>
</TR>

</TABLE>
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    <BR>
    51
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL Pagebreak End -->

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    The extent to which we acquire or invest in products, businesses
    and technologies;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    The extent to which we choose to establish collaboration,
    co-promotion, distribution or other similar agreements for
    product candidates;&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    The costs of preparing, submitting and prosecuting patent
    applications and maintaining, enforcing and defending
    intellectual property claims.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    To the extent that our capital resources are insufficient to
    meet our future operating and capital requirements, we will need
    to finance our cash needs through public or private equity
    offerings, debt financings, corporate collaboration and
    licensing arrangements or other financing alternatives. The
    covenants under the May 2010 Loan Facility and the pledge of our
    assets as collateral limit our ability to obtain additional debt
    financing. We have no committed external sources of funds.
    Additional equity or debt financing or corporate collaboration
    and licensing arrangements may not be available on acceptable
    terms, if at all.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    If we raise additional funds by issuing equity securities, our
    stockholders will experience dilution. Debt financing, if
    available, would result in increased fixed payment obligations
    and may involve agreements that include covenants limiting or
    restricting our ability to take specific actions, such as
    incurring additional debt, making capital expenditures or
    declaring dividends. Any debt financing or additional equity
    that we raise may contain terms, such as liquidation and other
    preferences, that are not favorable to us or our stockholders.
    If we raise additional funds through collaboration and licensing
    arrangements with third parties, it may be necessary to
    relinquish valuable rights to our technologies, future revenue
    streams or product candidates or to grant licenses on terms that
    may not be favorable to us.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Cash
    Flows</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The following table summarizes our cash flows from operating,
    investing and financing activities for the years ended
    December&#160;31, 2007, 2008 and 2009:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="69%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=02 type=lead -->
    <TD width="5%" align="right">&nbsp;</TD>	<!-- colindex=02 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=02 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=03 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=03 type=lead -->
    <TD width="6%" align="right">&nbsp;</TD>	<!-- colindex=03 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=03 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=04 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=04 type=lead -->
    <TD width="6%" align="right">&nbsp;</TD>	<!-- colindex=04 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=04 type=hang1 -->
</TR>
<!-- Table Width Row END -->
<!-- TableOutputHead -->
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="10" align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Year Ended December&#160;31,</B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>2007</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>2008</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>2009</B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="10" align="center" valign="bottom">
    <B>(In thousands)</B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<!-- TableOutputBody -->
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <B>Statement of Cash Flows Data:</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Total cash provided by (used in):
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Operating activities
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    (8,629
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    (12,274
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    (13,568
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Investing activities
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (36
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (5,627
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (29
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Financing activities
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    7,284
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    22,439
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    9,155
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Increase (decrease) in cash and cash equivalents
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    (1,381
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    4,538
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    (4,442
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Operating
    Activities</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Net cash used in operating activities for the year ended
    December&#160;31, 2009 was $13.6&#160;million, an increase of
    $1.3&#160;million from the year ended December&#160;31, 2008.
    This increase was primarily due to a $3.2&#160;million increase
    in research and development expenses for our pivotal
    Phase&#160;III clinical trial and our Phase&#160;III safety
    trials for Zelrix, partially offset by a $0.6&#160;million
    decrease in manufacturing expenses and a $0.6&#160;million
    decrease in preclinical development expenses, as described in
    more detail under &#147;&#151;&#160;Results of Operations.&#148;
    Net cash used in operating activities for the year ended
    December&#160;31, 2008 was $12.3&#160;million, an increase of
    $3.6&#160;million from the year ended December&#160;31, 2007.
    This increase was primarily due to the $2.2&#160;million
    increase in operating expenses in 2008, as described in more
    detail under &#147;&#151;&#160;Results of Operations,&#148; and
    $0.7&#160;million for prepaid clinical supplies that we
    purchased in 2008 for use in future clinical trials.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We expect cash used in operating activities to increase in 2010
    as compared to 2009 due to an expected increase in our operating
    losses associated with the Phase&#160;III safety trials for
    Zelrix and costs associated with the expected submission of an
    NDA for Zelrix during the fourth quarter of 2010 and the
    expected acceleration of our preclinical development programs.
</DIV>
<!-- XBRL Pagebreak Begin -->

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    52
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL Pagebreak End -->

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Investing
    Activities</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Cash used in investing activities for the purchase of property
    and equipment was $29,000 in 2009, $127,000 in 2008 and $36,000
    in 2007. Additionally, in 2008 we expended $5.5&#160;million in
    connection with our acquisition of a patent application utilized
    in Zelrix and a worldwide license in the field of migraine to
    additional intellectual property.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Financing
    Activities</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Cash provided by financing activities for the year ended
    December&#160;31, 2009 was $9.2&#160;million, reflecting
    $10.1&#160;million of net proceeds from the sale of
    Series&#160;B preferred stock, partially offset by scheduled
    debt repayments of $0.9&#160;million.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Cash provided by financing activities for the year ended
    December&#160;31, 2008 was $22.4&#160;million, reflecting
    $23.2&#160;million of net proceeds from the sale of
    Series&#160;B preferred stock, partially offset by scheduled
    debt repayments of $0.9&#160;million.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Cash provided by financing activities for the year ended
    December&#160;31, 2007 was $7.3&#160;million, reflecting
    $5.0&#160;million of net proceeds from the sale of Series&#160;B
    preferred stock and $2.4&#160;million, net of issuance costs,
    from a term loan that we entered into in 2007, partially offset
    by scheduled debt repayments of $0.1&#160;million.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Off-Balance
    Sheet Arrangements</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We do not have any off-balance sheet arrangements, except for
    operating leases, or relationships with unconsolidated entities
    or financial partnerships, such as entities often referred to as
    structured finance or special purpose entities.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Contractual
    Obligations</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The following table summarizes our contractual obligations as of
    December&#160;31, 2009:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="52%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=02 type=lead -->
    <TD width="4%" align="right">&nbsp;</TD>	<!-- colindex=02 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=02 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=03 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=03 type=lead -->
    <TD width="4%" align="right">&nbsp;</TD>	<!-- colindex=03 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=03 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=04 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=04 type=lead -->
    <TD width="5%" align="right">&nbsp;</TD>	<!-- colindex=04 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=04 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=05 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=05 type=lead -->
    <TD width="5%" align="right">&nbsp;</TD>	<!-- colindex=05 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=05 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=06 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=06 type=lead -->
    <TD width="6%" align="right">&nbsp;</TD>	<!-- colindex=06 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=06 type=hang1 -->
</TR>
<!-- Table Width Row END -->
<!-- TableOutputHead -->
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="18" align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Payments Due by Period</B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>2011 and<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>2013 and<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>2015 and<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>Contractual
    Obligations<SUP style="font-size: 85%; vertical-align: top">(1)</SUP></B>

</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Total</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>2010</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>2012</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>2014</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Thereafter</B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="18" align="center" valign="bottom">
    <B>(In thousands)</B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<!-- TableOutputBody -->
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Debt
    obligations<SUP style="font-size: 85%; vertical-align: top">(2)</SUP>

</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    818
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    818
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Interest payments on debt
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    42
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    42
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    License maintenance
    fees<SUP style="font-size: 85%; vertical-align: top">(3)</SUP>

</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    330
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    30
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    100
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    100
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    100
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Operating lease obligations
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    1,143
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    346
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    708
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    89
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    2,333
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    1,236
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    808
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    189
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    100
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV style="font-size: 1pt; margin-left: 0%; width: 13%;  align: left; border-bottom: 1pt solid #000000"></DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>



<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

<TR>
    <TD width="2%"></TD>
    <TD width="1%"></TD>
    <TD width="97%"></TD>
</TR>

<TR>
    <TD align="right" valign="top">
    (1) </TD>
    <TD></TD>
    <TD valign="bottom">
    This table does not include any contingent milestone or royalty
    payments that may become payable to third parties under license
    agreements because the timing and likelihood of such payments
    are not known.</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD align="right" valign="top">
    (2) </TD>
    <TD></TD>
    <TD valign="bottom">
    This table does not reflect the $10.1&#160;million outstanding
    principal balance under the April 2010 Convertible Notes and the
    $5.0&#160;million outstanding principal balance under the May
    2010 Loan Facility. Outstanding principal and accrued interest
    under the April 2010 Convertible Notes automatically convert
    into shares of common stock upon the closing of this offering.
    The terms of the repayment of the May 2010 Loan Facility are
    described in more detail under &#147;&#151; Liquidity and
    Capital Resources &#151; Debt Facilities.&#148;</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD align="right" valign="top">
    (3) </TD>
    <TD></TD>
    <TD valign="bottom">
    Under an agreement with Penn, we are required to pay annual
    license maintenance fees up to $50,000 until the first
    commercial sale of the first licensed product. In 2010, the
    annual fee is $30,000. After 2010, the annual fee is $50,000.
    Because we cannot currently estimate when the first sale of the
    licensed product will occur, we have shown payments only through
    2016.</TD>
</TR>

</TABLE>
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<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    53
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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL Pagebreak End -->

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In addition to the contractual commitments reflected in the
    table above, we have agreed to pay Penn aggregate milestone
    payments of up to $950,000, per licensed product, upon the
    achievement of specified development and regulatory milestones
    related to each licensed product that contains ropinirole and
    other specified active ingredients, including the active
    ingredients in NP201 and NP202, and royalties in the low single
    digits on worldwide net sales of such licensed products. We and
    Penn have agreed to negotiate the milestone payments and
    royalties payable for each licensed product that contains an
    active ingredient other than those currently specified in the
    agreement. We are unable to determine the timing of the
    achievement of these milestones or whether and when we will
    commercialize and generate any sales for a licensed product.
    Also, the terms of our agreement with Penn requires that we
    expend at least $250,000 annually towards the development and
    commercialization of licensed products, until the first
    commercial sale of the first licensed product.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We have also entered into a license agreement with SurModics
    under which we have agreed to pay SurModics aggregate milestone
    payments of up to $4.75&#160;million upon the first achievement
    of specified development, regulatory and sales level milestones
    related to the first clinical indication approved by a
    regulatory authority for NP201. We must also pay an additional
    single milestone payment upon regulatory approval of each
    additional clinical indication for NP201 and royalties in the
    low single digits on worldwide net sales of commercial product.
    We are unable to determine the timing of the achievement of
    these milestones or whether and when we will commercialize and
    generate any sales for a licensed product.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Recent
    Accounting Pronouncements</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We have adopted new accounting guidance on fair value
    measurements effective January&#160;1, 2008, for financial
    assets and liabilities. In addition, effective January&#160;1,
    2009, we adopted this guidance as it relates to nonfinancial
    assets and liabilities that are not recognized or disclosed at
    fair value in the financial statements on at least an annual
    basis. This guidance defines fair value as the price that would
    be received to sell an asset or paid to transfer a liability,
    referred to as the exit price, in an orderly transaction between
    market participants at the measurement date. The guidance
    outlines a valuation framework and creates a fair value
    hierarchy in order to increase the consistency and comparability
    of fair value measurements and the related disclosures. The
    adoption of this guidance did not have a material impact on our
    financial statements.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In June 2008, the Financial Accounting Standards Board, or FASB,
    issued new guidance related to assessing whether an
    equity-linked financial instrument (or embedded feature) is
    indexed to an entity&#146;s own stock for the purposes of
    determining whether such equity-linked financial instrument (or
    embedded feature) is subject to derivative accounting. We
    adopted this new guidance effective January&#160;1, 2009. The
    adoption of this guidance did not have a material impact on our
    financial statements.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In May 2009, the FASB issued a new standard regarding subsequent
    events. The standard provides guidance on management&#146;s
    assessment of subsequent events and incorporates this guidance
    in accounting literature. The guidance is effective
    prospectively for interim and annual periods ending after
    June&#160;15, 2009. We adopted this guidance beginning with the
    interim period ended June&#160;30, 2009. The adoption of this
    guidance did not have a material impact on our financial
    statements.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In April 2009, the FASB issued a staff position requiring fair
    value disclosures in both interim and annual financial
    statements in order to provide more timely information about the
    effects of current market conditions on financial instruments.
    The guidance is effective for interim and annual periods ending
    after June&#160;15, 2009. We adopted this guidance beginning
    with the issuance of our September&#160;30, 2009 financial
    statements. The adoption of this guidance did not have a
    material impact on our financial statements.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In June 2009, the FASB Accounting Standards Codification, or
    ASC, was issued, effective for financial statements issued for
    interim and annual periods ending after September&#160;15, 2009.
    The ASC supersedes literature of the FASB, Emerging Issues Task
    Force and other sources. The ASC did not change
    U.S.&#160;generally accepted accounting principles. The adoption
    of this guidance did not have a material impact on our financial
    statements.
</DIV>
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<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    54
</DIV><!-- END PAGE WIDTH -->
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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL Pagebreak End -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Quantitative
    and Qualitative Disclosures about Market Risk</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The primary objective of our investment activities is to
    preserve our capital to fund operations. We also seek to
    maximize income from our investments without assuming
    significant risk. Our exposure to market risk is confined to our
    cash and cash equivalents. As of December&#160;31, 2009, we had
    cash and cash equivalents of $3.9&#160;million. We do not engage
    in any hedging activities against changes in interest rates.
    Because of the short-term maturities of our cash and cash
    equivalents, we do not believe that an increase in market rates
    would have any significant impact on the realized value of our
    investments, but may increase the interest expense associated
    with our debt.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We have no operations outside the U.S.&#160;We do, however, have
    an agreement with a manufacturer in Germany whereby the
    manufacturer provides services to us related to the production
    and assembly of Zelrix. Because of this agreement, we are
    subject to the fluctuations in the value of the Euro. We paid
    $2.1&#160;million in 2008 and $1.2&#160;million in 2009 to this
    vendor. We are currently in the process of transferring these
    manufacturing activities to the U.S.&#160;and anticipate that
    all of our commercial manufacturing activities will be located
    in the U.S.&#160;following this transfer, thereby substantially
    eliminating our exposure to the fluctuation in the Euro.
</DIV>
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<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    55
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL Pagebreak End -->

<A name='110'>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">BUSINESS</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Overview</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We are a specialty pharmaceutical company focused on the
    development and commercialization of branded therapeutics for
    diseases of the central nervous system, including neurological
    and psychiatric disorders. Our most advanced product candidate,
    Zelrix, is an active, single-use transdermal sumatriptan patch
    that we are developing for the treatment of acute migraine.
    Zelrix uses our proprietary SmartRelief technology. We
    successfully completed a pivotal Phase&#160;III clinical trial
    for Zelrix in July 2009 and expect to submit a New Drug
    Application, or NDA, to the United States Food and Drug
    Administration, or FDA, in the fourth quarter of 2010. Before we
    submit our NDA, we must complete two ongoing pharmacokinetic
    trials in healthy subjects and obtain interim data from two
    ongoing open label Phase&#160;III long-term safety trials, or
    our Phase&#160;III safety trials. Subject to the approval of our
    NDA, we plan to build our own specialty sales force in the
    U.S.&#160;to launch Zelrix. We have two other proprietary
    product candidates in preclinical development that address large
    market opportunities, NP201 for the continuous symptomatic
    treatment of Parkinson&#146;s disease and NP202 for the
    long-term treatment of schizophrenia and bipolar disorder.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Migraine affects approximately 28&#160;million people in the
    U.S.&#160;In 2009, according to IMS Health Inc., or IMS,
    U.S.&#160;sales of prescription products for migraine exceeded
    $2&#160;billion, over 96% of which were for a class of
    medication called triptans.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    During a migraine, most migraine patients, or migraineurs,
    suffer from one or more significant gastrointestinal problems,
    which include nausea, vomiting and a compromised ability to
    digest, known as decreased gastric motility. Nausea and vomiting
    impede the use of oral medications, while reduced gastric
    motility can result in inconsistent efficacy. According to a
    survey with over 500 respondents conducted by the National
    Headache Foundation in 2008, 90% of migraineurs have experienced
    nausea with a migraine and 59% of migraineurs have experienced
    vomiting with a migraine. In this survey, 48% of respondents who
    ever experienced nausea or vomiting with a migraine reported
    that the nausea or vomiting had a moderate to major impact on
    when or how they take migraine medications.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The American Academy of Neurology, or AAN, guidelines recommend
    a non-oral route of administration for patients who experience
    nausea or vomiting as significant symptoms. Despite this
    recommendation and the prevalence of nausea and vomiting, IMS
    reported that non-oral formulations comprised only 4% of triptan
    units sold in the U.S.&#160;in 2009. Current non-oral migraine
    treatments, limited to nasal spray and injectable formulations,
    are often poorly tolerated and associated with frequent adverse
    events. There is no patch approved for the treatment of
    migraine. We believe that Zelrix will provide an attractive
    alternative to migraineurs, especially those experiencing nausea
    and vomiting, inconsistent relief from oral treatments or
    adverse events associated with triptan use.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In addition to Zelrix, we are developing other product
    candidates that target opportunities where we believe improved
    medication delivery can address significant central nervous
    system medical needs. Based on preclinical testing, we believe
    that NP201 and NP202, both of which use our long-acting
    delivery, or LAD, technology, will be able to deliver stable
    medication levels for multiple months with a single
    administration.
</DIV>
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    <BR>
    56
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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL Pagebreak End -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Our
    Product Candidates</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The following table summarizes key information about our
    existing product candidates. We hold worldwide commercialization
    rights to all of our product candidates.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF"><!-- TABLE 01 -->
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="16%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="18%">&nbsp;</TD>	<!-- colindex=02 type=maindata -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=03 type=gutter -->
    <TD width="18%">&nbsp;</TD>	<!-- colindex=03 type=maindata -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=04 type=gutter -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=04 type=maindata -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=05 type=gutter -->
    <TD width="38%">&nbsp;</TD>	<!-- colindex=05 type=maindata -->
</TR>
<!-- Table Width Row END -->
<!-- TableOutputHead -->
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom" style="border-left: 1px solid #000000; padding-left: 2pt; border-top: 1px solid #000000">
    <B>Product<BR>
    </B>
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom" style="border-left: 1px solid #000000; padding-left: 2pt; border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom" style="border-left: 1px solid #000000; padding-left: 2pt; border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD colspan="3" align="center" valign="bottom" style="border-right: 1px solid #000000; padding-right: 2pt; border-left: 1px solid #000000; padding-left: 2pt; border-top: 1px solid #000000">
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom" style="border-left: 1px solid #000000; padding-left: 2pt">
    <B>Candidate</B>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom" style="border-left: 1px solid #000000; padding-left: 2pt">
    <B>Indication(s)</B>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom" style="border-left: 1px solid #000000; padding-left: 2pt">
    <B>Description</B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" align="center" valign="bottom" style="border-right: 1px solid #000000; padding-right: 2pt; border-left: 1px solid #000000; padding-left: 2pt">
    <B>Development Status</B>
</TD>
</TR>
<!-- TableOutputBody -->
<TR valign="bottom">
<TD nowrap align="left" valign="top" style="border-left: 1px solid #000000; padding-left: 2pt; border-top: 1px solid #000000">
<DIV style="text-indent: -10pt; margin-left: 15pt">
    Zelrix
</DIV>
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD nowrap align="left" valign="top" style="border-left: 1px solid #000000; padding-left: 2pt; border-top: 1px solid #000000">
    Acute migraine
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD align="left" valign="top" style="border-left: 1px solid #000000; padding-left: 2pt; border-top: 1px solid #000000">
    Active, single-use sumatriptan
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD nowrap align="left" valign="top" style="border-left: 1px solid #000000; padding-left: 2pt; border-top: 1px solid #000000">
    &#149;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD align="left" valign="top" style="border-right: 1px solid #000000; padding-right: 2pt; border-top: 1px solid #000000">
    Expected NDA submission during fourth quarter of 2010.
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top" style="border-left: 1px solid #000000; padding-left: 2pt">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top" style="border-left: 1px solid #000000; padding-left: 2pt">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top" style="border-left: 1px solid #000000; padding-left: 2pt">
    transdermal patch
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top" style="border-left: 1px solid #000000; padding-left: 2pt">
    &#149;
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top" style="border-right: 1px solid #000000; padding-right: 2pt">
    Pivotal Phase&#160;III clinical trial completed.
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top" style="border-left: 1px solid #000000; padding-left: 2pt">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top" style="border-left: 1px solid #000000; padding-left: 2pt">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top" style="border-left: 1px solid #000000; padding-left: 2pt">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top" style="border-left: 1px solid #000000; padding-left: 2pt">
    &#149;
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top" style="border-right: 1px solid #000000; padding-right: 2pt">
    Two ongoing Phase&#160;III safety trials.
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top" style="border-left: 1px solid #000000; padding-left: 2pt">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top" style="border-left: 1px solid #000000; padding-left: 2pt">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top" style="border-left: 1px solid #000000; padding-left: 2pt">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top" style="border-left: 1px solid #000000; padding-left: 2pt">
    &#149;
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top" style="border-right: 1px solid #000000; padding-right: 2pt">
    Two ongoing pharmacokinetic trials in healthy subjects.
</TD>
</TR>
<TR style="font-size: 1pt">
<TD nowrap align="left" valign="top" style="border-left: 1px solid #000000; padding-left: 2pt; border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD nowrap align="left" valign="top" style="border-left: 1px solid #000000; padding-left: 2pt; border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD nowrap align="left" valign="top" style="border-left: 1px solid #000000; padding-left: 2pt; border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD nowrap align="left" valign="top" style="border-left: 1px solid #000000; padding-left: 2pt; border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD nowrap align="left" valign="top" style="border-right: 1px solid #000000; padding-right: 2pt; border-top: 1px solid #000000">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top" style="border-left: 1px solid #000000; padding-left: 2pt">
<DIV style="text-indent: -10pt; margin-left: 15pt">
    NP201
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top" style="border-left: 1px solid #000000; padding-left: 2pt">
    Parkinson&#146;s disease
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top" style="border-left: 1px solid #000000; padding-left: 2pt">
    Ropinirole two-month implant
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top" style="border-left: 1px solid #000000; padding-left: 2pt">
    &#149;
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top" style="border-right: 1px solid #000000; padding-right: 2pt">
    Expected Investigational New Drug submission during first half
    of 2011.
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top" style="border-left: 1px solid #000000; padding-left: 2pt">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top" style="border-left: 1px solid #000000; padding-left: 2pt">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top" style="border-left: 1px solid #000000; padding-left: 2pt">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top" style="border-left: 1px solid #000000; padding-left: 2pt">
    &#149;
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top" style="border-right: 1px solid #000000; padding-right: 2pt">
    Preclinical proof of concept completed.
</TD>
</TR>
<TR style="font-size: 1pt">
<TD nowrap align="left" valign="top" style="border-left: 1px solid #000000; padding-left: 2pt; border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD nowrap align="left" valign="top" style="border-left: 1px solid #000000; padding-left: 2pt; border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD nowrap align="left" valign="top" style="border-left: 1px solid #000000; padding-left: 2pt; border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD nowrap align="left" valign="top" style="border-left: 1px solid #000000; padding-left: 2pt; border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD nowrap align="left" valign="top" style="border-right: 1px solid #000000; padding-right: 2pt; border-top: 1px solid #000000">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top" style="border-left: 1px solid #000000; padding-left: 2pt">
<DIV style="text-indent: -10pt; margin-left: 15pt">
    NP202
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top" style="border-left: 1px solid #000000; padding-left: 2pt">
    Schizophrenia and bipolar disorder
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top" style="border-left: 1px solid #000000; padding-left: 2pt">
    Atypical antipsychotic three-month implant
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top" style="border-left: 1px solid #000000; padding-left: 2pt">
    &#149;
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top" style="border-right: 1px solid #000000; padding-right: 2pt">
    Expected Investigational New Drug submission in 2012.
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top" style="border-left: 1px solid #000000; padding-left: 2pt">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top" style="border-left: 1px solid #000000; padding-left: 2pt">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top" style="border-left: 1px solid #000000; padding-left: 2pt">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top" style="border-left: 1px solid #000000; padding-left: 2pt">
    &#149;
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top" style="border-right: 1px solid #000000; padding-right: 2pt">
    Prototype development in progress.
</TD>
</TR>
<TR style="font-size: 1pt">
<TD nowrap align="left" valign="bottom" style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom" style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom" style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom" style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom" style="border-top: 1px solid #000000">
&nbsp;
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Migraine
    Market</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Overview</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Migraine is a debilitating neurological disease that affects
    approximately 28&#160;million people in the U.S.&#160;Symptoms
    of migraine include moderate to severe headache pain, nausea and
    vomiting, photophobia, or abnormal sensitivity to light, and
    phonophobia, or abnormal sensitivity to sound. Most migraines
    last between four and 24&#160;hours, but some last as long as
    three days. According to an article by Dr.&#160;Richard Lipton
    published in 2007 in <I>Neurology</I>, a peer-reviewed medical
    journal, 63% of migraineurs experience between one and four
    migraines per month, and 31% of migraineurs experience three or
    more migraines per month. Migraineurs are limited in their daily
    function during a migraine and often seek dark, quiet
    surroundings until the migraine has passed.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    According to an article, also by Dr.&#160;Richard Lipton,
    published in 2001 in <I>Headache</I>, a peer-reviewed medical
    journal, which we refer to as Lipton, over 18% of women and over
    6% of men in the U.S.&#160;experience migraines. Lipton further
    reported that migraines are most common in the working
    population, from 25 to 55&#160;years old, and can be
    sufficiently serious to cause migraineurs to miss work or
    school. According to an article by Dr.&#160;Kevin Hawkins
    published in 2008 in <I>Headache</I>, estimated direct medical
    expenditures for migraine, including outpatient costs,
    pharmaceutical costs, inpatient costs and emergency department
    costs, exceed $11.0&#160;billion per year in the U.S.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    According to IMS, over 13&#160;million prescriptions for
    medications indicated for acute migraine were filled in the
    U.S.&#160;in 2009. More than 90% of these prescriptions were for
    triptans. Triptan sales in the U.S.&#160;in 2009 exceeded
    $2.0&#160;billion, with approximately 123&#160;million
    individual units sold.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Migraine-Associated
    Nausea and Vomiting</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Symptoms other than headache pain contribute significantly to
    the disability caused by acute migraine. In particular, nausea
    and vomiting during a migraine can be severe and incapacitating.
    According to an article by Dr.&#160;Stephen Silberstein
    published in 1995 in <I>Headache</I>, 92% of migraineurs have
    experienced nausea at least once during a migraine, and 56% of
    these migraineurs experience nausea in a majority of migraines.
    Silberstein also reported that 68% of migraineurs have
    experienced vomiting at least once during a migraine, and 32% of
    these migraineurs experience vomiting in a majority of
    migraines. Accordingly, these data indicate
</DIV>
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<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    57
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL Pagebreak End -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    that 52% of all migraineurs experience nausea in a majority of
    migraines and 22% of all migraineurs experience vomiting in a
    majority of migraines.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Treatment
    of Acute Migraine</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The FDA has approved acute migraine prescription medications in
    four classes:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Triptans, including a triptan combination;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Ergotamines and dihydroergotamine, or DHE;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Analgesic combinations;&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    A non-steroidal anti-inflammatory drug, or NSAID, which has not
    yet commercially launched.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Currently, triptans constitute the most prescribed class of
    medication for the treatment of acute migraine in the
    U.S.&#160;Sumatriptan, approved by the FDA in 1992, is the most
    widely prescribed triptan, according to IMS.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The following table summarizes U.S.&#160;unit and dollar sales
    information for 2009, by product class, for prescription
    products indicated for the treatment of acute migraine, based on
    IMS data:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="26%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=02 type=maindata -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=03 type=gutter -->
    <TD width="25%">&nbsp;</TD>	<!-- colindex=03 type=maindata -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=04 type=gutter -->
    <TD width="14%">&nbsp;</TD>	<!-- colindex=04 type=maindata -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=05 type=gutter -->
    <TD width="11%">&nbsp;</TD>	<!-- colindex=05 type=maindata -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=06 type=gutter -->
    <TD width="11%">&nbsp;</TD>	<!-- colindex=06 type=maindata -->
</TR>
<!-- Table Width Row END -->
<!-- TableOutputHead -->
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom" style="border-left: 1px solid #000000; padding-left: 2pt; border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD colspan="3" align="center" valign="bottom" style="border-left: 1px solid #000000; padding-left: 2pt; border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom" style="border-left: 1px solid #000000; padding-left: 2pt; border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom" style="border-left: 1px solid #000000; padding-left: 2pt; border-top: 1px solid #000000">
    <B>2009 Units<BR>
    </B>
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom" style="border-right: 1px solid #000000; padding-right: 2pt; border-left: 1px solid #000000; padding-left: 2pt; border-top: 1px solid #000000">
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom" style="border-left: 1px solid #000000; padding-left: 2pt">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" align="center" valign="bottom" style="border-left: 1px solid #000000; padding-left: 2pt">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom" style="border-left: 1px solid #000000; padding-left: 2pt">
    <B>Route of<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom" style="border-left: 1px solid #000000; padding-left: 2pt">
    <B>Sold<SUP style="font-size: 85%; vertical-align: top">(1)<BR>

    </SUP></B>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom" style="border-right: 1px solid #000000; padding-right: 2pt; border-left: 1px solid #000000; padding-left: 2pt">
    <B>2009 Sales<BR>
    </B>
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom" style="border-left: 1px solid #000000; padding-left: 2pt">
    <B>Product Class</B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" align="center" valign="bottom" style="border-left: 1px solid #000000; padding-left: 2pt">
    <B>Key Product Brands (Drug)</B>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom" style="border-left: 1px solid #000000; padding-left: 2pt">
    <B>Administration</B>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom" style="border-left: 1px solid #000000; padding-left: 2pt">
    <B>(% Total)</B>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom" style="border-right: 1px solid #000000; padding-right: 2pt; border-left: 1px solid #000000; padding-left: 2pt">
    <B>(% Total)</B>
</TD>
</TR>
<!-- TableOutputBody -->
<TR valign="bottom">
<TD nowrap align="left" valign="top" style="border-left: 1px solid #000000; padding-left: 2pt; border-top: 1px solid #000000">
<DIV style="text-indent: -10pt; margin-left: 15pt">
    Triptan
</DIV>
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD nowrap align="left" valign="top" style="border-left: 1px solid #000000; padding-left: 2pt; border-top: 1px solid #000000">
    &#149;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD align="left" valign="top" style="border-top: 1px solid #000000">
    Generic sumatriptan and<BR>
    Imitrex
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD align="left" valign="top" style="border-left: 1px solid #000000; padding-left: 2pt; border-top: 1px solid #000000">
    Tablet, orally disintegrating
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD nowrap align="left" valign="top" style="border-left: 1px solid #000000; padding-left: 2pt; border-top: 1px solid #000000">
    122.9 million<BR>
    (69.2%)
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD nowrap align="left" valign="top" style="border-right: 1px solid #000000; padding-right: 2pt; border-left: 1px solid #000000; padding-left: 2pt; border-top: 1px solid #000000">
    $2.1 billion<BR>
    (96.8%)
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top" style="border-left: 1px solid #000000; padding-left: 2pt">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top" style="border-left: 1px solid #000000; padding-left: 2pt">
    &#149;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
    Maxalt (rizatriptan)
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top" style="border-left: 1px solid #000000; padding-left: 2pt">
    tablet, nasal
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top" style="border-left: 1px solid #000000; padding-left: 2pt">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top" style="border-right: 1px solid #000000; padding-right: 2pt; border-left: 1px solid #000000; padding-left: 2pt">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top" style="border-left: 1px solid #000000; padding-left: 2pt">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top" style="border-left: 1px solid #000000; padding-left: 2pt">
    &#149;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
    Zomig (zolmitriptan)
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top" style="border-left: 1px solid #000000; padding-left: 2pt">
    spray, injection
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top" style="border-left: 1px solid #000000; padding-left: 2pt">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top" style="border-right: 1px solid #000000; padding-right: 2pt; border-left: 1px solid #000000; padding-left: 2pt">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top" style="border-left: 1px solid #000000; padding-left: 2pt">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top" style="border-left: 1px solid #000000; padding-left: 2pt">
    &#149;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
    Relpax (eletriptan)
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top" style="border-left: 1px solid #000000; padding-left: 2pt">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top" style="border-left: 1px solid #000000; padding-left: 2pt">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top" style="border-right: 1px solid #000000; padding-right: 2pt; border-left: 1px solid #000000; padding-left: 2pt">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top" style="border-left: 1px solid #000000; padding-left: 2pt">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top" style="border-left: 1px solid #000000; padding-left: 2pt">
    &#149;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
    Treximet (sumatriptan/naproxen)
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top" style="border-left: 1px solid #000000; padding-left: 2pt">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top" style="border-left: 1px solid #000000; padding-left: 2pt">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top" style="border-right: 1px solid #000000; padding-right: 2pt; border-left: 1px solid #000000; padding-left: 2pt">
&nbsp;
</TD>
</TR>
<TR style="font-size: 1pt">
<TD nowrap align="left" valign="top" style="border-left: 1px solid #000000; padding-left: 2pt; border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD nowrap align="left" valign="top" style="border-left: 1px solid #000000; padding-left: 2pt; border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD nowrap align="left" valign="top" style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD nowrap align="left" valign="top" style="border-left: 1px solid #000000; padding-left: 2pt; border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD nowrap align="left" valign="top" style="border-left: 1px solid #000000; padding-left: 2pt; border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD nowrap align="left" valign="top" style="border-right: 1px solid #000000; padding-right: 2pt; border-left: 1px solid #000000; padding-left: 2pt; border-top: 1px solid #000000">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top" style="border-left: 1px solid #000000; padding-left: 2pt">
<DIV style="text-indent: 0pt; margin-left: 5pt">
    Analgesic Combination
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top" style="border-left: 1px solid #000000; padding-left: 2pt">
    &#149;
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Epidrin, Midrin, Migrazone and generics (isometheptene mucate,
    dichloralphenazone, acetaminophen)
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top" style="border-left: 1px solid #000000; padding-left: 2pt">
    Capsule
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top" style="border-left: 1px solid #000000; padding-left: 2pt">
    48.4 million<BR>
    (27.2%)
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top" style="border-right: 1px solid #000000; padding-right: 2pt; border-left: 1px solid #000000; padding-left: 2pt">
    $15.0 million<BR>
    (0.7%)
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top" style="border-left: 1px solid #000000; padding-left: 2pt">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top" style="border-left: 1px solid #000000; padding-left: 2pt">
    &#149;
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Prodrin <I>(</I>acetaminophen, caffeine, isometheptene)
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top" style="border-left: 1px solid #000000; padding-left: 2pt">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top" style="border-left: 1px solid #000000; padding-left: 2pt">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top" style="border-right: 1px solid #000000; padding-right: 2pt; border-left: 1px solid #000000; padding-left: 2pt">
&nbsp;
</TD>
</TR>
<TR style="font-size: 1pt">
<TD nowrap align="left" valign="top" style="border-left: 1px solid #000000; padding-left: 2pt; border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD nowrap align="left" valign="top" style="border-left: 1px solid #000000; padding-left: 2pt; border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD nowrap align="left" valign="top" style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD nowrap align="left" valign="top" style="border-left: 1px solid #000000; padding-left: 2pt; border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD nowrap align="left" valign="top" style="border-left: 1px solid #000000; padding-left: 2pt; border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD nowrap align="left" valign="top" style="border-right: 1px solid #000000; padding-right: 2pt; border-left: 1px solid #000000; padding-left: 2pt; border-top: 1px solid #000000">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top" style="border-left: 1px solid #000000; padding-left: 2pt">
<DIV style="text-indent: -10pt; margin-left: 15pt">
    Ergotamine
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top" style="border-left: 1px solid #000000; padding-left: 2pt">
    &#149;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
    Migranal<BR>
    (dihydroergotamine)
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top" style="border-left: 1px solid #000000; padding-left: 2pt">
    Nasal spray, injection,
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top" style="border-left: 1px solid #000000; padding-left: 2pt">
    6.4 million<BR>
    (3.6%)
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top" style="border-right: 1px solid #000000; padding-right: 2pt; border-left: 1px solid #000000; padding-left: 2pt">
    $54.4 million<BR>
    (2.5%)
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top" style="border-left: 1px solid #000000; padding-left: 2pt">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top" style="border-left: 1px solid #000000; padding-left: 2pt">
    &#149;
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    DHE-45 and generics
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top" style="border-left: 1px solid #000000; padding-left: 2pt">
    tablet
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top" style="border-left: 1px solid #000000; padding-left: 2pt">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top" style="border-right: 1px solid #000000; padding-right: 2pt; border-left: 1px solid #000000; padding-left: 2pt">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top" style="border-left: 1px solid #000000; padding-left: 2pt">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top" style="border-left: 1px solid #000000; padding-left: 2pt">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
    (dihydroergotamine)
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top" style="border-left: 1px solid #000000; padding-left: 2pt">
    suppository
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top" style="border-left: 1px solid #000000; padding-left: 2pt">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top" style="border-right: 1px solid #000000; padding-right: 2pt; border-left: 1px solid #000000; padding-left: 2pt">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top" style="border-left: 1px solid #000000; padding-left: 2pt">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top" style="border-left: 1px solid #000000; padding-left: 2pt">
    &#149;
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Cafergot and generics (dihydroergotamine, caffeine)
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top" style="border-left: 1px solid #000000; padding-left: 2pt">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top" style="border-left: 1px solid #000000; padding-left: 2pt">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top" style="border-right: 1px solid #000000; padding-right: 2pt; border-left: 1px solid #000000; padding-left: 2pt">
&nbsp;
</TD>
</TR>
<TR style="font-size: 1pt">
<TD nowrap align="left" valign="bottom" style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom" style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom" style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom" style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom" style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom" style="border-top: 1px solid #000000">
&nbsp;
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV style="font-size: 1pt; margin-left: 0%; width: 13%;  align: left; border-bottom: 1pt solid #000000"></DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>



<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

<TR>
    <TD width="2%"></TD>
    <TD width="1%"></TD>
    <TD width="97%"></TD>
</TR>

<TR>
    <TD align="right" valign="top">
    (1) </TD>
    <TD></TD>
    <TD valign="bottom">
    A unit represents a single dose of each medication.</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    As of December&#160;31, 2009, there were seven commercially
    available triptan medications in the U.S.&#160;utilizing a
    variety of routes of administration: tablet, orally
    disintegrating tablet, nasal spray and injection. According to
    IMS, oral triptans, in tablet and orally disintegrating tablet
    formulations, accounted for 96% of triptan units sold in the
    U.S.&#160;in 2009, while non-oral triptans, in nasal spray and
    injectable formulations, accounted for only 4% of such triptan
    units.
</DIV>
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    <BR>
    58
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
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<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Limitations
    of Current Treatments for Acute Migraine</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We believe that most marketed migraine therapies are subject to
    significant limitations, including:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    <I>Administration challenges from nausea and
    vomiting.</I>&#160;&#160;Patients with nausea often delay taking
    medication until the nausea subsides, may skip treatment
    altogether or, in extreme cases, force themselves to vomit.
    According to a survey conducted by the National Headache
    Foundation in 2008, 48% of respondents who ever experienced
    nausea or vomiting with a migraine reported that the nausea or
    vomiting had a moderate to major impact on when or how they take
    migraine medications. In the same survey, some migraineurs
    reported they delay taking migraine medication until nausea
    subsides, while others reported they avoid taking their migraine
    medication altogether because of nausea or vomiting. This runs
    contrary to well-accepted clinical practice, which stresses the
    importance of treating migraines without delay.
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    <I>Poor or inconsistent relief.</I>&#160;&#160;According to a
    2001 article by Dr.&#160;Michel Ferrari published in <I>The
    Lancet</I>, a peer-reviewed medical journal, clinical trials
    have demonstrated that at least 40% of migraineurs fail to
    respond consistently to oral triptans. Based on data from
    multiple published third party clinical trials, we believe
    patients&#146; failure to respond consistently results from a
    variety of causes, including low and inconsistent absorption of
    oral medication because of reduced gastric motility.
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    <I>Fear of adverse events.</I>&#160;&#160;Many patients avoid or
    delay treatment because they fear adverse events, including
    triptan adverse events. Triptan adverse events include chest
    tightness, chest heaviness, numbness of the extremities,
    paresthesias, or tingling, and panic. The incidence of triptan
    adverse events is 47% for injection and up to 14% for oral
    sumatriptan. According to a 2003 article by Dr.&#160;R. Michael
    Gallagher published in <I>Headache</I>, 67% of migraine patients
    who use prescription migraine medication reported that they had
    delayed or avoided taking a prescription migraine medication due
    to concerns about adverse events.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    As a result of these limitations, we believe that many
    migraineurs are dissatisfied with currently marketed
    medications. According to an article by Dr.&#160;Marcelo Bigal
    published in 2007 in <I>Headache</I>, over 80% of patients
    currently using a triptan have used a different triptan in the
    past and over 48% have used two or more different triptans or
    different formulations of the same triptan in the past. Bigal
    also reported that 79% of migraineurs stated that they would try
    a new medication.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Our
    Solution: Zelrix</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We designed Zelrix specifically to overcome these limitations.
    Zelrix is an active, single-use sumatriptan transdermal patch
    that is applied during a migraine. Zelrix provides controlled
    delivery of sumatriptan through a non-oral route of
    administration. This approach is consistent with the AAN
    guidelines that recommend non-oral therapies for migraineurs who
    experience nausea or vomiting as significant migraine symptoms.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Zelrix
    Design</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Zelrix utilizes SmartRelief, our proprietary transdermal
    delivery technology. SmartRelief consists of a controlled
    delivery technology that uses a mild electrical current to
    actively deliver medication through the skin in a process called
    iontophoresis. To use Zelrix, a patient applies the patch to the
    upper arm or thigh and presses a button. A small light on the
    patch indicates that the patch is delivering medication. Zelrix
    actively delivers sumatriptan for four hours. The patient may
    remove the patch whenever convenient after the dosing period.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Potential
    Benefits of Zelrix</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We believe that Zelrix overcomes the limitations of currently
    marketed migraine medications by:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    <I>Circumventing nausea and vomiting.</I>&#160;&#160;Because
    Zelrix is administered transdermally, we believe that it will be
    an attractive alternative for migraineurs suffering from nausea
    or vomiting who might otherwise delay or avoid taking medication.
</TD>
</TR>

</TABLE>
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    <BR>
    59
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL Pagebreak End -->

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    <I>Increasing consistency of response.</I>&#160;&#160;Zelrix
    does not depend on gastrointestinal absorption. As a result, we
    believe that Zelrix will provide more consistent relief than
    oral triptans.
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    <I>Minimizing triptan adverse events.</I>&#160;&#160;Zelrix
    tightly controls the delivery of sumatriptan. As a result and
    based on our clinical trial experience, we believe that Zelrix
    use will result in a low incidence of triptan adverse events
    while effectively treating migraine.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Patches have been used in the U.S.&#160;for decades for the
    transdermal delivery of various medications for a wide variety
    of indications, including nicotine addiction, birth control and
    pain relief. Because of the potential benefits of Zelrix and the
    familiarity of physicians and patients with patches, we believe
    that this route of administration of medication will be readily
    accepted by migraineurs.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Our
    Zelrix Development Program</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We expect to submit an NDA for Zelrix to the FDA in the fourth
    quarter of 2010 under Section&#160;505(b)(2) of the Federal
    Food, Drug, and Cosmetic Act, or FDCA. In addition to our Zelrix
    data, under Section&#160;505(b)(2), our NDA submission will rely
    on existing published data and the FDA&#146;s previous finding
    of the safety and effectiveness of Imitrex. Before submitting
    our NDA, we are required to complete our two ongoing
    pharmacokinetic trials in healthy subjects and obtain interim
    data from our two Phase&#160;III safety trials as described
    below.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Our clinical trial program for Zelrix consists of:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Six completed Phase I clinical trials;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    One completed pivotal Phase&#160;III clinical trial;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Two ongoing pharmacokinetic trials in healthy subjects;&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Two ongoing Phase&#160;III safety trials.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We established the primary and key secondary efficacy endpoints
    for our pivotal Phase&#160;III clinical trial for Zelrix based
    on discussions with the FDA. We believe, also based on our
    discussions with the FDA, that we are not required to conduct a
    second pivotal Phase&#160;III clinical trial for Zelrix.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    As part of our NDA submission for Zelrix, the FDA indicated that
    it will require that we provide long-term clinical data for
    patients treated for six months and patients treated for one
    year. We plan to conduct an interim analysis of data from
    patients enrolled in our Phase&#160;III safety trials in order
    to be able to include these required data in our NDA submission.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In addition, because Zelrix will be applied to the skin, the FDA
    requested that we conduct a skin sensitization study. We are
    collecting skin sensitization data in our two Phase&#160;III
    safety trials. Because we are collecting these data, we
    requested a waiver from the FDA with respect to conducting a
    separate skin sensitization study. If the FDA does not grant
    this waiver, we will conduct the separate skin sensitization
    study prior to submitting our NDA.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The FDA also requested that we provide data in our NDA regarding
    an <I>in&#160;vitro </I>analytical testing method for Zelrix to
    confirm the amount of medication delivered. An <I>in&#160;vitro
    </I>analytical test is usually conducted on artificial tissue.
    To date, we have not successfully developed this test because
    Zelrix is designed to operate only on living tissue. We are
    working with the FDA to develop acceptable alternatives.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Pivotal
    Phase&#160;III Clinical Trial</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Our pivotal Phase&#160;III clinical trial for Zelrix was a
    randomized, double-blind, placebo-controlled trial designed to
    compare the safety and efficacy of Zelrix to an active
    transdermal placebo patch in patients with acute migraine. The
    inclusion criteria for the trial required that, in the three
    months prior to being randomized into the trial, patients
    generally had experienced moderate to severe pain during a
    migraine, had experienced migraines for at least one year and
    had reported from one to six migraines per month. Patients
    remained in the
</DIV>
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    <BR>
    60
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
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<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    trial until they treated one migraine with a patch or two months
    after randomization into the trial, whichever occurred first.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The primary efficacy endpoint for the trial was the proportion
    of patients treated with Zelrix who were headache pain free at
    two hours after patch application compared to patients treated
    with placebo. Using a standard migraine diary, patients rated
    their baseline headache pain severity immediately prior to
    applying a patch using a four-point scale, with zero for no
    pain, one for mild pain, two for moderate pain and three for
    severe pain. Patients applied a patch only if they rated their
    baseline headache pain severity as a two (moderate) or three
    (severe). Patients also rated the presence or absence of nausea,
    photophobia and phonophobia immediately prior to applying a
    patch. After patch application, patients recorded headache pain
    severity and presence or absence of nausea, photophobia and
    phonophobia at 0.5, 1, 2, 3, 4, 6, 12 and 24&#160;hours.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Pivotal trials for all previously FDA approved triptans have
    used pain relief, which means reduction from severe or moderate
    pain to mild or no pain, as a primary efficacy endpoint. We
    believe pain free, which required the patient to record zero
    (none) with respect to headache pain severity, is a more
    exacting standard than pain relief.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The key secondary endpoints for our pivotal Phase&#160;III
    clinical trial were:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    The proportion of patients treated with Zelrix who were nausea
    free at two hours after patch application compared to patients
    treated with placebo;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    The proportion of patients treated with Zelrix who were
    photophobia free at two hours after patch application compared
    to patients treated with placebo;&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    The proportion of patients treated with Zelrix who were
    phonophobia free at two hours after patch application compared
    to patients treated with placebo.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Safety assessments in the trial included:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Adverse event assessments;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Investigator skin irritation examination scores;&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Subject skin irritation self-examination scores.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In this trial, we treated 469&#160;patients at 38 investigative
    sites in the U.S.&#160;The patient demographics of this trial
    were similar to those reported in other large scale migraine
    clinical trials. The Zelrix patient population included 197
    women and 37 men. The placebo patient population included 201
    women and 34 men. Each patient population had a mean age of
    approximately 41&#160;years.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We completed this trial in July 2009. Zelrix met each of the
    primary and key secondary endpoints with statistical
    significance. The following table summarizes the analysis of the
    primary endpoint, headache pain free at two hours and selected
    secondary endpoints:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
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<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="7" nowrap align="center" valign="bottom">
    <B>Zelrix<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="7" nowrap align="center" valign="bottom">
    <B>Placebo<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>ITT
    Analysis<SUP style="font-size: 85%; vertical-align: top">(1)</SUP></B>

</TD>
<TD>
&nbsp;
</TD>
<TD colspan="7" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Patients</B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="7" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Patients</B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>Symptom Two Hours After Patch Application&#160;&#151;
    LOCF<SUP style="font-size: 85%; vertical-align: top">(2)</SUP></B>

</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>226 Total</B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>%</B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>228 Total</B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>%</B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>% Difference</B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B><I>p</I>
    value<SUP style="font-size: 85%; vertical-align: top">(3)</SUP></B>

</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<!-- TableOutputBody -->
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Headache pain free
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    40
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    17.7
</TD>
<TD nowrap align="left" valign="bottom">
    %
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    21
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    9.2
</TD>
<TD nowrap align="left" valign="bottom">
    %
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    8.5
</TD>
<TD nowrap align="left" valign="bottom">
    %
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    0.0092
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Headache pain relief
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    119
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    52.9
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    65
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    28.6
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    24.3
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#060;0.0001
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Nausea free
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    189
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    83.6
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    144
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    63.2
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    20.4
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#060;0.0001
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Photophobia free
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    116
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    51.3
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    83
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    36.4
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    14.9
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    0.0028
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Phonophobia free
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    125
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    55.3
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    89
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    39.0
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    16.3
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    0.0002
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV style="font-size: 1pt; margin-left: 0%; width: 13%;  align: left; border-bottom: 1pt solid #000000"></DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>



<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

<TR>
    <TD width="2%"></TD>
    <TD width="1%"></TD>
    <TD width="97%"></TD>
</TR>

<TR>
    <TD align="right" valign="top">
    (1) </TD>
    <TD></TD>
    <TD valign="bottom">
    <FONT style="white-space: nowrap">Intent-to-Treat</FONT>
    Analysis: Patients are analyzed in the groups to which they were
    randomized, regardless of whether they received or adhered to
    the allocated treatment. ITT analysis provides unbiased
    comparisons among the treatment groups and is the primary
    statistical analysis used by the FDA.</TD>
</TR>

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    <BR>
    61
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<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
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<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

<TR>
    <TD width="2%"></TD>
    <TD width="1%"></TD>
    <TD width="97%"></TD>
</TR>

<TR>
    <TD align="right" valign="top">
    (2) </TD>
    <TD></TD>
    <TD valign="bottom">
    Last Observation Carried Forward: Last observation carried
    forward is a method to address missing data. For each
    individual, missing values are replaced by the last observed
    value of that variable.</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD align="right" valign="top">
    (3) </TD>
    <TD></TD>
    <TD valign="bottom">
    The results of a clinical trial are statistically significant if
    they are unlikely to have occurred by chance. We determined the
    statistical significance of the trial results based on a widely
    used, conventional statistical method that establishes the <I>p
    </I>value of the results. The FDA requires a <I>p </I>value of
    0.05 or less to demonstrate statistical significance.</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In addition to achieving statistically significant results for
    the primary and key secondary endpoints, Zelrix also
    demonstrated statistically significant results for a number of
    other secondary endpoints, including:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    <I>Headache pain relief within one hour.</I>&#160;&#160;Zelrix
    demonstrated statistically significant headache pain relief at
    one hour after patch application, with 29% of Zelrix patients
    experiencing headache pain relief as compared to 19% of placebo
    patients <I>(p = 0.0123)</I>. While not statistically
    significant, 38% more Zelrix patients than placebo patients
    experienced pain relief in 30 minutes, 29 of 226 Zelrix patients
    compared to 21 of 228 placebo patients.
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    <I>Sustained pain relief.</I>&#160;&#160;In a retrospective
    analysis we conducted, for those patients who experienced pain
    relief at two hours, Zelrix demonstrated statistically
    significant sustained pain relief at each measurement point from
    two hours through 24&#160;hours after patch application, with
    34% of Zelrix patients experiencing sustained pain relief as
    compared to 21% of placebo patients <I>(p = 0.0015)</I>. For
    purposes of this analysis, we defined patients with sustained
    relief as patients with no pain or mild pain at all measurement
    points from two hours through 24&#160;hours after patch
    application and who had not taken rescue medication.
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    <I>Freedom from nausea within one hour.</I>&#160;&#160;Zelrix
    demonstrated statistically significant freedom from nausea at
    one hour after patch application, with 71% of Zelrix patients
    being nausea free as compared to 58% of placebo patients <I>(p =
    0.0251)</I>.
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    <I>Freedom from migraine.</I>&#160;&#160;Zelrix demonstrated
    statistically significant freedom from migraine at two hours
    after patch application, with 16% of Zelrix patients being
    migraine free as compared to 8% of placebo patients <I>(p =
    0.0135)</I>. Freedom from migraine means the absence of
    headache, nausea, photophobia and phonophobia.
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    <I>Decreased use of rescue medication.</I>&#160;&#160;Zelrix
    demonstrated a statistically significant difference in the
    number of patients that used pain or nausea rescue medication
    during the 24&#160;hours after patch application, with 40% of
    Zelrix patients using rescue medication as compared to 60% of
    placebo patients <I>(p &#060;0.0001)</I>. Rescue medications are
    any additional medications taken by the patient to relieve
    symptoms of migraine after patch application.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    A total of 117&#160;patients, or 50% of patients, receiving
    Zelrix and 103&#160;patients, or 44% of patients, receiving the
    placebo patch experienced at least one treatment-emergent
    adverse event, which is an event that was not present prior to
    patch application or a worsening of either the intensity or
    frequency of a symptom following patch application. The most
    common adverse events reported in the trial among patients
    receiving Zelrix related to the application site and included
    application site pain and application site tingling. There were
    no deaths or serious adverse events in this trial. Zelrix
    demonstrated skin tolerability typical of other transdermal
    products, with mild to moderate redness generally present upon
    patch removal.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Patients receiving Zelrix exhibited a low incidence of triptan
    adverse events, with 1.7% experiencing atypical sensations and
    1.7% experiencing pain and other pressure sensations. Patients
    described all of these adverse events to be of mild intensity,
    except for one adverse event, which a patient described as
    &#147;cold sensation head&#148; of moderate intensity.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Ongoing
    Open Label Phase&#160;III Long-Term Safety Trials</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We are conducting two Phase&#160;III safety trials, both of
    which we initiated in the first quarter of 2009, to evaluate the
    safety of Zelrix in the treatment of acute migraine over
    12&#160;months. Patient eligibility requirements in these trials
    are similar to the requirements for our completed pivotal
    Phase&#160;III clinical trial. These two trials
</DIV>
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    <BR>
    62
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL Pagebreak End -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    are fully enrolled with a total of 714&#160;patients at 34
    investigative sites in the U.S.&#160;As of April&#160;30, 2010,
    we had treated over 5,000 migraines with Zelrix in these trials.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    As part of our NDA submission for Zelrix, the FDA indicated that
    it will require that we provide long-term clinical data for
    patients treated for six months and patients treated for one
    year. We plan to conduct an interim analysis of data from
    patients enrolled in our Phase&#160;III safety trials in order
    to be able to include these required data in our NDA.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Phase
    I Clinical Trials</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We have completed six Phase I clinical trials of Zelrix. In four
    of these Phase I clinical trials, we evaluated Zelrix prototypes
    and design characteristics in healthy adult subjects to
    establish proof of concept. In the fifth Phase I clinical trial,
    we compared the pharmacokinetics of Zelrix to oral Imitrex in
    patients with migraine. Pharmacokinetics refers to a drug&#146;s
    absorption, distribution and metabolism in, and excretion from,
    the body and measures, among other things, bioavailability of a
    drug, or concentration of drug in the plasma.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In the sixth Phase I clinical trial, we compared the
    pharmacokinetics of Zelrix to three routes of administration of
    Imitrex in healthy adult subjects: 20&#160;mg nasal spray,
    100&#160;mg tablet and 6&#160;mg injection. As intended,
    treatment with Zelrix resulted in sumatriptan plasma levels
    between the levels of 20&#160;mg Imitrex nasal spray and the
    100&#160;mg Imitrex oral tablet. After Zelrix application,
    sumatriptan absorption in plasma reached therapeutic levels
    within 30 minutes. In addition, in this trial, treatment with
    Zelrix resulted in less variability in sumatriptan plasma levels
    than either 100&#160;mg oral tablet or 20&#160;mg nasal spray
    formulations, supporting our belief that transdermal
    administration provides more predictable delivery by bypassing
    absorption through the gastrointestinal system.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    At the time of patch removal, more than 75% of subjects had no
    or minimal skin redness, and within 48&#160;hours following
    patch removal, all subjects had no or minimal skin redness. We
    also evaluated adverse events by different routes of
    administration. The trial categorized adverse events as either
    &#147;Atypical Sensations&#148; or &#147;Pain and Pressure
    Sensations.&#148; The following table sets forth each of these
    adverse events by category for each route of administration:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF"><!-- TABLE 01 -->
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="28%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="22%">&nbsp;</TD>	<!-- colindex=02 type=maindata -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=03 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=03 type=lead -->
    <TD width="7%" align="right">&nbsp;</TD>	<!-- colindex=03 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=03 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=04 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=04 type=lead -->
    <TD width="7%" align="right">&nbsp;</TD>	<!-- colindex=04 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=04 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=05 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=05 type=lead -->
    <TD width="7%" align="right">&nbsp;</TD>	<!-- colindex=05 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=05 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=06 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=06 type=lead -->
    <TD width="7%" align="right">&nbsp;</TD>	<!-- colindex=06 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=06 type=hang1 -->
</TR>
<!-- Table Width Row END -->
<!-- TableOutputHead -->
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD colspan="18" align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Summary of Triptan Adverse Events</B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD colspan="3" align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Adverse Event</B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="14" align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Number of Subjects Reporting Event&#160;(%)</B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Nasal<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Injection<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Oral<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Spray<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Zelrix<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>Categorization</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Preferred Term</B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>(23 Subjects)</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>(23 Subjects)</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>(23 Subjects)</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>(17 Subjects)</B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<!-- TableOutputBody -->
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Atypical Sensation
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Any adverse events
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    14
</TD>
<TD nowrap align="right" valign="bottom">
     (60.9
</TD>
<TD nowrap align="left" valign="bottom">
    %)
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    2
</TD>
<TD nowrap align="right" valign="bottom">
     (8.7
</TD>
<TD nowrap align="left" valign="bottom">
    %)
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Burning sensation mucosal
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    3
</TD>
<TD nowrap align="right" valign="bottom">
     (13.0
</TD>
<TD nowrap align="left" valign="bottom">
    %)
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
    Ear discomfort
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    1
</TD>
<TD nowrap align="right" valign="bottom">
     (4.3
</TD>
<TD nowrap align="left" valign="bottom">
    %)
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
    Facial pain
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    1
</TD>
<TD nowrap align="right" valign="bottom">
     (4.3
</TD>
<TD nowrap align="left" valign="bottom">
    %)
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
    Feeling hot
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    2
</TD>
<TD nowrap align="right" valign="bottom">
     (8.7
</TD>
<TD nowrap align="left" valign="bottom">
    %)
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
    Flushing
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    6
</TD>
<TD nowrap align="right" valign="bottom">
     (26.1
</TD>
<TD nowrap align="left" valign="bottom">
    %)
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
    Head discomfort
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    1
</TD>
<TD nowrap align="right" valign="bottom">
     (4.3
</TD>
<TD nowrap align="left" valign="bottom">
    %)
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    1
</TD>
<TD nowrap align="right" valign="bottom">
     (4.3
</TD>
<TD nowrap align="left" valign="bottom">
    %)
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
    Hot flush
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    3
</TD>
<TD nowrap align="right" valign="bottom">
     (13.0
</TD>
<TD nowrap align="left" valign="bottom">
    %)
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    1
</TD>
<TD nowrap align="right" valign="bottom">
     (4.3
</TD>
<TD nowrap align="left" valign="bottom">
    %)
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Sensation of heaviness
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    1
</TD>
<TD nowrap align="right" valign="bottom">
     (4.3
</TD>
<TD nowrap align="left" valign="bottom">
    %)
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Sensation of pressure
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    1
</TD>
<TD nowrap align="right" valign="bottom">
     (4.3
</TD>
<TD nowrap align="left" valign="bottom">
    %)
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Pain and Pressure Sensation
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Any adverse events
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    2
</TD>
<TD nowrap align="right" valign="bottom">
     (8.7
</TD>
<TD nowrap align="left" valign="bottom">
    %)
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    4
</TD>
<TD nowrap align="right" valign="bottom">
    (17.4
</TD>
<TD nowrap align="left" valign="bottom">
    %)
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
    Neck pain
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    2
</TD>
<TD nowrap align="right" valign="bottom">
     (8.7
</TD>
<TD nowrap align="left" valign="bottom">
    %)
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Sensation of heaviness
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    1
</TD>
<TD nowrap align="right" valign="bottom">
     (4.3
</TD>
<TD nowrap align="left" valign="bottom">
    %)
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    1
</TD>
<TD nowrap align="right" valign="bottom">
     (4.3
</TD>
<TD nowrap align="left" valign="bottom">
    %)
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Sensation of pressure
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    1
</TD>
<TD nowrap align="right" valign="bottom">
     (4.3
</TD>
<TD nowrap align="left" valign="bottom">
    %)
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    1
</TD>
<TD nowrap align="right" valign="bottom">
     (4.3
</TD>
<TD nowrap align="left" valign="bottom">
    %)
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In subjects treated with oral and injectable sumatriptan, all of
    the triptan adverse events occurred in subjects with sumatriptan
    plasma levels exceeding 50 nanograms per milliliter. In this
    trial, the maximum
</DIV>
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    <BR>
    63
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<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    sumatriptan plasma level observed for subjects receiving Zelrix
    reached therapeutic levels, but did not exceed 50 nanograms per
    milliliter. We believe the ability of Zelrix to control
    sumatriptan plasma levels within this dosing range explains why
    subjects receiving Zelrix in this trial did not experience
    triptan adverse events.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Ongoing
    Pharmacokinetic Trials in Healthy Subjects</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We are conducting two additional pharmacokinetic trials in
    healthy subjects. One is designed to evaluate the
    pharmacokinetics of Zelrix in the young and elderly; the other
    is designed to evaluate the bioavailability of Zelrix. Each
    clinical trial will enroll approximately 60 subjects and must be
    completed prior to submitting our NDA.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Commercial
    Strategy</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    If Zelrix is approved by the FDA, we plan to build a commercial
    infrastructure to launch Zelrix in the U.S., including a
    specialty sales force of approximately 100&#160;people. We
    expect to direct our marketing efforts at high potential
    prescribers of Zelrix, including neurologists, headache
    specialists and select other physicians. We believe a sales
    force of this size will enable us to address a significant
    portion of the commercial opportunity for Zelrix. We may seek to
    further penetrate the U.S.&#160;market in the future by
    expanding our sales force or through collaborations with other
    pharmaceutical or biotechnology companies. This would enable us
    to target additional physicians who are high prescribers of
    migraine medications.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Once we establish our commercial infrastructure, we may acquire
    additional products to market and sell or collaborate with
    pharmaceutical or biotechnology companies to market and sell
    their products using our sales force. We may also seek to
    commercialize Zelrix outside the U.S., although we currently
    plan to do so only with a collaborator.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Pipeline
    Products</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In addition to migraine, we also seek to identify other market
    opportunities in central nervous system disorders for which
    improved medication delivery can address significant medical
    needs. Our current research and development pipeline consists of
    two preclinical product candidates, one for the treatment of
    Parkinson&#146;s disease and one for the treatment of
    schizophrenia and bipolar disorder.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">NP201:
    Product candidate for the continuous symptomatic treatment of
    Parkinson&#146;s disease</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Parkinson&#146;s disease is a progressive, degenerative disease
    characterized by movement symptoms such as tremor or trembling
    in the hands, arms, and legs; rigidity of the limbs and trunk;
    slowness of movement; and impaired balance and coordination.
    According to the Parkinson&#146;s Disease Foundation,
    Parkinson&#146;s disease affects about one million people in the
    U.S.&#160;and more than four million people worldwide. Although
    symptoms of Parkinson&#146;s disease can appear at any age, the
    average age of onset is 60.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The loss of neurons in the brain that help to control movement
    causes Parkinson&#146;s disease. These neurons produce dopamine,
    a neurotransmitter that transmits signals that control movement.
    Currently, no cure exists for Parkinson&#146;s disease.
    Symptomatic treatments rely on the replacement of dopamine
    through either levodopa, which the brain converts to dopamine,
    or dopamine agonists, which mimic dopamine. According to IMS,
    2009 sales of Parkinson&#146;s disease therapies in the U.S.,
    European Union and Japan totaled approximately $3.6&#160;billion.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Multiple challenges complicate the treatment of Parkinson&#146;s
    disease. Intermittent dosing of oral medications leads to
    periods of &#147;on&#148; after dosing and periods of
    &#147;off&#148; as the medication wears off. During
    &#147;on&#148; periods, excessive levels of medication can
    produce adverse events, primarily abnormal movements. During
    &#147;off&#148; periods, low levels of medication lead to poor
    efficacy. In addition, Parkinson&#146;s disease is a progressive
    disease, which causes patients to become less responsive to
    their medication over time and more sensitive to excessive drug
    levels. Experts believe that intermittent dosing may exacerbate
    the progression of disease and result in more frequent and
    severe adverse events.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The majority of Parkinson&#146;s disease patients currently use
    oral medications that require administration one to three times
    per day, exposing the patient to varying medication levels. The
    intermittent dosing of oral
</DIV>
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    <BR>
    64
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    medications further complicates treatment, as patients
    experience periods of &#147;on&#148; after dosing and periods of
    &#147;off&#148; as the medication wears off. Some scientists
    believe that intermittent dosing may hasten the progression of
    Parkinson&#146;s disease by causing harm to the remaining
    dopamine receptors. Multiple third party studies suggest that
    continuous medication delivery can alleviate the symptoms of
    Parkinson&#146;s disease without inducing the abnormal movements
    caused by too much medication.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Only two Parkinson&#146;s disease medications currently provide
    for continuous delivery, and neither is approved in the
    U.S.&#160;Duodopa is a levodopa gel marketed by Solvay S.A. that
    requires the surgical insertion of a tube into the
    patient&#146;s small intestine. APO-go is an injectable
    apomorphine marketed by Britannia Pharmaceuticals Limited that
    requires the patient to wear a pump around his or her waist.
    Because both APO-go and Duodopa are difficult to administer,
    they are generally reserved for complicated and difficult to
    control patients.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We designed NP201 to provide continuous delivery of
    Parkinson&#146;s disease medication in an easy to administer and
    tolerable dose formulation. NP201 consists of our LAD technology
    combined with ropinirole, a generic, FDA approved dopamine
    agonist also known as Requip. After administration, NP201 is
    designed to slowly dissolve while releasing ropinirole.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We have studied NP201 in several animal models. We believe the
    data from these studies suggest that NP201 can provide
    continuous, stable medication levels for up to two months. In
    addition, we completed a proof of concept study in a
    well-accepted animal model of Parkinson&#146;s disease that we
    believe suggests NP201 has the potential to provide continuous
    symptomatic relief for up to two months per dose and to
    significantly decrease the incidence of adverse events
    associated with current treatments.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In March 2010, we met with the FDA to discuss our development
    plan for NP201. Based on this meeting, we believe that we can
    submit an NDA for NP201 under Section&#160;505(b)(2) of the FDCA
    and that the FDA will require only a single successful pivotal
    Phase&#160;III clinical trial for approval. We plan to initiate
    an acute toxicology study for NP201 in the second half of 2010
    and to submit an Investigational New Drug Application, or IND,
    in the first half of 2011.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">NP202:
    Product candidate for the long-term treatment of schizophrenia
    and bipolar disorder</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Schizophrenia is a life-long serious psychiatric illness that
    causes people to lose touch with reality and often interferes
    with their ability to think clearly, manage emotions, make
    decisions and relate to others. Bipolar disorder, or manic
    depression, is another life-long psychiatric illness that causes
    extreme shifts in mood, energy and functioning. These changes
    may be subtle or dramatic and typically vary greatly over the
    course of a person&#146;s life as well as among individuals.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    According the National Alliance on Mental Illness, schizophrenia
    affects over two million adults in the U.S., while bipolar
    disorder affects over ten&#160;million adults in the
    U.S.&#160;According to an article by Dr.&#160;Eric Wu published
    in 2005 in <I>The Journal of Clinical Psychiatry</I>, a
    peer-reviewed medical journal, as of 2002 the estimated direct
    health care costs of schizophrenia in the U.S.&#160;were
    $22.7&#160;billion, including outpatient care, medications and
    long-term care.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Patient compliance with medication has been a long-standing
    problem in the treatment of schizophrenia. As reported in an
    article by Dr.&#160;Jeffrey Lieberman published in 2005 in
    <I>The New England Journal of Medicine</I>, a peer-reviewed
    medical journal, the Clinical Antipsychotic Trials in
    Intervention Effectiveness, or CATIE, study, conducted between
    2001 and 2004, indicated that 74% of schizophrenia patients
    become non-compliant with their medication within 18&#160;months
    of commencing the use of medication. According to an article by
    Patricia Thieda published in 2003 in <I>Psychiatric
    Services</I>, a peer-reviewed medical journal, schizophrenia
    patients with poor compliance are more than twice as likely to
    experience relapse than patients with good compliance. We
    believe medication compliance represents a significant
    opportunity for improved treatments.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In an attempt to improve patient compliance, physicians
    administer antipsychotic drugs through depot injections. Depot
    injections release medication over a longer period than
    conventional injections or oral medications. Depot injection
    products include Risperdal Consta and Invega Sustenna, both
    marketed by Johnson&#160;&#038; Johnson, and Zyprexa Relprew,
    marketed by Eli Lilly&#160;&#038; Co. These drugs provide two to
    four weeks of therapy per dose.
</DIV>
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    <BR>
    65
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
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<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We believe that NP202 potentially could provide a significant
    improvement over existing treatment options for patients
    suffering from schizophrenia or bipolar disorder because:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    We are developing NP202 to provide up to three months of
    continuous delivery of an atypical antipsychotic with a single
    dose. Currently available products provide therapy for only two
    to four weeks, resulting in frequent physician visits and
    increasing the risk of non-compliance;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    We are designing NP202 to allow a physician to remove the
    implant at any time during the dosing period. With currently
    available injectable products, physicians and patients cannot
    stop therapy, which may discourage some physicians and patients
    concerned about adverse events;&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    We are developing NP202 as an easy to administer, pre-loaded
    injectable product that can be stored at room temperature.
    Risperdal Consta, the leading depot injectable product, must be
    prepared and mixed prior to administration.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We have developed NP202 prototype products, initiated pre-IND
    activities and plan to submit an IND to the FDA in 2012.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Our
    Proprietary Delivery Technologies</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Our current drug development activities use two proprietary
    medication delivery technologies: SmartRelief and LAD. Zelrix
    incorporates SmartRelief, while NP201 and NP202 both incorporate
    LAD. We own exclusive worldwide rights to both technologies.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">SmartRelief
    Technology</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    SmartRelief is our proprietary transdermal medication delivery
    technology based on iontophoresis, a non-invasive method of
    actively transporting molecules, such as sumatriptan, that are
    not able to be delivered passively through the skin.
    Iontophoresis involves the application of a mild electrical
    current to the skin through two reservoirs. One reservoir
    contains ionized, or charged, medication. The other reservoir
    contains a counter ion, commonly sodium chloride, or salt. When
    a current is applied, medication molecules travel out of the
    reservoir into the skin, where blood vessels absorb and disburse
    them throughout the body.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Unlike passive transdermal technologies, which rely on diffusion
    for medication delivery, iontophoresis controls the amount and
    rate of medication delivery. Iontophoresis enables transdermal
    delivery of a variety of medications that cannot be delivered
    passively through the skin. It is possible to deliver a variety
    of different medications, including proteins and peptides, using
    iontophoresis. The FDA has approved two pharmaceutical products
    incorporating iontophoresis, Johnson&#160;&#038; Johnson&#146;s
    IONSYS system and Vyteris, Inc.&#146;s LidoSite topical system
    for analgesia, and multiple iontophoretic medical devices.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Long-Acting
    Delivery Technology</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We designed LAD to improve the control, consistency and
    convenience of medication delivery. LAD is comprised of a
    biodegradable polymer matrix using commonly available medical
    polymers and an active drug, combined to form a small implant
    for injection just below the skin. We also have designed LAD to
    allow a physician to remove it using a minor surgical procedure
    if a decision is made to stop therapy.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    To date, we have tested several neuropsychiatric compounds
    formulated with LAD in multiple animal models. Based on these
    studies, we believe LAD has the potential to treat patients for
    one to three months with a single dose of a therapy. As a
    result, we believe LAD has the potential, depending upon the
    indication, to improve one or more of efficacy, medication
    compliance and incidence of adverse events. We have not yet
    tested LAD in humans.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Manufacturing</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We currently have no manufacturing facilities and limited
    personnel with manufacturing experience. We currently use, and
    expect to depend on, third party contract manufacturers to
    manufacture Zelrix and our other product candidates for our
    preclinical and clinical needs and, if we obtain marketing
    approval for our product
</DIV>
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<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    candidates, for commercial supply. We believe our reliance on
    contract manufacturing helps us control our expenses, as the
    construction, maintenance and insurance of pharmaceutical
    manufacturing facilities requires significant capital.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We have established an internal quality control and quality
    assurance program, including a set of standard operating
    procedures and specifications consistent with current Good
    Manufacturing Practices, or cGMP. The cGMP requirements govern
    quality control of the manufacturing process and documentation
    policies and procedures. We depend on our third party contract
    manufacturers for continued compliance with cGMP requirements.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Multiple pharmaceutical manufacturers produce sumatriptan, the
    active ingredient in Zelrix. We currently purchase sumatriptan
    from two suppliers and the various components of SmartRelief
    from multiple manufacturers, all on a purchase order basis.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Under the terms of a development and license agreement that we
    entered into in September 2007, LTS Lohmann
    Therapie-Systeme&#160;AG, or LTS, manufactures Zelrix, including
    the incorporation of SmartRelief. We pay fees to LTS for
    manufacturing development, preparation of manufacturing
    documentation for our NDA, manufacture of our clinical supplies
    and preparation for commercial manufacturing. We expect to enter
    into a commercial manufacturing agreement for Zelrix with LTS.
    In such event, the machinery that LTS would use to produce the
    commercial supply of Zelrix would be customized to the
    particular manufacturing specifications of Zelrix and does not
    exist currently. LTS would design this machinery and assemble it
    from components manufactured by third party suppliers.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We purchase preclinical supplies of NP201, consisting of LAD and
    the active ingredient, ropinirole, from SurModics
    Pharmaceuticals, Inc., or SurModics. Ropinirole is generic and
    available from multiple sources.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Competition</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The pharmaceutical and biotechnology industries are intensely
    competitive and subject to rapid and significant technological
    change. Our major competitors include organizations such as
    major multinational pharmaceutical companies, established
    biotechnology companies and specialty pharmaceutical and generic
    drug companies. Many of our competitors have greater financial
    and other resources than we have, such as larger research and
    development staffs and more extensive marketing and
    manufacturing organizations. As a result, these companies may
    obtain marketing approval more rapidly than we are able and may
    be more effective in selling and marketing their products.
    Smaller or early stage companies may also prove to be
    significant competitors, particularly through collaborative
    arrangements with large, established companies.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Our competitors may succeed in developing, acquiring or
    licensing on an exclusive basis technologies and drug products
    that are more effective or less costly than Zelrix or any other
    drug candidate that we are currently developing or that we may
    develop, which could render our products obsolete and
    noncompetitive. We expect any products that we develop and
    commercialize to compete on the basis of, among other things,
    efficacy, safety, convenience of administration and delivery,
    price, the level of generic competition and the availability of
    reimbursement from government and other third party payors. We
    also expect to face competition in our efforts to identify
    appropriate collaborators or partners to help commercialize our
    product candidates in our target commercial markets.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We anticipate Zelrix will compete with currently marketed
    triptans, including Imitrex (sumatriptan), Maxalt (rizatriptan),
    Zomig (zolmitriptan), Relpax (eletriptan), Axert (almotriptan),
    Frova (frovatriptan), Amerge (naratriptan), Treximet
    (sumatriptan/naproxen) and Sumavel DosePro (sumatriptan). In
    addition, we anticipate competition from generic sumatriptan,
    the active ingredient in Imitrex, and generic versions of other
    branded triptans that have lost or will lose their patent
    exclusivity. For example, we expect Amerge, the branded version
    of naratriptan, to lose patent protection in July 2010. In
    addition, we expect other triptan patents to expire between 2012
    and 2025. Many of these products are manufactured and marketed
    by large pharmaceutical companies and are well accepted by
    physicians, patients and third party payors. Because of the low
    cost, health insurers likely would require or encourage use of,
    and consumers likely would use, a generic
</DIV>
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<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    triptan prior to trying Zelrix. If approved, Zelrix will also
    compete with other currently approved products, including
    analgesic combinations, NSAIDs and ergotamines.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    If approved, we believe that Zelrix&#146;s features, including
    its convenient, non-oral route of administration, controlled
    delivery of medication and consistent dosing, will differentiate
    it from existing migraine treatments, particularly for
    migraineurs suffering from nausea or vomiting.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In addition to marketed migraine medications, both large and
    small companies have migraine product candidates in various
    stages of clinical development. These include Merck&#160;&#038;
    Co., Inc.&#146;s telcagepant, an orally administered calcitonin
    gene related peptide antagonist, and Levadex from MAP
    Pharmaceuticals, Inc., an inhaled formulation of
    dihydroergotamine, both for acute migraine, and Allergan,
    Inc.&#146;s Botox for chronic migraine. Each of these has either
    completed or is in Phase&#160;III clinical development.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Our strategy to compete in the migraine market includes:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Elevating physician awareness of current treatment limitations
    and impact on patients;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Emphasizing differentiating features of Zelrix;&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Building on physician experience with sumatriptan.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    As with Zelrix, if approved, each of NP201 and NP202 will face
    competition from generic and branded products. Specifically,
    NP201 will face competition from generic immediate release and
    extended release versions of ropinirole and the dopamine agonist
    pramiprexole, as well as from two continuous delivery
    medications, a levadopa gel and an injectable apomorphine. NP202
    will face competition from a variety of branded and generic
    versions of antipsychotic medications, in addition to several
    other sustained delivery depot formulations of atypical
    antipsychotics.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">License
    and Development Agreements</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Our material license and development agreements are described
    below.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Travanti
    Pharma Inc.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In July 2008, we entered into an asset purchase and license
    agreement with Travanti Pharma Inc., or Travanti. In May 2009,
    Teikoku Pharma USA, Inc. acquired Travanti. Pursuant to the
    terms of the Travanti agreement, we paid $5.5&#160;million to
    Travanti for the purchase of a patent application, including all
    supporting documentation and priority documents, that is
    directed to transdermal delivery of anti-migraine medications
    using an active delivery patch. Under the agreement, we granted
    Travanti a nonexclusive, royalty-free, perpetual, worldwide
    license to use the purchased patent application, and the
    invention covered by such patent application, outside the field
    of migraine.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In addition, under the Travanti agreement, we obtained a
    perpetual, worldwide, exclusive, royalty-free license, with the
    right to grant sublicenses, under Travanti&#146;s patent rights,
    including issued U.S.&#160;Patent No.&#160;6,745,071, as
    described in more detail under &#147;&#151;&#160;Intellectual
    Property and Exclusivity,&#148; and know-how that relate
    generally to specified iontophoresis technology to develop, make
    and commercialize migraine products. If we make improvements
    that directly relate to such Travanti patents and patent
    applications, Travanti will hold a nonexclusive, royalty-free,
    perpetual, worldwide license to use such improvements outside
    the field of migraine.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">LTS
    Lohmann Therapie-Systeme AG</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In September 2007, we entered into a development and license
    agreement with LTS, which was amended as of April 2008 and
    February 2009. Under the development and license agreement, LTS
    agreed to perform development activities relating to Zelrix in
    accordance with an agreed upon development plan. LTS must use
    commercially reasonable efforts to provide us with supplies for
    our clinical trials and also has provided us with supplies for
    our non-clinical use. We agreed to pay LTS for their services on
    an hourly basis.
</DIV>
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<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Pursuant to the terms of the development and license agreement,
    each party exclusively owns any inventions related to such
    party&#146;s existing intellectual property that arise out of
    the development program. The parties jointly own any joint
    inventions that arise out of the development program not solely
    based on one party&#146;s existing intellectual property. Each
    party grants to the other a non-exclusive, royalty-free license
    under its respective intellectual property for the sole purpose
    of developing Zelrix. If we execute a commercial manufacturing
    agreement for Zelrix with LTS, LTS will have the exclusive right
    to manufacture Zelrix and LTS will grant us an exclusive,
    worldwide, royalty-free license under LTS&#146;s intellectual
    property to use, import, sell, market and distribute, or have
    imported, sold, marketed or distributed, Zelrix under the
    manufacturing agreement between LTS and us. If we do not execute
    a commercial manufacturing agreement with LTS, we may not have
    access to LTS&#146;s proprietary technology and know-how
    necessary to develop, manufacture or commercialize Zelrix.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    An invention relating solely to our intellectual property arose
    in connection with the development and license agreement, and we
    filed a patent application covering that invention.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The development and license agreement remains in effect until
    the parties execute a commercial manufacturing agreement or
    until either party terminates the agreement by its terms. We may
    terminate the development and license agreement at any time upon
    60&#160;days notice to LTS. In addition, either party may
    terminate the agreement if the other party materially breaches
    the agreement and fails to cure the breach during a
    <FONT style="white-space: nowrap">60-day</FONT> cure
    period. Either party may terminate the agreement if the
    development committee established under the agreement determines
    that it is not feasible to develop a product as anticipated
    under the development plan.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">University
    of Pennsylvania</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We entered into a patent license agreement with the University
    of Pennsylvania, or Penn, which became effective in July 2006
    and was amended in May 2007. Under the patent license agreement,
    Penn granted to us exclusive, worldwide rights under specified
    Penn patent applications, and patents issuing therefrom, to
    make, use and sell products using LAD. Under the agreement, we
    have the right to sublicense, subject to specified conditions,
    including the payment of sublicense fees.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The patent license agreement requires that we use commercially
    reasonable efforts to develop and commercialize licensed
    products. We must submit development plans annually for products
    we intend to develop. We must also commit at least $250,000
    annually towards the development and commercialization of
    licensed products, until the first commercial sale of the first
    licensed product.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Under the patent license agreement, we have paid Penn license
    initiation, transaction, amendment and maintenance fees totaling
    $100,000 in the aggregate and must pay Penn annual license
    maintenance fees up to $50,000 until the first commercial sale
    of the first licensed product. In addition, we have agreed to
    pay Penn aggregate milestone payments of up to $950,000 upon the
    achievement of specified development and regulatory milestones
    related to each licensed product that contains ropinirole or
    other specified active ingredients, including the active
    ingredients in NP201 and NP202, and royalties in the low single
    digits on worldwide net sales of such licensed products. We and
    Penn have agreed to negotiate the milestone payments and
    royalties payable for each licensed product that contains an
    active ingredient other than those currently specified in the
    agreement. If we grant a sublicense of our rights under the Penn
    patent rights to a third party, we must pay Penn a specified
    portion of certain income received from such third party
    sublicensee.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The patent license agreement, and our obligation to pay
    royalties to Penn, will terminate, on a product by product
    basis, on the later of the expiration or abandonment of the last
    Penn patent or ten years after the first commercial sale of a
    licensed product if no patent issues from the patent
    applications licensed from Penn under the agreement. We may
    terminate the agreement at any time upon 60 days notice to Penn.
    Penn may terminate the agreement in connection with our uncured
    breach, bankruptcy or insolvency.
</DIV>
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    <B><I><FONT style="font-family: 'Times New Roman', Times">SurModics
    Pharmaceuticals Feasibility Agreement and License
    Agreement</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In March 2007, we entered into a feasibility agreement with
    SurModics (formerly known as Brookwood Pharmaceuticals, Inc.),
    pursuant to which SurModics performed evaluation, development
    and formulation work for NP201 and provided us with preclinical
    supplies of NP201. In September 2009, we exercised an option
    under the feasibility agreement to enter into a license
    agreement with SurModics. The feasibility agreement has since
    concluded.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In September 2009, we entered into a license agreement with
    SurModics, pursuant to which we received an exclusive worldwide
    license, with the right to sublicense, under SurModics&#146;
    intellectual property, including its interest in joint
    inventions developed under the feasibility agreement, to make,
    have made, use, sell, import and export products covered by the
    license agreement, including NP201, comprised of a
    biodegradable, preformed, macroscopic implant device consisting
    of ropinirole, as the sole active pharmaceutical ingredient,
    incorporated into the controlled delivery system developed or
    optimized under the feasibility agreement. We granted SurModics
    an exclusive, perpetual, worldwide, royalty-free license under
    our interest in joint inventions for uses that do not relate to
    products covered by the agreement or include any of our existing
    technology or confidential information. We also granted
    SurModics a right of first negotiation to manufacture clinical
    supplies of covered products. If we and SurModics enter into
    such clinical manufacturing agreement, SurModics has a right of
    first negotiation to manufacture commercial supplies of covered
    products.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Under the license agreement, we have agreed to pay SurModics
    aggregate milestone payments of up to $4.75&#160;million upon
    the first achievement of specified development, regulatory and
    sales level milestones related to the first clinical indication
    approved by a regulatory authority for covered products. We must
    also pay an additional milestone payment upon regulatory
    approval of each additional clinical indication for covered
    products and royalties in the low single digits on worldwide net
    sales of commercial product. In countries where a valid
    SurModics patent claim does not cover the product, the
    applicable royalty rate decreases. If we do not enter into a
    commercial manufacturing agreement with SurModics, the
    applicable royalty rate will increase, though it will remain in
    the low single digits.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Under the license agreement we are responsible for developing
    and obtaining regulatory approval for covered products. We have
    agreed to use commercially reasonable efforts to actively
    develop and obtain regulatory approvals to market a covered
    product, including NP201, in major markets throughout the world.
    In addition, we have agreed to comply with specific diligence
    milestones to obtain such regulatory approval and to develop and
    commercialize a covered product in the U.S.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The license agreement and our obligation to pay SurModics
    royalties will terminate on a country by country basis on the
    later of the date on which a valid SurModics patent claim no
    longer covers the product or an agreed period after the first
    commercial sale of the product in such country. Thereafter the
    license will become an exclusive, perpetual fully
    <FONT style="white-space: nowrap">paid-up</FONT>
    license.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We have the right to terminate the license agreement for any
    reason at any time upon ninety days notice to SurModics. Either
    party has the right to terminate the agreement in connection
    with the other party&#146;s uncured material breach, bankruptcy
    or insolvency. SurModics may either terminate the license
    agreement or make it non-exclusive if we fail to meet the agreed
    upon diligence milestones or otherwise fail to use commercially
    reasonable efforts to develop and obtain regulatory approval for
    a covered product.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Intellectual
    Property and Exclusivity</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We seek to protect our product candidates and our technology
    through a combination of patents, trade secrets, proprietary
    know-how, FDA exclusivity and contractual restrictions on
    disclosure.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Patents
    and Patent Applications</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Our policy is to seek to protect the proprietary position of our
    product candidates by, among other methods, filing U.S.&#160;and
    foreign patent applications related to our proprietary
    technology, inventions and improvements that are important to
    the development of our business. U.S.&#160;patents generally
    have a term of 20&#160;years from the date of nonprovisional
    filing. Because patent protection is not available for the
    active
</DIV>
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    <BR>
    70
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<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    pharmaceutical ingredient compounds included in our current
    product candidates, we will need to rely primarily on the
    protections afforded by device, formulation and method of use
    patents.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    As of April&#160;30, 2010, we exclusively license one issued
    U.S.&#160;patent and its foreign counterparts, and own six
    U.S.&#160;patent applications, as well as corresponding Patent
    Cooperation Treaty, or PCT, applications and their foreign
    counterparts, which relate to Zelrix.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Our licensed issued U.S.&#160;Patent No.&#160;6,745,071, owned
    by Travanti, is generally directed towards wearable
    iontophoretic devices, including Zelrix, that are prepackaged as
    complete self-contained units that include an active
    pharmaceutical ingredient to be administered, a provision for
    isolating moisture sources from the electrodes and from the
    power source during storage to optimize shelf stability, and a
    simple, user-friendly mechanism to transfer the active
    pharmaceutical ingredient and counter ion reservoirs to the
    electrodes. The expiration date for this patent is in 2023.
    There are corresponding foreign patent applications pending in
    Australia, Canada, China, Europe, Japan and Korea which will
    also expire in 2023 if issued. Under the Travanti asset purchase
    and license agreement, we also have a perpetual, worldwide,
    exclusive, royalty-free license, in the field of migraine, to
    Travanti patents, patent applications and know-how that relate
    generally to iontophoresis.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Our six U.S.&#160;pending patent applications are generally
    directed to:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Methods and devices for treating migraine using integrated
    iontophoretic patches, including Zelrix;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Active ingredient reservoir formulations, including the Zelrix
    formulation;&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Electronic control systems and methods for use of the same in
    delivering an active for an integrated iontophoretic patch,
    including Zelrix.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Four of the U.S.&#160;applications currently have pending
    international applications. We have corresponding foreign patent
    applications in Australia, Brazil, Canada, China, Europe, Japan,
    Mexico, New Zealand, South&#160;Africa, Asia, India and Israel
    for one of these applications. The remaining two
    U.S.&#160;applications are related provisional applications and
    have yet to be foreign filed. If the four non-provisional
    U.S.&#160;applications and their foreign corresponding
    applications issue, we generally expect these patents to expire
    between 2027 and 2029. The two U.S.&#160;provisional
    applications, if pursued in non-provisional and foreign
    corresponding applications, and if issued, would generally be
    expected to expire in 2030.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Additionally, as of April&#160;30, 2010, we own or exclusively
    license one issued U.S.&#160;patent and nine U.S.&#160;patent
    applications, as well as corresponding PCT patent applications
    and their foreign counterparts, relating to our LAD pipeline
    product candidates. The U.S.&#160;patent, and seven
    non-provisional U.S.&#160;applications and their corresponding
    foreign applications, if issued, are generally expected to
    expire between 2021 and 2027. The remaining two
    U.S.&#160;provisional applications, if pursued in
    non-provisional and foreign corresponding applications, and if
    issued, would generally be expected to expire in 2030. These
    patents and patent applications include claims generally
    directed to the LAD technology, as well as the use of the LAD
    technology in conjunction with various medications in the
    treatment of certain neurological and psychiatric diseases,
    including Parkinson&#146;s disease, schizophrenia and bipolar
    disorder.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Under the LTS development and license agreement and the
    SurModics license agreement, we have rights to LTS&#146;s and
    SurModics&#146; proprietary processing and manufacturing
    technologies related to our product candidates.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">FDA
    Marketing Exclusivity</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The FDA may grant three years of marketing exclusivity in the
    U.S.&#160;for the approval of new and supplemental NDAs,
    including Section&#160;505(b)(2) NDAs, for, among other things,
    new indications, dosages or dosage forms of an existing drug, if
    new clinical investigations that were conducted or sponsored by
    the applicant are essential to the approval of the application.
    Additionally, six months of marketing exclusivity in the
    U.S.&#160;is available under Section&#160;505A of the FDCA if,
    in response to a written request from the FDA, a sponsor submits
    and the agency accepts requested information relating to the use
    of the approved drug in the pediatric population. This six month
    pediatric exclusivity period is not a standalone exclusivity
    period, but
</DIV>
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    rather is added to any existing patent or non-patent exclusivity
    period for which the drug product is eligible. Based on our
    clinical trial program for Zelrix, we plan to seek three years
    of marketing exclusivity upon receipt of FDA approval for
    Zelrix. We may also seek an additional period of six months
    exclusivity from the FDA if the FDA requests, and we
    successfully complete, pediatric clinical trials for Zelrix.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Trade
    Secrets and Proprietary Information</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We seek to protect our proprietary information, including our
    trade secrets and proprietary know-how, by requiring our
    employees, consultants and other advisors to execute
    confidentiality agreements upon the commencement of their
    employment or engagement. These agreements generally provide
    that all confidential information developed or made known during
    the course of the relationship with us be kept confidential and
    not be disclosed to third parties except in specific
    circumstances. In the case of our employees, the agreements also
    typically provide that all inventions resulting from work
    performed for us, utilizing our property or relating to our
    business and conceived or completed during employment shall be
    our exclusive property to the extent permitted by law. Where
    appropriate, agreements we obtain with our consultants also
    typically contain similar assignment of invention obligations.
    Further, we require confidentiality agreements from entities
    that receive our confidential data or materials.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Government
    Regulation</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Federal
    Food, Drug and Cosmetic Act</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Prescription drug products are subject to extensive pre- and
    post-market regulation by the FDA, including regulations that
    govern the testing, manufacturing, distribution, safety,
    efficacy, approval, labeling, storage, record keeping,
    reporting, advertising and promotion of such products under the
    FDCA, and its implementing regulations, and by comparable
    agencies and laws in foreign countries. Failure to comply with
    applicable FDA or other regulatory requirements may result in
    civil or criminal penalties, recall or seizure of products,
    partial or total suspension of production or withdrawal of the
    product from the market. The FDA must approve any new unapproved
    drug or dosage form, including a new use of a previously
    approved drug, prior to marketing in the U.S.&#160;All
    applications for FDA approval must contain, among other things,
    information relating to safety and efficacy, pharmaceutical
    formulation, stability, manufacturing, processing, packaging,
    labeling and quality control.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">New
    Drug Applications</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Generally, the FDA must approve any new drug before marketing of
    the drug occurs in the U.S.&#160;This process generally involves:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Completion of preclinical laboratory and animal testing in
    compliance with the FDA&#146;s Good Laboratory Practice, or GLP,
    regulations;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Submission to the FDA of an IND application for human clinical
    testing, which must become effective before human clinical
    trials may begin in the U.S.;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Performance of human clinical trials, including adequate and
    well-controlled clinical trials, to establish the safety and
    efficacy of the proposed drug product for each intended use;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Satisfactory completion of an FDA pre-approval inspection of the
    product&#146;s manufacturing facility or facilities to assess
    compliance with the FDA&#146;s cGMP regulations;&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Submission to, and approval by, the FDA of an NDA application.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The preclinical and clinical testing and approval process
    requires substantial time, effort and financial resources, and
    we cannot be certain that the FDA will grant approvals for any
    of our product candidates on a timely basis, if at all.
    Preclinical tests include laboratory evaluation of product
    chemistry, formulation and stability, as well as studies to
    evaluate toxicity in animals. The results of preclinical tests,
    together with manufacturing information and analytical data,
    comprise a part of an IND application submission to the FDA. The
    IND automatically becomes effective 30&#160;days after receipt
    by the FDA, unless the FDA, within the
    <FONT style="white-space: nowrap">30-day</FONT>
</DIV>
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    <BR>
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    time period, raises concerns or questions about the conduct of
    the clinical trial, including concerns regarding exposure of
    human research subjects to unreasonable health risks. In such a
    case, the IND sponsor and the FDA must resolve any outstanding
    concerns before the clinical trial can begin. Our submission of
    an IND may not result in FDA authorization to commence a
    clinical trial. In addition, the FDA requires a separate
    submission to an existing IND for each successive clinical trial
    conducted during product development. Further, an independent
    institutional review board, or IRB, covering each medical center
    proposing to conduct the clinical trial must review and approve
    the plan for any clinical trial before it commences at that
    center and it must monitor the clinical trial until completed.
    The FDA, the IRB or the sponsor may suspend a clinical trial at
    any time, or from time to time, on various grounds, including a
    finding that the subjects or patients are being exposed to an
    unacceptable health risk. As a separate amendment to an IND, a
    sponsor may submit a request for a special protocol assessment,
    or SPA, from the FDA. Under the SPA procedure, a sponsor may
    seek the FDA&#146;s agreement on the design, conduct and
    analyses of, among other things, a clinical trial intended to
    form the primary basis of an efficacy claim. If the FDA agrees
    in writing, it may not change its agreement after the clinical
    trial begins, except in limited circumstances, such as upon
    identification of a substantial scientific issue essential to
    determining the safety and effectiveness of a product candidate
    after commencement of a Phase&#160;III clinical trial. If the
    clinical trial succeeds, the sponsor can ordinarily rely on it
    as the primary basis for approval with respect to effectiveness.
    Clinical testing also must satisfy extensive Good Clinical
    Practice, or GCP, regulations, including regulations for
    informed consent, IRB review and approval and IND submission.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    For purposes of an NDA submission and approval, typically, the
    conduct of human clinical trials occurs in the following three
    pre-market sequential phases, which may overlap:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    <I>Phase I:</I>&#160;&#160;Sponsors initially conduct clinical
    trials in a limited population to test the product candidate for
    safety, dose tolerance, absorption, metabolism, distribution and
    excretion in healthy humans or, on occasion, in patients, such
    as cancer patients.
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    <I>Phase II:</I>&#160;&#160;Sponsors conduct clinical trials
    generally in a limited patient population to identify possible
    adverse effects and safety risks, to determine the efficacy of
    the product for specific targeted indications and to determine
    dose tolerance and optimal dosage. Sponsors may conduct multiple
    Phase&#160;II clinical trials to obtain information prior to
    beginning larger and more extensive Phase&#160;III clinical
    trials.
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    <I>Phase III:</I>&#160;&#160;These include expanded controlled
    and uncontrolled trials, including pivotal clinical trials. When
    Phase&#160;II evaluations suggest the effectiveness of a dose
    range of the product and acceptability of such product&#146;s
    safety profile, sponsors undertake Phase&#160;III clinical
    trials in larger patient populations to obtain additional
    information needed to evaluate the overall benefit and risk
    balance of the drug and to provide an adequate basis to develop
    labeling.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In addition, sponsors may conduct Phase&#160;IV clinical trials
    after the FDA approves a drug. In some cases, the FDA may
    condition approval of an NDA for a product candidate on the
    sponsor&#146;s agreement to conduct additional clinical trials
    to further assess the drug&#146;s safety or effectiveness after
    NDA approval. Such post approval trials are typically referred
    to as Phase&#160;IV clinical trials.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Sponsors submit the results of product development, preclinical
    studies and clinical trials to the FDA as part of an NDA. NDAs
    must also contain extensive manufacturing information and
    proposed labeling. Upon receipt, the FDA initially reviews the
    NDA to determine whether it is sufficiently complete to initiate
    a substantive review. If the FDA identifies deficiencies that
    would preclude substantive review, the FDA will refuse to accept
    the NDA and will inform the sponsor of the deficiencies that
    must be corrected prior to resubmission. If the FDA accepts the
    submission for substantive review, the FDA typically reviews the
    NDA in accordance with established time frames. Under the
    Prescription Drug User Fee Act, or PDUFA, the FDA agrees to
    specific goals for NDA review time through a two-tiered
    classification system, Priority Review and Standard Review. For
    a Priority Review application, the FDA aims to complete the
    initial review cycle in six months. Standard Review applies to
    all applications that are not eligible for Priority Review. The
    FDA aims to complete Standard Review NDAs within a
    <FONT style="white-space: nowrap">ten-month</FONT>
    timeframe. We anticipate that the FDA will grant our product
    candidates a Standard Review. Review processes often extend
    significantly beyond anticipated
</DIV>
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    completion dates due to FDA requests for additional information
    or clarification, difficulties scheduling an advisory committee
    meeting or FDA workload issues. The FDA may refer the
    application to an advisory committee for review, evaluation and
    recommendation as to the application&#146;s approval. The
    recommendations of an advisory committee do not bind the FDA,
    but the FDA generally follows such recommendations.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    If an NDA does not satisfy applicable regulatory criteria, the
    FDA may deny approval of an NDA or may require, among other
    things, additional clinical data or an additional pivotal
    Phase&#160;III clinical trial. Even if such data are submitted,
    the FDA may ultimately decide that the NDA does not satisfy the
    criteria for approval. Data from clinical trials are not always
    conclusive and the FDA may interpret data differently than we
    do. The FDA could also require a risk evaluation and mitigation
    strategy, or REMS, plan to mitigate risks, which could include
    medication guides, physician communication plans, or elements to
    assure safe use, such as restricted distribution methods,
    patient registries and other risk minimization tools. The FDA
    also may condition approval on, among other things, changes to
    proposed labeling, a commitment to conduct one or more
    post-market studies or clinical trials and the correction of
    identified manufacturing deficiencies, including the development
    of adequate controls and specifications.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    After approval, the NDA sponsor must comply with comprehensive
    requirements governing, among other things, manufacturing,
    marketing activities, distribution, annual reporting and adverse
    event reporting. If new safety issues are identified following
    approval, the FDA can require the NDA sponsor to revise the
    approved labeling to reflect the new safety information; conduct
    post-market studies or clinical trials to assess the new safety
    information; and implement a REMS program to mitigate
    newly-identified risks. In addition, if after approval the FDA
    determines that the product does not meet applicable regulatory
    requirements or poses unacceptable safety risks, the FDA may
    take other regulatory actions, including requesting a product
    recall or initiating suspension or withdrawal of the NDA
    approval.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Drugs may be marketed only for approved indications and in
    accordance with the provisions of the approved label. Further,
    if we modify a drug, including any changes in indications,
    labeling or manufacturing processes or facilities, the FDA may
    required us to submit and obtain FDA approval of a new or
    supplemental NDA, which may require us to develop additional
    data or conduct additional preclinical studies and clinical
    trials.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Under PDUFA, NDA applicants must pay significant NDA user fees
    upon submission. In addition, manufacturers of approved
    prescription drug products must pay annual establishment and
    product user fees.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Section&#160;505(b)(2)
    New Drug Applications</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    As an alternate path to FDA approval, particularly for
    modifications to drug products previously approved by the FDA,
    an applicant may submit an NDA under Section&#160;505(b)(2) of
    the FDCA. Section&#160;505(b)(2) was enacted as part of the Drug
    Price Competition and Patent Term Restoration Act of 1984, also
    known as the Hatch-Waxman Act, and permits the submission of an
    NDA where at least some of the information required for approval
    comes from clinical trials not conducted by or for the applicant
    and for which the applicant has not obtained a right of
    reference. The FDA interprets Section&#160;505(b)(2) of the FDCA
    to permit the applicant to rely upon the FDA&#146;s previous
    findings of safety and effectiveness for an approved product.
    The FDA may also require companies to perform additional
    clinical trials or measurements to support any change from the
    previously approved product. The FDA may then approve the new
    product candidate for all or some of the label indications for
    which the referenced product has been approved, as well as for
    any new indication sought by the Section&#160;505(b)(2)
    applicant.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    To the extent that a Section&#160;505(b)(2) NDA relies on
    clinical trials conducted for a previously approved drug product
    or the FDA&#146;s prior findings of safety and effectiveness for
    a previously approved drug product, the 505(b)(2) applicant must
    submit patent certifications in its 505(b)(2) application with
    respect to any patents listed for the approved product on which
    the application relies in the FDA&#146;s publication, Approved
    Drug Products with Therapeutic Equivalence Evaluations, commonly
    referred to as the Orange Book. Specifically, the applicant must
    certify for each listed patent that (1)&#160;the required patent
    information has not been filed; (2)&#160;the listed patent has
    expired; (3)&#160;the listed patent has not expired, but will
    expire on a particular date and approval is not sought until
    after patent expiration; or (4)&#160;the listed patent is
    invalid, unenforceable or will not be infringed by the proposed
    new product. A certification that the new product will not
    infringe the
</DIV>
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    previously approved product&#146;s listed patent or that such
    patent is invalid or unenforceable is known as a
    Paragraph&#160;IV certification. If the applicant does not
    challenge one or more listed patents through a Paragraph&#160;IV
    certification, the FDA will not approve the
    Section&#160;505(b)(2) NDA application until all the
    unchallenged listed patents claiming the referenced product have
    expired. Further, the FDA will also not accept or approve, as
    applicable, a Section&#160;505(b)(2) NDA application until any
    non-patent exclusivity, such as exclusivity for obtaining
    approval of a New Chemical Entity, listed in the Orange Book for
    the referenced product, has expired.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    If the 505(b)(2) NDA applicant has provided a Paragraph&#160;IV
    certification to the FDA, the applicant must also send notice of
    the Paragraph&#160;IV certification to the owner of the
    referenced NDA for the previously approved product and relevant
    patent holders within 20&#160;days after the 505(b)(2) NDA has
    been accepted for submission by the FDA. The NDA and patent
    holders may then initiate a patent infringement suit against the
    505(b)(2) applicant. Under the FDCA, the filing of a patent
    infringement lawsuit within 45&#160;days of receipt of the
    notification regarding a Paragraph&#160;IV certification
    automatically prevents the FDA from approving the
    Section&#160;505(b)(2) NDA for 30&#160;months, or until a court
    deems the patent unenforceable, invalid or not infringed,
    whichever is earlier. Moreover, in cases where a 505(b)(2)
    application containing a Paragraph&#160;IV certification is
    submitted during a previously approved drug&#146;s five year
    exclusivity period, the 30-month period is automatically
    extended to prevent approval of the 505(b)(2) application until
    the date that is seven and one-half years after approval of the
    previously approved reference product. The court also has the
    ability to shorten or lengthen either the 30&#160;month or the
    seven and one-half year period if either party is found not to
    be reasonably cooperating in expediting the litigation. Thus,
    the Section&#160;505(b)(2) applicant may invest a significant
    amount of time and expense in the development of its product
    only to be subject to significant delay and patent litigation
    before its product may be commercialized. Alternatively, if the
    NDA applicant or relevant patent holder does not file a patent
    infringement lawsuit within the specified 45&#160;day period,
    the 30&#160;month stay will not prevent approval of the
    505(b)(2) application.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Notwithstanding the approval of many products by the FDA
    pursuant to Section&#160;505(b)(2), over the last few years,
    some pharmaceutical companies and others have objected to the
    FDA&#146;s interpretation of Section&#160;505(b)(2). If the FDA
    changes its interpretation of Section&#160;505(b)(2), or if the
    FDA&#146;s interpretation is successfully challenged in court,
    this could delay or even prevent the FDA from approving any
    Section&#160;505(b)(2) NDA that we submit.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In the NDA submissions for our product candidates, we intend to
    follow the development and approval pathway permitted under the
    FDCA that we believe will maximize the commercial opportunities
    for these product candidates.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">International
    Regulation</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In addition to regulations in the U.S., we will be subject to a
    variety of foreign regulations governing clinical trials and
    commercial sales and distribution of any future products.
    Whether or not we obtain FDA approval for a product, we must
    obtain approval by the comparable regulatory authorities of
    foreign countries before we can commence clinical trials or
    marketing of the product in those countries. The approval
    process varies from country to country, and the time may be
    longer or shorter than that required for FDA approval. The
    requirements governing the conduct of clinical trials, product
    licensing, pricing and reimbursement vary greatly from country
    to country.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    For example, under European Union regulatory systems, sponsors
    may submit marketing authorizations either under a centralized
    or mutual recognition procedure. The centralized procedure
    provides for the grant of a single marketing authorization that
    is valid for all European Union member states. The mutual
    recognition procedure provides for mutual recognition of
    national approval decisions. Under this procedure, the holder of
    a national marketing authorization may submit an application to
    the remaining member states. Within 90&#160;days of receiving
    the applications and assessment report, each member state must
    decide whether to recognize approval.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In addition to regulations in Europe and the U.S., we will be
    subject to a variety of foreign regulations governing clinical
    trials and commercial distribution of any future products.
</DIV>
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<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Third
    Party Payor Coverage and Reimbursement</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Although none of our product candidates have been commercialized
    for any indication, if the FDA approves these products for
    marketing, commercial success of our product candidates will
    depend, in part, upon the availability of coverage and
    reimbursement from third party payors at the federal, state and
    private levels. Government payor programs, including Medicare
    and Medicaid, private health care insurance companies and
    managed care plans have attempted to control costs by limiting
    coverage and the amount of reimbursement for particular
    procedures or drug treatments. The United States Congress and
    state legislatures from time to time propose and adopt
    initiatives aimed at cost containment, which could impact our
    ability to sell our products profitably.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    For example, in March 2010, President Obama signed into law the
    Patient Protection and Affordable Care Act and the associated
    reconciliation bill, which we refer to collectively as the
    Health Care Reform Law, a sweeping law intended to broaden
    access to health insurance, reduce or constrain the growth of
    healthcare spending, enhance remedies against fraud and abuse,
    add new transparency requirements for health care and health
    insurance industries, impose new taxes and fees on the health
    industry and impose additional health policy reforms. Effective
    October&#160;1, 2010, the Health Care Reform Law revises the
    definition of &#147;average manufacturer price&#148; for
    reporting purposes, which could increase the amount of Medicaid
    drug rebates to states once the provision is effective. Further,
    beginning in 2011, the new law imposes a significant annual fee
    on companies that manufacture or import branded prescription
    drug products. Substantial new provisions affecting compliance
    have also been enacted, which may require us to modify our
    business practices with health care practitioners. We will not
    know the full effects of the Health Care Reform Law until
    applicable federal and state agencies issue regulations or
    guidance under the new law. Although it is too early to
    determine the effect of the Health Care Reform Law, the new law
    appears likely to continue the pressure on pharmaceutical
    pricing, especially under the Medicare program, and may also
    increase our regulatory burdens and operating costs. Moreover,
    in the coming years, additional changes could be made to
    governmental healthcare programs that could significantly impact
    the success of our products.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The cost of pharmaceuticals continues to generate substantial
    governmental and third party payor interest. We expect that the
    pharmaceutical industry will experience pricing pressures due to
    the trend toward managed health care, the increasing influence
    of managed care organizations and additional legislative
    proposals. Our results of operations could be adversely affected
    by current and future health care reforms.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Some third party payors also require pre-approval of coverage
    for new or innovative devices or drug therapies before they will
    reimburse health care providers that use such therapies. While
    we cannot predict whether any proposed cost-containment measures
    will be adopted or otherwise implemented in the future, the
    announcement or adoption of these proposals could have a
    material adverse effect on our ability to obtain adequate prices
    for our product candidates and operate profitably.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Manufacturing
    Requirements</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We and our third party manufacturers must comply with applicable
    FDA regulations relating to FDA&#146;s cGMP regulations. The
    cGMP regulations include requirements relating to organization
    of personnel, buildings and facilities, equipment, control of
    components and drug product containers and closures, production
    and process controls, packaging and labeling controls, holding
    and distribution, laboratory controls, records and reports, and
    returned or salvaged products. The manufacturing facilities for
    our products must meet cGMP requirements to the satisfaction of
    the FDA pursuant to a pre-approval inspection before we can use
    them to manufacture our products. We and our third party
    manufacturers are also subject to periodic inspections of
    facilities by the FDA and other authorities, including
    procedures and operations used in the testing and manufacture of
    our products to assess our compliance with applicable
    regulations. Failure to comply with statutory and regulatory
    requirements subjects a manufacturer to possible legal or
    regulatory action, including warning letters, the seizure or
    recall of products, injunctions, consent decrees placing
    significant restrictions on or suspending manufacturing
    operations and civil and criminal penalties. Adverse experiences
    with the product must be reported to the FDA and could result in
    the imposition of market restrictions through labeling changes
</DIV>
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<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    or in product removal. Product approvals may be withdrawn if
    compliance with regulatory requirements is not maintained or if
    problems concerning safety or efficacy of the product occur
    following approval.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Other
    Regulatory Requirements</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    With respect to post-market product advertising and promotion,
    the FDA imposes a number of complex regulations on entities that
    advertise and promote pharmaceuticals, which include, among
    other things, standards for
    <FONT style="white-space: nowrap">direct-to-consumer</FONT>
    advertising, off-label promotion, industry-sponsored scientific
    and educational activities and promotional activities involving
    the Internet. The FDA has very broad enforcement authority under
    the FDCA, and failure to abide by these regulations can result
    in penalties, including the issuance of a warning letter
    directing entities to correct deviations from FDA standards, a
    requirement that future advertising and promotional materials be
    pre-cleared by the FDA, civil money penalties and state and
    federal civil and criminal investigations and prosecutions.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We are also subject to various laws and regulations regarding
    laboratory practices, the experimental use of animals and the
    use and disposal of hazardous or potentially hazardous
    substances in connection with our research. In each of these
    areas, as above, government agencies have broad regulatory and
    enforcement powers, including the ability to levy fines and
    civil penalties.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In addition, drug manufacturers also are subject to federal and
    state requirements and restrictions concerning interactions with
    physicians and other health care professionals, internal
    compliance programs, and transparency reporting requirements,
    including, for example, reporting of physician payments and
    other transfers of value, reporting of physician ownership or
    investment interests, reporting of marketing expenditures and
    clinical trial registration and reporting of clinical trial
    results on the publicly available clinical trial databank
    maintained by the National Institutes of Health at
    www.ClinicalTrials.gov.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Legal
    Proceedings</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We are not currently a party to any legal proceeding.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Employees</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    As of April&#160;30, 2010, we employed 21&#160;full-time
    employees, of which 14 were engaged in research and development
    and clinical trials and seven were engaged in administration,
    finance, marketing and business development. None of our
    employees are represented by a labor union and we consider our
    employee relations to be good.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Facilities</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Our corporate headquarters are located in Conshohocken,
    Pennsylvania, where we occupy approximately 11,075&#160;square
    feet of office space. Our lease term expires March&#160;31, 2013.
</DIV>
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    <BR>
    77
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL Pagebreak End -->

<A name='111'>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">MANAGEMENT</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Executive
    Officers, Directors and Key Employee</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The following table sets forth information regarding our
    executive officers, directors and key employee as of
    April&#160;30, 2010:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="47%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=02 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=03 type=gutter -->
    <TD width="46%">&nbsp;</TD>	<!-- colindex=03 type=maindata -->
</TR>
<!-- Table Width Row END -->
<!-- TableOutputHead -->
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>Name</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>Age</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>Position</B>
</DIV>
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<!-- TableOutputBody -->
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <I>Executive Officers and Directors</I>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Jane H. Hollingsworth
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
    52
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="bottom">
    Chief Executive Officer and Director
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Terri B. Sebree
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
    52
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    President
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Keith A. Goldan
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
    39
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="bottom">
    Vice President and Chief Financial Officer
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Gerald W. McLaughlin
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
    42
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="bottom">
    Vice President Commercial Operations
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Ezra H. Felker
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
    40
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="bottom">
    Vice President Business Development
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Michael
    Cola<SUP style="font-size: 85%; vertical-align: top">(1)(3)</SUP>

</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
    50
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    Director
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Jeanne
    Cunicelli<SUP style="font-size: 85%; vertical-align: top">(2)</SUP>

</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
    43
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    Director
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Michael C.
    Diem,&#160;MD<SUP style="font-size: 85%; vertical-align: top">(2)</SUP>

</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
    40
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    Director
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    John H.
    Dillon,&#160;II<SUP style="font-size: 85%; vertical-align: top">(2)</SUP>

</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
    68
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    Director
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Richard S.
    Kollender<SUP style="font-size: 85%; vertical-align: top">(3)</SUP>

</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
    40
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    Director
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Gary J.
    Kurtzman,&#160;MD<SUP style="font-size: 85%; vertical-align: top">(3)</SUP>

</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
    55
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    Director
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <I>Key Employee</I>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Mark W. Pierce, MD, PhD
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
    61
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="bottom">
    Vice President and Chief Scientific Officer
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV style="font-size: 1pt; margin-left: 0%; width: 13%;  align: left; border-bottom: 1pt solid #000000"></DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>



<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

<TR>
    <TD width="2%"></TD>
    <TD width="1%"></TD>
    <TD width="97%"></TD>
</TR>

<TR>
    <TD align="right" valign="top">
    (1) </TD>
    <TD></TD>
    <TD valign="bottom">
    Chairman of the board of directors.</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD align="right" valign="top">
    (2) </TD>
    <TD></TD>
    <TD valign="bottom">
    Member of the audit committee.</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD align="right" valign="top">
    (3) </TD>
    <TD></TD>
    <TD valign="bottom">
    Member of the compensation committee.</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Jane H. Hollingsworth </I>is one of our founders and has
    served as a director and our Chief Executive Officer since
    January 2005. Prior to founding our company,
    Ms.&#160;Hollingsworth co-founded and served as Executive Vice
    President, Secretary and General Counsel of Auxilium
    Pharmaceuticals, Inc., or Auxilium, a specialty pharmaceutical
    company. Prior to co-founding Auxilium, Ms.&#160;Hollingsworth
    served as Vice President, Secretary and General Counsel of IBAH,
    Inc., or IBAH, a multinational contract research organization.
    Earlier in her career, Ms.&#160;Hollingsworth practiced law at
    the law firm of Montgomery, McCracken, Walker&#160;&#038;
    Rhoads. Ms. Hollingsworth holds a BA from Gettysburg College and
    a JD from the Villanova University School of Law.
    Ms.&#160;Hollingsworth&#146;s legal background and widespread
    experience in the pharmaceutical industry provide significant
    expertise that she uses to advise our board of directors in
    evaluating regulatory, financial and other matters, which we
    believe makes her a valuable member of our board.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Terri B. Sebree </I>is one of our founders and has served as
    our President since February 2005. Prior to founding our
    company, Ms.&#160;Sebree served as Senior Vice President,
    Development of Auxilium. Prior to joining Auxilium,
    Ms.&#160;Sebree served as Executive Vice President,
    U.S.&#160;Operations at IBAH. Prior to that, Ms. Sebree served
    in a variety of management roles with Abbott Laboratories for
    over nine years. Ms.&#160;Sebree holds a BS from Texas A&#038;M
    University.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Keith A. Goldan, CPA </I>has served as our Vice President and
    Chief Financial Officer since November 2008. Previously,
    Mr.&#160;Goldan served as Chief Financial Officer of PuriCore
    plc, a medical technology company listed on the London Stock
    Exchange, from October 2004 through October 2008. Mr. Goldan
    also served as a member of PuriCore&#146;s board of directors.
    Prior to that, Mr.&#160;Goldan served as Vice President and
    Chief Financial Officer of Biosyn, Inc., a specialty
    pharmaceutical company, and in a variety of roles with
    ViroPharma Incorporated, Century Capital Associates, a specialty
    consulting firm with a focus on capital strategy for healthcare
    clients, and the Healthcare&#160;&#038; Life Sciences Practice
    of KPMG LLP. Mr.&#160;Goldan holds a BA from the Robert H. Smith
    School of Business at the University of Maryland and an MBA from
    The Wharton School at the University of Pennsylvania.
</DIV>
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    <BR>
    78
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
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<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Gerald W. McLaughlin </I>has served as our Vice President
    Commercial Operations since September 2007. Previously,
    Mr.&#160;McLaughlin served in a variety of roles at Endo
    Pharmaceuticals, a specialty pharmaceutical company, including
    Senior Director, Strategic Marketing from January 2007 through
    August 2007, Regional Sales Director from July 2005 through
    December 2006, Group Marketing Director, Pain Products from
    November 2002 through June 2005 and Marketing Director. Prior to
    that, Mr.&#160;McLaughlin served in a variety of marketing and
    sales roles at Merck&#160;for 11&#160;years. Mr.&#160;McLaughlin
    holds a BA from Dickinson College and an MBA from Villanova
    University.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Ezra H. Felker </I>has served as our Vice President Business
    Development since January 2006. Previously, Mr.&#160;Felker
    served as an Entrepreneur in Residence at BioAdvance, an
    initiative of the Commonwealth of Pennsylvania committed to
    funding early stage life sciences companies, from June 2005
    through December 2005. Prior to that, Mr.&#160;Felker served as
    Associate Vice President, BTG Ventures at BTG International
    Inc., Manager, Business Development at Icagen, Inc. and as a
    protein chemist at Hybritech and Biosite Diagnostics.
    Mr.&#160;Felker holds a BS from the University of California,
    San&#160;Diego and an MBA from the Weatherhead School of
    Management at Case Western Reserve University.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Michael Cola </I>has served as the Chairman of our board of
    directors since December 2006. Mr.&#160;Cola has served as
    President, Specialty Pharmaceuticals at Shire plc, or Shire, a
    global specialty pharmaceutical company, since June 2005. Prior
    to joining Shire, Mr.&#160;Cola served as Group President of
    Safeguard Scientifics, Inc., or Safeguard, a holding company for
    growth stage technology and life sciences companies, and in a
    variety of positions at AstraZeneca and AstraMerck, including
    Vice President, Global Clinical Operations. Mr. Cola has also
    served on the board of directors of Clarient, Inc., a publicly
    traded company. Mr.&#160;Cola holds a BA in biology and physics
    from Ursinus College and an MS in biomedical science from Drexel
    University. Mr.&#160;Cola has more than 20&#160;years of
    international pharmaceutical industry experience.
    Mr.&#160;Cola&#146;s extensive expertise in pharmaceutical
    product development, commercialization and marketing, as well as
    his involvement in the development of public pharmaceutical
    companies, have provided him with a broad perspective on
    operations and make him a valuable asset to our board of
    directors. Furthermore, Mr.&#160;Cola&#146;s leadership
    abilities make him particularly well qualified to be our
    Chairman.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Jeanne Cunicelli </I>has served as one of our directors since
    August 2006. Ms.&#160;Cunicelli has served as an Investment
    Partner at Bay City Capital LLC, a venture capital firm with a
    focus on the life sciences industry, since January 2004.
    Ms.&#160;Cunicelli joined Bay City Capital LLC as a Consultant
    in 1997. She is a member of the board of trustees, the Chairman
    of the investment committee and serves on the finance committee
    of the University of San&#160;Francisco. Ms.&#160;Cunicelli
    holds a BS in cognitive psychology from Carnegie Mellon
    University and an MBA from the University of San&#160;Francisco.
    Ms.&#160;Cunicelli&#146;s position with Bay City Capital has
    resulted in her gaining valuable experience in evaluating the
    financial performance and operations of companies in our
    industry, which we believe makes her a valuable member of our
    board of directors.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Michael C. Diem, MD </I>has served as one of our directors
    since July 2008. Dr.&#160;Diem has served as a Partner at SR
    One, Limited, or SR One, the venture capital subsidiary of
    GlaxoSmithKline, since September 2008. Dr.&#160;Diem joined SR
    One as an associate in July 2005. Prior to joining SR One,
    Dr.&#160;Diem was an associate at Frantz Medical Ventures and
    practiced as an attending physician. Dr.&#160;Diem holds a BA in
    biological sciences from Rutgers University, an MD from the
    University of Medicine and Dentistry of New Jersey-Robert Wood
    Johnson Medical School and an MBA from the Weatherhead School of
    Management at Case Western Reserve University, completed his
    residency training at Duke University Medical Center and is an
    alumnus of the Kauffman Fellows Program. Dr.&#160;Diem&#146;s
    scientific, medical and pharmaceutical background, as well as
    his investment experience, enable him to advise our board of
    directors on a wide range of strategic and other financial
    transactions, which makes him a valuable member of our board.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>John H. Dillon,&#160;II</I>, has served as one of our
    directors since March 2006. Mr. Dillon has served as Managing
    Director and Chief Executive Officer of BioVerum Partners LLC, a
    healthcare consulting firm, since 2006. Before retiring in
    August 2004, Mr.&#160;Dillon served as Executive Vice President,
    Corporate Development and Senior Vice President, Marketing at
    Auxilium, where he managed all pre-launch and launch activities
    for Auxilium&#146;s first commercial product. Prior to joining
    Auxilium, Mr.&#160;Dillon served for more than 20 years in a
    variety of positions at SmithKline Beecham Corporation,
    including Vice President and Director of Worldwide
</DIV>
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    <BR>
    79
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    Business Development, where he managed business development and
    strategic product planning. He has also served on the board of
    directors and as a member of the audit committee for Encysive
    Pharmaceuticals Inc., a publicly traded company. Mr.&#160;Dillon
    holds a BA in history from Lafayette College and an MBA from The
    Wharton School at the University of Pennsylvania. His extensive
    expertise in marketing and product development, as well as his
    background in business and strategic planning, have enabled him
    to advise our board of directors on a wide range of strategic,
    operations, marketing and development matters, which we believe
    makes him an asset to our board.
</DIV>

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    <I>Richard S. Kollender </I>has served as one of our directors
    since December 2007. Mr.&#160;Kollender has served as a Partner
    at Quaker BioVentures, a venture capital firm with a focus on
    the life sciences industry, since October&#160;2005. Mr.
    Kollender joined Quaker BioVentures as a Principal in 2003.
    Prior to joining Quaker BioVentures, Mr. Kollender served in a
    variety of sales, marketing and worldwide business development
    positions at GlaxoSmithKline, as an Investment Manager at SR One
    and as a Certified Public Accountant with KPMG LLP, with a
    significant emphasis on the healthcare and emerging businesses
    sectors. Mr.&#160;Kollender holds a BA from Franklin and
    Marshall College in Accounting and Business Administration and
    an MBA from the University of Chicago. Mr.&#160;Kollender&#146;s
    strong accounting background, pharmaceutical commercial
    experience and financial experience in the healthcare and
    emerging business sectors qualify him to serve as a member of
    our board of directors.
</DIV>

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    <I>Gary J. Kurtzman, MD </I>has served as one of our directors
    since August 2006. Dr.&#160;Kurtzman has served as a Vice
    President at Safeguard since June 2006. Dr. Kurtzman is also a
    Managing Director in Safeguard&#146;s Life Science Group.
    Previously, he served in a variety of roles at BioAdvance from
    July 2002 until June 2006, with his most recent position being
    Managing Director and Chief Operating Officer. Dr.&#160;Kurtzman
    currently serves on the board of directors of Tengion, Inc., a
    publicly traded biotechnology company, and is a lecturer in
    health care management at The Wharton School at the University
    of Pennsylvania, where he teaches bioentrepreneurship.
    Dr.&#160;Kurtzman holds a BS from Stanford University, an MD
    from Washington University and completed post-doctoral training
    at the National Heart, Lung and Blood Institute and Stanford
    University. Dr.&#160;Kurtzman&#146;s strong background of
    service on the boards of directors of numerous biotechnology
    companies and his position as a managing director in an
    organization that provides capital to biotechnology companies
    make him a valuable member of our board of directors who will
    assist in the development of our growth strategy and business
    plans.
</DIV>

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    <I>Mark W. Pierce, MD, PhD </I>has served as our Vice President
    and Chief Scientific Officer since October 2006. Previously,
    Dr.&#160;Pierce served as a Senior Vice President of
    Pfizer&#146;s Global Research and Development from July 2002
    through October 2005. Dr.&#160;Pierce holds a BA and a PhD from
    Northwestern University and an MD from Northwestern University
    Medical School. He received his postgraduate training in
    internal medicine at the Peter Bent Brigham Hospital and
    Massachusetts General Hospital in Boston. Dr.&#160;Pierce was
    previously an Instructor in Medicine and Associate Professor of
    Medicine at Harvard Medical School.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Board
    Composition and Election of Directors</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Our board of directors currently consists of seven directors. In
    accordance with our restated certificate of incorporation, to be
    in effect upon the closing of this offering, our board of
    directors may establish from time to time by resolution the
    authorized number of directors. Upon the closing of this
    offering, eight directors will be authorized to serve on our
    board of directors. All of our directors are elected annually
    for a one-year<B> </B>term until the next annual meeting of
    stockholders.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Under applicable NASDAQ Marketplace Rules, a director will only
    qualify as an &#147;independent director&#148; if, in the
    opinion of our board of directors, that person does not have a
    relationship that would interfere with the exercise of
    independent judgment in carrying out the responsibilities of a
    director.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Our board of directors has determined that each of our
    directors, with the exception of Ms. Hollingsworth, is an
    &#147;independent director&#148; as defined under
    Rule&#160;5605(a)(2) of The NASDAQ Marketplace Rules. In making
    such determination, the board of directors considered the
    relationships that each such non-employee director has with our
    company and all other facts and circumstances that the board of
    directors deemed relevant in determining their independence,
    including the beneficial ownership of our capital stock by
</DIV>
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    <BR>
    80
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<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    each non-employee director. In considering the independence of
    the directors listed above, our board of directors considered
    the association of our directors with the holders of more than
    five percent of our common stock. There are no family
    relationships among any of our directors or executive officers.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Board
    Leadership Structure and Board&#146;s Role in Risk
    Oversight</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The positions of our chairman of the board and chief executive
    officer are separated. Separating these positions allows our
    chief executive officer to focus on our
    <FONT style="white-space: nowrap">day-to-day</FONT>
    business, while allowing the chairman of the board to lead the
    board of directors in its fundamental role of providing advice
    to and independent oversight of management. Our board of
    directors recognizes the time, effort and energy that the chief
    executive officer must devote to her position in the current
    business environment, as well as the commitment required to
    serve as our chairman, particularly as the board of
    directors&#146; oversight responsibilities continue to grow. Our
    board of directors also believes that this structure ensures a
    greater role for the independent directors in the oversight of
    our company and active participation of the independent
    directors in setting agendas and establishing priorities and
    procedures for the work of our board of directors. This
    leadership structure also is preferred by a significant number
    of our stockholders. Our board of directors believes its
    administration of its risk oversight function has not affected
    its leadership structure.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Although our restated bylaws that will be in effect upon the
    closing of this offering will not require that our chairman and
    chief executive officer positions be separate, our board of
    directors believes that having separate positions is the
    appropriate leadership structure for us at this time and
    demonstrates our commitment to good corporate governance.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Risk is inherent with every business, and how well a business
    manages risk can ultimately determine its success. We face a
    number of risks, including those described under &#147;Risk
    Factors.&#148; Our board of directors is actively involved in
    oversight of risks that could affect us. This oversight is
    conducted primarily through committees of the board of
    directors, as disclosed in the descriptions of each of the
    committees below, but the full board of directors has retained
    responsibility for general oversight of risks. Our board of
    directors satisfies this responsibility through full reports by
    each committee chair regarding the committee&#146;s
    considerations and actions, as well as through regular reports
    directly from officers responsible for oversight of particular
    risks within our company. Our board of directors believes that
    full and open communication between management and the board of
    directors is essential for effective risk management and
    oversight.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Board
    Committees</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Our board of directors has an audit committee and a compensation
    committee and, as of the closing of this offering, will have a
    nominating and corporate governance committee. Upon the closing
    of this offering, each of these committees will operate under a
    charter that has been approved by our board of directors.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Audit
    Committee</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Our audit committee consists of Ms.&#160;Cunicelli,
    Mr.&#160;Dillon and Dr.&#160;Diem. Mr.&#160;Dillon serves as the
    chair of our audit committee. Upon the closing of this offering,
    the responsibilities of the audit committee will include, among
    other things:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

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    <TD width="2%"></TD>
    <TD width="94%"></TD>
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    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Evaluating the performance, independence and qualifications of
    our independent auditors and determining whether to retain our
    existing independent auditors or engage new independent auditors;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


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    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Reviewing and approving the engagement of our independent
    auditors to perform audit services and any permissible non-audit
    services;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


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    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Monitoring the rotation of partners of our independent auditors
    on our engagement team as required by law;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Reviewing our annual and quarterly financial statements and
    reports and discussing the statements and reports with our
    independent auditors and management;
</TD>
</TR>

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<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

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    <TD width="2%"></TD>
    <TD width="94%"></TD>
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    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Reviewing with our independent auditors and management
    significant issues that arise regarding accounting principles
    and financial statement presentation, and matters concerning the
    scope, adequacy and effectiveness of our financial controls;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Reviewing with management and our auditors any earnings
    announcements and other public announcements regarding material
    developments;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Establishing procedures for the receipt, retention and treatment
    of complaints received by us regarding financial controls,
    accounting or auditing matters and other matters;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


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    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Preparing the audit committee report that the SEC requires in
    our annual proxy statement;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Reviewing the disclosures of the chief executive officer and
    chief financial officer during their certification process for
    our
    <FONT style="white-space: nowrap">Form&#160;10-K</FONT>
    and
    <FONT style="white-space: nowrap">Form&#160;10-Q</FONT>
    filings with the SEC;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Reviewing and providing oversight with respect to any related
    party transactions and monitoring compliance with our code of
    ethics;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Reviewing our investment, risk assessment and management and
    accounting policies on a periodic basis;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Reviewing the adequacy of our audit committee charter on a
    periodic basis;&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


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    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Reviewing and evaluating the performance of the audit committee,
    including compliance of the audit committee with its charter.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Our board of directors has determined that each of the directors
    serving on our audit committee is independent within the meaning
    of The NASDAQ Marketplace Rules and Rule
    <FONT style="white-space: nowrap">10A-3</FONT> under
    the Securities Exchange Act of 1934, as amended, or the Exchange
    Act. In addition, our board of directors has determined that
    &#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;<B>
    </B>qualifies as an audit committee financial expert within the
    meaning of SEC regulations and The NASDAQ Marketplace Rules. In
    making this determination, our board has considered the formal
    education and nature and scope of his/her<B> </B>previous
    experience, coupled with past and present service on various
    audit committees. Both our independent auditors and management
    periodically meet privately with our audit committee.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Compensation
    Committee</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Our compensation committee consists of Mr.&#160;Cola,
    Mr.&#160;Kollender and Dr.&#160;Kurtzman. Mr.&#160;Kollender<B>
    </B>serves as the chair of our compensation committee. Upon the
    closing of this offering, the responsibilities of the
    compensation committee will include, among other things:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

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    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Reviewing, approving and, in the case of our chief executive
    officer, recommending to our board of directors the compensation
    and other terms of employment of our executive officers,
    including the terms of any employment agreements, severance
    arrangements, change in control protections and any other
    compensatory arrangements;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Reviewing, approving and, in the case of our chief executive
    officer, recommending to our board of directors performance
    goals and objectives relevant to the compensation of our
    executive officers and assessing their performance against these
    goals and objectives;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Evaluating and approving the equity incentive plans,
    compensation plans and similar programs advisable for us, as
    well as modification or termination of existing plans and
    programs;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Evaluating, approving and, in the case of our chief executive
    officer, recommending to our board of directors the type and
    amount of compensation to be paid or awarded to board members;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


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    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Administering our equity incentive plans;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


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    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Establishing policies with respect to equity compensation
    arrangements;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Reviewing the competitiveness of our executive compensation
    programs and evaluating the effectiveness of our compensation
    policy and strategy in achieving expected benefits to us;
</TD>
</TR>

</TABLE>
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    <BR>
    82
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<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

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    <TD width="2%"></TD>
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</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Reviewing with management our disclosures under the
    &#147;Compensation Discussion and Analysis&#148; section and
    recommending to the full board of directors inclusion in our
    periodic reports to be filed with the SEC;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Preparing the report that the SEC requires in our annual proxy
    statement;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Reviewing the adequacy of our compensation committee charter on
    a periodic basis;&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Reviewing and evaluating the performance of our compensation
    committee.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Nominating
    and Corporate Governance Committee</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Upon the closing of this offering, we will establish a
    nominating and corporate governance committee on which we expect
    <B>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</B>,
    <B>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;
    </B>and
    <B>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;
    </B>will initially serve.
    <B>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;
    </B>will serve as the chair of our nominating and corporate
    governance committee. Upon the closing of this offering, the
    responsibilities of the nominating and corporate governance
    committee will include, among other things:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Identifying, reviewing, evaluating, nominating and recommending
    candidates to serve on our board of directors;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Determining the minimum qualifications for service on our board
    of directors;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Evaluating director performance on the board of directors and
    applicable committees of the board;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Considering nominations by stockholders of candidates for
    election to our board of directors;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Considering and assessing the independence of members of our
    board of directors;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Developing, as appropriate, a set of corporate governance
    principles, and reviewing and recommending to our board of
    directors any changes to such principles;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Periodically reviewing our policy statements to determine their
    adherence to our code of business conduct and ethics and
    considering any request by our directors or executive officers
    for a waiver from such code;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Reviewing the adequacy of its charter on a periodic
    basis;&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Evaluating the performance of our nominating and corporate
    governance committee.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Compensation
    Committee Interlocks and Insider Participation</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    No member of our compensation committee has ever been an officer
    or employee of ours. None of our officers currently serves, or
    has served during the last completed year, on our compensation
    committee or the board of directors of any other entity that has
    one or more of its officers serving as a member of our board of
    directors or compensation committee. Prior to establishing our
    compensation committee, our full board of directors made
    decisions relating to compensation of our officers.
</DIV>
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<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    83
</DIV><!-- END PAGE WIDTH -->
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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL Pagebreak End -->

<A name='112'>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">EXECUTIVE
    COMPENSATION</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Compensation
    Discussion and Analysis</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In this Compensation Discussion and Analysis, we address the
    compensation determinations and the rationale for those
    determinations relating to our chief executive officer, our
    chief financial officer and our next three most highly
    compensated executive officers who were serving as executive
    officers as of December&#160;31, 2009. We refer to these
    executive officers collectively as our &#147;named executive
    officers.&#148; Our named executive officers for the year ended
    December&#160;31, 2009 are:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Jane H. Hollingsworth, Chief Executive Officer;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Terri B. Sebree, President;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Keith A. Goldan, Vice President and Chief Financial Officer;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Gerald W. McLaughlin, Vice President Commercial
    Operations;&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Ezra H. Felker, Vice President Business Development.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Objectives
    and Philosophy of Executive Compensation</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The primary objective of our executive compensation program, as
    established by the compensation committee of our board of
    directors, is to attract, retain and motivate individuals who
    possess knowledge, experience and skills that we believe are
    important to the advancement of our business of developing and
    commercializing branded therapeutics for diseases of the central
    nervous system, including neurological and psychiatric disorders.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Specifically, our compensation programs are designed to:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Attract and retain individuals with superior ability and
    managerial experience;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Align executive officers&#146; incentives with our corporate
    strategies, business objectives and the long-term interests of
    our stockholders;&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Increase the incentive to achieve key strategic performance
    measures by linking incentive award opportunities to the
    achievement of performance objectives in these areas and by
    providing a portion of total compensation opportunities for
    executive officers in the form of direct ownership in our
    company.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    To achieve these objectives, we seek to provide a competitive
    compensation package that ties a substantial portion of the
    executive&#146;s overall compensation to both our company
    objectives and the executive&#146;s individual performance. Base
    salary increases and annual performance bonuses are tied to our
    company and individual performance in relation to competitive
    market conditions. Equity awards are primarily used to promote
    long-term stockholder value and employee retention through the
    use of multi-year vesting schedules that provide an incentive to
    the executive to remain in the employ of the company through the
    end of the vesting period in order to share in any increase in
    the value of our company over time.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Determination
    of Executive Compensation</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Our compensation committee oversees our compensation and benefit
    plans and policies, administers our equity incentive plans and
    reviews and approves annually all compensation decisions
    relating to all executive officers.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    When determining our executive compensation policies, reviewing
    the performance of our executive officers and establishing
    compensation levels and programs, our compensation committee
    considers recommendations from Ms.&#160;Hollingsworth, our chief
    executive officer, regarding the compensation for executive
    officers other than herself. Ms.&#160;Hollingsworth does not
    participate in determining the amount of her own compensation.
    With the exception of our chief executive officer, our
    compensation committee has the final authority regarding the
    overall compensation structure for our executive officers. In
    the case of Ms.&#160;Hollingsworth, our compensation committee
    evaluates Ms.&#160;Hollingsworth&#146;s performance, with
    significant input and recommendations from the chairman of our
</DIV>
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    <BR>
    84
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL Pagebreak End -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    compensation committee, and recommends compensation levels to
    the board of directors, which sets her compensation.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Prior to this offering, we have not used a peer group to engage
    in benchmarking in determining our total compensation or the
    primary components of compensation for our executive officers.
    In reviewing compensation levels for 2009 and 2010, our
    compensation committee reviewed survey information for private
    life sciences companies published in CompStudy, an annual survey
    of compensation for executives at more than 700 private life
    sciences and technology companies conducted by J. Robert Scott
    in partnership with Ernst&#160;&#038; Young LLP. As a survey
    participant, we had access to survey data, which we used to
    provide information to our compensation committee in setting
    compensation.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In the future, we expect that our compensation committee will
    engage a compensation consultant, establish comprehensive
    policies and guidelines for executive compensation and conduct
    competitive benchmarking against a peer group of public
    companies established in consultation with the compensation
    consultant.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Elements
    of Executive Compensation</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The compensation for our executive officers consists of the
    following principal elements:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Base salary;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Annual performance bonuses;&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Long-term incentives in the form of equity grants.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We do not have a formal or informal policy or target for
    allocating compensation between long-term and short-term
    compensation, cash and non-cash compensation, or among different
    forms of non-cash compensation. Our compensation committee has
    balanced our need to preserve cash with the expectations of
    those we hope to recruit and retain as executives. In the
    future, we may adjust the mix of cash and non-cash compensation
    if required by competitive market conditions for attracting and
    retaining skilled personnel.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We have set salary levels and the size of annual performance
    bonuses based on individual performance and by comparison to
    market survey data in CompStudy. Equity grant awards have been
    our primary form of long-term incentive and retention benefits,
    which have the benefit of not requiring a cash outlay from our
    company. We use awards of equity as a significant component of
    the initial compensation incentive when we hire executive
    officers. We have generally made equity grants to existing
    executives at times when we have raised capital from new
    investors, and not as a part of annual compensation. Our equity
    awards to executive officers generally have vesting schedules
    over four years, which we believe results in a retention
    incentive for our executives. If an executive voluntarily leaves
    our employ before the completion of the vesting period, then
    that executive would not receive any benefit from the non-vested
    portion of his or her award.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Base
    Salary</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We generally establish base salaries for our executive officers
    based on the scope of their responsibilities and the amount and
    type of work experience prior to joining us, taking into account
    competitive market compensation paid by other companies for
    similar positions. In general, our compensation committee
    reviews base salaries annually based on these factors to adjust
    salaries to reflect current market levels. We may also adjust
    base salaries from time to time during the year in connection
    with promotions or in light of changes in market conditions. For
    2009 and 2010, the base salaries for our named executive
    officers are set forth in the table below:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="77%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="4%" align="right">&nbsp;</TD>	<!-- colindex=02 type=lead -->
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    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=03 type=body -->
    <TD width="4%" align="left">&nbsp;</TD>	<!-- colindex=03 type=hang1 -->
</TR>
<!-- Table Width Row END -->
<!-- TableOutputHead -->
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
    <B>2009<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
    <B>2010<BR>
    </B>
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>Named Executive Officer</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Base Salary</B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Base Salary</B>
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<!-- TableOutputBody -->
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Jane H. Hollingsworth
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    304,756
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    320,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Terri B. Sebree
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    280,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    293,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Keith A. Goldan
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    275,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    280,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Gerald W. McLaughlin
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    206,876
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    216,500
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Ezra H. Felker
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    196,833
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    216,500
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>
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    <BR>
    85
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
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<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In setting salary levels for 2009 and 2010, our compensation
    committee had a goal of setting target compensation for our
    named executive officers at levels the committee believed to be
    competitive for companies of similar size and stage of
    development operating in the life sciences industry. To
    accomplish this, our compensation committee reviewed CompStudy
    survey information for private therapeutics companies with 20 to
    40 employees, revenue of up to $40&#160;million and between two
    to five rounds of outside investor financing. Salary levels for
    our named executive officers for 2010 were increased, based on
    the position and industry experience of the individual, to
    provide them generally with a level of total compensation in the
    <FONT style="white-space: nowrap">mid-range</FONT>
    for comparable positions. Salaries for 2009 were increased on
    the same basis, from 2008 salaries of $295,880 for
    Ms.&#160;Hollingsworth, $262,500 for Ms.&#160;Sebree, $200,850
    for Mr.&#160;McLaughlin and $191,100 for Mr.&#160;Felker.
    Mr.&#160;Goldan&#146;s 2008 salary of $275,000 was negotiated at
    the time he was hired in November 2008 and remained at the same
    level for 2009.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Annual
    Performance Bonus Compensation</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We pay annual performance bonuses to reward the performance
    achievements of our named executive officers. We generally pay
    these bonuses in cash, and an executive must be employed by us
    on the pay date to receive a bonus. Each named executive officer
    is assigned a targeted maximum payout, expressed as a percentage
    of his or her base salary for the year, which varies by their
    role with us. Each named executive officer&#146;s annual
    performance bonus is generally determined based on our
    achievement of company objectives and the executive
    officer&#146;s individual performance goals. For 2009, our chief
    executive officer&#146;s annual performance bonus was determined
    solely based on attainment of company objectives. Our board of
    directors and compensation committee determined that this was
    appropriate given our chief executive officer&#146;s
    responsibility for the overall direction and success of our
    business. Our company objectives generally relate to the
    achievement of preestablished performance goals based on
    company-wide business objectives. Individual performance goals
    are based on either key operational objectives, functional
    objectives within the executive&#146;s area of responsibility,
    or a combination of operational and functional objectives. If
    our company&#146;s or an executive officer&#146;s performance
    does not meet one or more of the objectives established for the
    year, then the portion of annual performance bonus attributable
    to that objective will not be paid.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The performance objectives are generally objectively
    determinable and measurable and their outcomes are uncertain at
    the time established. When we set the 2009 objectives, we
    considered them to be ambitious, but attainable and designed to
    cause annual performance bonus payments to reflect meaningful
    performance requirements.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Our compensation committee authorizes annual performance bonuses
    to the executive officers, other than the chief executive
    officer, in amounts that are commensurate with each executive
    officer&#146;s targeted maximum annual performance bonus and the
    result achieved by the end of the year. Prior to this offering,
    our compensation committee has authorized our chief executive
    officer to establish individual performance goals for each other
    executive officer on a basis consistent with compensation
    objectives for the year. At the end of the year, our chief
    executive officer assesses the achievement of the objectively
    determinable individual performance goals of the executive
    officers, other than herself, reports her findings to our
    compensation committee and submits recommendations for annual
    performance bonus payouts for the approval of our compensation
    committee. Our compensation committee reviews our chief
    executive officer&#146;s analysis and in its sole discretion may
    accept or reject, in whole or in part, the recommendations of
    Ms.&#160;Hollingsworth.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    For our chief executive officer, our compensation committee
    assesses the achievement of the objectively determinable
    performance goals and reports its findings and annual
    performance bonus recommendations to our board of directors. In
    its sole discretion, our board of directors may accept or
    reject, in whole or in part, the annual performance bonus
    recommendations of our compensation committee. For 2009, our
    board of directors reviewed and accepted our compensation
    committee&#146;s annual performance bonus recommendation with
    respect to Ms.&#160;Hollingsworth.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    As discussed above, Ms.&#160;Hollingsworth&#146;s 2009 annual
    performance bonus award payout was based 100% on the achievement
    of our company objectives. The 2009 annual performance bonuses
    for each of the other named executive officers was based 75% on
    the achievement of company objectives and 25% on the
</DIV>
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    <BR>
    86
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<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
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<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    achievement of individual performance objectives. Our
    compensation committee establishes our company objectives for
    each fiscal year prior to the end of the first quarter of the
    year and determines a separate weighting for each of our company
    objectives. For 2009, our company objectives, including their
    weightings, are set forth below:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Successfully complete our pivotal Phase&#160;III clinical trial
    for Zelrix (weighted 50%);
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Facilitate a significant transaction involving our company or
    Zelrix (weighted 25%);&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Raise capital in 2009 through new investors (weighted 25%).
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    For 2009, we completed our pivotal Phase&#160;III clinical trial
    for Zelrix but did not achieve the other two company objectives.
    As a result, in March 2010, Ms.&#160;Hollingsworth was paid 50%
    of her 2009 targeted annual performance bonus. All other named
    executive officers were allocated 50% of the company objective
    portion of their 2009 annual performance bonus award payout.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    As discussed above, our chief executive officer established
    individual performance objectives for each other executive
    officer at approximately the same time as the company objectives
    were established. Each component of the individual performance
    goals was assigned equal weight for 2009.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Ms.&#160;Sebree&#146;s 2009 individual performance goals
    consisted entirely of operational objectives related to:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Completing pivotal Phase&#160;III clinical trial for Zelrix;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Establishing commercial manufacturing arrangements for Zelrix;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Preparing an NDA for Zelrix; and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Implementing preclinical studies for NP201.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Mr.&#160;Goldan&#146;s 2009 individual performance goals
    consisted of the same operational objectives as Ms.&#160;Sebree
    and functional objectives related to:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Developing and implementing financing arrangements;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Improving financial controls, financial management, budgeting
    and forecasting;&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Managing information technology, facilities, human resources and
    treasury functions.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Mr.&#160;McLaughlin&#146;s 2009 individual performance goals
    consisted entirely of functional objectives related to:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Developing plans for commercial launch of Zelrix;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Developing marketing plans for Zelrix, including packaging and
    market research;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Establishing support for Zelrix with key opinion leaders; and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Engaging in efforts to identify new product candidates and
    partnering opportunities.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Mr.&#160;Felker&#146;s 2009 individual performance goals
    consisted of the same operational objectives as Ms.&#160;Sebree
    and functional objectives related to:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Engaging in efforts to identify partnering opportunities;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Establishing manufacturing relationships for Zelrix;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Developing strategies for continued enhancement of migraine
    patch design;&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Creating strategies for development and partnering of NP201.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The compensation committee assessed the performance of these
    named executive officers against the individual performance
    metrics and determined they achieved the following percentages
    for individual performance: Ms.&#160;Sebree, 56%,
    Mr.&#160;Goldan, 58%, Mr.&#160;McLaughlin, 80%, and
    Mr.&#160;Felker, 50%.
</DIV>
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    <BR>
    87
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
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<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Taking into account the relative weighting of the corporate and
    individual performance goals, with 75% for corporate goals and
    25% for individual performance goals for the named executive
    officers other than Ms. Hollingsworth, and the achievement of
    these goals on a percentage basis as described above, we paid
    each named executive officer the following 2009 annual
    performance bonus in 2010:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="53%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="4%" align="right">&nbsp;</TD>	<!-- colindex=02 type=lead -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=02 type=body -->
    <TD width="4%" align="left">&nbsp;</TD>	<!-- colindex=02 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=03 type=gutter -->
    <TD width="3%" align="right">&nbsp;</TD>	<!-- colindex=03 type=lead -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=03 type=body -->
    <TD width="3%" align="left">&nbsp;</TD>	<!-- colindex=03 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=04 type=gutter -->
    <TD width="6%" align="right">&nbsp;</TD>	<!-- colindex=04 type=lead -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=04 type=body -->
    <TD width="6%" align="left">&nbsp;</TD>	<!-- colindex=04 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=05 type=gutter -->
    <TD width="3%" align="right">&nbsp;</TD>	<!-- colindex=05 type=lead -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=05 type=body -->
    <TD width="3%" align="left">&nbsp;</TD>	<!-- colindex=05 type=hang1 -->
</TR>
<!-- Table Width Row END -->
<!-- TableOutputHead -->
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="15" align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>2009 Annual Performance Bonus</B>
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
    <B>Maximum as<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
    <B>Maximum<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
    <B>Actual<BR>
    </B>
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
    <B>% of 2009<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
    <B>Bonus<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
    <B>% of Maximum<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
    <B>Bonus<BR>
    </B>
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>Named Executive Officer</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>Base Salary</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Amount</B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Achieved</B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Payout</B>
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<!-- TableOutputBody -->
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Jane H. Hollingsworth
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    40
</TD>
<TD nowrap align="left" valign="bottom">
    %
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    121,902
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    50
</TD>
<TD nowrap align="left" valign="bottom">
    %
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    60,952
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Terri B. Sebree
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    30
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    84,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    52
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    43,680
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Keith A. Goldan
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    30
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    82,500
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    52
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    42,900
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Gerald W. McLaughlin
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    25
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    51,719
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    58
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    29,997
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Ezra H. Felker
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    25
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    49,208
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    50
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    24,604
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    For 2010, the compensation committee has set the following
    maximum annual performance bonus amounts:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="79%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="4%" align="right">&nbsp;</TD>	<!-- colindex=02 type=lead -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=02 type=body -->
    <TD width="4%" align="left">&nbsp;</TD>	<!-- colindex=02 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=03 type=gutter -->
    <TD width="3%" align="right">&nbsp;</TD>	<!-- colindex=03 type=lead -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=03 type=body -->
    <TD width="3%" align="left">&nbsp;</TD>	<!-- colindex=03 type=hang1 -->
</TR>
<!-- Table Width Row END -->
<!-- TableOutputHead -->
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="7" align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>2010 Annual Performance Bonus</B>
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
    <B>Maximum as<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
    <B>Maximum<BR>
    </B>
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
    <B>% of 2010<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
    <B>Bonus<BR>
    </B>
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>Named Executive Officer</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>Base Salary</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Amount</B>
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<!-- TableOutputBody -->
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Jane H. Hollingsworth
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    40
</TD>
<TD nowrap align="left" valign="bottom">
    %
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    128,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Terri B. Sebree
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    35
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    102,500
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Keith A. Goldan
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    30
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    84,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Gerald W. McLaughlin
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    30
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    65,950
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Ezra H. Felker
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    30
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    65,950
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The compensation committee established the maximum annual
    performance bonus amounts for 2010 so that total annual
    compensation for the named executive officer was in the
    mid-range based on position and experience of the CompStudy
    survey, which resulted in an increase in the maximum bonus as a
    percentage of 2010 salary for Ms. Sebree, Mr. McLaughlin and Mr.
    Felker.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Long-Term
    Incentive Compensation</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We believe that long-term performance is enhanced through stock
    and equity awards that reward our executives for maximizing
    stockholder value over time and that align the interests of our
    employees and management with those of stockholders. Our
    compensation committee believes that the use of equity awards
    offers an effective way to align the interests of our executive
    officers with our stockholders because equity ownership ties a
    significant portion of an executive&#146;s potential
    compensation to the market price of our stock. Prior to this
    offering, we have used stock options and, to a very limited
    degree, restricted stock, as the primary long-term equity
    incentive vehicle. Our last grants of restricted stock were in
    2006 when the fair value of our stock was lower and the awards
    had less income tax consequence to the executive upon vesting.
    Since then, we have made option grants to executive officers who
    are newly hired, and generally made stock option grants to
    existing executives at times when we have raised capital from
    new investors.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We expect to continue to use equity awards as a long-term
    incentive vehicle, with vesting based on multi-year periods and,
    perhaps, performance-based goals. These equity awards may be in
    the form of stock options, restricted stock or restricted stock
    units. We believe that:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    The opportunity to receive future equity awards provides an
    incentive for executives to deliver superior performance;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    The vesting period of equity awards helps retain executives;
</TD>
</TR>

</TABLE>
<!-- XBRL Pagebreak Begin -->

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    88
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL Pagebreak End -->

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Equity awards are inherently performance-based because the value
    our executives realize from the equity award depends on the
    success of our business and any increase in the market price of
    our common stock following this offering;&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Equity awards help to provide a balance to the overall executive
    compensation program as base salary and our annual performance
    bonus program focus on short-term compensation, while equity
    grants reward executives for increases in stockholder value over
    the longer term.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Our 2005 Equity Compensation Plan, or our 2005 Plan, authorizes
    us to grant a wide variety of equity awards, including stock
    options, restricted stock, restricted stock units, stock
    appreciation rights, or SARs, and other stock-based awards to
    our employees and executive officers as well as non-employee
    members of our board of directors and certain consultants and
    advisors to the company. Our 2005 Plan is described in more
    detail under &#147;&#151;&#160;Employee Benefit Plans.&#148;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We have not generally used equity compensation in our annual
    performance bonus program. We have typically paid these bonuses
    in cash. To preserve cash, however, our compensation committee
    did not pay cash bonuses for 2008. The compensation committee
    instead granted fully vested stock options to our named
    executive officers in January 2009. The compensation committee
    determined the grant amounts based on a subjective analysis of
    the performance and the relative position of each executive in
    the management team, and not based on specific performance goals
    for 2008. Our named executive officers received fully vested
    stock options to purchase the following number of shares of
    common stock: Ms.&#160;Hollingsworth&#160;&#151;
    67,000&#160;shares; Ms.&#160;Sebree&#160;&#151;
    60,000&#160;shares; Mr.&#160;McLaughlin&#160;&#151;
    48,000&#160;shares; and Mr.&#160;Felker&#160;&#151;
    36,000&#160;shares. Mr.&#160;Goldan did not receive an option
    grant because he had recently joined us in November 2008, at
    which time he received a new hire option grant.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Our board of directors has adopted a new 2010 Omnibus Incentive
    Compensation Plan, or our 2010 Plan, which we expect to be
    approved by our stockholders prior to this offering and is
    described in more detail under &#147;&#151;&#160;Employee
    Benefit Plans.&#148; Immediately following the closing of this
    offering, our 2010 Plan will replace our existing 2005 Plan for
    use in granting future equity awards, including stock options,
    restricted stock, restricted stock units, SARs and other
    stock-based awards, including equity grants intended to qualify
    as &#147;qualified performance-based compensation&#148; under
    Section&#160;162(m) of the Code, to our executive officers and
    our other employees, as well as non-employee members of our
    board of directors and our consultants and advisors. Our 2010
    Plan also provides for the grant of cash awards to our named
    executive officers that are considered &#147;qualified
    performance-based compensation&#148; under Section&#160;162(m)
    of the Code.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Our board of directors has delegated oversight of the
    administration of our equity compensation plans to our
    compensation committee. We do not have any equity security
    ownership guidelines or requirements for our executive officers.
    We do not have any program, plan or obligation that requires us
    to grant equity compensation on specified dates. The
    compensation committee considers and approves equity awards to
    executive officers based upon a review of competitive
    compensation data, its assessment of individual performance, a
    review of each executive&#146;s existing long-term incentives
    and retention considerations.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The exercise price of stock options is the fair value of our
    common stock as determined by our board of directors or
    compensation committee on the date of grant. Our stock options
    typically vest over a four-year period, either monthly over 48
    months or with 25% vesting 12&#160;months after the vesting
    commencement date and the remainder vesting monthly thereafter
    over a three-year period, subject to continued employment or
    association with us, and generally expire ten years after the
    date of grant. Incentive stock options also include terms
    necessary to assure compliance with the applicable provision of
    the Code.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Because we have not been a public company, we have not made
    equity grants in connection with the release or withholding of
    material non-public information. However, we intend to implement
    policies to ensure that equity awards are granted at fair market
    value on the date that the grant action occurs.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Other
    Benefits</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Executive officers are eligible to participate in all of our
    employee benefit plans, such as medical, dental, vision, group
    life, short and long-term disability, and our 401(k) plan, in
    each case on the same basis as other
</DIV>
<!-- XBRL Paragraph Pagebreak -->
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<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    89
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL Pagebreak End -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    employees, subject to applicable laws. We also provide vacation
    and other paid holidays to all employees, including our
    executive officers.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Tax
    Considerations</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    As discussed above, our compensation committee considers the tax
    and accounting treatment associated with the cash and equity
    awards it makes, although these considerations are not
    dispositive. Section&#160;162(m) of the Code places a limit of
    $1.0&#160;million per person on the amount of compensation that
    we may deduct in any year with respect to each of our named
    executive officers. There is an exemption from the
    $1.0&#160;million limitation for performance-based compensation
    that meets certain requirements. Since we are a privately held
    corporation, Section&#160;162(m) does not currently apply to our
    compensation. Under the transition rules, in general,
    compensation paid under a plan that existed while we are private
    is exempt from the $1.0&#160;million deduction limit until the
    third annual meeting of our stockholders following this
    offering. We will take these transition rules into account when
    awarding compensation to our named executive officers. Following
    this offering, grants of options or SARs under our 2010 Plan are
    intended to qualify for the exemption. Grants of restricted
    shares or stock units that are made in the future under our 2010
    Plan may qualify for the exemption if vesting is contingent on
    the attainment of objectives based on the performance criteria
    set forth in the plan and if certain other requirements are
    satisfied. Grants of restricted shares or stock units that vest
    solely on the basis of service cannot qualify for the exemption.
    In addition, the terms of our 2010 Plan contemplate that cash
    performance bonuses made in the future may qualify for the
    exemption. To maintain flexibility in compensating officers in a
    manner designed to promote varying company goals, our
    compensation committee has not adopted a policy requiring all
    compensation to be deductible. Our compensation committee may
    approve compensation or changes to plans, programs or awards
    that may cause the compensation or awards to exceed the
    limitation under Section&#160;162(m) if it determines that
    action is appropriate and in our best interests.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Summary
    Compensation Table</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The following table sets forth information for the year ended
    December&#160;31, 2009 regarding compensation awarded to or
    earned by our named executive officers.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="32%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=02 type=lead -->
    <TD width="2%" align="right">&nbsp;</TD>	<!-- colindex=02 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=02 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=03 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=03 type=lead -->
    <TD width="6%" align="right">&nbsp;</TD>	<!-- colindex=03 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=03 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=04 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=04 type=lead -->
    <TD width="5%" align="right">&nbsp;</TD>	<!-- colindex=04 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=04 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=05 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=05 type=lead -->
    <TD width="10%" align="right">&nbsp;</TD>	<!-- colindex=05 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=05 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=06 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=06 type=lead -->
    <TD width="10%" align="right">&nbsp;</TD>	<!-- colindex=06 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=06 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=07 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=07 type=lead -->
    <TD width="6%" align="right">&nbsp;</TD>	<!-- colindex=07 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=07 type=hang1 -->
</TR>
<!-- Table Width Row END -->
<!-- TableOutputHead -->
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Non-Equity<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Incentive<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Option<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Plan<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>All Other<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Salary<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Awards<SUP style="font-size: 85%; vertical-align: top">(1)<BR>

    </SUP></B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Compensation<SUP style="font-size: 85%; vertical-align: top">(2)<BR>

    </SUP></B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Compensation<SUP style="font-size: 85%; vertical-align: top">(3)<BR>

    </SUP></B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Total<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>Name and Principal Position</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Year</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>($)</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>($)</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>($)</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>($)</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>($)</B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<!-- TableOutputBody -->
<TR valign="bottom" style="color: #000000; background: #CCEEFF">
<TD align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Jane H. Hollingsworth
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    2009
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    304,483
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    11,377
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    60,952
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    8,705
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    385,517
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="color: #000000; background: #CCEEFF">
<TD align="left" valign="top">
<DIV style="text-indent: 0pt; margin-left: 10pt">
    Chief Executive Officer
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Terri B. Sebree
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    2009
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    279,462
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    10,188
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    43,680
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    8,705
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    342,035
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: 0pt; margin-left: 10pt">
    President
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="color: #000000; background: #CCEEFF">
<TD align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Keith A. Goldan
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    2009
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    275,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    42,900
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    8,718
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    326,618
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="color: #000000; background: #CCEEFF">
<TD align="left" valign="top">
<DIV style="text-indent: 0pt; margin-left: 10pt">
    Vice President and Chief Financial Officer
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Gerald W. McLaughlin
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    2009
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    206,690
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    8,150
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    29,997
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    7,555
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    252,392
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="top">
<DIV style="text-indent: 0pt; margin-left: 10pt">
    Vice President Commercial Operations
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="color: #000000; background: #CCEEFF">
<TD align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Ezra H. Felker
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    2009
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    196,657
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    6,113
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    24,604
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    7,221
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    234,595
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="color: #000000; background: #CCEEFF">
<TD align="left" valign="top">
<DIV style="text-indent: 0pt; margin-left: 10pt">
    Vice President Business Development
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV style="font-size: 1pt; margin-left: 0%; width: 13%;  align: left; border-bottom: 1pt solid #000000"></DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>



<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

<TR>
    <TD width="2%"></TD>
    <TD width="1%"></TD>
    <TD width="97%"></TD>
</TR>

<TR>
    <TD align="right" valign="top">
    (1) </TD>
    <TD></TD>
    <TD valign="bottom">
    Amounts reflect the grant date fair value of option awards
    granted in 2009 in accordance with FASB ASC Topic 718, or
    ASC&#160;718, formerly Statement of Financial Accounting
    Standards No.&#160;123R. Our named executive officers will only
    realize compensation to the extent the market price of our
    common stock is greater than the exercise price of such stock
    options. For information regarding assumptions underlying the
    valuation of equity awards, see note&#160;8 to our financial
    statements appearing at the end of this prospectus.</TD>
</TR>

</TABLE>
<!-- XBRL Pagebreak Begin -->

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    90
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL Pagebreak End -->

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

<TR>
    <TD width="2%"></TD>
    <TD width="1%"></TD>
    <TD width="97%"></TD>
</TR>

<TR>
    <TD align="right" valign="top">
    (2) </TD>
    <TD></TD>
    <TD valign="bottom">
    Amounts represent annual performance bonus compensation earned
    for the year ended December&#160;31, 2009 based on
    pre-established performance objectives. Annual performance bonus
    compensation for 2009 was paid in 2010. Our annual performance
    bonus program is described in more detail under
    &#147;&#151;&#160;Compensation Discussion and
    Analysis&#160;&#151; Annual Performance Bonus Compensation.&#148;</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD align="right" valign="top">
    (3) </TD>
    <TD></TD>
    <TD valign="bottom">
    Amounts include the premium amounts paid by us for life
    insurance and long-term disability insurance coverage for the
    named executive officer, plus the employer matching
    contributions made on behalf of the named executive officer to
    our 401(k) plan.</TD>
</TR>

</TABLE>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Grants of
    Plan-Based Awards</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The following table sets forth information regarding grants of
    plan-based awards to the named executive officers during the
    year ended December&#160;31, 2009. Annual performance bonus
    amounts paid in respect of the non-equity plan incentive awards
    for 2009 are reported in the Summary Compensation Table under
    the Non-Equity Incentive Plan Compensation column.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 9pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="34%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=02 type=lead -->
    <TD width="5%" align="right">&nbsp;</TD>	<!-- colindex=02 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=02 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=03 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=03 type=lead -->
    <TD width="5%" align="right">&nbsp;</TD>	<!-- colindex=03 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=03 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=04 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=04 type=lead -->
    <TD width="2%" align="right">&nbsp;</TD>	<!-- colindex=04 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=04 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=05 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=05 type=lead -->
    <TD width="5%" align="right">&nbsp;</TD>	<!-- colindex=05 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=05 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=06 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=06 type=lead -->
    <TD width="6%" align="right">&nbsp;</TD>	<!-- colindex=06 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=06 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=07 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=07 type=lead -->
    <TD width="5%" align="right">&nbsp;</TD>	<!-- colindex=07 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=07 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=08 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=08 type=lead -->
    <TD width="5%" align="right">&nbsp;</TD>	<!-- colindex=08 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=08 type=hang1 -->
</TR>
<!-- Table Width Row END -->
<!-- TableOutputHead -->
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>All Other<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Option<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Grant<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Awards:<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Exercise<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Date Fair<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="10" nowrap align="center" valign="bottom">
    <B>Estimated Future Payouts Under <BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Number of<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>or Base<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Value of<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="10" nowrap align="center" valign="bottom">
    <B>Non-Equity Incentive <BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Securities<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Price of<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Stock and<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="10" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Plan
    Awards<SUP style="font-size: 85%; vertical-align: top">(1)</SUP></B>

</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Underlying<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Option<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Option<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Grant<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Threshold<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Target<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Maximum<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Options<SUP style="font-size: 85%; vertical-align: top">(2)<BR>

    </SUP></B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Awards<SUP style="font-size: 85%; vertical-align: top">(3)<BR>

    </SUP></B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Awards<SUP style="font-size: 85%; vertical-align: top">(4)<BR>

    </SUP></B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>Name</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Date</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>($)</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>($)</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>($)</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>(#)</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>($/Sh)</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>($)</B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<!-- TableOutputBody -->
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="top">
<DIV style="text-indent: -9pt; margin-left: 9pt">
    Jane H. Hollingsworth
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    1/29/2009
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    67,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    0.24
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    11,377
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    1/29/2009
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    121,902
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="line-height: 9pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="top">
<DIV style="text-indent: -9pt; margin-left: 9pt">
    Terri B. Sebree
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    1/29/2009
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    60,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    0.24
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    10,188
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    1/29/2009
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    84,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="line-height: 9pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="top">
<DIV style="text-indent: -9pt; margin-left: 9pt">
    Keith A. Goldan
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    1/29/2009
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    82,500
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="line-height: 9pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="top">
<DIV style="text-indent: -9pt; margin-left: 9pt">
    Gerald W. McLaughlin
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    1/29/2009
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    48,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    0.24
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    8,150
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    1/29/2009
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    51,719
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="line-height: 9pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="top">
<DIV style="text-indent: -9pt; margin-left: 9pt">
    Ezra H. Felker
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    1/29/2009
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    36,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    0.24
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    6,113
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    1/29/2009
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    49,208
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV style="font-size: 1pt; margin-left: 0%; width: 13%;  align: left; border-bottom: 1pt solid #000000"></DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>



<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

<TR>
    <TD width="2%"></TD>
    <TD width="1%"></TD>
    <TD width="97%"></TD>
</TR>

<TR>
    <TD align="right" valign="top">
    (1) </TD>
    <TD></TD>
    <TD valign="bottom">
    Amounts represent maximum payouts for 2009 annual performance
    bonuses determined by our compensation committee for each named
    executive as a percentage of 2009 base salary.</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD align="right" valign="top">
    (2) </TD>
    <TD></TD>
    <TD valign="bottom">
     Amounts represent 2008 annual incentive compensation that was
    paid in January 2009 in the form of fully vested stock options.</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD align="right" valign="top">
    (3) </TD>
    <TD></TD>
    <TD valign="bottom">
    Amounts represent the fair value of our common stock as
    determined in good faith by our compensation committee on the
    date of the grant.</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD align="right" valign="top">
    (4) </TD>
    <TD></TD>
    <TD valign="bottom">
    Amounts reflect the aggregate grant date fair value of the
    awards calculated in accordance with ASC&#160;718.</TD>
</TR>

</TABLE>
<!-- XBRL Pagebreak Begin -->

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    91
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL Pagebreak End -->

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Outstanding
    Equity Awards at December&#160;31, 2009</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The following table sets forth information regarding outstanding
    equity awards granted to our named executive officers that
    remain outstanding as of December&#160;31, 2009. Equity awards
    made to our named executive officers are described in more
    detail under &#147;&#151;&#160;Compensation Discussion and
    Analysis&#160;&#151; Long-Term Incentive Compensation.&#148;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="30%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=02 type=lead -->
    <TD width="7%" align="right">&nbsp;</TD>	<!-- colindex=02 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=02 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=03 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=03 type=lead -->
    <TD width="8%" align="right">&nbsp;</TD>	<!-- colindex=03 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=03 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=04 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=04 type=lead -->
    <TD width="4%" align="right">&nbsp;</TD>	<!-- colindex=04 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=04 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=05 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=05 type=lead -->
    <TD width="7%" align="right">&nbsp;</TD>	<!-- colindex=05 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=05 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=06 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=06 type=lead -->
    <TD width="7%" align="right">&nbsp;</TD>	<!-- colindex=06 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=06 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=07 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=07 type=lead -->
    <TD width="8%" align="right">&nbsp;</TD>	<!-- colindex=07 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=07 type=hang1 -->
</TR>
<!-- Table Width Row END -->
<!-- TableOutputHead -->
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="14" align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Option Awards</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="6" align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Stock Awards</B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Number of<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Number of<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Number of<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Market Value<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Securities<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Securities<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Shares or<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>of Shares or<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Underlying<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Underlying<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Option<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Units of<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Units of<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Unexercised<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Unexercised<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Exercise<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Option<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Stock That<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Stock That<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Options (#)<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Options (#)<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Price<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Expiration<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Have Not<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Have Not<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>Name</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Exercisable</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Unexercisable</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>($)</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Date</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Vested
    (#)<SUP style="font-size: 85%; vertical-align: top">(1)</SUP></B>

</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Vested
    ($)<SUP style="font-size: 85%; vertical-align: top">(2)</SUP></B>

</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<!-- TableOutputBody -->
<TR valign="bottom" style="color: #000000; background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Jane H. Hollingsworth
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    100,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    0.10
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    7/19/2015
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="color: #000000; background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    665,789
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    1,214,088
</TD>
<TD nowrap align="left" valign="bottom">
    <SUP style="font-size: 85%; vertical-align: top">(3)</SUP>

</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    0.24
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    9/11/2018
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="color: #000000; background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    67,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    0.24
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    1/29/2019
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="color: #000000; background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    25,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    6,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="line-height: 9pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Terri B. Sebree
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    100,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    0.10
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    7/19/2015
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    373,322
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    680,764
</TD>
<TD nowrap align="left" valign="bottom">
    <SUP style="font-size: 85%; vertical-align: top">(3)</SUP>

</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    0.24
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    9/11/2018
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    60,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    0.24
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    1/29/2019
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    25,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    6,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="line-height: 9pt; background: #CCEEFF">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="color: #000000; background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Keith A. Goldan
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    199,780
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    599,342
</TD>
<TD nowrap align="left" valign="bottom">
    <SUP style="font-size: 85%; vertical-align: top">(4)</SUP>

</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    0.24
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    12/15/2018
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="line-height: 9pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Gerald W. McLaughlin
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    91,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    91,000
</TD>
<TD nowrap align="left" valign="bottom">
    <SUP style="font-size: 85%; vertical-align: top">(5)</SUP>

</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    0.18
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    9/20/2017
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    161,956
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    295,333
</TD>
<TD nowrap align="left" valign="bottom">
    <SUP style="font-size: 85%; vertical-align: top">(3)</SUP>

</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    0.24
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    9/11/2018
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    48,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    0.24
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    1/29/2019
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="line-height: 9pt; background: #CCEEFF">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="color: #000000; background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Ezra H. Felker
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    75,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    25,000
</TD>
<TD nowrap align="left" valign="bottom">
    <SUP style="font-size: 85%; vertical-align: top">(6)</SUP>

</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    0.12
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    1/2/2016
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="color: #000000; background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    78,750
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    26,250
</TD>
<TD nowrap align="left" valign="bottom">
    <SUP style="font-size: 85%; vertical-align: top">(7)</SUP>

</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    0.18
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    10/12/2016
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="color: #000000; background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    132,560
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    241,729
</TD>
<TD nowrap align="left" valign="bottom">
    <SUP style="font-size: 85%; vertical-align: top">(3)</SUP>

</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    0.24
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    9/11/2018
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="color: #000000; background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    36,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    0.24
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    1/29/2019
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="color: #000000; background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    15,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    3,600
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV style="font-size: 1pt; margin-left: 0%; width: 13%;  align: left; border-bottom: 1pt solid #000000"></DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>



<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

<TR>
    <TD width="2%"></TD>
    <TD width="1%"></TD>
    <TD width="97%"></TD>
</TR>

<TR>
    <TD align="right" valign="top">
    (1) </TD>
    <TD></TD>
    <TD valign="bottom">
    All restricted stock awards were granted on March&#160;16, 2006
    and vest based on the achievement of performance factors.</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD align="right" valign="top">
    (2) </TD>
    <TD></TD>
    <TD valign="bottom">
    The market value of the restricted stock awards is based on the
    fair value of $0.24 per share of our common stock as of
    December&#160;31, 2009, as determined in good faith by our
    compensation committee.</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR>
    <TD align="right" valign="top">
    (3) </TD>
    <TD></TD>
    <TD valign="bottom">
    Such stock option vests in equal monthly increments over the
    48-month period following September&#160;11, 2008.</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD align="right" valign="top">
    (4) </TD>
    <TD></TD>
    <TD valign="bottom">
    Such stock option vested 25% on November&#160;3, 2009 and the
    remainder vests in equal monthly increments over the 36-month
    period following November&#160;3, 2009.</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD align="right" valign="top">
    (5) </TD>
    <TD></TD>
    <TD valign="bottom">
    Such stock option vested 25% on each of September&#160;20, 2007
    and 2009 and vests 25% on each of September&#160;20, 2010 and
    2011.</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD align="right" valign="top">
    (6) </TD>
    <TD></TD>
    <TD valign="bottom">
    Such stock option vested 25% on each of January&#160;2, 2007,
    2008, 2009 and 2010.</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD align="right" valign="top">
    (7) </TD>
    <TD></TD>
    <TD valign="bottom">
    Such stock option vested 25% on each of October&#160;12, 2007,
    2008 and 2009 and vests 25% on October&#160;12, 2010.</TD>
</TR>

</TABLE>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Option
    Exercises and Stock Vested</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    None of our named executive officers exercised stock options or
    had restricted stock vest during 2009. On April&#160;27, 2009,
    Ms.&#160;Hollingsworth forfeited 378,000 shares of restricted
    stock and Ms.&#160;Sebree forfeited 117,000&#160;shares of
    restricted stock pursuant to the performance-based vesting terms
    of their August&#160;31, 2006
</DIV>
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<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    92
</DIV><!-- END PAGE WIDTH -->
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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL Pagebreak End -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    restricted stock grant agreements, which were not met. Equity
    awards made to the named executive officers are described in
    more detail under &#147;&#151;&#160;Compensation Discussion and
    Analysis&#160;&#151; Long-Term Incentive Compensation.&#148;
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Pension
    Benefits</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    None of our named executive officers participate in or have
    account balances in qualified or non-qualified defined benefit
    plans sponsored by us. Our compensation committee may elect to
    adopt qualified or non-qualified benefit plans in the future if
    it determines that doing so is in our best interests.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Nonqualified
    Deferred Compensation</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    None of our named executive officers participate in or have
    account balances in nonqualified defined contribution plans or
    other nonqualified deferred compensation plans maintained by us.
    Our compensation committee may elect to provide our officers and
    other employees with non-qualified defined contribution or other
    nonqualified deferred compensation benefits in the future if it
    determines that doing so is in our best interests.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Employee
    Benefit Plans</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">2005
    Plan and 2010 Plan</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Our board of directors previously adopted our 2005 Plan, which
    was approved by stockholders effective as of July&#160;19, 2005,
    to provide for the grant of incentive stock options,
    nonqualified stock options, stock awards, stock units, SARs and
    other equity-based awards to employees, certain consultants and
    advisors and non-employee members of the board.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    On&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;,
    2010, our board of directors adopted our 2010 Plan, which was
    approved by our stockholders
    on&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;,
    2010. Our 2010 Plan will become effective immediately prior to
    the effective date of the registration statement for this
    offering. Our 2010 Plan provides for the grant of incentive
    stock options, nonqualified stock options, stock awards, stock
    units, performance units, SARs and other stock-based awards to
    employees, certain consultants and advisors and non-employee
    members of the board. Our 2010 Plan will also provide for the
    grant of equity awards intended to qualify as &#147;qualified
    performance-based compensation&#148; for purposes of
    Section&#160;162(m) of the Code and for the payment of bonus
    awards in cash to selected executive employees that are also
    intended to so qualify.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    As of the effective date of our 2010 Plan, our 2005 Plan will be
    merged with and into our 2010 Plan and no additional grants will
    be made thereafter under our 2005 Plan. Outstanding grants under
    our 2005 Plan will continue in effect according to their terms
    as in effect before our 2010 Plan merger, and the shares with
    respect to outstanding grants under our 2005 Plan will be issued
    or transferred under our 2010 Plan.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Except as provided in the description below with respect to the
    definition of a change of control under our 2005 Plan, the
    descriptions provided below regarding incentive stock options,
    nonqualified stock options, stock awards, stock units, SARs and
    other stock-based awards under our 2010 Plan are also applicable
    to the terms of such awards under our 2005 Plan. Our 2005 Plan
    does not provide for payment of performance units or cash bonus
    awards.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Under our 2005 Plan, a change of control occurs if:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    A person, entity or affiliated group (with certain exceptions)
    acquires more than 50% of our then outstanding voting securities;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    A transaction in which we merge into another entity is
    consummated unless the holders of our voting shares immediately
    prior to the merger have at least 50% of the combined voting
    power of the securities in the merged entity or its parent;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    We sell or dispose of all or substantially all of our assets; or
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    We are liquidated or dissolved.
</TD>
</TR>

</TABLE>
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<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    93
</DIV><!-- END PAGE WIDTH -->
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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL Pagebreak End -->

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">2010
    Plan</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Introduction.</I>&#160;&#160;The purpose of our 2010 Plan is
    to attract and retain employees, non-employee directors and
    consultants and advisors. Our 2010 Plan provides for the
    issuance of incentive stock options, nonqualified stock options,
    stock awards, stock units, performance units, SARs and other
    stock-based awards. Our 2010 Plan also provides for the issuance
    of annual bonus awards, intended to qualify as &#147;qualified
    performance-based compensation&#148; for purposes of
    Section&#160;162(m) of the Code, to selected executive
    employees. Our 2010 Plan is intended to provide an incentive to
    participants to contribute to our economic success by aligning
    the economic interests of participants with those of our
    stockholders.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Administration.</I>&#160;&#160;Our 2010 Plan will be
    administered by our compensation committee, and our compensation
    committee will determine all of the terms and conditions
    applicable to grants under our 2010 Plan. Our compensation
    committee will also determine who will receive grants under our
    2010 Plan and the number of shares of common stock that will be
    subject to grants, except that grants to members of our
    compensation committee must be authorized by a disinterested
    majority of our board of directors.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Awards.</I>&#160;&#160;Our 2010 Plan authorizes the issuance
    or transfer of up
    to&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;shares
    of common stock, which includes the number of shares that are
    subject to outstanding grants under our 2005 Plan and shares
    that remain available for issuance under our 2005 Plan. During
    the term of our 2010 Plan, the share reserve will automatically
    increase on the first trading day in January each calendar year,
    beginning in calendar year 2011, by an amount equal to the
    lesser of&#160;&#160;&#160;&#160;&#160;% of the total number of
    outstanding shares of common stock on the last trading day in
    December in the prior calendar year
    or&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;
    shares. In no event will any such annual increase
    exceed&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;shares.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    If any options or SARs, including options and SARs granted under
    our 2005 Plan, terminate, expire or are canceled, forfeited,
    exchanged or surrendered without having been exercised or if any
    stock awards, stock units or other stock-based awards, including
    awards granted under our 2005 Plan, are forfeited, terminated or
    otherwise not paid in full, the shares subject to such grants
    will again be available for purposes of our 2010 Plan. In
    addition, if any shares of our common stock are surrendered in
    payment of the exercise price of an option or stock appreciation
    right, the number of shares available for issuance under our
    2010 Plan will be reduced only by the net number of shares
    actually issued upon exercise and not by the total number of
    shares under which such option or stock appreciation right is
    exercised. If shares of our common stock otherwise issuable
    under our 2010 Plan are withheld in satisfaction of the
    withholding taxes incurred in connection with the issuance,
    vesting or exercise of any grant or the issuance of our common
    stock, then the number of shares of our common stock available
    for issuance under our 2010 Plan shall be reduced by the net
    number of shares issued, vested or exercised under such grant.
    If any grants are paid in cash, and not in shares of our common
    stock, any shares of our common stock subject to such grants
    will also be available for future grants.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Our 2010 Plan also contains annual limits
    of&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;shares
    for all grants measured in shares of common stock and
    $&#160;&#160;&#160;&#160;&#160;, for all grants measured in cash
    dollars. Both limits are subject to adjustment as described in
    our 2010 Plan.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Adjustments.</I>&#160;&#160;In connection with stock splits,
    stock dividends, recapitalizations and certain other events
    affecting common stock, our compensation committee will make
    adjustments as it deems appropriate in the maximum number of
    shares of common stock reserved for issuance as grants, the
    maximum number of shares of common stock that any individual
    participating in our 2010 Plan may be granted in any year, the
    number and kind of shares covered by outstanding grants, the
    kind of shares that may be issued or transferred under our 2010
    Plan, and the price per share or market value of any outstanding
    grants.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Eligibility.</I>&#160;&#160;All of our employees are eligible
    to receive grants under our 2010 Plan. In addition, our
    non-employee directors and consultants and advisors who perform
    services for us may receive grants under our 2010 Plan.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Vesting.</I>&#160;&#160;Our compensation committee determines
    the vesting of awards granted under our 2010 Plan.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Options.</I>&#160;&#160;Under our 2010 Plan, our compensation
    committee will determine the exercise price of the options
    granted and may grant options to purchase shares of common stock
    in such amounts as it determines.
</DIV>
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    Our compensation committee may grant options that are intended
    to qualify as incentive stock options under Section&#160;422 of
    the Code, or nonqualified stock options, which are not intended
    to so qualify. Incentive stock options may only be granted to
    employees. Anyone eligible to participate in our 2010 Plan may
    receive a grant of nonqualified stock options. The exercise
    price of a stock option granted under our 2010 Plan cannot be
    less than the fair market value of a share of our common stock
    on the date the option is granted. If an incentive stock option
    is granted to a 10% stockholder, the exercise price cannot be
    less than 110% of the fair market value of a share of our common
    stock on the date the option is granted. The exercise price for
    any option is generally payable in cash; in certain
    circumstances as permitted by our compensation committee, by the
    surrender of shares of our common stock with an aggregate fair
    market value on the date the option is exercised equal to the
    exercise price; by payment through a broker in accordance with
    procedures established by the Federal Reserve Board; by
    surrender of the vested portion of the option to us for an
    appreciation distribution payable in shares of our common stock
    with a fair market value at the time of the option surrender
    equal to the dollar amount by which the then fair market value
    of the shares of our common stock subject to the surrendered
    portion exceeds the aggregate exercise price. The term of an
    option cannot exceed ten years from the date of grant, except
    that if an incentive stock option is granted to a 10%
    stockholder, the term cannot exceed five years from the date of
    grant.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Except as provided in the grant instrument or as otherwise
    determined by our compensation committee, an option may only be
    exercised while a grantee is employed by or providing service to
    us or during an applicable period after termination of
    employment or service.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Stock Awards.</I>&#160;&#160;Under our 2010 Plan, our
    compensation committee may grant stock awards. A stock award is
    an award of our common stock that may be subject to restrictions
    as our compensation committee determines. The restrictions, if
    any, may lapse over a specified period of employment or based on
    the satisfaction of pre-established criteria, in installments or
    otherwise, as our compensation committee may determine. Except
    to the extent restricted under the grant instrument relating to
    the stock award, a grantee will have all of the rights of a
    stockholder as to those shares, including the right to vote and
    the right to receive dividends or distributions on the shares.
    All unvested stock awards are forfeited if the grantee&#146;s
    employment or service is terminated for any reason, unless our
    compensation committee determines otherwise.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Stock Units.</I>&#160;&#160;Under our 2010 Plan, our
    compensation committee may grant stock units to anyone eligible
    to participate in our 2010 Plan. Stock units are phantom units
    that represent shares of our stock. Stock units become payable
    on terms and conditions determined by our compensation committee
    and will be payable in cash or shares of our stock as determined
    by our compensation committee. All unvested stock units are
    forfeited if the grantee&#146;s employment or service is
    terminated for any reason, unless our compensation committee
    determines otherwise.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Performance Units.</I>&#160;&#160;Under our 2010 Plan, our
    compensation committee may grant performance units to anyone
    eligible to participate in our 2010 Plan. Performance units
    represent a participating interest in a special bonus pool tied
    to the attainment of pre-established corporate performance
    objectives based on one or more performance goals or the right
    to receive a targeted dollar amount tied to the attainment of
    pre-established corporate performance objectives based on one or
    more performance goals. The amount of the bonus pool and the
    targeted dollar amounts may vary based on the level at which the
    applicable performance objectives are attained. The value of
    each performance unit which becomes due and payable upon the
    attained level of performance shall be determined by dividing
    the amount of the resulting bonus pool, if any, by the total
    number of performance units issued and outstanding at the
    completion of the applicable performance period or based on the
    threshold, target and maximum amounts that may be paid if the
    performance goals are met. Performance units become payable on
    the attainment of the applicable performance objectives as
    determined by our compensation committee and will be payable in
    cash, in shares of common stock, or in a combination of cash and
    shares of common stock, as determined by our compensation
    committee. All unvested performance units are forfeited if the
    grantee&#146;s employment or service is terminated for any
    reason, unless the committee determines otherwise.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Other Stock-Based Awards.</I>&#160;&#160;Under our 2010 Plan,
    our compensation committee may grant other types of awards that
    are based on, measured by or payable to anyone eligible to
    participate in our 2010 Plan in shares
</DIV>
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<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    of common stock, including SARs. Our compensation committee will
    determine the terms and conditions of such awards, including the
    base amount of a SAR, which will not be less than the fair
    market value of a share of our common stock on the date the SAR
    is granted. Other stock-based awards may be payable in cash,
    shares of common stock or a combination of the two.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Dividend Equivalents.</I>&#160;&#160;Under our 2010 Plan, our
    compensation committee may grant dividend equivalents in
    connection with grants of stock units or other stock-based
    awards made under our 2010 Plan. Dividend equivalents entitle
    the grantee to receive amounts equal to ordinary dividends that
    are paid on the shares underlying a grant while the grant is
    outstanding. Our compensation committee will determine whether
    dividend equivalents will be paid currently or credited to a
    bookkeeping account as a dollar amount or in the form of stock
    units. Dividend equivalents may be paid in cash, in shares of
    common stock or in a combination of the two. Our compensation
    committee will determine whether dividend equivalents will be
    conditioned upon the exercise, vesting or payment of the grant
    to which they relate and the other terms and conditions of the
    grant.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Qualified Performance-Based Compensation.</I>&#160;&#160;Our
    2010 Plan permits our compensation committee to impose
    performance goals that must be met with respect to grants of
    stock awards, stock units, performance units, other stock-based
    awards and dividend equivalents that are intended to meet the
    exception for qualified performance-based compensation under
    Section&#160;162(m) of the Code. Prior to or soon after the
    beginning of a performance period, our compensation committee
    will establish the performance goals that must be met, the
    applicable performance periods, the amounts to be paid if the
    performance goals are met and any other conditions.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The performance goals, to the extent designed to meet the
    requirements of Section&#160;162(m) of the Code, will be based
    on one or more of the following criteria: cash flow; earnings
    (including gross margin, earnings before interest and taxes,
    earnings before taxes, earnings before interest, taxes,
    depreciation, amortization and charges for stock-based
    compensation, earnings before interest, taxes, depreciation and
    amortization, and net earnings); earnings per share; growth in
    earnings or earnings per share; stock price; return on equity or
    average stockholder equity; total stockholder return or growth
    in total stockholder return either directly or in relation to a
    comparative group; return on capital; return on assets or net
    assets; revenue, growth in revenue or return on sales; income or
    net income; operating income, net operating income or net
    operating income after tax; operating profit or net operating
    profit; operating margin; return on operating revenue or return
    on operating profit; regulatory filings; regulatory approvals;
    litigation and regulatory resolution goals; other operational,
    regulatory or departmental objectives; budget comparisons,
    growth in stockholder value relative to established indexes, or
    another peer group or peer group index; development and
    implementation of strategic plans
    <FONT style="white-space: nowrap">and/or</FONT>
    organizational restructuring goals; development and
    implementation of risk and crisis management programs;
    improvement in workforce diversity; compliance requirements and
    compliance relief; safety goals; productivity goals; workforce
    management and succession planning goals; economic value-added
    (including typical adjustments consistently applied from
    generally accepted accounting principles required to determine
    economic value-added performance measures); measures of customer
    satisfaction, employee satisfaction or staff development;
    development or marketing collaborations, formations of joint
    ventures or partnerships or the completion of other similar
    transactions intended to enhance our revenue or profitability or
    enhance its customer base; merger and acquisitions; and other
    similar criteria consistent with the foregoing.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    If dividend equivalents are granted as qualified
    performance-based compensation, the maximum amount of dividend
    equivalents that may be accrued by a grantee in a calendar year
    is $1.0&#160;million.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Change of Control.</I>&#160;&#160;If we experience a change
    of control, unless our compensation committee determines
    otherwise, all outstanding options and SARs will automatically
    accelerate and become fully exercisable, the restrictions and
    conditions on all outstanding stock awards will immediately
    lapse and all grantees holding stock units, performance units,
    dividend equivalents and other equity-based awards will
</DIV>
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<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    receive a payment in settlement of such grants in an amount
    determined by our compensation committee. Our compensation
    committee may also provide that:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Grantees will be required to surrender their outstanding stock
    options and SARs in exchange for a payment, in cash or shares of
    common stock, equal to the difference between the exercise price
    and the fair market value of the underlying shares of common
    stock;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    After grantees have the opportunity to exercise their stock
    options and SARs, any unexercised stock options and SARs will be
    terminated on the date determined by our compensation committee;
    or
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    All outstanding stock options and SARs not exercised will be
    assumed or replaced with comparable options or rights by the
    surviving corporation (or a parent or subsidiary of the
    surviving corporation) and other outstanding grants will be
    converted to similar grants of the surviving corporation (or a
    parent or subsidiary of the surviving corporation) as determined
    by our compensation committee.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In general terms, a change of control under our 2010 Plan occurs
    if:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    A person, entity or affiliated group, with certain exceptions,
    acquires more than 50% of our then outstanding voting securities;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    We merge into another entity unless the holders of our voting
    shares immediately prior to the merger have at least 50% of the
    combined voting power of the securities in the merged entity or
    its parent;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    We merge into another entity and the members of the board of
    directors prior to the merger would not constitute a majority of
    the board of the merged entity or its parent;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    We sell or dispose of all or substantially all of our assets;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    We are liquidated or dissolved;&#160;or
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    A majority of the members of our board of directors is replaced
    during any
    <FONT style="white-space: nowrap">12-month</FONT>
    period or less by directors whose appointment or election is not
    endorsed by a majority of the incumbent directors.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Cash Bonus Awards.</I>&#160;&#160;Our 2010 Plan authorizes
    our compensation committee to grant cash bonus awards, which are
    intended to qualify as &#147;qualified performance-based
    compensation&#148; for purposes of Section&#160;162(m) of the
    Code, to executive employees as selected by our compensation
    committee. Our compensation committee will impose and specify
    the performance goals that must be met with respect to the grant
    of cash bonus awards and the performance period for the
    performance goals. To satisfy the requirements of
    Section&#160;162(m) of the Code for qualified performance-based
    compensation, our compensation committee will establish in
    writing the performance goals that must be met in order to
    receive payment for the bonus award, the maximum amounts to be
    paid if the performance goals are met, performance threshold
    levels that must be met to receive payment for the bonus award,
    and any other conditions our compensation committee determines
    and to be consistent with the requirements of
    Section&#160;162(m) of the Code.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Our compensation committee will use performance goals based on
    one or more criteria as described above for qualified
    performance-based compensation.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Separate and apart from the cash bonus awards, our compensation
    committee may also grant to selected executive employees other
    bonuses which may be based on individual performance, our
    performance, or such other criteria as determined by our
    compensation committee.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Deferrals.</I>&#160;&#160;Our compensation committee may
    permit or require grantees to defer receipt of the payment of
    cash or the delivery of shares of common stock that would
    otherwise be due to the grantee in connection with a grant under
    our 2010 Plan. Our compensation committee will establish the
    rules and procedures applicable to any such deferrals,
    consistent with the requirements of Section&#160;409A of the
    Code.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Repricing.</I>&#160;&#160;Our compensation committee may
    cancel, with the consent of the affected holders, any or all of
    the outstanding options or SARs, including options or SARs
    transferred from our 2005 Plan, and in exchange for (i)&#160;new
    options or SARs with an exercise price or base amount per share
    not less than the fair market value per share of our common
    stock on the new grant date or (ii)&#160;cash or shares of our
    common
</DIV>
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    stock. Our compensation committee shall also have the authority,
    with the consent of the affected holders, to reduce the exercise
    price or base amount of one or more outstanding options or SARs
    to the then current fair market value per share of our common
    stock or issue new options or SARs with a lower exercise price
    or base amount.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Amendment; Termination.</I>&#160;&#160;Our board of directors
    may amend or terminate our 2010 Plan at any time; except that
    our stockholders must approve any amendment if such approval is
    required in order to comply with the Code, applicable laws, or
    applicable stock exchange requirements. Unless terminated sooner
    by our board or extended with stockholder approval, our 2010
    Plan will terminate on the day immediately preceding the tenth
    anniversary of the date on which the underwriting agreement
    related to this offering is signed.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Foreign Participants.</I>&#160;&#160;If any individual who
    receives a grant under our 2010 Plan is subject to taxation in
    countries other than the U.S., our 2010 Plan provides that our
    compensation committee may make grants to such individuals on
    such terms and conditions as our compensation committee
    determines appropriate to comply with the laws of the applicable
    countries.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Outstanding Grants.</I>&#160;&#160;Our compensation committee
    has previously approved the grant of options to the following
    executive officers at an exercise price equal to the initial
    public offering price as shown in the following table:
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">2010
    Employee Stock Purchase Plan</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Introduction.</I>&#160;&#160;Our 2010 Employee Stock Purchase
    Plan, or our ESPP, was adopted by our board of directors
    on&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;,
    2010 and approved by our stockholders
    on&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;,
    2010. Our ESPP will become effective immediately prior to the
    effective date of the registration statement for this offering.
    Our ESPP permits eligible employees to purchase shares of our
    common stock through after-tax payroll deductions. It is
    intended that the ESPP meets the requirements for an
    &#147;employee stock purchase plan&#148; under Section&#160;423
    of the Code.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Share
    Reserve.</I>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;shares
    of common stock, representing&#160;&#160;&#160;&#160;&#160;% of
    our outstanding common stock, are initially reserved for
    issuance under our ESPP. During the term of our ESPP, the
    reserve will automatically increase on the first trading day in
    January each calendar year, beginning in calendar year 2011, by
    an amount equal to the lesser of&#160;&#160;&#160;&#160;&#160;%
    of the total number of outstanding shares of common stock
    outstanding on the last trading day in December of the prior
    calendar year
    or&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;shares.
    In no event will any such annual increase
    exceed&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;shares.
    All of the foregoing share limits are subject to adjustment as
    described below.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Adjustments.</I>&#160;&#160;In connection with stock splits,
    stock dividends, recapitalizations and other events affecting
    our common stock, our compensation committee will make
    adjustments as it deems appropriate to the maximum number and
    class of securities issuable under our ESPP, the maximum number
    and class of securities purchasable per participant on any
    interim purchase date, the maximum number and class of
    securities purchasable in total by all participants on any
    interim purchase date, and the number and class of securities
    and the price per share in effect under each outstanding option,
    in order to prevent the dilution or enlargement of benefits
    thereunder.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Eligibility.</I>&#160;&#160;Each of our employees that adopt
    our ESPP who are regularly scheduled to work more than
    20&#160;hours per week and for more than five months per
    calendar year will be eligible to participate in our ESPP. Under
    the Code requirements, an employee who owns 5% or more of the
    total combined voting power of all classes of our stock is not
    eligible to participate. For purposes of determining who is a 5%
    owner, attribution of ownership rules apply, and shares of stock
    subject to outstanding options are taken into account. Eligible
    employees may not participate in more than one offering period
    at a time.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Offering Period.</I>&#160;&#160;Under our ESPP, there will be
    a series of overlapping offering periods, each 24&#160;months
    long with interim purchase intervals approximately every six
    months. The first offering period will begin on the effective
    date of this initial public offering of our common stock and
    will end
    on&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;,
    20&#160;&#160;. Purchase intervals will run
    from&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;
    to&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;
    and
    from&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;
    to&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;,
    except that the first purchase interval will run from the
    effective date of the initial public offering of our common
    stock until
</DIV>
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<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    98
</DIV><!-- END PAGE WIDTH -->
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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL Pagebreak End -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    &#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;,
    20&#160;&#160;. Unless our compensation committee determines
    otherwise prior to the beginning of an offering period, each
    subsequent offering period will begin
    on&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;
    and will end
    on&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;,
    24&#160;months later. If any of the designated dates are not a
    business day, the purchase date will be moved to the next
    business day.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Reset Feature.</I>&#160;&#160;If the fair market value of our
    common stock on any interim purchase date is less than the fair
    market value of our common stock on the first day of the
    offering period, the participants in the offering period will,
    immediately after the purchase of shares on such interim
    purchase date, be transferred from that offering period into the
    next offering period that commences after the interim purchase
    date.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Participation.</I>&#160;&#160;Each eligible employee who
    elects to participate in an offering period will be granted an
    option to purchase shares of common stock on the first day of
    the offering period. The option will automatically be exercised
    on each interim purchase date during the offering period based
    on the employee&#146;s accumulated contributions to our ESPP.
    The purchase price for each share of stock during the initial
    offering period will be equal to 85% of the lesser of the
    initial public offering price of our common stock or the fair
    market value of our stock on the interim purchase date. For each
    subsequent offering period, the purchase price of each share of
    common stock under our ESPP will be equal to 85% of the lesser
    of the fair market value per share of our common stock on the
    first day of the offering period or the fair market value of our
    stock on each interim purchase date. Participants will generally
    be permitted to allocate up to 10% of their compensation to
    purchase common stock under our ESPP.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Initial Election Period.</I>&#160;&#160;The first offering
    period will begin on the effective date of the registration
    statement for this offering. For the first offering period, all
    eligible employees will be automatically enrolled in our ESPP
    prior to the commencement of the offering period at a
    contribution rate equal
    to&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;%
    of their compensation. Shortly after the first offering period
    commences, but prior to the first interim purchase date,
    participants will be able to elect to continue their
    participation in our ESPP, withdraw from participation in our
    ESPP or reduce the amount they contribute to our ESPP.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Termination of Employment.</I>&#160;&#160;Participants may
    modify or end their participation in our ESPP at any time during
    any offering period. Participation ends automatically upon
    termination of employment or if the participant ceases to be an
    eligible employee.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Maximum Number of Purchasable Shares.</I>&#160;&#160;The
    maximum number of shares that a participant may purchase on any
    interim purchase date may not
    exceed&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;shares
    and the maximum number of shares purchasable in the aggregate by
    all participants in our ESPP on any one interim purchase date
    may not
    exceed&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;shares,
    subject to adjustment by our compensation committee prior to the
    beginning of the offering period and subject to adjustments as
    described above. In addition, no participant may purchase more
    than $25,000 worth of common stock during each calendar year
    under our ESPP.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Change of Control.</I>&#160;&#160;If we experience a change
    of control while our ESPP is in effect, all outstanding options
    under our ESPP will automatically be exercised immediately prior
    to the effective date of any change of control and the purchase
    price for each share of common stock under our ESPP on such
    purchase date will be equal to 85% of the lesser of the fair
    market value per share of our common stock on the first day of
    the offering period in which the participant is enrolled or the
    fair market value of our stock immediately prior to the change
    of control. If a change of control occurs, the limitation on the
    aggregate number of shares that all participants may purchase on
    the purchase date will not apply.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In general terms, a change of control under our ESPP occurs in
    the same circumstances described above with respect to our 2010
    Plan.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Plan Administration.</I>&#160;&#160;Our ESPP will be
    administered by our compensation committee.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Amendment; Termination.</I>&#160;&#160;Our board of directors
    may amend or terminate our ESPP at any time, with such amendment
    or termination to become effective immediately following the
    close of an interim purchase date. However, our board of
    directors may not amend our ESPP without stockholder approval if
    such amendment increases the number of shares of common stock
    issuable under our ESPP except for permissible adjustments in
    the event of changes in our capitalization, alters the purchase
    price formula to reduce the purchase price payable
</DIV>
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<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    99
</DIV><!-- END PAGE WIDTH -->
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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL Pagebreak End -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    for shares purchasable under our ESPP, or modifies the
    eligibility requirements under our ESPP. Unless sooner
    terminated by our board of directors, our ESPP will terminate
    upon the earliest of:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    &#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;,
    2020;
</TD>
</TR>


<TR style="line-height: 4pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    The date all shares available for issuance under our ESPP have
    been issued;&#160;or
</TD>
</TR>


<TR style="line-height: 4pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    The date all options are exercised in connection with a change
    of control.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 8pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">401(k)
    Plan</FONT></I></B>
</DIV>

<DIV style="margin-top: 4pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We maintain a defined contribution employee retirement plan for
    our employees. Our 401(k) plan is intended to qualify as a
    tax-qualified plan under Section&#160;401 of the Code so that
    contributions to our 401(k) plan, and income earned on such
    contributions, are not taxable to participants until withdrawn
    or distributed from the 401(k) plan. Our 401(k) plan provides
    that each participant may contribute up to 90% of his or her
    pre-tax compensation, up to a statutory limit, which is $16,500
    for 2010. Participants who are at least 50&#160;years old can
    also make
    <FONT style="white-space: nowrap">&#147;catch-up&#148;</FONT>
    contributions, which in 2010&#160;may be up to an additional
    $5,500 above the statutory limit. Under our 401(k) plan, each
    employee is fully vested in his or her deferred salary
    contributions. Employee contributions are held and invested by
    the plan&#146;s trustee. Our 401(k) plan also permits us to make
    discretionary contributions and matching contributions, subject
    to established limits and a vesting schedule. For 2009, we made
    an employer matching contribution equal to 50% of employee
    deferral contributions up to a maximum deferral rate of 6% of
    compensation.
</DIV>

<DIV style="margin-top: 8pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Non-Employee
    Director Compensation</FONT></B>
</DIV>

<DIV style="margin-top: 4pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The following table sets forth information regarding the total
    compensation paid to our current non-employee directors during
    the year ended December&#160;31, 2009 for their service on our
    board of directors. The compensation amounts presented in the
    table below are historical and are not indicative of the amounts
    we may pay our directors in the future. Directors who are also
    our employees receive no additional compensation for their
    services as directors and are not set forth in the table below.
    After this offering, each non-employee director will be entitled
    to receive an annual fee. The chairpersons of our audit
    committee, compensation committee and nominating and corporate
    governance compensation committee will each receive an
    additional annual fee. Committee members who are not
    chairpersons will also receive an annual fee. We also reimburse
    non-employee directors for reasonable expenses incurred in
    connection with attending board of director and committee
    meetings.
</DIV>

<DIV style="margin-top: 4pt; font-size: 1pt">&nbsp;</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="70%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=02 type=lead -->
    <TD width="8%" align="right">&nbsp;</TD>	<!-- colindex=02 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=02 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=03 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=03 type=lead -->
    <TD width="4%" align="right">&nbsp;</TD>	<!-- colindex=03 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=03 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=04 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=04 type=lead -->
    <TD width="4%" align="right">&nbsp;</TD>	<!-- colindex=04 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=04 type=hang1 -->
</TR>
<!-- Table Width Row END -->
<!-- TableOutputHead -->
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Fees Earned<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>or Paid<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Option<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>in Cash<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Awards<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Total<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>Name</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>($)</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>($)<SUP style="font-size: 85%; vertical-align: top">(1)</SUP></B>

</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>($)</B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<!-- TableOutputBody -->
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Michael Cola
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    1,720
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    1,720
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Jeanne Cunicelli
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Michael C. Diem,&#160;MD&#160;
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    John H. Dillon,&#160;II
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    1,720
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    1,720
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Richard S. Kollender
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Gary J. Kurtzman,&#160;MD&#160;
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV style="font-size: 1pt; margin-left: 0%; width: 13%;  align: left; border-bottom: 1pt solid #000000"></DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>



<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

<TR>
    <TD width="2%"></TD>
    <TD width="1%"></TD>
    <TD width="97%"></TD>
</TR>

<TR>
    <TD align="right" valign="top">
    (1) </TD>
    <TD></TD>
    <TD valign="bottom">
    Amounts reflect the grant date fair value of option awards
    granted in accordance with ASC 718. The aggregate number of
    shares subject to each director&#146;s outstanding option awards
    as of December&#160;31, 2009 was as follows:
    Mr.&#160;Cola&#160;&#151; 265,000 and
    Mr.&#160;Dillon&#160;&#151; 90,000. Ms.&#160;Cunicelli,
    Dr.&#160;Diem, Mr.&#160;Kollender and Dr.&#160;Kurtzman did not
    hold any options at December&#160;31, 2009. For information
    regarding assumptions underlying the valuation of equity awards,
    see note&#160;8 to our financial statements appearing at the end
    of this prospectus.</TD>
</TR>

</TABLE>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Limitation
    of Liability and Indemnification</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Our restated certificate of incorporation, which will become
    effective upon the closing of this offering, limits the
    liability of directors to the maximum extent permitted by
    Delaware law. Delaware law
</DIV>
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    <BR>
    100
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
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<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    provides that directors of a corporation will not be personally
    liable for monetary damages for breach of their fiduciary duties
    as directors, except for liability for any:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Breach of their duty of loyalty to the corporation or its
    stockholders;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Act or omission not in good faith or that involves intentional
    misconduct or a knowing violation of law;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Unlawful payment of dividends or redemption of shares;&#160;or
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Transaction from which the directors derived an improper
    personal benefit.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    These limitations of liability do not apply to liabilities
    arising under federal securities laws and do not affect the
    availability of equitable remedies such as injunctive relief or
    rescission.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Our bylaws, which will become effective upon the closing of this
    offering, provide that we will indemnify our directors and
    executive officers, and may indemnify other officers, employees
    and other agents, to the fullest extent permitted by law. Our
    bylaws also permit us to secure insurance on behalf of any
    officer, director, employee or other agent for any liability
    arising out of his or her actions in connection with their
    services to us, regardless of whether our bylaws permit such
    indemnification. We have obtained a policy of directors&#146;
    and officers&#146; liability insurance.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We have entered into separate indemnification agreements with
    our directors in addition to the indemnification provided for in
    our bylaws. These agreements, among other things, require us to
    indemnify our directors for certain expenses, including
    attorneys&#146; fees, judgments, fines and settlement amounts
    incurred by a director in any action or proceeding arising out
    of their services as one of our directors or any subsidiaries or
    any other company or enterprise to which the person provides
    services at our request.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    At present, there is no pending litigation or proceeding
    involving any of our directors or executive officers as to which
    indemnification is required or permitted, and we are not aware
    of any threatened litigation or proceeding that may result in a
    claim for indemnification.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Insofar as indemnification for liabilities arising under the
    Securities Act may be permitted to directors, executive officers
    or persons controlling us, we have been informed that in the
    opinion of the SEC such indemnification is against public policy
    as expressed in the Securities Act and is therefore
    unenforceable.
</DIV>
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<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    101
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL Pagebreak End -->

<A name='113'>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">TRANSACTIONS
    WITH RELATED PERSONS</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The following is a description of transactions since
    January&#160;1, 2007 to which we have been a party, in which the
    amount involved in the transaction exceeds $120,000, and in
    which any of our directors, executive officers or beneficial
    owners of more than five percent of our voting securities, or
    affiliates or immediate family members of any of our directors,
    executive officers or beneficial owners of more than five
    percent of our voting securities, had or will have a direct or
    indirect material interest. We believe the terms obtained or
    consideration that we paid or received, as applicable, in
    connection with the transactions described below were comparable
    to terms available or the amounts that would be paid or
    received, as applicable, from unrelated third parties.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Convertible
    Note Financings</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In July 2009, we sold $1,934,183 in gross principal amount of
    subordinated convertible promissory notes, or the 2009
    Convertible Notes, in a private placement to certain of our
    existing investors. In August 2009, pursuant to the terms of the
    2009 Convertible Notes, all principal and interest due under the
    2009 Convertible Notes was converted into shares of
    Series&#160;B preferred stock. At the time of conversion,
    pursuant to the terms of the 2009 Convertible Notes, warrants to
    purchase an aggregate of 736,514&#160;shares of Series&#160;B
    preferred stock were issued to the holders of such notes. This
    purchase is described in more detail under &#147;&#151;Preferred
    Stock Financings.&#148;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Purchasers of the 2009 Convertible Notes included two of our
    executive officers and certain holders of more than five percent
    of our capital stock, or entities affiliated with them. The
    following table sets forth the amount purchased by each such
    party of the 2009 Convertible Notes, and the warrants received
    in connection with the conversion of such notes:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="65%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="6%" align="right">&nbsp;</TD>	<!-- colindex=02 type=lead -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=02 type=body -->
    <TD width="6%" align="left">&nbsp;</TD>	<!-- colindex=02 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=03 type=gutter -->
    <TD width="8%" align="right">&nbsp;</TD>	<!-- colindex=03 type=lead -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=03 type=body -->
    <TD width="8%" align="left">&nbsp;</TD>	<!-- colindex=03 type=hang1 -->
</TR>
<!-- Table Width Row END -->
<!-- TableOutputHead -->
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
    <B>Warrant to Purchase<BR>
    </B>
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
    <B>Shares of Series B<BR>
    </B>
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
    <B>Initial Principal<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
    <B>Preferred Stock<BR>
    </B>
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>Participants</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Amount of Note</B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Upon Conversion</B>
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<!-- TableOutputBody -->
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <B>5% Stockholders:</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Quaker BioVentures II, L.P. and its affiliates
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    855,638
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    325,817
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Safeguard Delaware, Inc.
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    394,910
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    150,377
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    SR One, Limited
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    329,092
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    125,314
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Battelle Ventures, L.P. and its affiliates
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    197,456
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    75,189
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Birchmere Ventures III, L.P. and its affiliates
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    142,606
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    54,303
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <B>Executive Officers:</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Jane H. Hollingsworth
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    3,291
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    1,253
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Ezra H. Felker
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    2,962
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    1,128
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In April 2010, we sold $10.1&#160;million in gross principal
    amount of the April 2010 Convertible Notes, in a private
    placement to certain of our existing investors. The April 2010
    Convertible Notes accrue interest at a rate equal to 8% per
    annum, compounding monthly, and have a maturity date of
    December&#160;31, 2010, unless converted prior thereto. The
    April 2010 Convertible Notes are automatically convertible into
    common stock at a 20% discount to the initial public offering
    price. They also are convertible into shares of Series&#160;B
    preferred stock if we experience a change of control or shares
    of preferred equity securities sold in a financing of at least
    $10.0 million prior to the closing of this offering.
</DIV>
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    <BR>
    102
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<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
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<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Purchasers of the April 2010 Convertible Notes included two of
    our executive officers and certain holders of more than five
    percent of our capital stock, or entities affiliated with them.
    The following table sets forth the amount purchased by each such
    party of the April 2010 Convertible Notes:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="85%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="6%" align="right">&nbsp;</TD>	<!-- colindex=02 type=lead -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=02 type=body -->
    <TD width="6%" align="left">&nbsp;</TD>	<!-- colindex=02 type=hang1 -->
</TR>
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<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
    <B>Initial Principal<BR>
    </B>
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>Participants</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Amount of Note</B>
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<!-- TableOutputBody -->
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <B>5% Stockholders:</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Quaker BioVentures II, L.P. and its affiliates
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    3,396,226
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Safeguard Delaware, Inc.
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    2,716,981
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    SR One, Limited
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    1,132,075
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Battelle Ventures, L.P. and its affiliates
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    1,358,491
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Birchmere Ventures III, L.P. and its affiliates
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    1,396,227
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <B>Executive Officers:</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Jane H. Hollingsworth
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    50,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Keith A. Goldan
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    7,500
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Preferred
    Stock Financings</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In August 2006, we entered into a Series&#160;A Preferred Stock
    Purchase Agreement pursuant to which we issued and sold to
    investors an aggregate of 19,610,677&#160;shares of
    Series&#160;A preferred stock in four separate closings from
    August 2006 through April 2008, at a purchase price of $0.93 per
    share, or the Series&#160;A Preferred Stock Financing. The
    aggregate consideration for the Series&#160;A Preferred Stock
    Financing included $15,000,000 in cash and $2,590,343 in
    aggregate principal and interest due under convertible
    promissory notes held by existing investors, which pursuant to
    the terms of such notes, was converted into shares of
    Series&#160;A preferred stock.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The following table sets forth the shares of Series&#160;A
    preferred stock issued to our executive officers and holders of
    more than five percent of our capital stock and their
    affiliates, and the breakdown of the purchase price paid for
    such shares in the Series&#160;A Preferred Stock Financing by
    such persons:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="62%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="4%" align="right">&nbsp;</TD>	<!-- colindex=02 type=lead -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=02 type=body -->
    <TD width="4%" align="left">&nbsp;</TD>	<!-- colindex=02 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=03 type=gutter -->
    <TD width="4%" align="right">&nbsp;</TD>	<!-- colindex=03 type=lead -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=03 type=body -->
    <TD width="4%" align="left">&nbsp;</TD>	<!-- colindex=03 type=hang1 -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=04 type=gutter -->
    <TD width="6%" align="right">&nbsp;</TD>	<!-- colindex=04 type=lead -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=04 type=body -->
    <TD width="6%" align="left">&nbsp;</TD>	<!-- colindex=04 type=hang1 -->
</TR>
<!-- Table Width Row END -->
<!-- TableOutputHead -->
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="7" align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Purchase Price for Series A Shares</B>
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
    <B>Shares of<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
    <B>Financed by<BR>
    </B>
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
    <B>Series A<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
    <B>Amounts Due<BR>
    </B>
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
    <B>Preferred<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
    <B>Under Existing<BR>
    </B>
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>Participants</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Stock Issued</B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Paid in Cash</B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Convertible Notes</B>
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<!-- TableOutputBody -->
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <B>5% Stockholders:</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Safeguard Delaware, Inc.
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    6,451,612
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    5,999,999
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Battelle Ventures, L.P. and its affiliates
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    3,225,806
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    2,550,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Birchmere Ventures III, L.P. and its affiliates
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    4,301,076
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    3,573,334
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    BioAdvance Ventures, L.P.&#160;
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    2,150,538
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    2,000,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <B>Executive Officers:</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Jane H. Hollingsworth
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    143,668
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    106,889
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In July 2008, we entered into a Series&#160;B Preferred Stock
    Purchase Agreement pursuant to which we issued and sold to
    investors an aggregate of 33,485,663&#160;shares of
    Series&#160;B preferred stock in three separate closings from
    July 2008 through August 2009, at a purchase price of $0.93 per
    share, or the Series&#160;B Preferred Stock Financing. The
    aggregate consideration paid in the Series&#160;B Preferred
    Stock Financing included $29,184,643 in cash and $1,957,023 in
    aggregate principal and interest due under the 2009 Convertible
    Notes, which, pursuant to the terms of the 2009 Convertible
    Notes was converted into shares of Series&#160;B preferred
    stock. In addition, 2,688,171&#160;shares of Series&#160;A
    preferred stock that were acquired in a prior financing by
    certain persons participating in the Series&#160;B Preferred
    Stock Financing were exchanged for an equal number of shares of
    Series&#160;B preferred stock.
</DIV>
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<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    103
</DIV><!-- END PAGE WIDTH -->
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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL Pagebreak End -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The following table sets forth the shares of Series&#160;B
    preferred stock issued to our executive officers and holders of
    more than five percent of our capital stock and their
    affiliates, and the breakdown of the purchase price paid for
    such shares in the Series&#160;B Preferred Stock Financing by
    such persons:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="48%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=02 type=lead -->
    <TD width="8%" align="right">&nbsp;</TD>	<!-- colindex=02 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=02 type=hang1 -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=03 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=03 type=lead -->
    <TD width="10%" align="right">&nbsp;</TD>	<!-- colindex=03 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=03 type=hang1 -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=04 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=04 type=lead -->
    <TD width="10%" align="right">&nbsp;</TD>	<!-- colindex=04 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=04 type=hang1 -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=05 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=05 type=lead -->
    <TD width="8%" align="right">&nbsp;</TD>	<!-- colindex=05 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=05 type=hang1 -->
</TR>
<!-- Table Width Row END -->
<!-- TableOutputHead -->
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="10" align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Purchase Price for Series B Shares</B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Financed by<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Shares of<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Amounts Due<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Represented<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Series B<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Under the 2009<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>by Exchange<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Preferred<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Convertible<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>of Series A<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>Participants</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Stock Issued</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Paid in Cash</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Notes</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Shares</B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<!-- TableOutputBody -->
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <B>5% Stockholders:</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Quaker BioVentures II, L.P. and its affiliates
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    14,336,918
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    12,134,258
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    865,742
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    358,423
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Safeguard Delaware, Inc.
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    7,526,881
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    5,600,427
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    399,573
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    1,075,268
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    SR One, Limited
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    5,376,344
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    4,667,022
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    332,978
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Battelle Ventures, L.P. and its affiliates
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    3,763,441
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    2,800,213
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    199,788
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    537,634
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Birchmere Ventures III, L.P. and its affiliates
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    3,046,595
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    2,022,377
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    144,290
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    716,846
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <B>Executive Officers:</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Jane H. Hollingsworth
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    53,763
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    46,670
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    3,330
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Keith A. Goldan
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    26,882
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    25,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Ezra H. Felker
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    48,387
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    42,003
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    2,997
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    These stockholders and their equity holdings are described in
    more detail under &#147;Principal Stockholders.&#148;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The following table sets forth the members of our board of
    directors as of April&#160;30, 2010 that are associated with the
    holders of more than five percent of our capital stock.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="50%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="48%">&nbsp;</TD>	<!-- colindex=02 type=maindata -->
</TR>
<!-- Table Width Row END -->
<!-- TableOutputHead -->
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>Director</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>5% Stockholder</B>
</DIV>
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<!-- TableOutputBody -->
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Jeanne Cunicelli
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Birchmere Ventures III, L.P. and its affiliates
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Michael C. Diem,&#160;MD
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    SR One, Limited
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Richard S. Kollender
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Quaker BioVentures II, L.P. and its affiliates
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Gary J. Kurtzman,&#160;MD
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Safeguard Delaware, Inc.
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Investor
    Rights Agreement and Stockholders Agreement</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In connection with our various preferred stock financings, we
    entered into our amended and restated investor rights agreement,
    or our Investor Rights Agreement, and our amended and restated
    stockholders agreement, or our Stockholders Agreement,
    containing voting rights, information rights, rights of first
    refusal, preemptive rights and registration rights, among other
    things, with certain holders of preferred stock and certain
    holders of common stock. The Stockholders Agreement will
    automatically terminate upon the closing of this offering. The
    registration rights in our Investor Rights Agreement are
    described in more detail under &#147;Description of Capital
    Stock&#160;&#151; Registration Rights.&#148;
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Stock
    Option and Restricted Stock Grant Awards to Executive Officers
    and Directors</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We have granted stock options and restricted stock to certain of
    our executive officers and directors, as described in more
    detail under &#147;Executive Compensation.&#148;
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Indemnification
    Agreements</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We have entered into indemnification agreements with each of our
    directors, as described in more detail under &#147;Executive
    Compensation&#160;&#151; Limitation of Liability and
    Indemnification.&#148;
</DIV>
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    <BR>
    104
</DIV><!-- END PAGE WIDTH -->
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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL Pagebreak End -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Policies
    and Procedures for Transactions with Related Persons</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In connection with this offering, our board of directors is
    adopting written policies and procedures for the review of any
    transaction, arrangement or relationship in which we are a
    participant, the amount involved exceeds $120,000 and one of our
    executive officers, directors, director nominees or 5%
    stockholders, or their immediate family members, each of whom we
    refer to as a &#147;related person,&#148; has a direct or
    indirect material interest.&#148; Transactions involving
    compensation for services provided to us as an employee,
    director, consultant or similar capacity by a related person
    will not be covered by this policy.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Under the policy, where a transaction has been identified as a
    related person transaction, management must present information
    regarding the proposed related person transaction to our audit
    committee, or, where review by our audit committee would be
    inappropriate, to another independent body of our board of
    directors, for review. The presentation must include a
    description of, among other things, the material facts, the
    direct and indirect interests of the related persons, the
    benefits of the transaction to us and whether any alternative
    transactions are available. To identify related person
    transactions in advance, we rely on information supplied by our
    executive officers, directors and certain significant
    stockholders. In considering related person transactions, our
    audit committee or other independent body of our board of
    directors takes into account the relevant available facts and
    circumstances including:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    The risks, costs and benefits to us;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    The impact on a director&#146;s independence in the event the
    related person is a director, immediate family member of a
    director or an entity with which a director is affiliated;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    The terms of the transaction;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    The availability of other sources for comparable services or
    products;&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    The terms available to or from, as the case may be, unrelated
    third parties or to or from our employees generally.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In the event a director has an interest in the proposed
    transaction, the director must recuse himself or herself from
    the deliberations and approval. Our policy requires that, in
    reviewing a related-person transaction, our audit committee or
    other independent body of our board of directors must consider,
    in light of known circumstances, whether the transaction is in,
    or is not inconsistent with, the best interests of us and our
    stockholders, as our audit committee or other independent body
    of our board of directors determines in the good faith exercise
    of its discretion. We did not previously have a formal policy
    concerning transactions with related persons.
</DIV>
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    <BR>
    105
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<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL Pagebreak End -->

<A name='114'>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">PRINCIPAL
    STOCKHOLDERS</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The following table sets forth information regarding beneficial
    ownership of our common stock outstanding as of April&#160;30,
    2010 by:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Each person, or group of affiliated persons, known by us to
    beneficially own more than 5% of our common stock;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Each of our directors;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Each of our named executive officers;&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    All of our directors and executive officers as a group.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The number of shares and percentage of shares beneficially owned
    before the offering shown in the table is based on a total
    of&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;shares
    of common stock, which includes:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    3,143,905&#160;shares of common stock outstanding as of
    April&#160;30, 2010, including 71,250&#160;shares of unvested
    restricted stock;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    61,824,121&#160;shares of common stock issuable upon the
    conversion of all outstanding shares of our preferred stock,
    including accrued dividends, upon the closing of this offering,
    assuming that the closing occurred on April&#160;30,
    2010;&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    &#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;shares
    of common stock issuable upon the automatic conversion of all
    principal and accrued interest outstanding under the April 2010
    Convertible Notes upon the closing of this offering, assuming an
    initial public offering price of $&#160;&#160;  per share, the
    midpoint of the price range set forth on the cover page of this
    prospectus, and that the closing occurred on April&#160;30, 2010.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The number of shares and percentage of shares beneficially owned
    after the offering also gives effect to the issuance by us
    of&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;shares
    of common stock in this offering.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Each individual or entity shown in the table has furnished
    information to us with respect to beneficial ownership. We have
    determined beneficial ownership in accordance with the rules and
    regulations of the SEC, which generally attribute beneficial
    ownership of our common stock and other securities to those
    persons who possess sole or shared voting power or investment
    power with respect to such securities. Shares of our common
    stock subject to options or warrants that are currently
    exercisable or exercisable within 60&#160;days of April&#160;30,
    2010, are considered outstanding and beneficially owned by the
    person holding the options or warrants for the purpose of
    calculating the percentage ownership of that person but not for
    the purpose of calculating the percentage ownership of any other
    person. Unless otherwise indicated, the persons or entities
    identified in the table have sole voting and investment power
    with respect to all shares shown as beneficially owned by them,
    subject to applicable community property laws.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Except as otherwise noted in the table, the address for each
    person or entity listed in the table is
    <FONT style="white-space: nowrap">c/o&#160;NuPathe</FONT>
    Inc., 227 Washington Street, Suite&#160;200, Conshohocken,
    Pennsylvania 19428.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>
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    <BR>
    106
</DIV><!-- END PAGE WIDTH -->
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<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL Pagebreak End -->

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF"><!-- TABLE 01 -->
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="72%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="8%">&nbsp;</TD>	<!-- colindex=02 type=maindata -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=03 type=gutter -->
    <TD width="6%">&nbsp;</TD>	<!-- colindex=03 type=maindata -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=04 type=gutter -->
    <TD width="6%">&nbsp;</TD>	<!-- colindex=04 type=maindata -->
</TR>
<!-- Table Width Row END -->
<!-- TableOutputHead -->
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
    <B>Number of<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
    <B>Percentage of Shares<BR>
    </B>
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
    <B>Shares<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Beneficially Owned</B>
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
    <B>Beneficially<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
    <B>Before<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
    <B>After<BR>
    </B>
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>Name and Address of Beneficial Owner</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Owned</B>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Offering</B>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Offering</B>
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<!-- TableOutputBody -->
<TR valign="bottom" style="color: #000000; background: #CCEEFF">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <B>5% Stockholders:</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Quaker BioVentures II, L.P. and its
    affiliates<SUP style="font-size: 85%; vertical-align: top">(1)</SUP>

</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    &#160;&#160;&#160;&#160;&#160;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    &#160;&#160;&#160;&#160;&#160;%
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    &#160;&#160;&#160;&#160;&#160;%
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="top">
<DIV style="text-indent: 0pt; margin-left: 10pt">
    Cira Center<BR>
    2929 Arch Street<BR>
    Philadelphia, PA
    <FONT style="white-space: nowrap">19104-2868</FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="color: #000000; background: #CCEEFF">
<TD align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Safeguard Delaware,
    Inc.<SUP style="font-size: 85%; vertical-align: top">(2)</SUP>

</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    &#160;&#160;&#160;&#160;&#160;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="color: #000000; background: #CCEEFF">
<TD align="left" valign="top">
<DIV style="text-indent: 0pt; margin-left: 10pt">
    1105&#160;N.&#160;Market St.<BR>
    Suite&#160;1300<BR>
    Wilmington, DE 19801
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Birchmere Ventures III, L.P. and its
    affiliates<SUP style="font-size: 85%; vertical-align: top">(3)</SUP>

</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    &#160;&#160;&#160;&#160;&#160;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="top">
<DIV style="text-indent: 0pt; margin-left: 10pt">
    2835 East Carson Street, Suite&#160;208<BR>
    Pittsburgh, PA 15203
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="color: #000000; background: #CCEEFF">
<TD align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Battelle Ventures, L.P. and its
    affiliates<SUP style="font-size: 85%; vertical-align: top">(4)</SUP>

</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    &#160;&#160;&#160;&#160;&#160;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="color: #000000; background: #CCEEFF">
<TD align="left" valign="top">
<DIV style="text-indent: 0pt; margin-left: 10pt">
    103 Carnegie Center, Suite&#160;100<BR>
    Princeton, NJ 08540
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    SR One,
    Limited<SUP style="font-size: 85%; vertical-align: top">(5)</SUP>

</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    &#160;&#160;&#160;&#160;&#160;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="top">
<DIV style="text-indent: 0pt; margin-left: 10pt">
    161 Washington Street, Suite&#160;500<BR>
    Conshohocken, PA 19428
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="color: #000000; background: #CCEEFF">
<TD align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <B>Executive Officers and Directors:</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
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</TR>
<TR valign="bottom">
<TD align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Jane H.
    Hollingsworth<SUP style="font-size: 85%; vertical-align: top">(6)</SUP>

</DIV>
</TD>
<TD>
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    &#160;&#160;&#160;&#160;&#160;
</TD>
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<TD align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Terri B.
    Sebree<SUP style="font-size: 85%; vertical-align: top">(7)</SUP>

</DIV>
</TD>
<TD>
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<TD nowrap align="left" valign="bottom">
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</TR>
<TR valign="bottom">
<TD align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Keith A.
    Goldan<SUP style="font-size: 85%; vertical-align: top">(8)</SUP>

</DIV>
</TD>
<TD>
&nbsp;
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<TD nowrap align="left" valign="bottom">
    &#160;&#160;&#160;&#160;&#160;
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</TR>
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<TD align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Gerald W.
    McLaughlin<SUP style="font-size: 85%; vertical-align: top">(9)</SUP>

</DIV>
</TD>
<TD>
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<TD nowrap align="left" valign="bottom">
    &#160;&#160;&#160;&#160;&#160;
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</TR>
<TR valign="bottom">
<TD align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Ezra H. Felker
    <SUP style="font-size: 85%; vertical-align: top">(10)</SUP>

</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    &#160;&#160;&#160;&#160;&#160;
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</TR>
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<TD nowrap align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Michael
    Cola<SUP style="font-size: 85%; vertical-align: top">(11)</SUP>

</DIV>
</TD>
<TD>
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<TD nowrap align="left" valign="bottom">
    &#160;&#160;&#160;&#160;&#160;
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<TD nowrap align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Jeanne
    Cunicelli<SUP style="font-size: 85%; vertical-align: top">(12)</SUP>

</DIV>
</TD>
<TD>
&nbsp;
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<TD nowrap align="left" valign="bottom">
    &#160;&#160;&#160;&#160;&#160;
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<TD align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Michael C. Diem,
    MD<SUP style="font-size: 85%; vertical-align: top">(13)</SUP>

</DIV>
</TD>
<TD>
&nbsp;
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<TD nowrap align="left" valign="bottom">
    &#160;&#160;&#160;&#160;&#160;
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<TD nowrap align="left" valign="bottom">
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</TD>
</TR>
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<TD align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    John H.
    Dillon,&#160;II<SUP style="font-size: 85%; vertical-align: top">(14)</SUP>

</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    &#160;&#160;&#160;&#160;&#160;
</TD>
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</TD>
</TR>
<TR valign="bottom" style="color: #000000; background: #CCEEFF">
<TD align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Richard S.
    Kollender<SUP style="font-size: 85%; vertical-align: top">(15)</SUP>

</DIV>
</TD>
<TD>
&nbsp;
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<TD nowrap align="left" valign="bottom">
    &#160;&#160;&#160;&#160;&#160;
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</TD>
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<TR valign="bottom">
<TD align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Gary J. Kurtzman,
    MD<SUP style="font-size: 85%; vertical-align: top">(16)</SUP>

</DIV>
</TD>
<TD>
&nbsp;
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<TD nowrap align="left" valign="bottom">
    &#160;&#160;&#160;&#160;&#160;
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</TR>
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<TD align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    All executive officers and directors as a group (11&#160;persons)
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    &#160;&#160;&#160;&#160;&#160;
</TD>
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<TD nowrap align="left" valign="bottom">
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</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV style="font-size: 1pt; margin-left: 0%; width: 13%;  align: left; border-bottom: 1pt solid #000000"></DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>



<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF"><!-- TABLE 06 -->

<TR>
    <TD width="2%"></TD>
    <TD width="1%"></TD>
    <TD width="97%"></TD>
</TR>

<TR>
    <TD align="right" valign="top">
    (1) </TD>
    <TD></TD>
    <TD valign="bottom">
    Includes with respect to Quaker BioVentures II, L.P., or Quaker,
    (a)&#160;12,903,226&#160;shares of common stock issuable upon
    the automatic conversion of 12,903,226 shares of Series&#160;B
    preferred stock, (b)&#160;1,453,085&#160;shares of common stock
    that represent accrued dividends on such Series&#160;B preferred
    stock<B>, </B>(c)&#160;300,754&#160;shares of common stock
    issuable upon the exercise of a warrant within 60&#160;days of
    April&#160;30, 2010 and
    (d)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;shares
    of common stock issuable upon the automatic conversion of all
    principal and accrued interest outstanding under the April 2010
    Convertible Note held by Quaker upon the closing of this
    offering, assuming an initial public offering price of
    $&#160;&#160;&#160;&#160;&#160; per share, the midpoint of the
    price range set forth on the cover page of this prospectus, and
    that the closing occurred on April&#160;30, 2010.</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD align="right" valign="top">
</TD>
    <TD></TD>
    <TD valign="bottom">
    Includes with respect to BioAdvance Ventures, L.P., or
    BioAdvance, (a)&#160;1,792,115&#160;shares of common stock
    issuable upon the automatic conversion of 1,792,115 shares of
    Series&#160;A preferred stock, (b)&#160;1,433,692&#160;shares of
    common stock issuable upon the automatic conversion of 1,433,692
    shares of Series&#160;B preferred stock,
    (c)&#160;644,428&#160;shares of common stock that represent
    accrued dividends on such Series&#160;A and Series&#160;B
    preferred stock and (d)&#160;25,063&#160;shares of common stock
    issuable upon the exercise of a warrant within 60&#160;days of
    April&#160;30, 2010.</TD>
</TR>

</TABLE>
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    107
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<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
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<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

<TR>
    <TD width="2%"></TD>
    <TD width="1%"></TD>
    <TD width="97%"></TD>
</TR>

<TR>
    <TD align="right" valign="top">
</TD>
    <TD></TD>
    <TD valign="bottom">
    Richard S. Kollender, a member of our board of directors, serves
    in a variety of roles related to Quaker and BioAdvance.
    Mr.&#160;Kollender is a Vice President of Quaker BioVentures
    Management, LLC, which is the general partner of Quaker
    BioVentures Management, L.P., which is the management company
    for Quaker. Mr.&#160;Kollender is also a Vice President of
    Quaker BioVentures Capital&#160;II, LLC, which is the general
    partner of Quaker BioVentures Capital&#160;II,&#160;L.P., which
    is the general partner of Quaker. Mr.&#160;Kollender is also a
    partner of Quaker BioVentures Management,&#160;L.P. and a
    limited partner of Quaker BioVentures Capital II Joint Venture,
    L.P., which is a limited partner of Quaker BioVentures
    Capital&#160;II,&#160;L.P.</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD align="right" valign="top">
</TD>
    <TD></TD>
    <TD valign="bottom">
    Mr. Kollender is also a Vice President of Quaker BioAdvance
    Management, LLC, the general partner of Quaker BioAdvance
    Management, L.P., which is the manager of BioAdvance. Mr.
    Kollender is also a partner of Quaker Joint Venture, which is a
    limited partner of Quaker BioVentures Capital, L.P., which is a
    limited partner of BioAdvance GP I, L.P., which is the general
    partner of BioAdvance.</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD align="right" valign="top">
</TD>
    <TD></TD>
    <TD valign="bottom">
    Mr. Kollender disclaims beneficial ownership of the shares of
    capital stock held by Quaker and BioAdvance, except to the
    extent of his pecuniary interest therein.</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD align="right" valign="top">
    (2) </TD>
    <TD></TD>
    <TD valign="bottom">
    Consists of (a)&#160;5,376,344&#160;shares of common stock
    issuable upon the automatic conversion of 5,376,344&#160;shares
    of Series&#160;A preferred stock, (b)&#160;7,526,881&#160;shares
    of common stock issuable upon the automatic conversion of
    7,526,881&#160;shares of Series&#160;B preferred stock,
    (c)&#160;2,287,360&#160;shares of common stock that represent
    accrued dividends on such Series&#160;A and Series&#160;B
    preferred stock, (d)&#160;150,377&#160;shares of common stock
    issuable upon the exercise of a warrant within 60&#160;days of
    April&#160;30, 2010 and (e)
    <B>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</B>&#160;shares
    of common stock issuable upon the automatic conversion of all
    principal and accrued interest outstanding under the April 2010
    Convertible Note held by Safeguard Delaware, Inc., or Safeguard
    Delaware, upon the closing of this offering, assuming an initial
    public offering price of
    $<B>&#160;&#160;&#160;&#160;&#160;</B>per share, the midpoint of
    the price range set forth on the cover page of this prospectus,
    and that the closing occurred on April&#160;30, 2010.</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD align="right" valign="top">
</TD>
    <TD></TD>
    <TD valign="bottom">
    Gary J. Kurtzman, MD, a member of our board of directors, is a
    Vice President and Managing Director of Safeguard, which is the
    parent of Safeguard Delaware. Dr.&#160;Kurtzman disclaims
    beneficial ownership of the shares of capital stock held by
    Safeguard, except to the extent of his pecuniary interest
    therein.</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD align="right" valign="top">
    (3) </TD>
    <TD></TD>
    <TD valign="bottom">
    Includes with respect to Birchmere Ventures&#160;III TSIB, L.P.,
    or Birchmere TSIB, (a)&#160;1,290,323&#160;shares of common
    stock issuable upon the automatic conversion of
    1,290,323&#160;shares of Series&#160;A preferred stock,
    (b)&#160;1,096,775&#160;shares of common stock issuable upon the
    automatic conversion of 1,096,775&#160;shares of Series&#160;B
    preferred stock, (c)&#160;471,440&#160;shares of common stock
    that represent accrued dividends on such Series&#160;A and
    Series&#160;B preferred stock, (d)&#160;19,549&#160;shares of
    common stock issuable upon the exercise of a warrant within
    60&#160;days of April&#160;30, 2010 and (e)
    <B>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</B>&#160;shares
    of common stock issuable upon the automatic conversion of all
    principal and accrued interest outstanding under the April 2010
    Convertible Note held by Birchmere TSIB upon the closing of this
    offering, assuming an initial public offering price of
    $<B>&#160;&#160;&#160;&#160;&#160;</B>per share, the midpoint of
    the price range set forth on the cover page of this prospectus,
    and that the closing occurred on April&#160;30, 2010.</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD align="right" valign="top">
</TD>
    <TD></TD>
    <TD valign="bottom">
    Includes with respect to Birchmere Ventures III, L.P., or
    Birchmere, (a)&#160;2,293,907&#160;shares of common stock
    issuable upon the automatic conversion of 2,293,907&#160;shares
    of Series&#160;A preferred stock, (b)&#160;1,949,820&#160;shares
    of common stock issuable upon the automatic conversion of
    1,949,820&#160;shares of Series&#160;B preferred stock,
    (c)&#160;838,115&#160;shares of common stock that represent
    accrued dividends on such Series&#160;A and Series&#160;B
    preferred stock, (d)&#160;34,754&#160;shares of common stock
    issuable upon the exercise of a warrant within 60&#160;days of
    April&#160;30, 2010 and (e)
    <B>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</B>&#160;shares
    of common stock issuable upon the automatic conversion of all
    principal and accrued interest outstanding under the April 2010
    Convertible Note held by Birchmere upon the closing of this
    offering, assuming an initial public offering price of
    $<B>&#160;&#160;&#160;&#160;&#160; </B>per share, the midpoint
    of the price range set forth on the cover page of this
    prospectus, and that the closing occurred on April&#160;30, 2010.</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD align="right" valign="top">
</TD>
    <TD></TD>
    <TD valign="bottom">
    Jeanne Cunicelli, a member of our board of directors, is an
    Investment Partner of Bay City Capital LLC, which is the manager
    of BV3GP Investors, LLC, which is the managing member of BV3
    LLC, which is the general partner of BV3 Management LP, which is
    the general partner of Birchmere and the general partner of
    Birchmere TSIB. Ms.&#160;Cunicelli disclaims beneficial
    ownership of the shares of capital stock </TD>
</TR>
<!-- XBRL Paragraph Pagebreak -->

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    <BR>
    108
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<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL Pagebreak End -->

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

<TR>
    <TD width="2%"></TD>
    <TD width="1%"></TD>
    <TD width="97%"></TD>
</TR>

<TR>
    <TD valign="top">
</TD>
    <TD></TD>
    <TD valign="bottom">
    held by the funds managed by Bay City Capital LLC, except to the
    extent of her pecuniary interest therein.</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD align="right" valign="top">
    (4) </TD>
    <TD></TD>
    <TD valign="bottom">
    Includes with respect to Battelle Ventures, L.P., or Battelle,
    (a)&#160;2,274,194&#160;shares of common stock issuable upon the
    automatic conversion of 2,274,194&#160;shares of Series&#160;A
    preferred stock, (b)&#160;3,387,097&#160;shares of common stock
    issuable upon the automatic conversion of 3,387,097&#160;shares
    of Series&#160;B preferred stock, (c)&#160;985,845&#160;shares
    of common stock that represent accrued dividends on such
    Series&#160;A and Series&#160;B preferred stock,
    (d)&#160;67,670&#160;shares of common stock issuable upon the
    exercise of a warrant within 60&#160;days of April&#160;30, 2010
    and (e)
    <B>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</B>&#160;shares
    of common stock issuable upon the automatic conversion of all
    principal and accrued interest outstanding under the
    April&#160;2010 Convertible Note held by Battelle upon the
    closing of this offering, assuming an initial public offering
    price of $<B>&#160;&#160;&#160;&#160;&#160;</B> per share, the
    midpoint of the price range set forth on the cover page of this
    prospectus, and that the closing occurred on April&#160;30, 2010.</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD align="right" valign="top">
</TD>
    <TD></TD>
    <TD valign="bottom">
    Includes with respect to Innovation Valley Partners, LP, or IVP,
    (a)&#160;413,978&#160;shares of common stock issuable upon the
    automatic conversion of 413,978 shares of Series&#160;A
    preferred stock, (b)&#160;376,344&#160;shares of common stock
    issuable upon the automatic conversion of 376,344 shares of
    Series&#160;B preferred stock, (c)&#160;155,766&#160;shares of
    common stock that represent accrued dividends on such
    Series&#160;A and Series&#160;B preferred stock,
    (d)&#160;7,519&#160;shares of common stock issuable upon the
    exercise of a warrant within 60&#160;days of April&#160;30, 2010
    and (e)
    <B>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</B>&#160;shares
    of common stock issuable upon the automatic conversion of all
    principal and accrued interest outstanding under the April 2010
    Convertible Note held by IVP upon the closing of this offering,
    assuming an initial public offering price of
    $<B>&#160;&#160;&#160;&#160;&#160; </B>per share, the midpoint
    of the price range set forth on the cover page of this
    prospectus, and that the closing occurred on April&#160;30, 2010.</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD align="right" valign="top">
    (5) </TD>
    <TD></TD>
    <TD valign="bottom">
    Consists of (a)&#160;5,376,344&#160;shares of common stock
    issuable upon the automatic conversion of 5,376,344 shares of
    Series&#160;B preferred stock, (b)&#160;620,939&#160;shares of
    common stock that represent accrued dividends on such
    Series&#160;B preferred stock, (c)&#160;125,314&#160;shares of
    common stock issuable upon the exercise of a warrant within
    60&#160;days of April&#160;30, 2010 and (d)
    <B>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</B>&#160;shares
    of common stock issuable upon the automatic conversion of all
    principal and accrued interest outstanding under the April 2010
    Convertible Note held by SR One upon the closing of this
    offering, assuming an initial public offering price of
    $<B>&#160;&#160;&#160;&#160;&#160; </B>per share, the midpoint
    of the price range set forth on the cover page of this
    prospectus, and that the closing occurred on April&#160;30, 2010.</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD align="right" valign="top">
</TD>
    <TD></TD>
    <TD valign="bottom">
    Michael C. Diem, MD, a member of our board of directors, is a
    Partner of SR One. Dr.&#160;Diem disclaims beneficial ownership
    of the shares of capital stock held by SR One, except to the
    extent of his pecuniary interest therein.</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD align="right" valign="top">
    (6) </TD>
    <TD></TD>
    <TD valign="bottom">
    Consists of (a)&#160;1,350,000&#160;shares of common stock<B>,
    </B>which includes 25,000&#160;shares of unvested restricted
    stock, 50,000&#160;shares of common stock held by Jane
    Hollingsworth 2000 Irrevocable Family Trust&#160;I, and
    50,000&#160;shares of common stock held by Bradford
    Hollingsworth 2000 Irrevocable Family Trust&#160;I,
    (b)&#160;143,668&#160;shares of common stock issuable upon the
    automatic conversion of 143,668 shares of Series&#160;A
    preferred stock, (c)&#160;53,763&#160;shares of common stock
    issuable upon the automatic conversion of 53,763 shares of
    Series&#160;B preferred stock, (d)&#160;48,394&#160;shares of
    common stock that represent accrued dividends on such
    Series&#160;A and Series&#160;B preferred stock,
    (e)&#160;1,067,774&#160;shares of common stock issuable upon the
    exercise of stock options within 60&#160;days of April&#160;30,
    2010, (f)&#160;1,253&#160;shares of common stock issuable upon
    the exercise of a warrant within 60&#160;days of April&#160;30,
    2010 and (g)
    <B>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</B>&#160;shares
    of common stock issuable upon the automatic conversion of all
    principal and accrued interest outstanding under the April 2010
    Convertible Note held by Ms.&#160;Hollingsworth upon the closing
    of this offering, assuming an initial public offering price of
    $<B>&#160;&#160;&#160;&#160;&#160; </B>per share, the midpoint
    of the price range set forth on the cover page of this
    prospectus, and that the closing occurred on April&#160;30, 2010.</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD align="right" valign="top">
</TD>
    <TD></TD>
    <TD valign="bottom">
    Ms.&#160;Hollingsworth disclaims beneficial ownership of the
    shares held by the Jane Hollingsworth 2000 Irrevocable Family
    Trust&#160;I and the Bradford Hollingsworth 2000 Irrevocable
    Family Trust&#160;I.</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD align="right" valign="top">
    (7) </TD>
    <TD></TD>
    <TD valign="bottom">
    Consists of 1,350,000&#160;shares of common stock, which
    includes 25,000&#160;shares of unvested restricted stock and
    665,082&#160;shares of common stock issuable upon the exercise
    of stock options within 60&#160;days of April&#160;30, 2010.</TD>
</TR>

</TABLE>
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    109
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
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<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR>
    <TD align="right" valign="top">
    (8) </TD>
    <TD></TD>
    <TD valign="bottom">
    Consists of (a)&#160;26,882&#160;shares of common stock issuable
    upon the automatic conversion of 26,882 shares of Series&#160;B
    preferred stock, (b)&#160;3,212&#160;shares of common stock that
    represent accrued dividends on such Series&#160;B preferred
    stock, (c)&#160;299,670&#160;shares of common stock issuable
    upon the exercise of stock options within 60&#160;days of
    April&#160;30, 2010 and (d)
    <B>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</B>&#160;shares
    of common stock issuable upon the automatic conversion of all
    principal and accrued interest outstanding under the April 2010
    Convertible Note held by Mr.&#160;Goldan upon the closing of
    this offering, assuming an initial public offering price of
    $<B>&#160;&#160;&#160;&#160;&#160; </B>per share, the midpoint
    of the price range set forth on the cover page of this
    prospectus, and that the closing occurred on April&#160;30, 2010.</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD align="right" valign="top">
    (9) </TD>
    <TD></TD>
    <TD valign="bottom">
    Consists of 358,117&#160;shares of common stock issuable upon
    the exercise of stock options within 60&#160;days of
    April&#160;30, 2010.</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD align="right" valign="top">
    (10) </TD>
    <TD></TD>
    <TD valign="bottom">
    Consists of (a)&#160;60,000&#160;shares of common stock, which
    includes 15,000&#160;shares of unvested restricted stock,
    (b)&#160;48,387&#160;shares of common stock issuable upon the
    automatic conversion of 48,387&#160;shares of Series&#160;B
    preferred stock held by Mr.&#160;Felker in his IRA account,
    (c)&#160;5,588&#160;shares of common stock that represent
    accrued dividends on such Series&#160;B preferred stock,
    (d)&#160;394,096&#160;shares of common stock issuable upon the
    exercise of stock options within 60&#160;days of April&#160;30,
    2010 and (e)&#160;1,128&#160;shares of common stock issuable
    upon the automatic conversion of 1,128&#160;shares of
    Series&#160;B preferred stock issuable to Mr.&#160;Felker&#146;s
    IRA account upon the exercise of a warrant within 60&#160;days
    of April&#160;30, 2010.</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD align="right" valign="top">
    (11) </TD>
    <TD></TD>
    <TD valign="bottom">
    Consists of 187,083&#160;shares of common stock issuable upon
    the exercise of stock options within 60&#160;days of
    April&#160;30, 2010.</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD align="right" valign="top">
    (12) </TD>
    <TD></TD>
    <TD valign="bottom">
    Jeanne Cunicelli is an Investment Partner of Bay City Capital
    LLC, which is the manager of BV3GP Investors, LLC, which is the
    managing member of BV3 LLC, which is the general partner of BV3
    Management LP, which is the general partner of Birchmere and the
    general partner of Birchmere TSIB. Ms.&#160;Cunicelli may be
    considered to have beneficial ownership of the Bay City Capital
    LLC funds&#146; interest in us. Ms.&#160;Cunicelli disclaims
    beneficial ownership of all such shares, except to the extent of
    her pecuniary interest therein. See note&#160;3 above.</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD align="right" valign="top">
    (13) </TD>
    <TD></TD>
    <TD valign="bottom">
    Michael C. Diem, MD is a Partner of SR One and may be considered
    to have beneficial ownership of SR&#160;One&#146;s interest in
    us. Dr.&#160;Diem disclaims beneficial ownership of all such
    shares, except to the extent of his pecuniary interest therein.
    See note&#160;5 above.</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD align="right" valign="top">
    (14) </TD>
    <TD></TD>
    <TD valign="bottom">
    Consists of 50,000&#160;shares of common stock and
    51,145&#160;shares of common stock issuable upon the exercise of
    stock options within 60&#160;days of April&#160;30, 2010.</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD align="right" valign="top">
    (15) </TD>
    <TD></TD>
    <TD valign="bottom">
    Richard S. Kollender serves in a variety of roles related to
    Quaker and BioAdvance, and Mr.&#160;Kollender may be considered
    to have beneficial ownership of Quaker&#146;s and
    BioAdvance&#146;s interests in us. Mr.&#160;Kollender disclaims
    beneficial ownership of all such shares, except to the extent of
    his pecuniary interest therein. See note&#160;1 above.</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD align="right" valign="top">
    (16) </TD>
    <TD></TD>
    <TD valign="bottom">
    Gary J. Kurtzman, MD, is a Vice President and Managing Director
    of Safeguard and may be considered to have beneficial ownership
    of Safeguard Delaware&#146;s interest in us. Dr.&#160;Kurtzman
    disclaims beneficial ownership of all such shares, except to the
    extent of his pecuniary interest therein. See note&#160;2 above.</TD>
</TR>

</TABLE>
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    <BR>
    110
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
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<A name='115'>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">DESCRIPTION
    OF CAPITAL STOCK</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">General</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The following description of our capital stock and provisions of
    our restated certificate of incorporation and our bylaws are
    summaries, and are qualified by reference to the provisions of
    our restated certificate of incorporation and our bylaws that
    will be in effect upon the closing of this offering. We have
    filed forms of these documents as exhibits to the registration
    statement for this offering. The description of our capital
    stock reflects changes to our capital structure that will occur
    upon the closing of this offering.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Upon the closing of this offering, our authorized capital stock
    will consist of
    <B>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</B>&#160;shares
    of common stock, par value $0.001 per share, and
    <B>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</B>&#160;shares
    of undesignated preferred stock.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    As of April&#160;30, 2010, we had issued and outstanding:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    3,143,905&#160;shares of common stock held by 12 stockholders of
    record, which included 71,250&#160;shares of unvested restricted
    stock; and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    53,096,340&#160;shares in the aggregate of Series&#160;A and
    Series&#160;B preferred stock, which, together with accrued
    dividends thereon, are automatically convertible into
    61,824,121&#160;shares of common stock upon the closing of this
    offering, assuming that the closing occurred on April&#160;30,
    2010.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    As of April&#160;30, 2010, we also had outstanding:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Options to purchase an aggregate of 7,520,075&#160;shares of
    common stock under our 2005 Plan at a weighted average exercise
    price of $0.23 per share;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    An aggregate of $10,109,081 of principal and accrued interest
    under the April 2010 Convertible Notes, which is automatically
    convertible
    into&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;shares
    of common stock upon the closing of this offering, assuming an
    initial public offering price of $&#160;&#160;&#160;&#160;&#160;
    per share, the midpoint of the price range set forth on the
    cover page of this prospectus, and that the closing occurred on
    April 30, 2010; and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Warrants to purchase an aggregate of 870,922&#160;shares of
    preferred stock at a weighted average exercise price of $0.93
    per share, which will become, in accordance with their terms,
    warrants to purchase 870,922 shares of common stock at an
    exercise price of $0.93&#160;per share of common stock upon the
    closing of this offering, held by a total of 13&#160;persons.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Common
    Stock</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Voting Rights.</I>&#160;&#160;Each holder of common stock is
    entitled to one vote per share on all matters submitted to a
    vote of the stockholders, including the election of directors.
    Our restated certificate of incorporation and our bylaws will
    not provide for cumulative voting rights. Because of this, the
    holders of a majority of the shares of common stock entitled to
    vote in any election of directors can elect all of the directors
    standing for election, if they should so choose. An election of
    directors by our stockholders is determined by a plurality of
    the votes cast by stockholders entitled to vote on the election.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Dividends.</I>&#160;&#160;Subject to preferences that may be
    applicable to any then outstanding preferred stock, the holders
    of our outstanding shares of common stock are entitled to
    receive dividends, if any, as may be declared from time to time
    by our board of directors out of legally available funds.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Liquidation.</I>&#160;&#160;In the event of our liquidation,
    dissolution or winding up, holders of common stock will be
    entitled to share ratably in the net assets legally available
    for distribution to stockholders after the payment of all of our
    debts and other liabilities, subject to the satisfaction of any
    liquidation preference granted to the holders of any outstanding
    shares of preferred stock.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Rights and Preferences.</I>&#160;&#160;Holders of our common
    stock have no preemptive, conversion or subscription rights, and
    there are no redemption or sinking fund provisions applicable to
    our common stock. The rights, preferences and privileges of the
    holders of common stock are subject to, and may be adversely
    affected by,
</DIV>
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    <BR>
    111
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
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<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    the rights of the holders of shares of any series of our
    preferred stock that we may designate and issue in the future.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Preferred
    Stock</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Our restated certificate of incorporation will not reference any
    existing series of preferred stock and will authorize our board
    of directors to issue up to
    <B>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</B>&#160;shares
    of undesignated preferred stock. Under the restated certificate
    of incorporation, our board will be authorized, without
    stockholder approval, to issue preferred stock in one or more
    series, to establish the number of shares to be included in each
    such series and to fix the designation, powers, preferences and
    rights of such shares and any qualifications, limitations or
    restrictions thereof. The issuance of preferred stock, while
    providing flexibility in connection with possible acquisitions
    and other corporate purposes, could, among other things, have
    the effect of delaying, deferring or preventing a change in our
    control that may otherwise benefit holders of common stock. The
    issuance of preferred stock with voting and conversion rights
    may adversely affect the voting power of the holders of common
    stock, including the loss of voting control to others. We have
    no current plans to issue any shares of preferred stock.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Warrants</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Assuming no warrants have been exercised as of May&#160;14,
    2010, upon the closing of this offering there will be
    outstanding 12 warrants to purchase an aggregate of
    736,514&#160;shares of common stock, each at an exercise price
    of $0.93 per share and each of which expire on August&#160;20,
    2016, one warrant to purchase 134,408&#160;shares of common
    stock at an exercise price of $0.93 per share, which will expire
    on the date five years following the closing of this offering,
    but in any event no later than March&#160;29, 2017 and two
    warrants to purchase 255,376&#160;shares of common stock, each
    at an exercise price of $0.93 per share and each of which expire
    ten years from the date of issuance.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Each of these warrants has a net exercise provision under which
    its holder may, in lieu of payment of the exercise price in
    cash, surrender the warrant and receive a net amount of shares
    based on the fair market value of our common stock at the time
    of exercise of the warrant after deduction of the aggregate
    exercise price. Each of these warrants also contains provisions
    for the adjustment of the exercise price and the aggregate
    number of shares issuable upon the exercise of the warrant in
    the event of stock dividends,
    <FONT style="white-space: nowrap">split-ups,</FONT>
    reclassifications, mergers, consolidations, combinations or
    exchanges of shares, separations, reorganizations or
    liquidations.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The holders of certain of these warrants are entitled to
    registration rights under our Investor Rights Agreement, as
    described in more detail under &#147;&#151;&#160;Registration
    Rights.&#148;
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Registration
    Rights</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Upon the closing of this offering, holders of a total
    of&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;shares
    of our common stock as of April&#160;30, 2010, including shares
    of our common stock issuable upon exercise of outstanding
    warrants, will have the right to require us to register these
    shares under the Securities Act, under specified circumstances,
    pursuant to the terms of the Investor Rights Agreement. After
    registration pursuant to these rights, these shares will become
    freely tradable without restriction under the Securities Act.
    These registration rights will terminate upon the earlier of the
    date that is three years following the closing of this offering
    and the date that all registrable shares may immediately be sold
    pursuant to Rule&#160;144 without regard to volume limitations.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Demand and
    <FONT style="white-space: nowrap">Form&#160;S-3</FONT>
    Registration Rights.</I>&#160;&#160;Subject to specified
    limitations, the holders of at least
    66<FONT style="vertical-align: text-top; font-size: 70%;">2</FONT>/<FONT style="font-size: 70%;">3</FONT>%
    of our preferred stock having registration rights may demand
    that we register all or a portion of their registrable shares
    under the Securities Act. We are not obligated to file a
    registration statement pursuant to this provision:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Until 180&#160;days after the closing of this offering;&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    On more than two occasions.
</TD>
</TR>

</TABLE>
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    <BR>
    112
</DIV><!-- END PAGE WIDTH -->
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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL Pagebreak End -->

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In addition, the holders of our registrable shares may demand
    that we register on
    <FONT style="white-space: nowrap">Form&#160;S-3</FONT>
    all or a portion of the registrable shares held by them. We are
    not obligated to file a
    <FONT style="white-space: nowrap">Form&#160;S-3</FONT>
    pursuant to this provision on more than two occasions in any
    <FONT style="white-space: nowrap">12-month</FONT>
    period.
</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Incidental Registration Rights.</I>&#160;&#160;If at any time
    after the closing of this offering we propose to file a
    registration statement to register any of our securities under
    the Securities Act, either for our own account or for the
    account of any of our stockholders, the holders of our
    registrable shares are entitled to notice of registration and
    are entitled to include their shares of common stock in the
    registration.
</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Limitations and Expenses.</I>&#160;&#160;In the event that
    any registration in which the holders of registrable shares
    participate pursuant to the Investor Rights Agreement is an
    underwritten public offering, the number of registrable shares
    to be included may, in specified circumstances, be limited due
    to market conditions. Pursuant to the Investor Rights Agreement,
    we are required to pay all registration expenses, including the
    fees and expenses of one counsel to represent the selling
    holders, other than any underwriting discounts, selling
    commissions and similar discounts relating to underwriters or
    commissions related to sales, related to any demand or
    incidental registration. We are also required to indemnify each
    participating holder with respect to each registration of
    registrable shares that is effected.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B>Delaware Anti-Takeover Law and Provisions of Our Restated
    Certificate of Incorporation and Our Bylaws</B>
</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Delaware Anti-Takeover Law.</I>&#160;&#160;We are subject to
    Section&#160;203 of the DGCL. Section&#160;203 generally
    prohibits a public Delaware corporation from engaging in a
    &#147;business combination&#148; with an &#147;interested
    stockholder&#148; for a period of three years after the date of
    the transaction in which the person became an interested
    stockholder, unless the interested stockholder attained such
    status with the approval of our board of directors, the business
    combination is approved in a prescribed manner or the interested
    stockholder acquired at least 85% of our outstanding voting
    stock in the transaction in which it became an interested
    stockholder. A &#147;business combination&#148; includes, among
    other things, a merger or consolidation involving us and the
    &#147;interested stockholder&#148; and the sale of more than 10%
    of our assets. In general, an &#147;interested stockholder&#148;
    is any entity or person beneficially owning 15% or more of our
    outstanding voting stock and any entity or person affiliated
    with or controlling or controlled by such entity or person.
</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Restated Certificate of Incorporation and
    Bylaws</I>.&#160;&#160;Provisions of our restated certificate of
    incorporation and our bylaws, which will become effective upon
    the closing of this offering, may delay or discourage
    transactions involving an actual or potential change of control
    or change in our management, including transactions in which
    stockholders might otherwise receive a premium for their shares,
    or transactions that our stockholders might otherwise deem to be
    in their best interests. Therefore, these provisions could
    adversely affect the price of our common stock. Among other
    things, our restated certificate of incorporation and our bylaws:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Authorize the issuance of &#147;blank check&#148; preferred
    stock, the terms of which may be established and shares of which
    may be issued without stockholder approval;
</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Prohibit stockholder action by written consent, thereby
    requiring all stockholder actions to be taken at a meeting of
    our stockholders;
</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Eliminate the ability of stockholders to call a special meeting
    of stockholders;&#160;and
</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Establish advance notice requirements for nominations for
    election to the board of directors or for proposing matters that
    can be acted upon at stockholder meetings.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The amendment of any of these provisions would require approval
    by the holders of at least
    66<FONT style="vertical-align: text-top; font-size: 70%;">2</FONT>/<FONT style="font-size: 70%;">3</FONT>%
    of our then outstanding common stock.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Listing
    on The NASDAQ Global Market</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We are applying to have our common stock listed on The NASDAQ
    Global Market under the symbol &#147;PATH.&#148;
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Transfer
    Agent and Registrar</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The transfer agent and registrar for our common stock will be
    <B>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</B>.
</DIV>
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    <BR>
    113
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL Pagebreak End -->

<A name='116'>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">SHARES&#160;ELIGIBLE
    FOR FUTURE SALE</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Prior to this offering, there has been no public market for our
    common stock, and a liquid trading market for our common stock
    may not develop or be sustained after this offering. Future
    sales of substantial amounts of our common stock in the public
    market, including shares issued upon exercise of outstanding
    options and warrants or in the public market after this
    offering, or the anticipation of these sales, could adversely
    affect market prices prevailing from time to time and could
    impair our ability to raise equity capital in the future.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Upon the closing of this offering, we will have outstanding an
    aggregate
    of&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;shares
    of common stock, assuming the underwriters do not exercise their
    over-allotment option and no options or warrants outstanding as
    of April&#160;30, 2010 are exercised.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Of the shares to be outstanding immediately after the closing of
    this offering, we expect
    that&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;shares
    will be freely tradable without restriction under the Securities
    Act unless purchased by our &#147;affiliates,&#148; as that term
    is defined in Rule&#160;144 under the Securities Act. The
    remaining&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;shares
    of our common stock outstanding after this offering will be
    &#147;restricted securities&#148; under Rule&#160;144 of the
    Securities Act, and we expect that substantially all of these
    shares will be subject to a
    <FONT style="white-space: nowrap">180-day</FONT>
    <FONT style="white-space: nowrap">lock-up</FONT>
    period under the
    <FONT style="white-space: nowrap">lock-up</FONT>
    agreements as described below. &#147;Restricted securities&#148;
    as defined under Rule&#160;144 were issued and sold by us in
    reliance on exemptions from the registration requirements of the
    Securities Act. These shares may be sold in the public market
    only if registered or pursuant to an exemption from
    registration, such as Rule&#160;144 or Rule&#160;701 under the
    Securities Act. Resale of
    the&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;restricted
    shares that will become available for sale in the public market
    starting 180&#160;days after the date of this prospectus will be
    limited by volume and other resale restrictions under
    Rule&#160;144 because certain holders are our affiliates.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times"><FONT style="white-space: nowrap">Lock-Up</FONT>
    Agreements</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We, our officers and directors and holders of substantially all
    of our outstanding stock, options and warrants have agreed,
    subject to specified exceptions, not to sell or transfer any
    common stock or securities convertible into, or exchangeable or
    exercisable for, common stock, during a period ending
    180&#160;days after the date of this prospectus, subject to
    extension, without first obtaining the written consent of
    Leerink Swann LLC and Lazard Capital Markets LLC. Specifically,
    we and these other individuals and entities have agreed not to:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Offer, pledge, sell or contract to sell, sell any option or
    contract to purchase, purchase any option or contract to sell,
    grant any option, right or warrant to purchase, lend, or
    otherwise transfer or dispose of, directly or indirectly, any
    shares of common stock or any securities convertible into or
    exercisable or exchangeable for common stock;&#160;or
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Enter into any swap or other arrangement that transfers to
    another, in whole or in part, any of the economic consequences
    of ownership of the common stock.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The <FONT style="white-space: nowrap">lock-up</FONT>
    restrictions and specified exceptions are described in more
    detail under &#147;Underwriting&#160;&#151;
    <FONT style="white-space: nowrap">Lock-Up</FONT>
    Agreements.&#148;
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Rule&#160;144</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In general, under Rule&#160;144, beginning 90&#160;days after
    the date of this prospectus, any person who is not our affiliate
    and has held their shares for at least six months, including the
    holding period of any prior owner other than one of our
    affiliates, may sell shares without restriction. In addition,
    under Rule&#160;144, any person who is not an affiliate of ours
    and has held their shares for at least one year, including the
    holding period of any prior owner other than one of our
    affiliates, would be entitled to sell an unlimited number of
    shares immediately upon the closing of this offering without
    regard to whether current public information about us is
    available.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Beginning 90&#160;days after the date of this prospectus, a
    person who is our affiliate or who was our affiliate at any time
    during the preceding three months and who has beneficially owned
    restricted securities for at least
</DIV>
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    <BR>
    114
</DIV><!-- END PAGE WIDTH -->
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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL Pagebreak End -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    six months, including the holding period of any prior owner
    other than one of our affiliates, is entitled to sell a number
    of shares within any three-month period that does not exceed the
    greater of:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    1% of the number of shares of our common stock then outstanding,
    which will equal
    approximately&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;
    shares immediately after this offering; and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    The average weekly trading volume of our common stock on The
    NASDAQ Global Market during the four calendar weeks preceding
    the filing of a Notice of Proposed Sale of Securities Pursuant
    to Rule&#160;144 with respect to the sale.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Sales under Rule&#160;144 by our affiliates are also subject to
    manner of sale provisions and notice requirements and to the
    availability of current public information about us.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Upon expiration of the
    <FONT style="white-space: nowrap">180-day</FONT>
    <FONT style="white-space: nowrap">lock-up</FONT>
    period described above,
    approximately&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;shares
    of our common stock will be eligible for sale under
    Rule&#160;144, including shares eligible for resale immediately
    upon the closing of this offering as described above. We cannot
    estimate the number of shares of our common stock that our
    existing stockholders will elect to sell under Rule&#160;144.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Rule&#160;701</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In general, under Rule&#160;701 of the Securities Act, any of
    our employees, consultants or advisors, other than our
    affiliates, who purchased shares from us in connection with a
    qualified compensatory stock plan or other written agreement is
    eligible to resell these shares 90&#160;days after the date of
    this prospectus in reliance on Rule&#160;144, but without
    compliance with the holding period requirements of Rule&#160;144
    and without regard to the volume of such sales or the
    availability of public information about us. Subject to the
    <FONT style="white-space: nowrap">180-day</FONT>
    <FONT style="white-space: nowrap">lock-up</FONT>
    period described above,
    approximately&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;shares
    of our common stock will be eligible for sale in accordance with
    Rule&#160;701.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Registration
    Rights</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Subject to the
    <FONT style="white-space: nowrap">lock-up</FONT>
    agreements described above, upon closing of this offering, the
    holders
    of&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;shares
    of our common stock and warrants to purchase up
    to&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;shares
    of our common stock will be entitled to require us to register
    these shares under the Securities Act under specified
    circumstances. After registration pursuant to these rights,
    these shares will become freely tradable without restriction
    under the Securities Act. These registration rights are
    described in more detail under &#147;Description of Capital
    Stock&#160;&#151; Registration Rights.&#148;
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Equity
    Incentive Plans</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We intend to file one or more registration statements on
    <FONT style="white-space: nowrap">Form&#160;S-8</FONT>
    under the Securities Act to register all shares of common stock
    subject to outstanding stock options and common stock issuable
    under our 2005 Plan, 2010 Plan and ESPP. We expect to file the
    registration statement covering shares offered pursuant to our
    stock plans shortly after the date of this prospectus,
    permitting the resale of such shares by non-affiliates in the
    public market without restriction under the Securities Act and
    the sale by affiliates in the public market, subject to
    compliance with the resale provisions of Rule&#160;144. Our
    equity incentive plans are described in more detail under
    &#147;Executive Compensation&#160;&#151; Employee Benefit
    Plans.&#148;
</DIV>
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<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    115
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL Pagebreak End -->

<A name='117'>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">UNDERWRITING</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Subject to the terms and conditions set forth in an underwriting
    agreement dated the date of this prospectus among us and the
    underwriters named below, we have agreed to sell to the
    underwriters, and each underwriter has severally agreed to
    purchase from us, the number of shares of common stock listed
    next to its name in the following table. Leerink Swann LLC and
    Lazard Capital Markets LLC are acting as joint book-running
    managers for the offering and as representatives of the
    underwriters.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="84%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=02 type=lead -->
    <TD width="12%" align="right">&nbsp;</TD>	<!-- colindex=02 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=02 type=hang1 -->
</TR>
<!-- Table Width Row END -->
<!-- TableOutputHead -->
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Number of<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>Name</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Shares</B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<!-- TableOutputBody -->
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Leerink Swann LLC
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Lazard Capital Markets LLC
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Thomas Weisel Partners LLC
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Needham&#160;&#038; Company, LLC
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Total
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The underwriters are committed to purchase all the shares of
    common stock offered by us if they purchase any shares. The
    underwriting agreement also provides that if an underwriter
    defaults, the purchase commitments of non-defaulting
    underwriters may be increased or the offering may be terminated.
    The underwriters are not obligated to purchase the shares of
    common stock covered by the underwriters&#146; over-allotment
    option described below.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The underwriters are offering the shares, subject to prior sale,
    when, as and if issued to and accepted by them, subject to
    approval of legal matters by their counsel, and other conditions
    contained in the underwriting agreement, such as the receipt by
    the underwriters of officer&#146;s certificates and legal
    opinions. The underwriters reserve the right to withdraw, cancel
    or modify offers to the public and to reject orders in whole or
    in part.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Discounts
    and Commissions</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The underwriters propose initially to offer the shares to the
    public at the public offering price set forth on the cover page
    of this prospectus and to dealers at that price less a
    concession not in excess of $&#160;&#160;&#160;&#160;&#160; per
    share. After the initial offering of the shares, the public
    offering price and other selling terms may be changed by the
    representatives.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The following table shows the public offering price,
    underwriting discounts and commissions and proceeds before
    expenses to us. The information assumes either no exercise or
    full exercise by the underwriters of their over-allotment option.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="63%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="3%" align="right">&nbsp;</TD>	<!-- colindex=02 type=lead -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=02 type=body -->
    <TD width="3%" align="left">&nbsp;</TD>	<!-- colindex=02 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=03 type=gutter -->
    <TD width="6%" align="right">&nbsp;</TD>	<!-- colindex=03 type=lead -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=03 type=body -->
    <TD width="6%" align="left">&nbsp;</TD>	<!-- colindex=03 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=04 type=gutter -->
    <TD width="4%" align="right">&nbsp;</TD>	<!-- colindex=04 type=lead -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=04 type=body -->
    <TD width="4%" align="left">&nbsp;</TD>	<!-- colindex=04 type=hang1 -->
</TR>
<!-- Table Width Row END -->
<!-- TableOutputHead -->
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Per Share</B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Without Option</B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>With Option</B>
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<!-- TableOutputBody -->
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Public offering price
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    &#160;&#160;&#160;&#160;&#160;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    &#160;&#160;&#160;&#160;&#160;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    &#160;&#160;&#160;&#160;&#160;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Underwriting discounts and commissions
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Proceeds, before expenses, to us
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">

</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The total estimated expenses of the offering, including
    registration, filing and listing fees, printing fees and legal
    and accounting expenses, but excluding underwriting discounts
    and commissions, are approximately
    $&#160;&#160;&#160;&#160;&#160; and are payable by us.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Lazard Fr&#232;res &#038; Co. LLC referred this transaction to
    Lazard Capital Markets LLC and will receive a referral fee from
    Lazard Capital Markets LLC in connection therewith.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Over-Allotment
    Option</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We have granted the underwriters an option to purchase up
    to&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;
    additional shares of common stock at the public offering price,
    less underwriting discounts and commissions. The underwriters
    may exercise this option for 30&#160;days from the date of this
    prospectus solely to cover sales of shares of common stock by
    the underwriters in excess of the total number of shares set
    forth in the table above. If any shares are purchased pursuant
    to this over-allotment option, the underwriters will purchase
    the additional shares in approximately the same proportion as
    shown in the table above. If any of these additional shares are
    purchased, the
</DIV>
<!-- XBRL Paragraph Pagebreak -->
<!-- XBRL Pagebreak Begin -->

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    116
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL Pagebreak End -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    underwriters will offer the additional shares on the same terms
    as those on which the shares are being offered. We will pay the
    expenses associated with the exercise of the over-allotment
    option.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Initial
    Public Offering Pricing</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Prior to this offering, there has been no public market for our
    common stock. The initial public offering price will be
    negotiated between us and the representatives. Among the factors
    considered in these negotiations are:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    The prospects for our company and the industry in which we
    operate;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Our past and present financial and operating performance;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Financial and operating information and market valuations of
    publicly traded companies engaged in activities similar to ours;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    The prevailing conditions of U.S.&#160;securities markets at the
    time of this offering;&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Other factors deemed relevant.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The estimated initial public offering price range set forth on
    the cover of this preliminary prospectus is subject to change as
    a result of market conditions and other factors.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times"><FONT style="white-space: nowrap">Lock-Up</FONT>
    Agreements</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We, our officers and directors and holders of substantially all
    of our outstanding stock, options and warrants have entered into
    <FONT style="white-space: nowrap">lock-up</FONT>
    agreements with the underwriters. Under these agreements, we and
    these other individuals have agreed, subject to specified
    exceptions, not to sell or transfer any common stock or
    securities convertible into, or exchangeable or exercisable for,
    common stock, during a period ending 180&#160;days after the
    date of this prospectus, without first obtaining the written
    consent of Leerink Swann LLC and Lazard Capital Markets LLC.
    Specifically, we and these other individuals have agreed not to:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Offer, pledge, sell or contract to sell, sell any option or
    contract to purchase, purchase any option or contract to sell,
    grant any option, right or warrant to purchase, lend, or
    otherwise transfer or dispose of, directly or indirectly, any
    shares of common stock or any securities convertible into or
    exercisable or exchangeable for common stock;&#160;or
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Enter into any swap or other arrangement that transfers to
    another, in whole or in part, any of the economic consequences
    of ownership of the common stock,
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    whether any such transaction described above is to be settled by
    delivery of common stock or other securities, in cash or
    otherwise.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The restrictions described above do not apply to:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    The sale of shares of common stock to the underwriters pursuant
    to the underwriting agreement;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    The issuance by us of shares of common stock upon the exercise
    of an option or warrant or the conversion of a security
    outstanding on the date of this prospectus of which the
    underwriters have been advised in writing or that is described
    in this prospectus;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    The grant by us of stock options or other stock-based awards, or
    the issuance of shares of common stock upon exercise thereof, to
    eligible participants pursuant to employee benefit or equity
    incentive plans described in this prospectus, provided that,
    prior to the grant of any such stock options or other
    stock-based awards that vest within the restricted period, each
    recipient of such grant shall sign and deliver a
    <FONT style="white-space: nowrap">lock-up</FONT>
    agreement agreeing to be subject to the restrictions on transfer
    described above;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Transactions by security holders relating to shares of common
    stock or other securities acquired in open market transactions
    after the completion of this offering, provided that no filing
    under Section&#160;16(a) of the Exchange Act is required or is
    voluntarily made in connection with subsequent sales of common
    stock or other securities acquired in such open market
    transactions;
</TD>
</TR>

</TABLE>
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    <BR>
    117
</DIV><!-- END PAGE WIDTH -->
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL Pagebreak End -->

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Sales or transfers by security holders of shares of common stock
    to us pursuant to the exercise on a net-issuance basis of any
    warrant outstanding on the date of the underwriting agreement of
    which the representatives have been advised in writing or that
    is described in this prospectus;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    The exercise of any option or warrant to purchase shares of
    common stock outstanding on the date of the underwriting
    agreement of which the representatives have been advised in
    writing or that is described in this prospectus, provided that
    the underlying shares of common stock issued upon exercise
    remain subject to the restrictions imposed by the
    <FONT style="white-space: nowrap">lock-up</FONT>
    agreement;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Transfers or contributions by security holders of shares of
    common stock or any security convertible into common stock as a
    bona fide gift, in connection with estate planning or upon death
    by will or intestate succession;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Transfers or distributions by security holders of shares of
    common stock or any security convertible into common stock to
    limited partners, members, stockholders or affiliates of the
    security holder; or
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Transfers or contributions by security holders of shares of
    common stock or any security convertible into common stock to
    any trust for the direct or indirect benefit of the security
    holder or the immediate family of the security holder;
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    provided that in the case of each of the preceding three types
    of transactions, each transferee or distributee signs and
    delivers a
    <FONT style="white-space: nowrap">lock-up</FONT>
    agreement agreeing to be subject to the restrictions on transfer
    described above and no filing under Section&#160;16(a) of the
    Exchange Act, reporting a reduction in beneficial ownership of
    shares of common stock, is required or is voluntarily made
    during the restricted period.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The <FONT style="white-space: nowrap">180-day</FONT>
    restricted period is subject to extension if (1)&#160;during the
    last 17&#160;days of the restricted period we issue an earnings
    release or material news or a material event relating to us
    occurs or (ii)&#160;prior to the expiration of the restricted
    period, we announce that we will release earnings results during
    the <FONT style="white-space: nowrap">16-day</FONT>
    period beginning on the last day of the restricted period, in
    which case the restrictions imposed in the
    <FONT style="white-space: nowrap">lock-up</FONT>
    agreements will continue to apply until the expiration of the
    <FONT style="white-space: nowrap">18-day</FONT>
    period beginning on the issuance of the earnings release or the
    occurrence of the material news or material event.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Indemnification</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We have agreed to indemnify the underwriters against certain
    liabilities, including liabilities under the Securities Act, and
    to contribute to payments that the underwriters may be required
    to make for these liabilities.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">The
    NASDAQ Global Market Listing</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We are applying to have our common stock listed on The NASDAQ
    Global Market under the symbol &#147;PATH.&#148;
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Price
    Stabilization, Short Positions and Penalty Bids</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In order to facilitate the offering of our common stock, the
    underwriters may engage in transactions that stabilize, maintain
    or otherwise affect the price of our common stock. In connection
    with the offering, the underwriters may purchase and sell our
    common stock in the open market. These transactions may include
    short sales, purchases on the open market to cover positions
    created by short sales and stabilizing transactions. Short sales
    involve the sale by the underwriters of a greater number of
    shares of common stock than they are required to purchase in the
    offering. &#147;Covered&#148; short sales are sales made in an
    amount not greater than the underwriters&#146; option to
    purchase additional shares of common stock in the offering. The
    underwriters may close out any covered short position by either
    exercising their over-allotment option or purchasing shares of
    common stock in the open market. In determining the source of
    shares of common stock to close out the covered short position,
    the underwriters will consider, among other things, the price of
    shares available for purchase in the open market as compared to
    the price at which they may purchase shares through the
    <FONT style="white-space: nowrap">over-allotment</FONT>
    option. &#147;Naked&#148; short sales are sales in excess of the
    over-allotment option. The underwriters
</DIV>
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    <BR>
    118
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
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<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    must close out any naked short position by purchasing shares of
    common stock in the open market. A naked short position is more
    likely to be created if the underwriters are concerned that
    there may be downward pressure on the price of our common stock
    in the open market after pricing that could adversely affect
    investors who purchase in the offering. Stabilizing transactions
    consist of various bids for or purchases of shares of common
    stock made by the underwriters in the open market prior to the
    completion of the offering.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Similar to other purchase transactions, the underwriters&#146;
    purchases to cover the syndicate short sales may have the effect
    of raising or maintaining the market price of our common stock
    or preventing or retarding a decline in the market price of our
    common stock. As a result, the price of our common stock may be
    higher than the price that might otherwise exist in the open
    market.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The underwriters have advised us that, pursuant to
    Regulation&#160;M of the Securities Act, they may also engage in
    other activities that stabilize, maintain or otherwise affect
    the price of our common stock, including the imposition of
    penalty bids. This means that if the representatives of the
    underwriters purchase common stock in the open market in
    stabilizing transactions or to cover short sales, the
    representatives can require the underwriters that sold those
    shares as part of this offering to repay the underwriting
    discount received by them.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The underwriters make no representation or prediction as to the
    direction or magnitude of any effect that the transactions
    described above may have on the price of our common stock. In
    addition, neither we nor the underwriters make any
    representation that the underwriters will engage in these
    transactions or that these transactions, once commenced, will
    not be discontinued without notice.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Electronic
    Offer, Sale and Distribution of Shares</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    A prospectus in electronic format may be made available on the
    websites maintained by one or more underwriters or selling group
    members, if any, participating in the offering. The underwriters
    may agree to allocate a number of shares of common stock to
    underwriters and selling group members for sale to their online
    brokerage account holders. Internet distributions will be
    allocated by the representatives to underwriters and selling
    group members that may make Internet distributions on the same
    basis as other allocations. Other than the prospectus in
    electronic format, the information on the underwriters&#146;
    websites and any information contained in any other website
    maintained by the underwriters is not part of this prospectus or
    the registration statement of which this prospectus forms a part.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Notice to
    <FONT style="white-space: nowrap">Non-U.S.</FONT>
    Investors</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In relation to each member state of the European Economic Area
    that has implemented the Prospectus Directive, each of which we
    refer to as a relevant member state, with effect from and
    including the date on which the Prospectus Directive is
    implemented in that relevant member state, or the relevant
    implementation date, an offer of securities described in this
    prospectus may not be made to the public in that relevant member
    state other than:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    To legal entities that are authorized or regulated to operate in
    the financial markets or, if not so authorized or regulated,
    whose corporate purpose is solely to invest in securities;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    To any legal entity that has two or more of (1)&#160;an average
    of at least 250&#160;employees during the last financial year;
    (2)&#160;a total balance sheet of more than &#128;43,000,000 and
    (3)&#160;an annual net turnover of more than &#128;50,000,000,
    as shown in its last annual or consolidated accounts;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    To fewer than 100 natural or legal persons (other than qualified
    investors as defined in the Prospectus Directive) subject to
    obtaining the prior consent of representatives for any such
    offer;&#160;or
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    In any other circumstances that do not require the publication
    of a prospectus pursuant to Article&#160;3 of the Prospectus
    Directive;
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    provided that no such offer of securities shall require us or
    any underwriter to publish a prospectus pursuant to
    Article&#160;3 of the Prospectus Directive.
</DIV>
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    <BR>
    119
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
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<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    For the purposes of this provision, the expression an
    &#147;offer of shares to the public&#148; in relation to any
    shares of common stock in any relevant member state means the
    communication in any form and by any means of sufficient
    information on the terms of the offer and the shares to be
    offered so as to enable an investor to decide to purchase or
    subscribe for the shares, as the same may be varied in that
    member state by any measure implementing the Prospectus
    Directive in that member state and the expression
    &#147;Prospectus Directive&#148; means Directive 2003/71/EC and
    includes any relevant implementing measure in each relevant
    member state.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Other
    Relationships</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    From time to time, certain of the underwriters and their
    affiliates have provided, and may provide in the future, various
    advisory, investment and commercial banking and other services
    to us in the ordinary course of business, for which they have
    received and may continue to receive customary fees and
    commissions.
</DIV>
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    <BR>
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
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<A name='118'>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">LEGAL
    MATTERS</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The validity of the shares of common stock being offered by this
    prospectus will be passed upon for us by Morgan,
    Lewis&#160;&#038; Bockius LLP, Philadelphia, Pennsylvania.
    Wilmer Cutler Pickering Hale and Dorr LLP, New York, New York,
    is acting as counsel for the underwriters in connection with
    this offering.
</DIV>

<A name='119'>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">EXPERTS</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The financial statements of NuPathe Inc. as of December&#160;31,
    2008 and 2009, and for each of the years in the three-year
    period ended December&#160;31, 2009 and the period from
    January&#160;7, 2005 (inception) through December&#160;31, 2009,
    have been included herein and in this prospectus in reliance
    upon the report of KPMG LLP, independent registered public
    accounting firm, appearing elsewhere herein, and upon the
    authority of said firm as experts in accounting and auditing.
    The audit report covering the December&#160;31, 2009 financial
    statements contains an explanatory paragraph that states that
    NuPathe has incurred recurring losses and negative cash flows
    from operations since its inception that raise substantial doubt
    about its ability to continue as a going concern. The financial
    statements do not include any adjustments that might result from
    the outcome of that uncertainty.
</DIV>

<A name='120'>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">WHERE YOU
    CAN FIND MORE INFORMATION</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We have filed with the SEC a registration statement on
    <FONT style="white-space: nowrap">Form&#160;S-1</FONT>
    (File Number 333-<B>&#160;&#160;</B>) under the Securities Act
    with respect to the shares of common stock we are offering by
    this prospectus. This prospectus, which constitutes a part of
    the registration statement, does not contain all of the
    information in the registration statement and its exhibits. For
    further information with respect to us and the common stock
    offered by this prospectus, you should refer to the registration
    statement and the exhibits to the registration statement.
    Statements contained in this prospectus as to the contents of
    any contract, agreement or any other document are not
    necessarily complete, and in each instance, we refer you to the
    copy of the contract, agreement or other document filed as an
    exhibit to the registration statement. Each of these statements
    is qualified in all respects by this reference.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    You may read and copy the registration statement for this
    offering at the SEC&#146;s Public Reference Room, which is
    located at 100&#160;F&#160;Street, N.E., Room&#160;1580,
    Washington, DC 20549. You may obtain information on the
    operation of the Public Reference Room by calling the SEC at
    <FONT style="white-space: nowrap">1-800-SEC-0330.</FONT>
    In addition, the SEC maintains an Internet website, which is
    located at
    <FONT style="white-space: nowrap">http://www.sec.gov</FONT>
    that contains reports, proxy and information statements and
    other information regarding issuers that file electronically
    with the SEC. You may access the registration statement for this
    offering at the SEC&#146;s Internet website.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Upon closing of this offering, we will be subject to the
    information and periodic reporting requirements of the Exchange
    Act, and we will file reports, proxy and information statements
    and other information with the SEC. These reports, proxy and
    information statements and other information will be available
    for inspection and copying at the Public Reference Room and
    website of the SEC, as described above.
</DIV>
<!-- XBRL Pagebreak Begin -->

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    121
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL Pagebreak End -->

<A name='121'>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">INDEX TO
    FINANCIAL STATEMENTS</FONT></B>
</DIV>
</A>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">NUPATHE
    INC.<BR>
    (A Development-Stage Company)<BR>
    <BR>
    </FONT></B>
</DIV>
<DIV align="left">
<!-- TOC -->
</DIV>

<DIV align="left">
<A name="tocpage"></A>
</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="97%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=02 type=quadleft -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=02 type=maindata -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=02 type=quadright -->
</TR>
<!-- Table Width Row END -->
<!-- TableOutputHead -->
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Page</B>
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<!-- TableOutputBody -->
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#300'>Report of Independent Registered Public
    Accounting Firm</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="left" valign="top">
    F-2
</TD>
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#301'>Balance Sheets</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="left" valign="top">
    F-3
</TD>
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#302'>Statements of Operations</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="left" valign="top">
    F-4
</TD>
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#303'>Statements of Redeemable Convertible Preferred
    Stock and Stockholders&#146; Deficit</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="left" valign="top">
    F-5
</TD>
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#304'>Statements of Cash Flows</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="left" valign="top">
    F-6
</TD>
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#305'>Notes to Financial Statements</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="left" valign="top">
    F-7
</TD>
<TD>&nbsp;
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<DIV align="left">
<!-- /TOC -->
</DIV>
<!-- XBRL Pagebreak Begin -->

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    F-1
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL Pagebreak End -->

<A name='300'>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Report of
    Independent Registered Public Accounting Firm</FONT></B>
</DIV>
</A>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The Board of Directors and Stockholders
</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    NuPathe Inc.:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We have audited the accompanying balance sheets of NuPathe Inc.
    (a development-stage company) (the Company) as of
    December&#160;31, 2008 and 2009, and the related statements of
    operations, redeemable convertible preferred stock and
    stockholders&#146; deficit, and cash flows for each of the years
    in the three-year period ended December&#160;31, 2009 and the
    period from January&#160;7, 2005 (inception) through
    December&#160;31, 2009. These financial statements are the
    responsibility of the Company&#146;s management. Our
    responsibility is to express an opinion on these financial
    statements based on our audits.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We conducted our audits in accordance with the standards of the
    Public Company Accounting Oversight Board (United States). Those
    standards require that we plan and perform the audit to obtain
    reasonable assurance about whether the financial statements are
    free of material misstatement. An audit includes examining, on a
    test basis, evidence supporting the amounts and disclosures in
    the financial statements. An audit also includes assessing the
    accounting principles used and significant estimates made by
    management, as well as evaluating the overall financial
    statement presentation. We believe that our audits provide a
    reasonable basis for our opinion.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In our opinion, the financial statements referred to above
    present fairly, in all material respects, the financial position
    of NuPathe Inc. as of December&#160;31, 2008 and 2009, and the
    results of its operations and its cash flows for each of the
    years in the three-year period ended December&#160;31, 2009 and
    for the period from January&#160;7, 2005 (inception) through
    December&#160;31, 2009, in conformity with U.S.&#160;generally
    accepted accounting principles.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The accompanying financial statements have been prepared
    assuming that the Company will continue as a going concern. As
    discussed in note&#160;2 to the financial statements, the
    Company has incurred recurring losses and negative cash flows
    from operations since its inception that raise substantial doubt
    about its ability to continue as a going concern.
    Management&#146;s plans in regard to these matters are also
    described in note&#160;2. The financial statements do not
    include any adjustments that might result from the outcome of
    this uncertainty.
</DIV>

<DIV style="margin-top: 24pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    /s/ KPMG LLP
</DIV>

<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Philadelphia, Pennsylvania
</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    May&#160;14, 2010
</DIV>
<!-- XBRL Pagebreak Begin -->

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    F-2
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL Pagebreak End -->

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">


    <B><FONT style="font-family: 'Times New Roman', Times">NUPATHE
    INC.<BR>
    (A Development-Stage Company)<BR>
    <!-- XBRL,bs --> <BR>
    <A name='301'>Balance Sheets</FONT></B>
</DIV>
</A>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>
<!-- XBRL,body -->
<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF"><!-- TABLE 01 -->
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="56%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=02 type=lead -->
    <TD width="9%" align="right">&nbsp;</TD>	<!-- colindex=02 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=02 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=03 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=03 type=lead -->
    <TD width="9%" align="right">&nbsp;</TD>	<!-- colindex=03 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=03 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=04 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=04 type=lead -->
    <TD width="12%" align="right">&nbsp;</TD>	<!-- colindex=04 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=04 type=hang1 -->
</TR>
<!-- Table Width Row END -->
<!-- TableOutputHead -->
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="6" align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>December&#160;31,</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Pro Forma<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>2008</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>2009</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>December&#160;31, 2009</B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Unaudited<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>(See note 3)</B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<!-- TableOutputBody -->
<TR valign="bottom" style="background: #CCEEFF">
<TD colspan="13" align="center" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <B>ASSETS</B>
</DIV>
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Current assets:
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Cash and cash equivalents
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    8,368,461
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    3,926,574
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    18,206,978
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Prepaid expenses and other
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    1,139,878
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    918,878
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    918,878
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 30pt">
    Total current assets
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    9,508,339
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    4,845,452
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    19,125,856
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Property and equipment, net
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    122,726
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    70,628
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    70,628
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Other assets
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    144,521
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    93,053
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    296,308
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 30pt">
    Total assets
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    9,775,586
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    5,009,133
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    19,492,792
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="line-height: 9pt">
<TD colspan="13">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD colspan="13" align="center" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <B>LIABILITIES AND STOCKHOLDERS&#146; EQUITY (DEFICIT)</B>
</DIV>
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Current liabilities:
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Current portion of long-term debt
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    890,929
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    818,139
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    36,043
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Accounts payable
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    920,422
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    1,464,106
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    1,464,106
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Accrued expenses
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    1,412,350
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    1,035,826
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    1,035,826
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 30pt">
    Total current liabilities
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    3,223,701
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    3,318,071
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    2,535,975
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Long-term debt
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    782,096
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    5,000,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Warrant liability
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    102,354
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    626,492
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 30pt">
    Total liabilities
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    4,108,151
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    3,944,563
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    7,535,975
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Commitments (note&#160;9)
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Redeemable convertible preferred stock, $0.001&#160;par value;
    authorized 71,745,055&#160;shares at December&#160;31, 2009;
    issued and outstanding 42,205,062, and 53,096,340&#160;shares at
    December&#160;31, 2008 and 2009, respectively (liquidation value
    of $56,179,639 at December&#160;31, 2009)
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    41,808,630
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    55,538,191
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Stockholders&#146; equity (deficit):
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Common stock, $0.001&#160;par value; authorized
    90,830,376&#160;shares, issued and outstanding 3,626,250,
    3,131,250
    and&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;shares
    at December&#160;31, 2008 and 2009 and December&#160;31, 2009
    pro forma, respectively
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    3,626
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    3,131
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    63,539
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Additional paid-in capital
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    66,370,030
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Deficit accumulated during the development stage
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (36,144,821
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (54,476,752
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (54,476,752
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 30pt">
    Total stockholders&#146; equity (deficit)
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (36,141,195
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (54,473,621
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    11,956,817
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 30pt">
    Total liabilities and stockholders&#146; equity (deficit)
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    9,775,586
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    5,009,133
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    19,492,792
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>
<!-- /XBRL,bs -->
<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    See accompanying notes to financial statements.
</DIV>
<!-- XBRL Pagebreak Begin -->

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    F-3
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL Pagebreak End -->

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">


    <B><FONT style="font-family: 'Times New Roman', Times">NUPATHE
    INC.<BR>
    (A Development-Stage Company)<BR>
    <!-- XBRL,op --> <BR>
    <A name='302'>Statements of Operations</FONT></B>
</DIV>
</A>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>
<!-- XBRL,body -->
<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="45%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=02 type=lead -->
    <TD width="9%" align="right">&nbsp;</TD>	<!-- colindex=02 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=02 type=hang1 -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=03 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=03 type=lead -->
    <TD width="9%" align="right">&nbsp;</TD>	<!-- colindex=03 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=03 type=hang1 -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=04 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=04 type=lead -->
    <TD width="9%" align="right">&nbsp;</TD>	<!-- colindex=04 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=04 type=hang1 -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=05 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=05 type=lead -->
    <TD width="12%" align="right">&nbsp;</TD>	<!-- colindex=05 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=05 type=hang1 -->
</TR>
<!-- Table Width Row END -->
<!-- TableOutputHead -->
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Period from<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>January&#160;7, 2005<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="10" align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Year Ended December&#160;31,</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>(inception) through<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>2007</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>2008</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>2009</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>December&#160;31, 2009</B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<!-- TableOutputBody -->
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Operating expenses:
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Research and development
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    7,761,442
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    8,815,354
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    11,309,503
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    31,787,569
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Acquired in-process research and development
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    5,500,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    5,500,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    General and administrative
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    1,883,822
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    3,075,084
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    3,142,253
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    9,827,382
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 30pt">
    Total operating expenses
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (9,645,264
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (17,390,438
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (14,451,756
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (47,114,951
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Interest income
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    222,866
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    157,622
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    30,437
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    526,473
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Interest expense
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (252,675
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (278,387
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (1,320,005
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (2,622,537
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 30pt">
    Loss before tax benefit
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (9,675,073
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (17,511,203
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (15,741,324
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (49,211,015
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Income tax benefit
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    151,012
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    151,012
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 30pt">
    Net loss
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (9,675,073
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (17,511,203
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (15,590,312
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    (49,060,003
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Accretion of redeemable convertible preferred stock
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (1,126,265
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (2,330,344
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (3,617,211
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 30pt">
    Net loss applicable to common stockholders
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    (10,801,338
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    (19,841,547
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    (19,207,523
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Basic and diluted net loss per common share
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    (3.67
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    (6.49
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    (6.28
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Weighted average basic and diluted common shares outstanding
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    2,947,005
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    3,059,137
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    3,060,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Unaudited pro forma net loss
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    (15,590,312
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Unaudited pro forma basic and diluted net loss per common share
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Unaudited pro forma weighted average basic and diluted common
    shares outstanding
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>
<!-- /XBRL,op -->
<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    See accompanying notes to financial statements.
</DIV>
<!-- XBRL Pagebreak Begin -->

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    F-4
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL Pagebreak End -->

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">


    <B><FONT style="font-family: 'Times New Roman', Times">NUPATHE
    INC.<BR>
    (A Development-Stage Company)<BR>
    <BR>
    <A name='303'> <!-- XBRL,se -->Statements of Redeemable
    Convertible Preferred Stock and Stockholders&#146; Deficit<BR>
    Period from January&#160;7, 2005 (inception) through
    December&#160;31, 2009</FONT></B>
</DIV>
</A>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>
<!-- XBRL,body -->
<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 7pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF"><!-- TABLE 01 -->
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="41%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=02 type=gutterleft -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=02 type=gutterright -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=02 type=lead -->
    <TD width="4%" align="right">&nbsp;</TD>	<!-- colindex=02 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=02 type=hang1 -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=03 type=gutterleft -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=03 type=gutterright -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=03 type=lead -->
    <TD width="5%" align="right">&nbsp;</TD>	<!-- colindex=03 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=03 type=hang1 -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=04 type=gutterleft -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=04 type=gutterright -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=04 type=lead -->
    <TD width="3%" align="right">&nbsp;</TD>	<!-- colindex=04 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=04 type=hang1 -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=05 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=05 type=lead -->
    <TD width="3%" align="right">&nbsp;</TD>	<!-- colindex=05 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=05 type=hang1 -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=06 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=06 type=lead -->
    <TD width="8%" align="right">&nbsp;</TD>	<!-- colindex=06 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=06 type=hang1 -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=07 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=07 type=lead -->
    <TD width="6%" align="right">&nbsp;</TD>	<!-- colindex=07 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=07 type=hang1 -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=08 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=08 type=lead -->
    <TD width="6%" align="right">&nbsp;</TD>	<!-- colindex=08 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=08 type=hang1 -->
</TR>
<!-- Table Width Row END -->
<!-- TableOutputHead -->
<TR style="font-size: 7pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="18" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Stockholders&#146; Deficit</B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 7pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-right: 1px solid #000000; padding-right: 2pt">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Deficit<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 7pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-right: 1px solid #000000; padding-right: 2pt">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Accumulated<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 7pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="7" nowrap align="center" valign="bottom">
    <B>Redeemable Convertible<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-right: 1px solid #000000; padding-right: 2pt">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>During the<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 7pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="7" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Preferred Stock</B>
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-right: 1px solid #000000; padding-right: 2pt">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="6" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Common Stock</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Additional<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Development<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 7pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Shares</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Amount</B>
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-right: 1px solid #000000; padding-right: 2pt">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Shares</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Amount</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Paid-in Capital</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Stage</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Total</B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<!-- TableOutputBody -->
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -7pt; margin-left: 7pt">
    Balance, January&#160;7, 2005 (inception)
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD style="border-right: 1px solid #000000; padding-right: 2pt">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -7pt; margin-left: 7pt">
    Issuance of common stock to initial stockholders at $0.08 per
    share
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD style="border-right: 1px solid #000000; padding-right: 2pt">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    2,710,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    2,710
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    214,090
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    216,800
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -7pt; margin-left: 7pt">
    Net loss
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD style="border-right: 1px solid #000000; padding-right: 2pt">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (1,067,659
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (1,067,659
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-right: 1px solid #000000; padding-right: 2pt">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -7pt; margin-left: 7pt">
    Balance, December&#160;31, 2005
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD style="border-right: 1px solid #000000; padding-right: 2pt">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    2,710,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    2,710
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    214,090
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (1,067,659
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (850,859
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -7pt; margin-left: 7pt">
    Stock-based compensation
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD style="border-right: 1px solid #000000; padding-right: 2pt">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    915,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    915
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    43,195
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    44,110
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -7pt; margin-left: 7pt">
    Conversion of convertible notes and accrued interest into
    Series&#160;A redeemable convertible preferred stock
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    3,481,645
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    2,590,343
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD style="border-right: 1px solid #000000; padding-right: 2pt">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    647,587
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    647,587
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -7pt; margin-left: 7pt">
    Sale of Series&#160;A redeemable convertible preferred stock at
    $0.93 per share, net of expenses of $267,458
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    8,064,516
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    7,232,542
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD style="border-right: 1px solid #000000; padding-right: 2pt">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -7pt; margin-left: 7pt">
    Accretion of Series&#160;A redeemable convertible preferred
    stock to redemption value
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    340,998
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD style="border-right: 1px solid #000000; padding-right: 2pt">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (340,998
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (340,998
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -7pt; margin-left: 7pt">
    Net loss
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD style="border-right: 1px solid #000000; padding-right: 2pt">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (5,215,756
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (5,215,756
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-right: 1px solid #000000; padding-right: 2pt">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -7pt; margin-left: 7pt">
    Balance, December&#160;31, 2006
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    11,546,161
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    10,163,883
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD style="border-right: 1px solid #000000; padding-right: 2pt">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    3,625,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    3,625
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    563,874
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (6,283,415
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (5,715,916
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -7pt; margin-left: 7pt">
    Stock-based compensation
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD style="border-right: 1px solid #000000; padding-right: 2pt">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    59,205
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    59,205
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -7pt; margin-left: 7pt">
    Sale of Series&#160;A redeemable convertible preferred stock at
    $0.93 per share, net of expenses of $20,272
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    5,376,345
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    4,979,729
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD style="border-right: 1px solid #000000; padding-right: 2pt">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -7pt; margin-left: 7pt">
    Accretion of Series&#160;A redeemable convertible preferred
    stock to redemption value
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    1,126,265
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD style="border-right: 1px solid #000000; padding-right: 2pt">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (623,079
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (503,186
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (1,126,265
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -7pt; margin-left: 7pt">
    Net loss
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD style="border-right: 1px solid #000000; padding-right: 2pt">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (9,675,073
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (9,675,073
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-right: 1px solid #000000; padding-right: 2pt">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -7pt; margin-left: 7pt">
    Balance, December&#160;31, 2007
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    16,922,506
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    16,269,877
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD style="border-right: 1px solid #000000; padding-right: 2pt">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    3,625,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    3,625
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (16,461,674
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (16,458,049
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -7pt; margin-left: 7pt">
    Stock-based compensation
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD style="border-right: 1px solid #000000; padding-right: 2pt">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    158,176
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    158,176
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -7pt; margin-left: 7pt">
    Exercise of stock options
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD style="border-right: 1px solid #000000; padding-right: 2pt">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    1,250
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    1
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    224
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    225
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -7pt; margin-left: 7pt">
    Sale of Series&#160;A redeemable convertible preferred stock at
    $0.93 per share
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    2,688,171
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    2,499,999
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD style="border-right: 1px solid #000000; padding-right: 2pt">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -7pt; margin-left: 7pt">
    Sale of Series&#160;B redeemable convertible preferred stock at
    $0.93 per share, net of expenses of $304,368
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    22,594,385
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    20,708,410
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD style="border-right: 1px solid #000000; padding-right: 2pt">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -7pt; margin-left: 7pt">
    Accretion of Series&#160;A and Series&#160;B redeemable
    convertible preferred stock to redemption value
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    2,330,344
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD style="border-right: 1px solid #000000; padding-right: 2pt">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (158,400
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (2,171,944
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (2,330,344
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -7pt; margin-left: 7pt">
    Net loss
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD style="border-right: 1px solid #000000; padding-right: 2pt">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (17,511,203
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (17,511,203
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-right: 1px solid #000000; padding-right: 2pt">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -7pt; margin-left: 7pt">
    Balance, December&#160;31, 2008
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    42,205,062
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    41,808,630
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD style="border-right: 1px solid #000000; padding-right: 2pt">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    3,626,250
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    3,626
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (36,144,821
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (36,141,195
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -7pt; margin-left: 7pt">
    Stock-based compensation
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD style="border-right: 1px solid #000000; padding-right: 2pt">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    319,055
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    319,055
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -7pt; margin-left: 7pt">
    Forfeiture of restricted stock
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD style="border-right: 1px solid #000000; padding-right: 2pt">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (495,000
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (495
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    495
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -7pt; margin-left: 7pt">
    Sale of Series&#160;B redeemable convertible preferred stock at
    $0.93 per share, net of expenses of $16,538
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    8,786,952
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    8,155,327
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD style="border-right: 1px solid #000000; padding-right: 2pt">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -7pt; margin-left: 7pt">
    Conversion of convertible notes and accrued interest into
    Series&#160;B redeemable convertible preferred stock
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    2,104,326
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    1,957,023
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD style="border-right: 1px solid #000000; padding-right: 2pt">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -7pt; margin-left: 7pt">
    Beneficial conversion feature related to the convertible note
    and warrant agreement
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD style="border-right: 1px solid #000000; padding-right: 2pt">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    556,042
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    556,042
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -7pt; margin-left: 7pt">
    Accretion of Series&#160;A and Series&#160;B redeemable
    convertible preferred stock to redemption value
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    3,617,211
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD style="border-right: 1px solid #000000; padding-right: 2pt">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (875,592
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (2,741,619
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (3,617,211
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -7pt; margin-left: 7pt">
    Net loss
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD style="border-right: 1px solid #000000; padding-right: 2pt">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (15,590,312
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (15,590,312
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-right: 1px solid #000000; padding-right: 2pt">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -7pt; margin-left: 7pt">
    Balance, December&#160;31, 2009
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    53,096,340
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    55,538,191
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD style="border-right: 1px solid #000000; padding-right: 2pt">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    3,131,250
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    3,131
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    (54,476,752
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    (54,473,621
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-right: 1px solid #000000; padding-right: 2pt">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>
<!-- /XBRL,se -->
<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    See accompanying notes to financial statements.
</DIV>
<!-- XBRL Pagebreak Begin -->

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    F-5
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL Pagebreak End -->

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">


    <B><FONT style="font-family: 'Times New Roman', Times">NUPATHE
    INC.<BR>
    (A Development-Stage Company)<BR>
    <!-- XBRL,cf --> <BR>
    <A name='304'>Statements of Cash Flows</FONT></B>
</DIV>
</A>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>
<!-- XBRL,body -->
<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 9pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF"><!-- TABLE 01 -->
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="53%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=02 type=lead -->
    <TD width="7%" align="right">&nbsp;</TD>	<!-- colindex=02 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=02 type=hang1 -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=03 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=03 type=lead -->
    <TD width="8%" align="right">&nbsp;</TD>	<!-- colindex=03 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=03 type=hang1 -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=04 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=04 type=lead -->
    <TD width="8%" align="right">&nbsp;</TD>	<!-- colindex=04 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=04 type=hang1 -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=05 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=05 type=lead -->
    <TD width="12%" align="right">&nbsp;</TD>	<!-- colindex=05 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=05 type=hang1 -->
</TR>
<!-- Table Width Row END -->
<!-- TableOutputHead -->
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Period from<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>January&#160;7, 2005<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="10" align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Year Ended December&#160;31,</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>(inception) through<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>2007</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>2008</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>2009</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>December&#160;31, 2009</B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<!-- TableOutputBody -->
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -9pt; margin-left: 9pt">
    Cash flows from operating activities:
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -9pt; margin-left: 18pt">
    Net loss
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    (9,675,073
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    (17,511,203
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    (15,590,312
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    (49,060,003
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -9pt; margin-left: 18pt">
    Adjustments to reconcile net loss to net cash used in operating
    activities:
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -9pt; margin-left: 36pt">
    Depreciation expense
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    17,140
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    48,197
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    57,383
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    130,825
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -9pt; margin-left: 36pt">
    Loss on asset disposal
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    23,508
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    23,508
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -9pt; margin-left: 36pt">
    Acquired in-process research and development
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    5,500,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    5,500,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -9pt; margin-left: 36pt">
    Stock-based compensation
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    59,205
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    158,176
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    319,055
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    589,346
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -9pt; margin-left: 36pt">
    Noncash interest expense
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    36,816
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    49,503
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    1,154,486
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    1,888,392
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -9pt; margin-left: 36pt">
    Changes in operating assets and liabilities:
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -9pt; margin-left: 45pt">
    Prepaid expenses and other assets
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (267,662
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (702,692
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    301,090
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (832,456
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -9pt; margin-left: 45pt">
    Accounts payable
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    663,389
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (11,149
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    543,684
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    1,464,106
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -9pt; margin-left: 45pt">
    Accrued expenses
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    537,134
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    195,537
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (376,524
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    1,160,196
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -9pt; margin-left: 54pt">
    Net cash used in operating activities
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (8,629,051
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (12,273,631
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (13,567,630
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (39,136,086
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -9pt; margin-left: 9pt">
    Cash flows from investing activities:
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -9pt; margin-left: 18pt">
    Purchase of in-process research and development
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (5,500,000
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (5,500,000
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -9pt; margin-left: 18pt">
    Purchases of property and equipment
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (35,721
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (126,677
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (28,792
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (224,960
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -9pt; margin-left: 54pt">
    Net cash used in investing activities
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (35,721
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (5,626,677
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (28,792
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (5,724,960
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -9pt; margin-left: 9pt">
    Cash flows from financing activities:
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -9pt; margin-left: 18pt">
    Proceeds from issuance of debt
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    2,507,992
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    100,749
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    2,608,741
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -9pt; margin-left: 18pt">
    Proceeds from convertible notes
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    1,934,183
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    4,404,183
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -9pt; margin-left: 18pt">
    Payment of debt issuance costs
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (74,034
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (74,034
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -9pt; margin-left: 18pt">
    Repayment of debt
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (129,648
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (870,879
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (934,975
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (1,935,502
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -9pt; margin-left: 18pt">
    Proceeds from sale of preferred stock, net
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    4,979,729
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    23,208,409
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    8,155,327
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    43,576,007
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -9pt; margin-left: 18pt">
    Proceeds from sale of common stock
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    225
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    208,225
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -9pt; margin-left: 54pt">
    Net cash provided by financing activities
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    7,284,039
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    22,438,504
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    9,154,535
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    48,787,620
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -9pt; margin-left: 54pt">
    Net increase (decrease) in cash and cash equivalents
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (1,380,733
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    4,538,196
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (4,441,887
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    3,926,574
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -9pt; margin-left: 9pt">
    Cash and cash equivalents, beginning of period
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    5,210,998
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    3,830,265
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    8,368,461
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -9pt; margin-left: 9pt">
    Cash and cash equivalents, end of period
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    3,830,265
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    8,368,461
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    3,926,574
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    3,926,574
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -9pt; margin-left: 9pt">
    Supplemental cash flow disclosures:
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -9pt; margin-left: 18pt">
    Noncash investing and financing activities:
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -9pt; margin-left: 27pt">
    Conversion of note principal and accrued interest to redeemable
    convertible preferred stock
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    1,957,023
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    4,547,366
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -9pt; margin-left: 27pt">
    Accretion of redeemable convertible preferred stock
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    1,126,265
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    2,330,344
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    3,617,211
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    7,414,818
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -9pt; margin-left: 27pt">
    Cash paid for interest
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    193,147
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    236,078
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    173,580
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    602,805
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>
<!-- /XBRL,cf -->
<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    See accompanying notes to financial statements.
</DIV>
<!-- XBRL Pagebreak Begin -->

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    F-6
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL Pagebreak End -->
<!-- XBRL,ns -->
<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">NUPATHE
    INC.<BR>
    </FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">


    <A name='305'><B><FONT style="font-family: 'Times New Roman', Times">Notes
    to Financial Statements</FONT></B></A>
</DIV>
</A>
<!-- XBRL,n -->
<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF"><!-- TABLE 05 -->

<TR>
    <TD width="4%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>
    <B><FONT style="font-family: 'Times New Roman', Times">(1)&#160;&#160;</FONT></B>
</TD>
    <TD>
    <B><FONT style="font-family: 'Times New Roman', Times">Background</FONT></B>
</TD>
</TR>

</TABLE>
<!-- XBRL,body -->
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    NuPathe Inc. (the Company) is a development-stage company
    incorporated in Delaware on January&#160;7, 2005 (inception).
    The Company is a specialty pharmaceutical company focused on the
    development and commercialization of branded therapeutics for
    diseases of the central nervous system. The Company operates in
    one segment and has its principal offices in Conshohocken,
    Pennsylvania.
</DIV>
<!-- XBRL,n -->
<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF"><!-- TABLE 05 -->

<TR>
    <TD width="4%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>
    <B><FONT style="font-family: 'Times New Roman', Times">(2)&#160;&#160;</FONT></B>
</TD>
    <TD>
    <B><FONT style="font-family: 'Times New Roman', Times">Development-Stage
    Risks and Liquidity</FONT></B>
</TD>
</TR>

</TABLE>
<!-- XBRL,body -->
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The Company has incurred losses and negative cash flows from
    operations since inception and has a deficit accumulated during
    the development stage of $54,476,752 as of December&#160;31,
    2009. The Company anticipates incurring additional losses until
    such time, if ever, that it can generate significant sales of
    its products currently in development. Management estimates that
    current cash and cash equivalents and the proceeds of
    $10,062,500 from convertible notes issued in April 2010 (the
    April 2010 Convertible Notes) (note&#160;6)&#160;and the
    $5,000,000 of proceeds from a term loan facility entered into in
    May 2010 (the May&#160;2010 Loan Facility)
    (note&#160;6)&#160;are sufficient to sustain planned operations
    through the third quarter of 2010. Substantial additional
    financing will be needed by the Company to fund its operations
    and to commercially develop its products. There is no assurance
    that such financing will be available when needed or on
    acceptable terms. These factors raise substantial doubt about
    the Company&#146;s ability to continue as a going concern.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The accompanying financial statements have been prepared on a
    going concern basis, which contemplates the realization of
    assets and satisfaction of liabilities in the normal course of
    business. The financial statements do not include any
    adjustments relating to the recoverability and classification of
    recorded asset amounts or the amounts and classification of
    liabilities that might result from the outcome of this
    uncertainty.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Management is currently evaluating different strategies to
    obtain the required funding of future operations. These
    strategies may include, but are not limited to: an initial
    public offering of the Company&#146;s common stock, additional
    venture capital funding, collaborative arrangements with third
    parties
    <FONT style="white-space: nowrap">and/or</FONT>
    borrowings of debt. There can be no assurance that these future
    funding efforts will be successful.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The Company is subject to those risks associated with any
    specialty pharmaceutical company that has substantial
    expenditures for research and development. There can be no
    assurance that the Company&#146;s research and development
    projects will be successful, that products developed will obtain
    necessary regulatory approval, or that any approved product will
    be commercially viable. In addition, the Company operates in an
    environment of rapid technological change, and is largely
    dependent on the services of its employees and consultants.
</DIV>
<!-- XBRL,n -->
<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF"><!-- TABLE 05 -->

<TR>
    <TD width="4%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>
    <B><FONT style="font-family: 'Times New Roman', Times">(3)&#160;&#160;</FONT></B>
</TD>
    <TD>
    <B><FONT style="font-family: 'Times New Roman', Times">Summary
    of Significant Accounting Policies</FONT></B>
</TD>
</TR>

</TABLE>
<!-- XBRL,body -->
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">(a)&#160;&#160;Use
    of Estimates</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The preparation of financial statements in conformity with
    U.S.&#160;generally accepted accounting principles requires
    management to make estimates and assumptions that affect the
    reported amounts of assets and liabilities and disclosure of
    contingent assets and liabilities at the date of the financial
    statements and the reported amounts of expenses during the
    reporting period. Actual results could differ from such
    estimates.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">(b)&#160;&#160;Fair
    Value of Financial Instruments</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Management believes that the carrying amounts of the
    Company&#146;s financial instruments, including cash
    equivalents, prepaid expenses and other current assets, accounts
    payable and accrued expenses, approximate fair value due to the
    short-term nature of those instruments. The carrying amount of
    the Company&#146;s debt obligations approximate fair value based
    on interest rates available on similar borrowings.
</DIV>
<!-- XBRL Pagebreak Begin -->

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    F-7
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL -->
<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">NUPATHE
    INC.<BR>
    </FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Notes to
    Financial Statements&#160;&#151;&#160;(Continued)</FONT></B>
</DIV>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>
<!-- XBRL Pagebreak End -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The Company follows Financial Accounting Standards Board (FASB)
    accounting guidance on fair value measurements for financial
    assets and liabilities measured on a recurring basis. The
    guidance requires fair value measurements be classified and
    disclosed in one of the following three categories:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    <I>Level&#160;1:</I>&#160;&#160;Unadjusted quoted prices in
    active markets that are accessible at the measurement date for
    identical, unrestricted assets or liabilities;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    <I>Level&#160;2:</I>&#160;&#160;Quoted prices in markets that
    are not active, or input which are observable, either directly
    or indirectly, for substantially the full term of the asset or
    liabilities;&#160;or
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    <I>Level&#160;3:</I>&#160;&#160;Prices or valuation techniques
    that require inputs that are both significant to the fair value
    measurement and unobservable (i.e., supported by little or no
    market activity).
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The following fair value hierarchy table presents information
    about each major category of the Company&#146;s financial assets
    and liability measured at fair value on a recurring basis as of
    December&#160;31, 2008 and 2009:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF"><!-- TABLE 01 -->
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="49%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="5%" align="right">&nbsp;</TD>	<!-- colindex=02 type=lead -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=02 type=body -->
    <TD width="5%" align="left">&nbsp;</TD>	<!-- colindex=02 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=03 type=gutter -->
    <TD width="4%" align="right">&nbsp;</TD>	<!-- colindex=03 type=lead -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=03 type=body -->
    <TD width="4%" align="left">&nbsp;</TD>	<!-- colindex=03 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=04 type=gutter -->
    <TD width="5%" align="right">&nbsp;</TD>	<!-- colindex=04 type=lead -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=04 type=body -->
    <TD width="5%" align="left">&nbsp;</TD>	<!-- colindex=04 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=05 type=gutter -->
    <TD width="4%" align="right">&nbsp;</TD>	<!-- colindex=05 type=lead -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=05 type=body -->
    <TD width="4%" align="left">&nbsp;</TD>	<!-- colindex=05 type=hang1 -->
</TR>
<!-- Table Width Row END -->
<!-- TableOutputHead -->
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="15" align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Fair Value Measurement at Reporting Date Using</B>
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
    <B>Quoted Prices<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
    <B>in Active<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
    <B>Significant<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
    <B>Markets for<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
    <B>Other<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
    <B>Significant<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
    <B>Identical<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
    <B>Observable<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
    <B>Unobservable<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
    <B>Assets<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
    <B>Inputs<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
    <B>Inputs<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>(Level 1)</B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>(Level 2)</B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>(Level 3)</B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Total</B>
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<!-- TableOutputBody -->
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <B>At December&#160;31, 2008</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <B>Assets </B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Cash equivalents
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    8,109,821
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    &#160;&#160;&#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    $&#160;&#160;&#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    8,109,821
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <B>Liabilities</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Warrant liability
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    $102,354
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    102,354
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <B>At December&#160;31, 2009</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <B>Assets</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Cash equivalents
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    3,654,831
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    $&#160;&#160;&#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    3,654,831
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <B>Liabilities</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Warrant liability
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    $626,492
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    626,492
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The reconciliation of warrant liability measured at fair value
    on a recurring basis using unobservable inputs
    (Level&#160;3)&#160;is as follows:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF"><!-- TABLE 01 -->
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="90%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=02 type=lead -->
    <TD width="6%" align="right">&nbsp;</TD>	<!-- colindex=02 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=02 type=hang1 -->
</TR>
<!-- Table Width Row END -->
<!-- TableOutputHead -->
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Warrant<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Liability</B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<!-- TableOutputBody -->
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Balance at January&#160;1, 2008
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    104,319
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Change in fair value of warrant liability
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (1,965
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Balance at December&#160;31, 2008
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    102,354
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Issuance of additional warrants
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    556,042
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Change in fair value of warrant liability
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (31,904
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Balance at December&#160;31, 2009
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    626,492
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The fair value of the warrant liability is based on Level&#160;3
    inputs. For this liability, the Company developed its own
    assumptions that do not have observable inputs or available
    market data to support the fair value. See note&#160;6 for
    further discussion of the warrant liability.
</DIV>
<!-- XBRL Pagebreak Begin -->

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    F-8
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL -->
<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">NUPATHE
    INC.<BR>
    </FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Notes to
    Financial Statements&#160;&#151;&#160;(Continued)</FONT></B>
</DIV>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>
<!-- XBRL Pagebreak End -->

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">(c)&#160;&#160;Unaudited
    Pro forma Balance Sheet Presentation</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The unaudited pro forma balance sheet as of December&#160;31,
    2009 reflects:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    The automatic conversion of all outstanding shares of redeemable
    convertible preferred stock, including accrued dividends, as of
    December&#160;31, 2009, into 60,408,215&#160;shares of common
    stock upon the closing of the initial public offering (IPO)
    contemplated by the Company&#146;s prospectus as of
    December&#160;31, 2009. The shares of common stock issued in the
    IPO and any related estimated net proceeds are excluded from
    such pro forma information. In addition, the Company has
    outstanding warrants to purchase 134,408&#160;shares of
    Series&#160;A redeemable convertible preferred stock
    (Series&#160;A)&#160;and 736,514&#160;shares of Series&#160;B
    redeemable convertible preferred stock
    (Series&#160;B),&#160;which will become warrants to purchase
    870,922&#160;shares of common stock upon the closing of the IPO.
    The liability of $626,492 related to these warrants has been
    reclassified to additional paid-in capital as these warrants
    will no longer be exercisable for redeemable preferred shares.
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    The receipt in April 2010 of gross proceeds of $10,062,500 upon
    the issuance of the April 2010 Convertible Notes and the
    automatic conversion of all principal outstanding under the
    April 2010 Convertible Notes into an aggregate
    of&#160;&#160;&#160;&#160;&#160; shares of common stock upon the
    closing of the IPO (note&#160;6).
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    The receipt in May 2010 of gross proceeds of $5,000,000 upon
    entering into the May 2010 Loan Facility and the issuance of
    warrants to purchase 255,376&#160;shares of Series&#160;B at
    $0.93 per share to the lenders under such facility, which will
    become warrants to purchase 255,376&#160;shares of common stock
    upon the closing of the IPO. The estimated fair value of the
    warrants of $203,255 has been reflected as deferred financing
    costs and additional paid-in capital in the pro forma balance
    sheet. The pro forma balance sheet also reflects the repayment
    in full of the finance company loan balance of $782,096 with the
    proceeds from the term loan facility (note&#160;6).
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">(d)&#160;&#160;Cash
    and Cash Equivalents</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The Company considers all highly liquid debt instruments that
    have maturities of three months or less when acquired to be cash
    equivalents. As of December&#160;31, 2008 and 2009, cash
    equivalents of $8,109,021 and $3,654,831, respectively,
    consisted of money market mutual funds invested in commercial
    paper and short-term corporate and government obligations. The
    Company maintains its checking account at one bank. The Company
    utilizes major financial institutions in order to reduce the
    associated risks. Since March 2007, the Company&#146;s cash
    accounts have been subject to account control agreements with
    the secured finance company that give the finance company the
    right to assume control of the accounts in the event of a loan
    default&#160;(note&#160;6).
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">(e)&#160;&#160;Property
    and Equipment</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Property and equipment are recorded at cost and are depreciated
    on a straight-line basis over their estimated useful lives. The
    Company uses a life of three years for laboratory equipment and
    computer equipment, including software, and five years for
    office equipment and furniture. Leasehold improvements are
    amortized over the shorter of the lease term or the estimated
    useful life of the asset. Long-lived assets, such as property
    and equipment, are reviewed for impairment whenever events or
    changes in circumstances indicate that the carrying amount of an
    asset may not be recoverable. Recoverability of assets to be
    held and used is measured by a comparison of the carrying amount
    of an asset to estimated undiscounted future cash flows expected
    to be generated by the asset. If the carrying amount of an asset
    exceeds its estimated future cash flows, then an impairment
    charge is recognized for the amount by which the carrying value
    of the asset exceeds the fair value of the asset. As of
    December&#160;31, 2008 and 2009, management believes that no
    revision of the remaining useful lives or write-down of
    long-lived assets is required.
</DIV>
<!-- XBRL Pagebreak Begin -->

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    F-9
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL -->
<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">NUPATHE
    INC.<BR>
    </FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Notes to
    Financial Statements&#160;&#151;&#160;(Continued)</FONT></B>
</DIV>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>
<!-- XBRL Pagebreak End -->

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">(f)&#160;&#160;Research
    and Development and In-Process Research and
    Development</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Research and development costs are charged to expense as
    incurred. Upfront and milestone payments made to third parties
    who perform research and development services on the
    Company&#146;s behalf will be expensed as services are rendered.
    Costs incurred in obtaining technology licenses are charged to
    research and development expense if the technology licensed has
    not reached technological feasibility and has no alternative
    future use.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">(g)&#160;&#160;Income
    Taxes</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Income taxes are accounted for under the asset and liability
    method. Deferred tax assets and liabilities are recognized for
    the future tax consequences attributable to differences between
    the financial statement carrying amounts of existing assets and
    liabilities and their respective tax basis and operating loss
    and tax credit carryforwards. Deferred tax assets and
    liabilities are measured using enacted tax rates expected to
    apply to taxable income in the years in which those temporary
    differences are expected to be recovered or settled. The effect
    on deferred tax assets and liabilities of a change in tax rates
    is recognized in income in the period that includes the
    enactment date.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In June 2006, the FASB issued guidance related to accounting for
    uncertainty in income taxes. This authoritative interpretation
    clarified and standardized the manner by which companies are
    required to account for uncertain income tax positions. Under
    this guidance, the Company may recognize, the tax benefit from
    an uncertain tax position only if it is more likely than not to
    be sustained upon examination based on the technical merits of
    the position. The amount of the accrual for which an exposure
    exists is measured as the largest amount of benefit determined
    on a cumulative probability basis that the Company believes is
    more likely than not to be realized upon ultimate settlement of
    the position. This interpretation also provides guidance on
    de-recognition, classification, interest and penalties,
    accounting in interim periods, disclosures, and transition. The
    Company adopted this guidance effective January&#160;1, 2007.
    The adoption of this guidance did not have any impact on the
    Company&#146;s financial position, results of operations or cash
    flows.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">(h)&#160;&#160;Stock-Based
    Compensation</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The Company measures employee stock-based awards at grant date
    fair value and records compensation expense on a straight-line
    basis over the vesting period of the award.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Determining the appropriate fair value of stock-based awards
    requires the use of subjective assumptions, including the fair
    value of the Company&#146;s common stock, and for stock options,
    the expected life of the option and expected stock price
    volatility. The Company uses the Black-Scholes option-pricing
    model to value its stock option awards. The assumptions used in
    calculating the fair value of stock-based awards represent
    management&#146;s best estimates and involve inherent
    uncertainties and the application of management&#146;s judgment.
    As a result, if factors change and management uses different
    assumptions, stock-based compensation expense could be
    materially different for future awards.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The expected life of stock options was estimated using the
    &#147;simplified method,&#148; as the Company has limited
    historical information to develop reasonable expectations about
    future exercise patterns and post-vesting employment termination
    behavior for its stock option grants. The simplified method is
    the midpoint between the vest date and the contractual term of
    the option. For stock price volatility, the Company uses
    comparable public companies as a basis for the expected
    volatility to calculate the fair value of option grants.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Nonemployee awards are revalued until an award vests and
    compensation expense is recorded on a straight-line basis over
    the vesting period of each separate vesting tranche of the
    award, or the accelerated attribution method. The estimation of
    the number of stock awards that will ultimately vest requires
    judgment, and to the extent actual results or updated estimates
    differ from the Company&#146;s current estimates, such amounts
    will be recorded as an adjustment in the period in which
    estimates are revised.
</DIV>
<!-- XBRL Pagebreak Begin -->

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    F-10
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL -->
<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">NUPATHE
    INC.<BR>
    </FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Notes to
    Financial Statements&#160;&#151;&#160;(Continued)</FONT></B>
</DIV>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>
<!-- XBRL Pagebreak End -->

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">(i)&#160;&#160;Net
    Loss Per Common Share</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Basic and diluted net loss per common share is determined by
    dividing net loss applicable to common stockholders by the
    weighted average common shares outstanding less the weighted
    average shares subject to repurchase, during the period. For all
    periods presented, the outstanding shares of Series&#160;A and
    Series&#160;B, common stock options, unvested restricted stock
    and preferred stock warrants have been excluded from the
    calculation because their effect would be anti-dilutive.
    Therefore, the weighted average shares used to calculate both
    basic and diluted loss per share are the same.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The following potentially dilutive securities have been excluded
    from the computations of diluted weighted average shares
    outstanding as of December&#160;31, 2007, 2008 and 2009, as they
    would be anti-dilutive:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="65%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="4%" align="right">&nbsp;</TD>	<!-- colindex=02 type=lead -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=02 type=body -->
    <TD width="4%" align="left">&nbsp;</TD>	<!-- colindex=02 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=03 type=gutter -->
    <TD width="4%" align="right">&nbsp;</TD>	<!-- colindex=03 type=lead -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=03 type=body -->
    <TD width="4%" align="left">&nbsp;</TD>	<!-- colindex=03 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=04 type=gutter -->
    <TD width="4%" align="right">&nbsp;</TD>	<!-- colindex=04 type=lead -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=04 type=body -->
    <TD width="4%" align="left">&nbsp;</TD>	<!-- colindex=04 type=hang1 -->
</TR>
<!-- Table Width Row END -->
<!-- TableOutputHead -->
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="11" align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>December&#160;31,</B>
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>2007</B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>2008</B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>2009</B>
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<!-- TableOutputBody -->
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Redeemable convertible preferred stock
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    16,922,506
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    42,205,062
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    53,096,340
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Shares issuable pursuant to redeemable convertible preferred
    stock accretion
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    1,309,674
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    3,616,584
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    7,311,875
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Options outstanding
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    1,328,557
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    7,203,947
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    7,620,042
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Unvested restricted stock
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    566,250
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    566,250
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    71,250
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Preferred stock warrants outstanding
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    134,408
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    134,408
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    870,922
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The unaudited pro forma net loss per common share is computed
    using the weighted average number of common shares outstanding
    and assumes the conversion of all outstanding shares of the
    Company&#146;s Series&#160;A and Series&#160;B, including
    accrued dividends,
    into&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;shares
    of common stock and the conversion of the April 2010 Convertible
    Notes
    into&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;shares
    of common stock upon the closing of the Company&#146;s planned
    IPO, as if they had occurred at the later of the beginning of
    the period or date of issuance. Accordingly, net loss applicable
    to common stockholders is adjusted to remove all preferred stock
    accretion. The Company believes the unaudited pro forma net loss
    per common share provides material information to investors, as
    the conversion of the Company&#146;s preferred stock to common
    stock, including accrued dividends, and the conversion of the
    April&#160;2010 Convertible Notes is expected to occur upon the
    closing of an IPO, and the disclosure of pro forma net loss per
    common share provides an indication of net loss per common share
    that is comparable to what will be reported by the Company as a
    public company following the closing of the IPO.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The following table summarizes the calculation of unaudited pro
    forma basic and diluted net loss per common share for the year
    ended December&#160;31, 2009:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="86%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=02 type=lead -->
    <TD width="10%" align="right">&nbsp;</TD>	<!-- colindex=02 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=02 type=hang1 -->
</TR>
<!-- Table Width Row END -->
<!-- TableOutputHead -->
<!-- TableOutputBody -->
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Numerator:
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Net loss applicable to common stockholders
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    (19,207,523
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Effect of pro forma conversion of preferred stock:
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 30pt">
    Accretion of redeemable convertible preferred stock
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    3,617,211
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 40pt">
    Pro forma net loss applicable to common stockholders
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    (15,590,312
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Denominator:
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Weighted average common shares outstanding
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    3,060,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Effect of pro forma conversion of redeemable convertible
    preferred stock:
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 30pt">
    Series&#160;A redeemable convertible preferred stock
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    20,262,880
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 30pt">
    Series&#160;B redeemable convertible preferred stock
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    31,303,945
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Effect of pro forma conversion of April 2010 Convertible Notes
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 40pt">
    Shares used in computing unaudited pro forma weighted average
    basic and diluted common shares outstanding
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Unaudited pro forma basic and diluted net loss per common share
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">

</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>
<!-- XBRL Pagebreak Begin -->

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    F-11
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL -->
<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">NUPATHE
    INC.<BR>
    </FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Notes to
    Financial Statements&#160;&#151;&#160;(Continued)</FONT></B>
</DIV>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>
<!-- XBRL Pagebreak End -->

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">(j)&#160;&#160;Segment
    Information</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The Company is managed and operated as one business. The entire
    business is managed by a single management team that reports to
    the chief executive officer. The Company does not operate
    separate lines of business or separate business entities with
    respect to any of its product candidates. Accordingly, the
    Company does not prepare discrete financial information with
    respect to separate product areas and does not have separately
    reportable segments.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">(k)&#160;&#160;Recently
    Issued Accounting Standards</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The Company adopted new accounting guidance on fair value
    measurements effective January&#160;1, 2008, for financial
    assets and liabilities. In addition, effective January&#160;1,
    2009, the Company adopted this guidance as it relates to
    nonfinancial assets and liabilities that are not recognized or
    disclosed at fair value in the financial statements on at least
    an annual basis. This guidance defines fair value as the price
    that would be received to sell an asset or paid to transfer a
    liability, referred to as the exit price, in an orderly
    transaction between market participants at the measurement date.
    The standard outlines a valuation framework and creates a fair
    value hierarchy in order to increase the consistency and
    comparability of fair value measurements and the related
    disclosures. The adoption of this guidance did not have a
    material impact on the Company&#146;s financial statements.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In June 2008, the FASB issued new guidance related to assessing
    whether an equity-linked financial instrument (or embedded
    feature) is indexed to an entity&#146;s own stock for the
    purposes of determining whether such equity-linked financial
    instrument (or embedded feature) is subject to derivative
    accounting. The Company adopted this new guidance effective
    January&#160;1, 2009. The adoption of this guidance did not have
    a material impact on the Company&#146;s financial statements.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In May 2009, the FASB issued new guidance on subsequent events.
    The standard provides guidance on management&#146;s assessment
    of subsequent events and incorporates this guidance into
    accounting literature. The standard is effective prospectively
    for interim and annual periods ending after June&#160;15, 2009
    and the Company adopted this guidance beginning with the interim
    period ended June&#160;30, 2009. The adoption of this standard
    did not have a material impact on the Company&#146;s financial
    statements.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In April 2009, the FASB issued a staff position requiring fair
    value disclosures in both interim as well as annual financial
    statements in order to provide more timely information about the
    effects of current market conditions on financial instruments.
    The guidance is effective for interim and annual periods ending
    after June&#160;15, 2009, and the Company adopted this guidance
    commencing with the issuance of the September&#160;30, 2009
    financial statements. The adoption of this standard did not have
    a material impact on the Company&#146;s financial statements.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In June 2009, the FASB Accounting Standards Codification (ASC)
    was issued, effective for financial statements issued for
    interim and annual periods ending after September&#160;15, 2009.
    The ASC supersedes literature of the FASB, Emerging Issues Task
    Force and other sources. The ASC did not change
    U.S.&#160;generally accepted accounting principles. The adoption
    of this standard did not have a material impact on the
    Company&#146;s financial statements.
</DIV>
<!-- XBRL Pagebreak Begin -->

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    F-12
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL -->
<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">NUPATHE
    INC.<BR>
    </FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Notes to
    Financial Statements&#160;&#151;&#160;(Continued)</FONT></B>
</DIV>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>
<!-- XBRL Pagebreak End -->
<!-- XBRL,n -->
<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">(4)&#160;&#160;Property
    and Equipment</FONT></B>
</DIV>
<!-- XBRL,body -->
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Property and equipment consisted of the following:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="79%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=02 type=lead -->
    <TD width="6%" align="right">&nbsp;</TD>	<!-- colindex=02 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=02 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=03 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=03 type=lead -->
    <TD width="6%" align="right">&nbsp;</TD>	<!-- colindex=03 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=03 type=hang1 -->
</TR>
<!-- Table Width Row END -->
<!-- TableOutputHead -->
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="6" align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>December&#160;31,</B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>2008</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>2009</B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<!-- TableOutputBody -->
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Computer equipment and software
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    153,878
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    109,414
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Office equipment and furniture
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    3,086
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    3,086
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Lab equipment
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    10,817
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    19,623
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Leasehold improvements
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    28,387
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    38,238
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    196,168
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    170,361
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Less accumulated depreciation and amortization
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (73,442
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (99,733
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    122,726
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    70,628
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Depreciation and amortization expense was $17,140, $48,197 and
    $57,383 for the years ended December&#160;31, 2007, 2008 and
    2009, respectively.
</DIV>
<!-- XBRL,n -->
<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">(5)&#160;&#160;Accrued
    Expenses</FONT></B>
</DIV>
<!-- XBRL,body -->
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Accrued expenses consisted of the following:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="75%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=02 type=lead -->
    <TD width="8%" align="right">&nbsp;</TD>	<!-- colindex=02 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=02 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=03 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=03 type=lead -->
    <TD width="8%" align="right">&nbsp;</TD>	<!-- colindex=03 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=03 type=hang1 -->
</TR>
<!-- Table Width Row END -->
<!-- TableOutputHead -->
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="6" align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>December&#160;31,</B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>2008</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>2009</B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<!-- TableOutputBody -->
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Accrued compensation and benefits
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    182,277
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    504,091
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Accrued professional fees
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    159,802
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    112,301
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Accrued research and development expenses
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    839,374
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    238,401
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Accrued interest and other
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    230,897
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    181,033
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    1,412,350
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    1,035,826
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>
<!-- XBRL,n -->
<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">(6)&#160;&#160;Debt</FONT></B>
</DIV>
<!-- XBRL,body -->
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">(a)&#160;&#160;Convertible
    Notes</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    From October 2005 to June 2006, the Company issued convertible
    promissory notes for cash proceeds of $2,470,000 to five
    institutional and individual investors, including an officer of
    the Company. The notes bore interest of 8% per year and were due
    two years from the issuance dates. The notes were convertible
    into preferred stock upon completion of a Qualified Financing,
    as defined.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In August 2006, the note holders converted their notes,
    including accrued interest of $120,343, into
    3,481,645&#160;shares of Series&#160;A at a conversion price of
    $0.74 per share, equal to a 20% discount from the per share
    price paid by the Series&#160;A investors (note 7). As a result
    of the discount and in accordance with FASB accounting guidance,
    the Company recorded a beneficial conversion feature (BCF) of
    $647,587 in connection with the conversion of the notes, which
    was recorded as interest expense in 2006.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In July 2009, the Company issued convertible promissory notes
    for cash proceeds of $1,934,183 to existing investors, including
    two officers of the Company (the 2009 Notes). The 2009 Notes
    bore interest of 10% per year and were due on June&#160;30,
    2010, if not converted prior to such date, and were mandatorily
    convertible into preferred stock upon the occurrence of the
    Second Tranche&#160;Closing, as defined. The holders of the 2009
    Notes were entitled to receive warrants to purchase shares of
    Series&#160;B upon the conversion of the 2009 Notes. The fair
    value of the warrants of $556,042 was recorded as a reduction in
    the carrying value of the 2009 Notes as original issue discount
    and recognized as interest expense. After the allocation of the
</DIV>
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<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    F-13
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL -->
<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">NUPATHE
    INC.<BR>
    </FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Notes to
    Financial Statements&#160;&#151;&#160;(Continued)</FONT></B>
</DIV>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>
<!-- XBRL Pagebreak End -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    original issue discount, the 2009 Notes contained a BCF of
    $556,042, which was also recognized as additional interest
    expense.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In August 2009, the holders of the 2009 Notes converted their
    notes, including accrued interest of $22,840, into
    2,104,326&#160;shares of Series&#160;B at a conversion price of
    $0.93 per share. Upon conversion, the investors received
    warrants to purchase 736,514&#160;shares of Series&#160;B at
    0.93 per share that are exercisable for a term of up to seven
    years. Because the Series&#160;B for which the warrants are
    exercisable is a redeemable security, the warrants are liability
    classified in accordance with FASB accounting guidance. The
    Company records the warrant liability at its fair value using
    the Black-Scholes option-pricing model and revalues the warrant
    at each reporting date. The following table summarizes the fair
    value and the assumptions used for the Black-Scholes
    option-pricing model for these Series&#160;B warrants:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="75%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="4%" align="right">&nbsp;</TD>	<!-- colindex=02 type=lead -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=02 type=body -->
    <TD width="4%" align="left">&nbsp;</TD>	<!-- colindex=02 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=03 type=gutter -->
    <TD width="5%" align="right">&nbsp;</TD>	<!-- colindex=03 type=lead -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=03 type=body -->
    <TD width="5%" align="left">&nbsp;</TD>	<!-- colindex=03 type=hang1 -->
</TR>
<!-- Table Width Row END -->
<!-- TableOutputHead -->
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
    <B>Date of<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
    <B>Issuance<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
    <B>(August&#160;20,<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
    <B>December&#160;31,<BR>
    </B>
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>2009)</B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>2009</B>
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<!-- TableOutputBody -->
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Fair value
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    556,042
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    526,828
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Expected dividend yield
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
    %
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
    %
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Expected volatility
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    95.50
</TD>
<TD nowrap align="left" valign="bottom">
    %
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    87.83
</TD>
<TD nowrap align="left" valign="bottom">
    %
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Risk-free interest rate
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    2.60
</TD>
<TD nowrap align="left" valign="bottom">
    %
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    3.26
</TD>
<TD nowrap align="left" valign="bottom">
    %
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Remaining contractual term
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    7&#160;years
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    6.6&#160;years
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In April 2010, the Company issued convertible promissory notes
    for cash proceeds of $10,062,500 to existing investors,
    including three officers of the Company. The April 2010
    Convertible Notes bear interest of 8% per year and are due on
    December&#160;31, 2010, if not converted prior to that date. The
    April 2010 Convertible Notes and related accrued interest are
    mandatorily convertible into common stock at a conversion price
    equal to 80% of the IPO price per share upon the occurrence of
    an IPO, as defined. Additionally, the April 2010 Convertible
    Notes are mandatorily convertible into preferred stock upon the
    execution of an acquisition agreement, as defined, or the
    issuance of equity securities with total proceeds greater than
    $10.0&#160;million. In the event that an IPO does not occur and
    the April 2010 Convertible Notes convert as a result of the
    events previously noted or the notes are still outstanding at
    the maturity date, the Company will issue warrants to the
    holders of the April 2010 Convertible Notes. The terms of such
    warrants are dependent upon the conversion or repayment event
    and are defined in the notes.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">(b)&#160;&#160;Credit
    Facilities and Vendor Debt</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In March 2007, the Company received a $2,500,000 loan from a
    finance company. The loan was secured by a lien on all of the
    Company&#146;s assets, excluding intellectual property, which
    was subject to a negative pledge. The loan contained certain
    additional nonfinancial covenants. In connection with the loan
    agreement, the Company&#146;s cash and investment accounts were
    subject to account control agreements with the finance company
    that gave the finance company the right to assume control of the
    accounts in the event of a loan default. Loan defaults were
    defined in the loan agreement and included, among others, the
    finance company&#146;s determination that there was a material
    adverse change in the Company&#146;s operations. Interest on the
    loan was at a rate of 11.44%. The loan was interest-only for six
    months, and was repayable in equal monthly payments of principal
    and interest of $82,369 over 36&#160;months. Interest expense of
    $215,204, $226,594 and $142,785 was recognized during the years
    ended December&#160;31, 2007, 2008 and 2009, respectively. At
    December&#160;31, 2008 and 2009, the balance outstanding on this
    loan was $1,627,735 and $782,096, respectively. This loan was
    repaid on May&#160;13, 2010.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In connection with the loan from the finance company, the
    Company issued a warrant to purchase 134,408&#160;shares of
    Series&#160;A at an exercise price of $0.93 per share that is
    exercisable for a term of up to ten years. Because the
    Series&#160;A for which the warrant is exercisable is a
    redeemable security, the warrant is liability classified. The
    Company records the warrant liability at its fair value using
    the Black-Scholes option-
</DIV>
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<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    F-14
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL -->
<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">NUPATHE
    INC.<BR>
    </FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Notes to
    Financial Statements&#160;&#151;&#160;(Continued)</FONT></B>
</DIV>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>
<!-- XBRL Pagebreak End -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    pricing model and revalues the warrant at each reporting date.
    The following table summarizes the fair value and the
    assumptions used for the Black-Scholes
    <FONT style="white-space: nowrap">option-pricing</FONT>
    model for this warrant:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="61%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="4%" align="right">&nbsp;</TD>	<!-- colindex=02 type=lead -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=02 type=body -->
    <TD width="4%" align="left">&nbsp;</TD>	<!-- colindex=02 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=03 type=gutter -->
    <TD width="5%" align="right">&nbsp;</TD>	<!-- colindex=03 type=lead -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=03 type=body -->
    <TD width="5%" align="left">&nbsp;</TD>	<!-- colindex=03 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=04 type=gutter -->
    <TD width="5%" align="right">&nbsp;</TD>	<!-- colindex=04 type=lead -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=04 type=body -->
    <TD width="5%" align="left">&nbsp;</TD>	<!-- colindex=04 type=hang1 -->
</TR>
<!-- Table Width Row END -->
<!-- TableOutputHead -->
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
    <B>Date of<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
    <B>Issuance<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
    <B>(March&#160;29,<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="7" align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>December&#160;31,</B>
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>2007)</B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>2008</B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>2009</B>
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<!-- TableOutputBody -->
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Fair value
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    106,457
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    102,354
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    99,664
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Expected dividend yield
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
    %
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
    %
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
    %
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Expected volatility
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    83.10
</TD>
<TD nowrap align="left" valign="bottom">
    %
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    89.79
</TD>
<TD nowrap align="left" valign="bottom">
    %
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    89.17
</TD>
<TD nowrap align="left" valign="bottom">
    %
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Risk-free interest rate
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    4.64
</TD>
<TD nowrap align="left" valign="bottom">
    %
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    2.03
</TD>
<TD nowrap align="left" valign="bottom">
    %
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    3.43
</TD>
<TD nowrap align="left" valign="bottom">
    %
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Remaining contractual term
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    10&#160;years
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    8.25&#160;years
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    7.25&#160;years
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The initial fair value of the warrant of $106,457 was recorded
    as deferred financing costs and is being amortized to interest
    expense over the life of the loan. Interest expense of $22,812,
    $30,416 and $30,416 related to the warrant was recorded during
    the years ended December&#160;31, 2007, 2008 and 2009,
    respectively.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In May 2010, the Company executed a term loan facility with
    lenders to fund working capital needs. The loan is secured by a
    lien on all of the Company&#146;s assets, excluding intellectual
    property, which is subject to a negative pledge. The Company
    received proceeds of $5,000,000 at closing. An additional
    $6,000,000 of proceeds is available to the Company subject to
    the closing of an equity financing as defined, and subject to
    final approval from the lenders. The loan bears interest at an
    annual rate of LIBOR plus 8.75%,&#160;subject to a LIBOR floor
    of 3.00%. The loan contains a material adverse change clause, as
    defined, which can trigger an event of default. The loan is
    repayable over 39&#160;months with interest only payments for
    the first twelve months. In connection with the loan, the
    lenders received warrants to purchase 255,376&#160;shares of
    Series&#160;B at $0.93 per share, which will become warrants to
    purchase 255,376&#160;shares of common stock upon the closing of
    the IPO. The Company is required to issue additional warrants to
    purchase up to an additional&#160;306,452 shares of
    Series&#160;B in the event that additional proceeds are received
    from the lenders.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Additionally, at December&#160;31, 2008 and 2009, there was
    $45,290 and $36,043, respectively, outstanding on a short-term
    loan from a vendor. As of December&#160;31, 2009, all of the
    Company&#146;s outstanding debt is due in 2010.
</DIV>
<!-- XBRL,n -->
<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">(7)&#160;&#160;Capital
    Structure</FONT></B>
</DIV>
<!-- XBRL,body -->
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">(a)&#160;&#160;Redeemable
    Convertible Preferred Stock</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    As of December&#160;31, 2009, the authorized and outstanding
    redeemable convertible preferred stock and their principal terms
    are as follows:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="49%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="4%" align="right">&nbsp;</TD>	<!-- colindex=02 type=lead -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=02 type=body -->
    <TD width="4%" align="left">&nbsp;</TD>	<!-- colindex=02 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=03 type=gutter -->
    <TD width="4%" align="right">&nbsp;</TD>	<!-- colindex=03 type=lead -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=03 type=body -->
    <TD width="4%" align="left">&nbsp;</TD>	<!-- colindex=03 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=04 type=gutter -->
    <TD width="5%" align="right">&nbsp;</TD>	<!-- colindex=04 type=lead -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=04 type=body -->
    <TD width="5%" align="left">&nbsp;</TD>	<!-- colindex=04 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=05 type=gutter -->
    <TD width="5%" align="right">&nbsp;</TD>	<!-- colindex=05 type=lead -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=05 type=body -->
    <TD width="5%" align="left">&nbsp;</TD>	<!-- colindex=05 type=hang1 -->
</TR>
<!-- Table Width Row END -->
<!-- TableOutputHead -->
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
    <B>Shares<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
    <B>Shares<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
    <B>Carrying<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
    <B>Liquidation<BR>
    </B>
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>Series</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Authorized</B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Outstanding</B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Amount</B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Value</B>
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<!-- TableOutputBody -->
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    A
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    17,056,914
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    16,922,506
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    19,060,782
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    19,473,996
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    B
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    54,688,141
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    36,173,834
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    36,477,409
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    36,705,643
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In August 2006, the Company entered into an agreement with a
    group of investors to sell 16,129,032&#160;shares of
    Series&#160;A at a price of $0.93 per share. Of these,
    6,451,613&#160;shares were sold in August 2006 and
    1,612,903&#160;shares were sold in October 2006, resulting in
    net cash proceeds of $7,232,542 in 2006. An additional
    5,376,345&#160;shares of Series&#160;A were sold to the
    investors in October 2007, resulting in net cash proceeds of
    $4,979,729, and 2,688,171&#160;shares of Series&#160;A were sold
    to the investors in April 2008, resulting in cash proceeds of
    $2,499,999. The Series&#160;A shares sold in April 2008 were
    exchanged into Series&#160;B shares in July 2008 on a
    <FONT style="white-space: nowrap">one-for-one</FONT>
    basis.
</DIV>
<!-- XBRL Pagebreak Begin -->

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    F-15
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL -->
<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">NUPATHE
    INC.<BR>
    </FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Notes to
    Financial Statements&#160;&#151;&#160;(Continued)</FONT></B>
</DIV>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>
<!-- XBRL Pagebreak End -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    An additional 3,481,645&#160;shares of Series&#160;A were issued
    in August 2006 to the convertible note holders in exchange for
    notes with a principal amount of $2,470,000 and accrued interest
    of $120,343 (note&#160;6).
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In July 2008, the Company entered into an agreement with a group
    of investors to sell up to 37,634,409&#160;shares of
    Series&#160;B at a price of $0.93 per share, of which
    19,632,019&#160;shares were sold in July 2008 and
    2,962,366&#160;shares were sold in November 2008, resulting in
    net cash proceeds of $20,708,410. In August 2009, an additional
    10,891,278&#160;shares of Series&#160;B were issued upon the
    achievement by the Company of a defined development milestone
    for net proceeds of $10,112,350 of which 2,104,326&#160;shares
    of Series B were from the conversion of the 2009 notes
    (note&#160;6). The Company does not currently have any purchase
    commitments for the balance of the 4,148,746&#160;shares
    authorized under this agreement.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    At the option of the holder, each share of Series&#160;A and
    Series&#160;B is convertible into the number of shares of common
    stock equal to the product obtained by multiplying the number of
    shares of preferred stock being converted by the quotient
    obtained by (i)&#160;dividing the sum of $0.93 per share plus
    all accrued and unpaid dividends per share by (ii)&#160;$0.93
    (subject to certain antidilution adjustments). The Series&#160;A
    and Series&#160;B&#160;shares are mandatorily convertible in the
    event of a qualified public offering, as defined. Holders of the
    Series&#160;A and Series&#160;B have the number of votes equal
    to the number of common shares into which their stock is
    convertible. Holders of the Series&#160;A have the right to
    elect two directors. Holders of the Series&#160;B have the right
    to elect another two directors. Holders of the Series&#160;A and
    Series&#160;B, together with the holders of the common stock,
    all voting together as a single class, have the right to elect
    three additional members of the board of directors. Approval of
    holders of 66.67% of the Series&#160;A and Series&#160;B shares
    is required for certain significant corporate events.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Series&#160;A and Series&#160;B holders are entitled to receive
    dividends of 8% per year as and when declared by the board of
    directors. Series&#160;A and Series&#160;B dividends accrue
    cumulatively and no dividends have been declared through
    December&#160;31, 2009. Dividends are accrued and are payable in
    the event of sale or liquidation of the Company or qualified
    public offering, as defined, or upon conversion or redemption of
    the Series&#160;A or Series&#160;B. As of December&#160;31, 2008
    and 2009, there were $2,477,031 and $3,736,066, respectively, of
    unpaid Series&#160;A dividends. As of December&#160;31, 2008 and
    2009, there were $886,392 and $3,063,978, respectively, of
    unpaid Series&#160;B dividends.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Series&#160;A and Series&#160;B holders are entitled to a
    liquidation preference in an amount equal to $0.93 per share,
    plus any accumulated but unpaid dividends, in the event of a
    liquidation, dissolution, or
    <FONT style="white-space: nowrap">winding-up</FONT>
    of the Company, or in the event the Company merges with or is
    acquired by another entity. Once the Series&#160;A and
    Series&#160;B liquidation preference has been paid, any
    remaining assets would be distributed pro rata to the
    Series&#160;B, Series&#160;A and common stockholders.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The Series&#160;B ranks senior to the Series&#160;A and common
    stock as to the payment of dividends or distributions of assets
    upon a liquidation or liquidity event.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    At any time after July&#160;31, 2013, the holders of 66.67% of
    Series&#160;A and Series&#160;B may require the Company to
    redeem the Series&#160;A and Series&#160;B shares for a price
    per share equal to the greater of $0.93, plus any accumulated
    but unpaid dividends, or its then-fair value. The carrying value
    of the Series&#160;A and Series&#160;B will be accreted to their
    redemption value by a charge to additional paid-in capital, if
    any, then to accumulated deficit.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">(b)&#160;&#160;Common
    Stock</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In 2005, 2,600,000&#160;shares of common stock were issued to
    the Company&#146;s founders and officers for $0.08 per share in
    cash. An additional 110,000&#160;shares were issued to an
    employee and a consultant in return for services, for which the
    Company recorded an expense of $8,800.
</DIV>
<!-- XBRL Pagebreak Begin -->

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    F-16
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL -->
<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">NUPATHE
    INC.<BR>
    </FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Notes to
    Financial Statements&#160;&#151;&#160;(Continued)</FONT></B>
</DIV>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>
<!-- XBRL Pagebreak End -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    As mentioned above, holders of the common stock, together with
    holders of Series&#160;A and Series&#160;B, all voting together
    as a single class, have the right to elect three members of the
    board of directors.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">(c)&#160;&#160;Warrants</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In connection with the finance company loan and the 2009 Notes,
    the Company issued warrants to purchase shares of Series&#160;A
    and B, respectively (note&#160;6). As of December&#160;31, 2009,
    the following warrants to purchase Preferred Stock were
    outstanding:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="67%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="3%" align="right">&nbsp;</TD>	<!-- colindex=02 type=lead -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=02 type=body -->
    <TD width="3%" align="left">&nbsp;</TD>	<!-- colindex=02 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=03 type=gutter -->
    <TD width="5%" align="right">&nbsp;</TD>	<!-- colindex=03 type=lead -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=03 type=body -->
    <TD width="5%" align="left">&nbsp;</TD>	<!-- colindex=03 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=04 type=gutter -->
    <TD width="3%" align="right">&nbsp;</TD>	<!-- colindex=04 type=lead -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=04 type=body -->
    <TD width="3%" align="left">&nbsp;</TD>	<!-- colindex=04 type=hang1 -->
</TR>
<!-- Table Width Row END -->
<!-- TableOutputHead -->
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
    <B>Number of<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>Series</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Shares</B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Exercise Price</B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Expiration</B>
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<!-- TableOutputBody -->
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    A
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    134,408
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    0.93
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    2017
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    B
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    736,514
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    0.93
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    2016
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The warrants are classified as warrant liability on the
    accompanying balance sheet in accordance with FASB accounting
    guidance, as the warrants entitle the holder to purchase
    preferred stock, which may be redeemed at the option of the
    holder. See note&#160;6 for further details.
</DIV>
<!-- XBRL,n -->
<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">(8)&#160;&#160;Stock-Based
    Compensation</FONT></B>
</DIV>
<!-- XBRL,body -->
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In 2005 (and as amended in August 2006 and July 2008), the
    Company adopted the 2005 Equity Compensation Plan (the Plan)
    that authorized the Company to grant up to 3,800,000&#160;shares
    of common stock to eligible employees, directors, and
    consultants to the Company in the form of restricted stock and
    stock options. In 2008, the Company authorized an additional
    5,000,000&#160;shares, for a total of 8,800,000&#160;shares,
    available for grant. The amount, terms of grants, and
    exercisability provisions are determined by the board of
    directors. The term of the options may be up to 10&#160;years,
    and options are exercisable in cash or as otherwise determined
    by the board of directors.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    As of December&#160;31, 2009, there were 758,708&#160;shares of
    common stock available for future grants under the Plan.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Stock-based compensation expense for the years ended
    December&#160;31, 2007, 2008 and 2009 includes compensation
    expense for employee and nonemployee stock option grants and
    restricted stock grants. The compensation expense for the years
    ended December&#160;31, 2007, 2008 and 2009 is as follows:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="69%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=02 type=lead -->
    <TD width="5%" align="right">&nbsp;</TD>	<!-- colindex=02 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=02 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=03 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=03 type=lead -->
    <TD width="6%" align="right">&nbsp;</TD>	<!-- colindex=03 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=03 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=04 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=04 type=lead -->
    <TD width="6%" align="right">&nbsp;</TD>	<!-- colindex=04 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=04 type=hang1 -->
</TR>
<!-- Table Width Row END -->
<!-- TableOutputHead -->
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="10" align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Year Ended December&#160;31,</B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>2007</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>2008</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>2009</B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<!-- TableOutputBody -->
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Stock options:
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Employee
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    36,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    104,547
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    308,418
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Nonemployee
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    9,621
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    9,466
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    18,869
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    45,621
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    114,013
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    327,287
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Restricted stock:
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Employee
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    13,584
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    44,163
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (8,232
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    59,205
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    158,176
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    319,055
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    For the years ended December&#160;31, 2007, 2008 and 2009,
    $18,759, $54,622 and $118,504, respectively, of expense is
    included in research and development expenses and $40,446,
    $103,554 and $200,551, respectively, is included in general and
    administrative expenses. The reversal of compensation expense
    for restricted stock in 2009 resulted from the cancellation of
    restricted stock grants for which expense was recorded in prior
    years.
</DIV>
<!-- XBRL Pagebreak Begin -->

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    F-17
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL -->
<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">NUPATHE
    INC.<BR>
    </FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Notes to
    Financial Statements&#160;&#151;&#160;(Continued)</FONT></B>
</DIV>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>
<!-- XBRL Pagebreak End -->

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Stock
    Options</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The weighted average fair value of the options granted during
    2007, 2008 and 2009 was estimated at $0.13, $0.17 and $0.17,
    respectively, on the date of grant using the Black-Scholes
    option-pricing model with the following weighted average
    assumptions:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="69%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="3%" align="right">&nbsp;</TD>	<!-- colindex=02 type=lead -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=02 type=body -->
    <TD width="3%" align="left">&nbsp;</TD>	<!-- colindex=02 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=03 type=gutter -->
    <TD width="3%" align="right">&nbsp;</TD>	<!-- colindex=03 type=lead -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=03 type=body -->
    <TD width="3%" align="left">&nbsp;</TD>	<!-- colindex=03 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=04 type=gutter -->
    <TD width="4%" align="right">&nbsp;</TD>	<!-- colindex=04 type=lead -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=04 type=body -->
    <TD width="4%" align="left">&nbsp;</TD>	<!-- colindex=04 type=hang1 -->
</TR>
<!-- Table Width Row END -->
<!-- TableOutputHead -->
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="11" align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Year Ended December&#160;31,</B>
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>2007</B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>2008</B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>2009</B>
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<!-- TableOutputBody -->
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Expected dividend yield
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
    %
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
    %
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
    %
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Expected volatility
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    80.7
</TD>
<TD nowrap align="left" valign="bottom">
    %
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    79.8
</TD>
<TD nowrap align="left" valign="bottom">
    %
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    92.8
</TD>
<TD nowrap align="left" valign="bottom">
    %
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Risk-free interest rate
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    4.3
</TD>
<TD nowrap align="left" valign="bottom">
    %
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    2.9
</TD>
<TD nowrap align="left" valign="bottom">
    %
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    2.2
</TD>
<TD nowrap align="left" valign="bottom">
    %
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Expected life
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    6&#160;years
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    6&#160;years
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    5.25&#160;years
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The expected life assumption is based on the use of the
    simplified method. The expected volatility was calculated based
    on a historical volatility analysis of public company peers that
    are similar to the Company. The risk-free interest rate is based
    on the zero-coupon U.S.&#160;Treasury yield at the date of grant
    for a term equivalent to the expected term of the option.
</DIV>

<DIV style="margin-top: 4pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The following is a summary of stock option activity under the
    Plan through December&#160;31, 2009:
</DIV>

<DIV style="margin-top: 4pt; font-size: 1pt">&nbsp;</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="57%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=02 type=lead -->
    <TD width="7%" align="right">&nbsp;</TD>	<!-- colindex=02 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=02 type=hang1 -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=03 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=03 type=lead -->
    <TD width="5%" align="right">&nbsp;</TD>	<!-- colindex=03 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=03 type=hang1 -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=04 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=04 type=lead -->
    <TD width="9%" align="right">&nbsp;</TD>	<!-- colindex=04 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=04 type=hang1 -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=05 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=05 type=lead -->
    <TD width="6%" align="right">&nbsp;</TD>	<!-- colindex=05 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=05 type=hang1 -->
</TR>
<!-- Table Width Row END -->
<!-- TableOutputHead -->
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Weighted<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Weighted<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Average<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Average<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Remaining<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Aggregate<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Number of<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Exercise<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Contractual<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Intrinsic<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Shares</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Price</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Term in Years</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Value</B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<!-- TableOutputBody -->
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Outstanding at January&#160;1, 2007
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    783,557
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    0.14
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Granted
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    547,500
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    0.18
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Exercised
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Cancelled/forfeited
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (2,500
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    0.18
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Outstanding at December&#160;31, 2007
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    1,328,557
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    0.16
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Granted
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    6,004,569
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    0.24
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Exercised
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (1,250
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    0.18
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Cancelled/forfeited
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (127,929
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    0.19
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Outstanding at December&#160;31, 2008
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    7,203,947
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    0.22
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Granted
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    548,700
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    0.24
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Exercised
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Cancelled/forfeited
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (132,605
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    0.22
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Outstanding at December&#160;31, 2009
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    7,620,042
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    0.23
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    8.44
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    107,230
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Vested and expected to vest at December&#160;31, 2009
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    7,590,728
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    0.23
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    8.38
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    107,086
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Exercisable at December&#160;31, 2009
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    3,464,595
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    0.21
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    8.14
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    92,384
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    As of December&#160;31, 2009, there was $667,013 of unrecognized
    compensation expense related to unvested stock options, which is
    expected to be recognized over a weighted average period of
    2.5&#160;years.
</DIV>
<!-- XBRL Pagebreak Begin -->

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    F-18
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL -->
<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">NUPATHE
    INC.<BR>
    </FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Notes to
    Financial Statements&#160;&#151;&#160;(Continued)</FONT></B>
</DIV>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>
<!-- XBRL Pagebreak End -->

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Restricted
    Stock</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The following summarizes the Company&#146;s restricted stock
    activity:
</DIV>



<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="78%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=02 type=lead -->
    <TD width="6%" align="right">&nbsp;</TD>	<!-- colindex=02 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=02 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=03 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=03 type=lead -->
    <TD width="7%" align="right">&nbsp;</TD>	<!-- colindex=03 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=03 type=hang1 -->
</TR>
<!-- Table Width Row END -->
<!-- TableOutputHead -->
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Weighted<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Average<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Number of<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Grant Date<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Shares</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Fair Value</B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<!-- TableOutputBody -->
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Nonvested shares at January&#160;1, 2007
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    751,640
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    0.16
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Granted
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Vested
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (185,390
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    0.12
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Forfeited/repurchased
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Nonvested shares at December&#160;31, 2007
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    566,250
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    0.17
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Granted
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Vested
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Forfeited/repurchased
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Nonvested shares at December&#160;31, 2008
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    566,250
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    0.17
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Granted
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Vested
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Forfeited/repurchased
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (495,000
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    0.18
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Nonvested shares at December&#160;31, 2009
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    71,250
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    0.12
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In 2006, the Company issued 320,000 restricted shares of common
    stock with a grant date fair value of $38,400 to officers and
    employees. These shares vest based upon defined Company and
    individual performance goals. As of December&#160;31, 2009,
    there were 71,250 unvested shares subject to vesting upon the
    achievement of such goals. As of December&#160;31, 2009, there
    was $8,550 of unrecognized compensation expense related to the
    unvested restricted stock awards that will vest upon the
    achievement of a certain defined milestone.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In 2006, the Company issued 495,000 restricted shares of common
    stock to officers that vest based upon a specific milestone
    related to the value of the Company&#146;s Series&#160;A upon a
    change of control of the Company&#146;s stock. In 2009, these
    restricted shares were forfeited based on the terms of the
    restricted stock agreement.
</DIV>
<!-- XBRL,n -->
<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">(9)&#160;&#160;Commitments</FONT></B>
</DIV>
<!-- XBRL,body -->
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">(a)&#160;&#160;Leases</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The Company leases office space and office equipment under
    operating leases, which expire at various times through March
    2013. Rent expense under these leases was $89,817, $316,350 and
    $299,342 for the years ended December&#160;31, 2007, 2008 and
    2009, respectively. Rent expense under these leases since
    inception has been $845,000.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Future minimum lease payments as of December&#160;31, 2009 are
    as follows:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="88%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=02 type=lead -->
    <TD width="8%" align="right">&nbsp;</TD>	<!-- colindex=02 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=02 type=hang1 -->
</TR>
<!-- Table Width Row END -->
<!-- TableOutputHead -->
<!-- TableOutputBody -->
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    2010
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    346,063
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    2011
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    351,601
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    2012
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    356,708
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    2013
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    88,341
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    1,142,713
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>
<!-- XBRL Pagebreak Begin -->

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    F-19
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL -->
<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">NUPATHE
    INC.<BR>
    </FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Notes to
    Financial Statements&#160;&#151;&#160;(Continued)</FONT></B>
</DIV>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>
<!-- XBRL Pagebreak End -->

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">(b)&#160;&#160;License
    Agreements</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In July 2008, the Company and Travanti Pharma Inc. (Travanti)
    entered into an asset purchase and license agreement and an
    assignment agreement. Pursuant to the terms of the Travanti
    agreement, the Company paid $5,500,000 for the purchase of a
    patent application, including all supporting documentation and
    priority documents, that is directed to transdermal delivery of
    anti-migraine medications using an active delivery patch. The
    Company granted Travanti a nonexclusive, royalty-free, perpetual
    worldwide license to use the purchased patent application, and
    the invention covered by such patent application, outside the
    field of migraine. In addition, Travanti granted to the Company
    a perpetual, worldwide, exclusive, royalty-free license, with
    the right to grant sublicenses, under Travanti&#146;s patent
    rights and know-how that relate generally to specified
    iontophoresis technology to develop, make and commercialize
    migraine products. This fee was recognized in the accompanying
    statement of operations for the year ended December&#160;31,
    2008 as acquired in process research and development, as
    additional research and development efforts and regulatory
    approval is required in order to commercialize this product in
    the United States.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The Company entered into a patent license agreement with the
    University of Pennsylvania (Penn), which became effective in
    July 2006 and was amended in May 2007. Under the patent license
    agreement, Penn granted to the Company exclusive, worldwide
    rights under specified patent applications, and patents issuing
    therefrom, to make, use and sell products using Long Acting
    Delivery (LAD) technology. Under the agreement, the Company has
    the right to sublicense, subject to specified conditions,
    including the payment of sublicense fees. The patent license
    agreement requires that the Company use commercially reasonable
    efforts to develop and commercialize licensed products. The
    license agreement requires the Company to commit a minimum of
    $250,000 per year, towards the development and commercialization
    of licensed products, until the first commercial sale of the
    first licensed product. The license agreement requires annual
    license maintenance payments up to $50,000 until the first
    commercial sale of the first licensed product. In addition, the
    Company has agreed to pay Penn aggregate milestone payments of
    up to $950,000 upon the achievement of specified development and
    regulatory milestones related to each licensed product as
    specified and royalty payments equal to a specified percentage
    of future commercial sales of licensed products subject to the
    license through the expiration of the licensed patents. The
    Company paid fees of $25,000, $20,000 and $30,000 in 2007, 2008
    and 2009, respectively, which were recorded as research and
    development expense. The Company reimbursed Penn for $34,534,
    $72,984 and $64,864 in 2007, 2008 and 2009, respectively, for
    patent prosecution costs, which was recorded as expense by the
    Company.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In September 2009, the Company entered into a license agreement
    with SurModics Pharmaceuticals, Inc. (SurModics), pursuant to
    which the Company received an exclusive worldwide license, with
    the right to sublicense, under SurModics&#146; intellectual
    property, including its interest in joint inventions developed
    under a feasibility agreement, to make, have made, use, sell,
    import and export products covered by the license agreement. The
    Company granted SurModics an exclusive, perpetual, worldwide,
    royalty-free license under the Company&#146;s interest in joint
    inventions for uses that do not relate to products covered by
    the agreement or include any of the Company&#146;s existing
    technology or confidential information. The Company also granted
    SurModics a right of first negotiation to manufacture clinical
    supplies of covered products. If the Company and SurModics enter
    into such clinical manufacturing agreement, SurModics has a
    right of first negotiation to manufacture commercial supplies of
    covered products. The Company is obligated to pay aggregate
    milestones of up to $4,750,000 upon the achievement of specified
    development, regulatory and sales level milestones related to
    the first clinical indication approved by regulatory authority
    for covered products. The Company must also pay an additional
    milestone payment upon regulatory approval of each additional
    clinical indication for covered products and specified royalties
    on sales of commercial product.
</DIV>
<!-- XBRL Pagebreak Begin -->

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    F-20
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL -->
<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">NUPATHE
    INC.<BR>
    </FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Notes to
    Financial Statements&#160;&#151;&#160;(Continued)</FONT></B>
</DIV>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>
<!-- XBRL Pagebreak End -->

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">(c)&#160;&#160;Employment
    Agreements</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Certain of the officers of the Company have employment
    agreements providing for severance and continuation of benefits
    in the event of termination without cause, including in the
    event of a Change of Control of the Company, as defined in the
    agreements.
</DIV>
<!-- XBRL,n -->
<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">(10)&#160;&#160;Related-Party
    Transactions</FONT></B>
</DIV>
<!-- XBRL,body -->
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    A former director and current shareholder and consultant of the
    Company is the chairman of a company that provides outsourced
    clinical development services to the pharmaceutical industry.
    During the years ended December&#160;31, 2007, 2008 and 2009,
    the Company purchased $97,514, $166,308 and $454,337,
    respectively, of services from that company. The Company
    considers the fees paid fair value for the services rendered.
</DIV>
<!-- XBRL,n -->
<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">(11)&#160;&#160;401(k)
    Profit Sharing Plan</FONT></B>
</DIV>
<!-- XBRL,body -->
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The Company maintains a 401(k) Profit Sharing Plan (the 401(k)
    Plan) available to all employees meeting certain eligibility
    criteria. The 401(k) Plan permits participants to contribute up
    to 90% of their salary, not to exceed the limits established by
    the Internal Revenue Code. All contributions made by
    participants into the participants&#146; accounts vest
    immediately. Throughout 2008 and 2009, the Company provided a
    biweekly matching contribution to participant&#146;s accounts as
    provided for under the 401(k) Plan. This contribution is
    determined by a formula that is based on the employee&#146;s
    contributions, not to exceed 3% of their eligible wages, as
    defined by the 401(k) Plan. The Company sponsored match was
    $48,000, $61,565 and $74,425 for the years ended
    December&#160;31, 2007, 2008 and 2009, respectively. The
    Company&#146;s contribution to the 401(k) Plan is 100% vested
    upon contribution date.
</DIV>
<!-- XBRL,n -->
<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">(12)&#160;&#160;Income
    Taxes</FONT></B>
</DIV>
<!-- XBRL,body -->
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    During the year ended December&#160;31, 2009, the Company sold
    $151,012 of Pennsylvania research and development tax credits to
    a third party buyer. Accordingly, the Company recorded an income
    tax benefit of $151,012 for the year ended December&#160;31,
    2009.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    A reconciliation of the statutory U.S.&#160;federal rate to the
    Company&#146;s effective tax rate is as follows:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="80%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=02 type=lead -->
    <TD width="2%" align="right">&nbsp;</TD>	<!-- colindex=02 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=02 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=03 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=03 type=lead -->
    <TD width="2%" align="right">&nbsp;</TD>	<!-- colindex=03 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=03 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=04 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=04 type=lead -->
    <TD width="2%" align="right">&nbsp;</TD>	<!-- colindex=04 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=04 type=hang1 -->
</TR>
<!-- Table Width Row END -->
<!-- TableOutputHead -->
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="10" align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Year Ended December&#160;31,</B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>2007</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>2008</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>2009</B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<!-- TableOutputBody -->
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Percent of pre-tax income:
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    U.S. federal statutory income tax rate
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    34.0
</TD>
<TD nowrap align="left" valign="bottom">
    %
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    34.0
</TD>
<TD nowrap align="left" valign="bottom">
    %
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    34.0
</TD>
<TD nowrap align="left" valign="bottom">
    %
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    State taxes, net of federal benefit
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    6.5
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    6.5
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    6.5
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Other
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    4.3
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    3.8
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    1.0
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Change in valuation allowance
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (44.8
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (44.3
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (40.6
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 30pt">
    Effective income tax rate
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
    %
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
    %
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    0.9
</TD>
<TD nowrap align="left" valign="bottom">
    %
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>
<!-- XBRL Pagebreak Begin -->

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    F-21
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL -->
<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">NUPATHE
    INC.<BR>
    </FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Notes to
    Financial Statements&#160;&#151;&#160;(Continued)</FONT></B>
</DIV>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>
<!-- XBRL Pagebreak End -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The tax effects of temporary differences that gave rise to
    significant portions of the deferred tax assets were as follows:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="71%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=02 type=lead -->
    <TD width="10%" align="right">&nbsp;</TD>	<!-- colindex=02 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=02 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=03 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=03 type=lead -->
    <TD width="10%" align="right">&nbsp;</TD>	<!-- colindex=03 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=03 type=hang1 -->
</TR>
<!-- Table Width Row END -->
<!-- TableOutputHead -->
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="6" align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>December&#160;31,</B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>2008</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>2009</B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<!-- TableOutputBody -->
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Net operating loss carryforwards
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    10,746,454
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    17,118,099
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Research and development credit
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    1,012,886
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    1,272,271
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Depreciation and amortization
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    2,125,418
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    2,014,476
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Capitalized
    <FONT style="white-space: nowrap">start-up</FONT>
    costs
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    169,429
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    141,190
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Other temporary differences
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    215,083
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    182,720
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Gross deferred tax asset
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    14,269,270
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (20,728,756
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Deferred tax assets valuation allowance
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (14,269,270
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (20,728,756
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In assessing the realizability of deferred tax assets, the
    Company considers whether it is more likely than not that some
    portion or all of the deferred tax assets will not be realized.
    The ultimate realization of deferred tax assets is dependent
    upon the generation of future taxable income during the periods
    in which the temporary differences representing net future
    deductible amounts become deductible. Due to the Company&#146;s
    history of losses, the deferred tax assets are fully offset by a
    valuation allowance at December&#160;31, 2008 and 2009. The
    valuation allowance in 2008 increased by $7,800,000 over 2007
    and the valuation allowance in 2009 increased by $6,500,000 over
    2008, related primarily to additional net operating losses
    incurred by the Company and additional capitalized
    <FONT style="white-space: nowrap">start-up</FONT>
    expenses.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    As of December&#160;31, 2008 and 2009, $417,000 and $348,000,
    respectively, of the Company&#146;s expenses had been
    capitalized for tax purposes as
    <FONT style="white-space: nowrap">start-up</FONT>
    costs. For tax purposes, capitalized
    <FONT style="white-space: nowrap">start-up</FONT>
    costs will be amortized over fifteen years beginning when the
    Company commences operations, as defined under the Internal
    Revenue Code.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The following table summarizes carryforwards of net operating
    losses and tax credits as of December&#160;31, 2009:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="71%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="5%" align="right">&nbsp;</TD>	<!-- colindex=02 type=lead -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=02 type=body -->
    <TD width="5%" align="left">&nbsp;</TD>	<!-- colindex=02 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=03 type=gutter -->
    <TD width="6%" align="right">&nbsp;</TD>	<!-- colindex=03 type=lead -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=03 type=body -->
    <TD width="6%" align="left">&nbsp;</TD>	<!-- colindex=03 type=hang1 -->
</TR>
<!-- Table Width Row END -->
<!-- TableOutputHead -->
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Amount</B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Expiration</B>
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<!-- TableOutputBody -->
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Federal net operating losses
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    42,169,658
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    2025 &#151; 2029
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    State net operating losses
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    1,272,271
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    2024 &#151; 2029
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The Tax Reform Act of 1986 (the Act) provides for a limitation
    of the annual use of net operating loss and research and
    development tax credit carryforwards following certain ownership
    changes (as defined by the Act) that could limit the
    Company&#146;s ability to utilize these carryforwards. The
    Company has not completed a study to assess whether an ownership
    change has occurred, or whether there have been multiple
    ownership changes since its formation, due to the significant
    costs and complexities associated with such a study. The Company
    may have experienced various ownership changes, as defined by
    the Act, as a result of past financings. Accordingly, the
    Company&#146;s ability to utilize the aforementioned
    carryforwards may be limited. Additionally, U.S.&#160;tax laws
    limit the time during which these carryforwards may be applied
    against future taxes; therefore, the Company may not be able to
    take full advantage of these carryforwards for federal or state
    income tax purposes.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The Company did not have unrecognized tax benefits as of
    December&#160;31, 2009 and does not expect this to change
    significantly over the next twelve months. As of
    December&#160;31, 2009, the Company has not accrued interest or
    penalties related to uncertain tax positions. The Company&#146;s
    tax returns for the years ended December&#160;31, 2006 through
    December&#160;31, 2009 are still subject to examination by major
    tax jurisdictions.
</DIV>
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<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    F-22
</DIV><!-- END PAGE WIDTH -->
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<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
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<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 16pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Shares</FONT></B>
</DIV>

<DIV style="margin-top: 15pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <IMG src="w78367w7836700.gif" alt="(NUPATHE LOGO)"><B><FONT style="font-size: 16pt">
    </FONT></B>
</DIV>



<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B><FONT style="font-size: 15pt">Common Stock</FONT></B>
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<CENTER style="font-size: 1pt; width: 28%; border-bottom: 1pt solid #000000"></CENTER>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 16pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="100%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
</TR>
<!-- Table Width Row END -->
<!-- TableOutputHead -->
<!-- TableOutputBody -->
<TR valign="bottom">
<TD nowrap align="center" valign="bottom">
<DIV style="text-indent: -16pt; margin-left: 16pt">
    <B>Leerink Swann</B>
</DIV>
</TD>
</TR>
<TR valign="bottom" style="line-height: 12pt">
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="center" valign="bottom">
<DIV style="text-indent: -16pt; margin-left: 16pt">
    <B>Lazard Capital Markets</B>
</DIV>
</TD>
</TR>
<TR valign="bottom" style="line-height: 12pt">
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="center" valign="bottom">
<DIV style="text-indent: -16pt; margin-left: 16pt">
    <B>Thomas Weisel Partners LLC</B>
</DIV>
</TD>
</TR>
<TR valign="bottom" style="line-height: 12pt">
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="center" valign="bottom">
<DIV style="text-indent: -16pt; margin-left: 16pt">
    <B>Needham &#038; Company, LLC </B>
</DIV>
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<DIV style="margin-top: 48pt; font-size: 1pt">&nbsp;</DIV>

<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <FONT style="font-family: 'Times New Roman', Times">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;,
    2010
    </FONT>
</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>
<!-- XBRL Pagebreak Begin -->

<P align="left" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL Pagebreak End -->

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">PART&#160;II<BR>
    </FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">INFORMATION
    NOT REQUIRED IN PROSPECTUS</FONT></B>
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

<TR>
    <TD width="9%"></TD>
    <TD width="91%"></TD>
</TR>

<TR valign="top">
    <TD>
    <B><FONT style="font-family: 'Times New Roman', Times">Item&#160;13.<I>&#160;&#160;</I></FONT></B>
</TD>
    <TD>
    <B><I><FONT style="font-family: 'Times New Roman', Times">Other
    expenses of issuance and distribution.</FONT></I></B>
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The following table sets forth all costs and expenses, other
    than underwriting discounts and commissions, in connection with
    the sale of the common stock being registered, all of which will
    be paid by us. All amounts shown are estimates except for the
    Securities Exchange Commission, or SEC, registration fee, the
    Financial Industry Regulatory Authority, or FINRA, filing fee
    and the listing fee for The NASDAQ Global Market.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="87%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=02 type=lead -->
    <TD width="9%" align="right">&nbsp;</TD>	<!-- colindex=02 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=02 type=hang1 -->
</TR>
<!-- Table Width Row END -->
<!-- TableOutputHead -->
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Amount Paid<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>or to be Paid</B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<!-- TableOutputBody -->
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    SEC registration fee
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    6,150
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    FINRA filing fee
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    9,125
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    The NASDAQ Global Market listing fee
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    *
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Blue sky qualification fees and expenses
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    *
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Printing expenses
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    *
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Legal fees and expenses
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    *
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Accounting fees and expenses
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    *
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Transfer agent and registrar fees and expenses
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    *
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Insurance Policy Premium
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    *
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Miscellaneous expenses
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    *
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Total Expenses
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    *
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>



<DIV style="font-size: 2pt; margin-left: 0%; width: 13%;  align: left; border-bottom: 1pt solid #000000"></DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>



<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

<TR>
    <TD width="1%"></TD>
    <TD width="1%"></TD>
    <TD width="98%"></TD>
</TR>

<TR>
    <TD valign="top">
    * </TD>
    <TD></TD>
    <TD valign="bottom">
    To be filed by amendment</TD>
</TR>

</TABLE>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

<TR>
    <TD width="9%"></TD>
    <TD width="91%"></TD>
</TR>

<TR valign="top">
    <TD>
    <B><FONT style="font-family: 'Times New Roman', Times">Item&#160;14.<I>&#160;&#160;</I></FONT></B>
</TD>
    <TD>
    <B><I><FONT style="font-family: 'Times New Roman', Times">Indemnification
    of directors and officers.</FONT></I></B>
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Section&#160;102(b)(7) of the DGCL provides that a Delaware
    corporation, in its certificate of incorporation, may limit the
    personal liability of a director to the corporation or its
    stockholders for monetary damages for breach of fiduciary duties
    as a director, except for liability for any:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Transaction from which the director derived an improper personal
    benefit;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Act or omission not in good faith or that involved intentional
    misconduct or a knowing violation of law;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Unlawful payment of dividends or redemption of shares;&#160;or
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Breach of the director&#146;s duty of loyalty to the corporation
    or its stockholders.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Section&#160;145(a) of the DGCL provides, in general, that a
    Delaware corporation may indemnify any person who was or is a
    party, or is threatened to be made a party, to any threatened,
    pending or completed action, suit or proceeding, whether civil,
    criminal, administrative or investigative (other than an action
    by or in the right of the corporation) because that person is or
    was a director, officer, employee or agent of the corporation,
    or is or was serving at the request of the corporation as a
    director, officer, employee or agent of another corporation or
    other enterprise. The indemnity may include against expenses
    (including attorneys&#146; fees), judgments, fines and amounts
    paid in settlement actually and reasonably incurred by the
    person in connection with such action, so long as the person
    acted in good faith and in a manner he or she reasonably
    believed was in or not opposed to the corporation&#146;s best
    interests of the corporation, and, with respect to any criminal
    action or proceeding, had no reasonable cause to believe his or
    her conduct was unlawful.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Section&#160;145(b) of the DGCL provides, in general, that a
    Delaware corporation may indemnify any person who was or is a
    party, or is threatened to be made a party, to any threatened,
    pending or completed action or
</DIV>
<!-- XBRL Paragraph Pagebreak -->
<!-- XBRL Pagebreak Begin -->

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    II-1
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL Pagebreak End -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    suit by or in the right of the corporation to obtain a judgment
    in its favor because the person is or was a director, officer,
    employee or agent of the corporation, or is or was serving at
    the request of the corporation as a director, officer, employee
    or agent of another corporation or other enterprise. The
    indemnity may include expenses (including attorneys&#146; fees)
    actually and reasonably incurred by the person in connection
    with the defense or settlement of such action, so long as the
    person acted in good faith and in a manner the person reasonably
    believed was in or not opposed to the corporation&#146;s best
    interests, except that no indemnification shall be permitted
    without judicial approval if a court has determined that the
    person is to be liable to the corporation with respect to such
    claim. If a present or former director or officer has been
    successful in defense of any action referred to above, the
    corporation must indemnify such officer or director against the
    expenses (including attorneys&#146; fees) he or she actually and
    reasonably incurred in connection with such action.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Section&#160;145(g) of the DGCL provides, in general, that a
    corporation may purchase and maintain insurance on behalf of any
    person who is or was a director, officer, employee or agent of
    the corporation, or is or was serving at the request of the
    corporation as a director, officer, employee or agent of another
    corporation or other enterprise against any liability asserted
    against and incurred by such person, in any such capacity, or
    arising out of his or her status as such, whether or not the
    corporation could indemnify the person against such liability
    under Section&#160;145 of the DGCL.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Our restated certificate of incorporation and our bylaws, each
    of which will become effective upon the closing of this
    offering, and our Investor Rights Agreement, each provide for
    the indemnification of our directors and officers to the fullest
    extent permitted under the DGCL.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In addition to the indemnification provisions provided for in
    our charter documents, we are party to indemnification
    agreements with certain of our directors. These indemnification
    agreements generally provide that we will indemnify the director
    to the fullest extent permitted by law for claims arising in his
    or her capacity as a director of our company or in connection
    with their service at our request for another corporation or
    entity. The indemnification agreements also provide for
    procedures that will apply in the event that a director makes a
    claim for indemnification and establish certain presumptions
    that are favorable to the director.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    At present, there is no pending litigation or proceeding
    involving any of our directors or officers as to which
    indemnification is required or permitted, and we are not aware
    of any threatened litigation or proceeding that may result in a
    claim for indemnification.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We maintain a general liability insurance policy which covers
    certain liabilities of our directors and officers arising out of
    claims based on acts or omissions in their capacities as
    directors or officers.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We intend to purchase<B> </B>and maintain an insurance policy
    which covers certain liabilities of our officers and directors
    arising out of claims based on acts or omissions in their
    capacities as officers and directors, including liabilities
    arising under the Securities Act, the Exchange Act or otherwise.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We have entered into an underwriting agreement, which provides
    for indemnification by the underwriters of us, our officers and
    directors, for certain liabilities, including liabilities
    arising under the Securities Act.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF"><!-- TABLE 05 -->

<TR>
    <TD width="9%"></TD>
    <TD width="91%"></TD>
</TR>

<TR valign="top">
    <TD>
    <B><FONT style="font-family: 'Times New Roman', Times">Item&#160;15.<I>&#160;&#160;</I></FONT></B>
</TD>
    <TD>
    <B><I><FONT style="font-family: 'Times New Roman', Times">Recent
    sales of unregistered securities.</FONT></I></B>
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The following list sets forth information regarding all
    securities sold by us in the three years preceding the filing of
    this registration statement:
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Preferred
    Stock Financings</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (a)&#160;In August 2006, we entered into a Series&#160;A
    Preferred Stock Purchase Agreement pursuant to which we issued
    and sold an aggregate of 19,610,677&#160;shares of Series&#160;A
    preferred stock in four separate closings from August 2006
    through April 2008, at a purchase price of $0.93 per share, for
    aggregate consideration of $15,000,000 in cash and $2,590,343 in
    aggregate principal and interest due under convertible
    promissory notes held by existing investors, which pursuant to
    the terms of such notes was converted into shares of
    Series&#160;A preferred stock.
</DIV>
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    <BR>
    II-2
</DIV><!-- END PAGE WIDTH -->
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<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
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<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (b)&#160;In July 2008, we entered into a Series&#160;B Preferred
    Stock Purchase Agreement pursuant to which we issued and sold an
    aggregate of 33,485,663&#160;shares of Series&#160;B preferred
    stock in three separate closings from July 2008 through August
    2009, at a purchase price of $0.93 per share, for aggregate
    consideration of $29,184,643 in cash and $1,957,023 in aggregate
    principal and interest due under convertible promissory notes
    held by existing investors, which pursuant to the terms of such
    notes was converted into shares of Series&#160;B preferred
    stock. In addition, 2,688,171&#160;shares of Series&#160;A
    preferred stock that were acquired in a prior financing by
    certain persons participating in the Series B financing were
    exchanged for an equal number of shares of Series&#160;B
    preferred stock.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Convertible
    Note Financings and Warrant Issuances</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (c)&#160;In July 2009, we received gross proceeds of $1,934,183
    from the sale of convertible promissory notes in a private
    placement to certain of our existing investors. In
    August&#160;2009, the convertible promissory notes converted
    into shares of Series&#160;B preferred stock pursuant to the
    terms of such notes. Upon such conversion, warrants to purchase
    an aggregate of 736,514&#160;shares of Series&#160;B preferred
    stock were issued to the holders of such notes, which, upon the
    closing of this offering, will become warrants to purchase
    736,514&#160;shares of common stock in accordance with their
    terms.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (d)&#160;In April 2010, we received gross proceeds of
    $10,062,500 from the sale of the convertible promissory notes in
    a private placement to certain of our existing investors. The
    convertible promissory notes accrue interest at a rate equal to
    8% per year, compounding monthly, and have a maturity date of
    December&#160;31, 2010, unless converted prior thereto. The
    convertible promissory notes are automatically convertible into
    common stock upon the closing of this offering at a conversion
    price equal to 80% of the price to the public in this offering.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (e)&#160;In May 2010, we entered into a $5.0&#160;million
    secured term loan facility. In connection with such loan we
    issued the lenders warrants to purchase 255,376&#160;shares of
    Series&#160;B preferred stock at an exercise price of $0.93 per
    share. Upon the closing of this offering, in accordance with
    their terms, the warrants will automatically become exercisable
    for 255,376&#160;shares of common stock at an exercise price of
    $0.93 per share of common stock.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Stock
    Option Grants</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (f)&#160;From May&#160;14, 2007 through May&#160;14, 2010, we
    granted stock options under our 2005 Equity Compensation Plan to
    purchase an aggregate of 6,960,769&#160;shares of common stock
    with a weighted average exercise price of $0.24 per share, to
    certain of our employees, consultants and directors.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We deemed the offers, sales and issuances of the securities
    described in paragraphs (a)&#160;through (f)&#160;to be exempt
    from registration under the Securities Act in reliance on either
    (i)&#160;Rule&#160;701 of the Securities Act as offers and sales
    of securities under compensatory benefit plans and contracts
    relating to compensation in compliance with Rule&#160;701 or
    (ii)&#160;Section&#160;4(2) of the Securities Act, including
    Regulation&#160;D promulgated thereunder, relative to
    transactions by an issuer not involving a public offering. Each
    of the recipients of securities in any transaction exempt from
    registration either received or had adequate access, through
    employment, business or other relationships, to information
    about us. All purchasers of shares in transactions exempt from
    registration pursuant to Regulation&#160;D represented to us
    that they were accredited investors and were acquiring the
    shares for investment purposes only and not with a view to, or
    for sale in connection with, any distribution thereof and that
    they could bear the risks of the investment and could hold the
    securities for an indefinite period of time. The purchasers
    received written disclosures that the securities had not been
    registered under the Securities Act and that any resale must be
    made pursuant to a registration statement or an available
    exemption from such registration.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    All certificates representing the securities issued in the
    transactions described in this Item&#160;15 included appropriate
    legends setting forth that the securities had not been offered
    or sold pursuant to a registration statement and describing the
    applicable restrictions on transfer of the securities. There
    were no underwriters employed in connection with any of the
    transactions set forth in this Item&#160;15.
</DIV>
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    <BR>
    II-3
</DIV><!-- END PAGE WIDTH -->
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<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL Pagebreak End -->

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

<TR>
    <TD width="9%"></TD>
    <TD width="91%"></TD>
</TR>

<TR valign="top">
    <TD>
    <B><FONT style="font-family: 'Times New Roman', Times">Item&#160;16.<I>&#160;&#160;</I></FONT></B>
</TD>
    <TD>
    <B><I><FONT style="font-family: 'Times New Roman', Times">Exhibits
    and financial statement schedules.</FONT></I></B>
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (a)&#160;Exhibits.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The exhibits to the registration statement are listed in the
    Exhibit&#160;Index attached hereto and incorporated by reference
    herein.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (b)&#160;Financial Statements Schedules.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    No financial statement schedules are provided because the
    information called for is not required or is shown either in the
    financial statements or the notes thereto.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

<TR>
    <TD width="9%"></TD>
    <TD width="91%"></TD>
</TR>

<TR valign="top">
    <TD>
    <B><FONT style="font-family: 'Times New Roman', Times">Item&#160;17.<I>&#160;&#160;</I></FONT></B>
</TD>
    <TD>
    <B><I><FONT style="font-family: 'Times New Roman', Times">Undertakings.</FONT></I></B>
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (a)&#160;The undersigned registrant hereby undertakes to provide
    to the underwriter at the closing specified in the underwriting
    agreement, certificates in such denominations and registered in
    such names as required by the underwriter to permit prompt
    delivery to each purchaser.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (b)&#160;Insofar as indemnification for liabilities arising
    under the Securities Act may be permitted to directors, officers
    and controlling persons of the registrant pursuant to the
    foregoing provisions or otherwise, the registrant has been
    advised that in the opinion of the SEC such indemnification is
    against public policy as expressed in the Act and is, therefore,
    unenforceable. In the event that a claim for indemnification
    against such liabilities (other than the payment by the
    registrant of expenses incurred or paid by a director, officer
    or controlling person of the registrant in the successful
    defense of any action, suit or proceeding) is asserted by such
    director, officer or controlling person in connection with the
    securities being registered, the registrant will, unless in the
    opinion of its counsel the matter has been settled by
    controlling precedent, submit to a court of appropriate
    jurisdiction the question whether such indemnification by it is
    against public policy as expressed in the Securities Act and
    will be governed by the final adjudication of such issue.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (c)&#160;The undersigned registrant hereby undertakes that:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    1)&#160;For purposes of determining any liability under the
    Securities Act, the information omitted from the form of
    prospectus filed as part of this registration statement in
    reliance upon Rule&#160;430A and contained in a form of
    prospectus filed by the registrant pursuant to Rule&#160;424(b)
    (1)&#160;or (4)&#160;or 497(h) under the Securities Act shall be
    deemed to be part of this registration statement as of the time
    it was declared effective.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    2)&#160;For the purpose of determining any liability under the
    Securities Act, each post-effective amendment that contains a
    form of prospectus shall be deemed to be a new registration
    statement relating to the securities offered therein, and the
    offering of such securities at that time shall be deemed to be
    the initial bona fide offering thereof.
</DIV>
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    <BR>
    II-4
</DIV><!-- END PAGE WIDTH -->
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL Pagebreak End -->

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">SIGNATURES</FONT></B>
</DIV>

<DIV style="margin-top: 2pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Pursuant to the requirements of the Securities Act, the
    Registrant has duly caused this Registration Statement to be
    signed on its behalf by the undersigned, thereunto duly
    authorized, in the city of Conshohocken, Commonwealth of
    Pennsylvania, on the 14th&#160;day of May, 2010.
</DIV>

<DIV style="margin-top: 20pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 49%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B>NUPATHE INC.</B>
</DIV>

<DIV style="margin-top: 40pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="49%"></TD>
    <TD width="4%"></TD>
    <TD width="47%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    <B>By:&#160;</B>
</TD>
    <TD align="left">
    <DIV style="display:inline; text-align:left;">/s/&#160;&#160;Jane
    H. Hollingsworth<B></B></DIV><B></B>
</TD>
</TR>

</TABLE>

<DIV style="font-size: 2pt; margin-left: 53%; width: 100%;  align: left; border-bottom: 1pt solid #000000"></DIV>

<DIV align="left" style="margin-left: 53%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    &#160;&#160;&#160;&#160;&#160;Jane H. Hollingsworth
</DIV>

<DIV align="left" style="margin-left: 53%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    &#160;&#160;&#160;&#160;&#160;Chief Executive Officer
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">POWER OF
    ATTORNEY</FONT></B>
</DIV>

<DIV style="margin-top: 2pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Each person whose individual signature appears below hereby
    authorizes and appoints Jane H. Hollingsworth and Keith A.
    Goldan, and each of them, with full power of substitution and
    resubstitution and full power to act without the other, as his
    or her true and lawful attorney in fact and agent to act in his
    or her name, place and stead and to execute in the name and on
    behalf of each person, individually and in each capacity stated
    below, and to file any and all amendments to this Registration
    Statement, including any and all post effective amendments and
    amendments thereto, and any registration statement relating to
    the same offering as this Registration Statement that is to be
    effective upon filing pursuant to Rule&#160;462(b) under the
    Securities Act of 1933, as amended, and to file the same, with
    all exhibits thereto, and other documents in connection
    therewith, with the Securities and Exchange Commission, granting
    unto said attorneys in fact and agents, and each of them, full
    power and authority to do and perform each and every act and
    thing, ratifying and confirming all that said attorneys in fact
    and agents or any of them or their or his substitute or
    substitutes may lawfully do or cause to be done by virtue
    thereof.
</DIV>

<DIV style="margin-top: 2pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Pursuant to the requirements of the Securities Act of 1933, as
    amended, this Registration Statement has been signed by the
    following persons in the capacities and on the dates indicated.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="3%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="39%">&nbsp;</TD>	<!-- colindex=02 type=maindata -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=03 type=gutter -->
    <TD width="39%">&nbsp;</TD>	<!-- colindex=03 type=maindata -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=04 type=gutter -->
    <TD width="12%">&nbsp;</TD>	<!-- colindex=04 type=maindata -->
</TR>
<!-- Table Width Row END -->
<!-- TableOutputHead -->
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD colspan="3" nowrap align="center" valign="bottom">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>Signature</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>Title</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>Date</B>
</DIV>
</TD>
</TR>
<TR style="line-height: 12pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<!-- TableOutputBody -->
<TR valign="bottom" style="line-height: 6pt">
<TD colspan="3">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD colspan="3" valign="top">
    <DIV style="display:inline; text-align:left;">/s/&#160;&#160;Jane
    H. Hollingsworth</DIV><BR>
    <DIV style="font-size: 2pt; margin-left: 0%; width: 100%;  align: left; border-bottom: 1pt solid #000000"></DIV>&#160;&#160;&#160;&#160;&#160;Jane
    H. Hollingsworth
</TD>
<TD>
&nbsp;
</TD>
<TD align="center" valign="top">
    Chief Executive Officer and Director (<I>Principal Executive
    Officer</I>)
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="top">
    May&#160;14, 2010
</TD>
</TR>
<TR valign="bottom" style="line-height: 6pt">
<TD colspan="3">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD colspan="3" valign="top">
    <DIV style="display:inline; text-align:left;">/s/&#160;&#160;Keith
    A. Goldan</DIV><BR>
    <DIV style="font-size: 2pt; margin-left: 0%; width: 100%;  align: left; border-bottom: 1pt solid #000000"></DIV>&#160;&#160;&#160;&#160;&#160;Keith
    A. Goldan
</TD>
<TD>
&nbsp;
</TD>
<TD align="center" valign="top">
    Chief Financial Officer<BR>
    (<I>Principal Financial and Accounting Officer</I>)
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="top">
    May&#160;14, 2010
</TD>
</TR>
<TR valign="bottom" style="line-height: 6pt">
<TD colspan="3">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD colspan="3" valign="top">
    <DIV style="display:inline; text-align:left;">/s/&#160;&#160;Michael
    Cola</DIV><BR>
    <DIV style="font-size: 2pt; margin-left: 0%; width: 100%;  align: left; border-bottom: 1pt solid #000000"></DIV>&#160;&#160;&#160;&#160;&#160;Michael
    Cola
</TD>
<TD>
&nbsp;
</TD>
<TD align="center" valign="top">
    Chairman of the Board
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="top">
    May&#160;14, 2010
</TD>
</TR>
<TR valign="bottom" style="line-height: 6pt">
<TD colspan="3">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD colspan="3" valign="top">
    <DIV style="display:inline; text-align:left;">/s/&#160;&#160;Jeanne
    Cunicelli</DIV><BR>
    <DIV style="font-size: 2pt; margin-left: 0%; width: 100%;  align: left; border-bottom: 1pt solid #000000"></DIV>&#160;&#160;&#160;&#160;&#160;Jeanne
    Cunicelli
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="top">
    Director
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="top">
    May&#160;14, 2010
</TD>
</TR>
<TR valign="bottom" style="line-height: 6pt">
<TD colspan="3">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD colspan="3" valign="top">
    <DIV style="display:inline; text-align:left;">/s/&#160;&#160;Michael
    C. Diem</DIV><BR>
    <DIV style="font-size: 2pt; margin-left: 0%; width: 100%;  align: left; border-bottom: 1pt solid #000000"></DIV>&#160;&#160;&#160;&#160;&#160;Michael
    C. Diem,&#160;M.D.
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="top">
    Director
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="top">
    May&#160;14, 2010
</TD>
</TR>
<TR valign="bottom" style="line-height: 6pt">
<TD colspan="3">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD colspan="3" valign="top">
    <DIV style="display:inline; text-align:left;">/s/&#160;&#160;John
    H. Dillon,&#160;II</DIV><BR>
    <DIV style="font-size: 2pt; margin-left: 0%; width: 100%;  align: left; border-bottom: 1pt solid #000000"></DIV>&#160;&#160;&#160;&#160;&#160;John
    H. Dillon,&#160;II
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="top">
    Director
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="top">
    May&#160;14, 2010
</TD>
</TR>
<TR valign="bottom" style="line-height: 6pt">
<TD colspan="3">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD colspan="3" valign="top">
    <DIV style="display:inline; text-align:left;">/s/&#160;&#160;Richard
    S. Kollender</DIV><BR>
    <DIV style="font-size: 2pt; margin-left: 0%; width: 100%;  align: left; border-bottom: 1pt solid #000000"></DIV>&#160;&#160;&#160;&#160;&#160;Richard
    S. Kollender
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="top">
    Director
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="top">
    May&#160;14, 2010
</TD>
</TR>
<TR valign="bottom" style="line-height: 6pt">
<TD colspan="3">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD colspan="3" valign="top">
    <DIV style="display:inline; text-align:left;">/s/&#160;&#160;Gary
    J. Kurtzman</DIV><BR>
    <DIV style="font-size: 2pt; margin-left: 0%; width: 100%;  align: left; border-bottom: 1pt solid #000000"></DIV>&#160;&#160;&#160;&#160;&#160;Gary
    J. Kurtzman, M.D.
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="top">
    Director
</TD>
<TD>
&nbsp;
</TD>
<TD align="center" valign="top">
    May&#160;14, 2010
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>
<!-- XBRL Pagebreak Begin -->

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    II-5
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL Pagebreak End -->

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Exhibit
    Index</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="3%" align="right">&nbsp;</TD>	<!-- colindex=01 type=lead -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=01 type=body -->
    <TD width="3%" align="left">&nbsp;</TD>	<!-- colindex=01 type=align1 -->
    <TD width="6%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="87%">&nbsp;</TD>	<!-- colindex=02 type=maindata -->
</TR>
<!-- Table Width Row END -->
<!-- TableOutputHead -->
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD colspan="3" nowrap align="center" valign="bottom">
    <B>Exhibit<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD colspan="3" nowrap align="center" valign="bottom">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>Number</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>Description of Document</B>
</DIV>
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<!-- TableOutputBody -->
<TR valign="bottom">
<TD nowrap align="right" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    1
</TD>
<TD nowrap align="left" valign="top">
    .1*
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Form of Underwriting Agreement
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="right" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    3
</TD>
<TD nowrap align="left" valign="top">
    .1*
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Third Amended and Restated Certificate of Incorporation of
    NuPathe Inc., as amended August&#160;20, 2009, April&#160;9,
    2010 and May&#160;13, 2010
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="right" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    3
</TD>
<TD nowrap align="left" valign="top">
    .2*
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Form of Restated Certificate of Incorporation of NuPathe Inc.,
    to be in effect upon the closing of this offering
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="right" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    3
</TD>
<TD nowrap align="left" valign="top">
    .3*
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Bylaws of NuPathe Inc.
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="right" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    3
</TD>
<TD nowrap align="left" valign="top">
    .4*
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Form of Bylaws of NuPathe Inc., to be in effect upon the closing
    of this offering
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="right" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    4
</TD>
<TD nowrap align="left" valign="top">
    .1*
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Amended and Restated Investor Rights Agreement, dated as of
    July&#160;8, 2008
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="right" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    4
</TD>
<TD nowrap align="left" valign="top">
    .2*
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Preferred Stock Warrant, dated as of March&#160;29, 2007, as
    amended, issued to Oxford Finance Corp.
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="right" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    4
</TD>
<TD nowrap align="left" valign="top">
    .3*
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Form&#160;Warrant to Purchase Shares of Series&#160;B Preferred
    Stock, as amended
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="right" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    4
</TD>
<TD nowrap align="left" valign="top">
    .4*
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Series&#160;B Preferred Stock Warrant, dated May&#160;13, 2010,
    issued to MidCap Funding III, LLC
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="right" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    4
</TD>
<TD nowrap align="left" valign="top">
    .5*
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Series&#160;B Preferred Stock Warrant, dated May&#160;13, 2010,
    issued to Silicon Valley Bank
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="right" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    5
</TD>
<TD nowrap align="left" valign="top">
    .1*
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Opinion of Morgan, Lewis &#038; Bockius LLP
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="right" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    10
</TD>
<TD nowrap align="left" valign="top">
    .1*
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Patent License Agreement, effective as of July&#160;1, 2006, as
    amended, between NuPathe Inc. and The Trustees of the University
    of Pennsylvania
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="right" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    10
</TD>
<TD nowrap align="left" valign="top">
    .2*
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Development and License Agreement, dated September&#160;14,
    2007, as amended, between NuPathe Inc. and LTS Lohmann
    Therapie-Systeme AG
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="right" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    10
</TD>
<TD nowrap align="left" valign="top">
    .3*
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Asset Purchase and License Agreement, dated July&#160;8, 2008,
    between NuPathe Inc. and Travanti Pharma Inc.
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="right" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    10
</TD>
<TD nowrap align="left" valign="top">
    .4*
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    License Agreement, dated September&#160;23, 2009, between
    NuPathe Inc. and SurModics Pharmaceuticals, Inc. (f/k/a
    Brookwood Pharmaceuticals, Inc.)
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="right" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    10
</TD>
<TD nowrap align="left" valign="top">
    .5*
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Secured Subordinated Convertible Note and Warrant Purchase
    Agreement, dated April&#160;9, 2010, between NuPathe Inc. and
    the Purchasers named therein
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="right" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    10
</TD>
<TD nowrap align="left" valign="top">
    .6*
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Loan and Security Agreement, effective as of May&#160;13, 2010,
    by and among MidCap Funding III, LLC, Silicon Valley Bank and
    NuPathe Inc.
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="right" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    10
</TD>
<TD nowrap align="left" valign="top">
    .7*
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Secured Promissory Note, dated May&#160;13, 2010, made by
    NuPathe Inc. in favor of MidCap Funding III, LLC
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="right" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    10
</TD>
<TD nowrap align="left" valign="top">
    .8*
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Secured Promissory Note, dated May&#160;13, 2010, made by
    NuPathe Inc. in favor of Silicon Valley Bank
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="right" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    10
</TD>
<TD nowrap align="left" valign="top">
    .9*
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Office Space Lease, dated January&#160;10, 2008, between NuPathe
    Inc. and Washington Street Associates II, L.P.
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="right" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    10
</TD>
<TD nowrap align="left" valign="top">
    .10*
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Amended and Restated NuPathe Inc. 2005 Equity Incentive Plan, as
    amended
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="right" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    10
</TD>
<TD nowrap align="left" valign="top">
    .11*
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    NuPathe Inc. 2010 Omnibus Incentive Compensation Plan, including
    all forms of grant agreements thereunder
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="right" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    10
</TD>
<TD nowrap align="left" valign="top">
    .12*
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    NuPathe Inc. 2010 Employee Stock Purchase Plan
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="right" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    23
</TD>
<TD nowrap align="left" valign="top">
    .1
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Consent of KPMG LLP, independent registered public accounting
    firm
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="right" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    23
</TD>
<TD nowrap align="left" valign="top">
    .2*
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Consent of Morgan, Lewis &#038; Bockius LLP (included in
    Exhibit&#160;5.1)
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="right" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    24
</TD>
<TD nowrap align="left" valign="top">
    .1
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Power of Attorney (included in the signature page to this
    registration statement)
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="right" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV style="font-size: 1pt; margin-left: 0%; width: 13%;  align: left; border-bottom: 1pt solid #000000"></DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>



<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

<TR>
    <TD width="2%"></TD>
    <TD width="1%"></TD>
    <TD width="97%"></TD>
</TR>

<TR>
    <TD align="right" valign="top">
    * </TD>
    <TD></TD>
    <TD valign="bottom">
    To be filed by amendment.</TD>
</TR>

</TABLE>
<!-- XBRL Pagebreak Begin -->

<P align="left" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

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sv1
Table of Contents
As filed
    with the Securities and Exchange Commission on May 14,
    2010
Registration
No. 333-
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.
    20549
Form S-1
REGISTRATION
    STATEMENT
UNDER
THE SECURITIES ACT OF
    1933
NuPathe
    Inc
.
(Exact name of registrant as
    specified in its charter)
Delaware
(State or other jurisdiction
    of
incorporation or organization)
2834
(Primary Standard
    Industrial
Classification Code Number)
20-2218246
(I.R.S. Employer
Identification Number)
227 Washington Street, Suite 200
Conshohocken, Pennsylvania 19428
(484) 567-0130
(Address, including zip code and
    telephone number, including area code, of registrant's
    principal executive offices)
Jane H. Hollingsworth
Chief Executive Officer
NuPathe Inc.
227 Washington Street, Suite 200
Conshohocken, Pennsylvania 19428
(484) 567-0130
(Name, address, including zip
    code and telephone number, including area code, of agent for
    service)
Copies
    to:
Michael N. Peterson, Esq.
James W. McKenzie, Jr., Esq.
Morgan, Lewis & Bockius LLP
1701 Market Street
Philadelphia, Pennsylvania 19103
(215) 963-5000
Suzanne M. Hanlon, Esq.
V.P. Administration, General Counsel, Secretary
NuPathe Inc.
227 Washington Street, Suite 200
Conshohocken, Pennsylvania 19428
(484) 567-0130
David E. Redlick, Esq.
Brian A. Johnson, Esq.
Wilmer Cutler Pickering Hale and Dorr LLP
399 Park Avenue
New York, New York 10022
(212) 230-8800
Approximate date of commencement of proposed sale to the
    public:
As soon as practicable after the
    effective date of this registration statement.
If any of the securities being registered on this form are to be
    offered on a delayed or continuous basis pursuant to
    Rule 415 under the Securities Act of 1933, check the
    following
    box.
o
If this Form is filed to register additional securities for an
    offering pursuant to Rule 462(b) under the Securities Act,
    check the following box and list the Securities Act registration
    statement number of the earlier effective registration statement
    for the same
    offering.
o
If this Form is a post-effective amendment filed pursuant to
    Rule 462(c) under the Securities Act, check the following
    box and list the Securities Act registration statement number of
    the earlier effective registration statement for the same
    offering.
o
If this Form is a post-effective amendment filed pursuant to
    Rule 462(d) under the Securities Act, check the following
    box and list the Securities Act registration statement number of
    the earlier effective registration statement for the same
    offering.
o
Indicate by check mark whether the registrant is a large
    accelerated filer, an accelerated filer, a non-accelerated
    filer, or a smaller reporting company. See the definitions of
    "large accelerated filer," "accelerated
    filer" and "smaller reporting company" in
Rule 12b-2
of the Exchange Act. (Check one):
Large
    accelerated
    filer
o
Accelerated
    filer
o
Non-accelerated
filer
þ
Smaller reporting
    company
o
(Do not check if a smaller
    reporting company)
CALCULATION
    OF REGISTRATION FEE
Proposed Maximum
Amount of
Title of Each Class of
Aggregate
Registration
Securities to be Registered
Offering Price(1)
Fee(2)
Common Stock, $0.001 par value per share
$
86,250,000
$
6,150
(1)
Estimated solely for the purpose of
    calculating the amount of the registration fee in accordance
    with Rule 457(o) under the Securities Act of 1933, as
    amended, and includes share of common stock that the
    underwriters have an option to purchase to cover
    over-allotments, if any.
(2)
Calculated pursuant to
    Rule 457(o) based on an estimate of the proposed maximum
    aggregate offering price.
The Registrant hereby amends this Registration Statement on
    such date or dates as may be necessary to delay its effective
    date until the Registrant shall file a further amendment which
    specifically states that this Registration Statement shall
    thereafter become effective in accordance with Section 8(a)
    of the Securities Act of 1933 or until the Registration
    Statement shall become effective on such date as the Commission,
    acting pursuant to said Section 8(a), may determine.
Table of Contents
The
information in this preliminary prospectus is not complete and
may be changed. We may not sell these securities until the
registration statement filed with the Securities and Exchange
Commission is declared effective. This preliminary prospectus is
not an offer to sell these securities and it is not soliciting
an offer to buy these securities in any jurisdiction where the
offer or sale is not permitted.
SUBJECT TO COMPLETION, DATED
    MAY 14, 2010
PROSPECTUS
Shares
Common Stock
NuPathe Inc. is offering
shares of
    common stock. This is our initial public offering, and no public
    market currently exists for our common stock. We anticipate that
    the initial public offering price will be between
    $
and $
per share.
We are applying to list our common stock on The NASDAQ Global
    Market under the symbol "PATH."
Investing in our common stock involves risks. See "Risk
    Factors" beginning on page 8.
Per Share
Total
Initial public offering price
$
$
Underwriting discounts and commissions
$
$
Proceeds, before expenses, to us
$
$
We have granted the underwriters an option for 30 days from
    the date of this prospectus to purchase up to
additional shares of our common stock at the initial public
    offering price, less underwriting discounts and commissions, to
    cover over-allotments.
Neither the Securities and Exchange Commission nor any state
    securities commission has approved or disapproved of these
    securities or determined if this prospectus is truthful or
    complete. Any representation to the contrary is a criminal
    offense.
The underwriters expect to deliver the shares of common stock on
    or about
, 2010.
Leerink Swann
Lazard Capital Markets
Joint Book-Running
    Managers
Thomas Weisel Partners LLC
Needham & Company, LLC
The date of this prospectus is  , 2010.
TABLE OF
    CONTENTS
Page
PROSPECTUS SUMMARY
1
RISK FACTORS
8
SPECIAL NOTE REGARDING FORWARD-LOOKING
    STATEMENTS
33
USE OF PROCEEDS
34
DIVIDEND POLICY
35
CAPITALIZATION
36
DILUTION
38
SELECTED FINANCIAL DATA
40
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
    FINANCIAL CONDITION AND RESULTS OF OPERATIONS
41
BUSINESS
56
MANAGEMENT
78
EXECUTIVE COMPENSATION
84
TRANSACTIONS WITH RELATED PERSONS
102
PRINCIPAL STOCKHOLDERS
106
DESCRIPTION OF CAPITAL STOCK
111
SHARES ELIGIBLE FOR FUTURE SALE
114
UNDERWRITING
116
LEGAL MATTERS
121
EXPERTS
121
WHERE YOU CAN FIND MORE INFORMATION
121
INDEX TO FINANCIAL STATEMENTS
F-1
EXHIBITS
EX-23.1
You should rely only on the information contained in this
    prospectus and any free writing prospectus prepared by or on
    behalf of us or to which we have referred you. We have not
    authorized anyone to provide you with information that is
    different. We are offering to sell shares of our common stock,
    and seeking offers to buy shares of our common stock, only in
    jurisdictions where offers and sales are permitted. The
    information in this prospectus is accurate only as of the date
    of this prospectus, regardless of the time of delivery of this
    prospectus or any sale of our common stock.
Until
,
    2010, 25 days after the date of this prospectus, all
    dealers that buy, sell or trade our common stock, whether or not
    participating in this offering, may be required to deliver a
    prospectus. This is in addition to the dealer's obligation
    to deliver a prospectus when acting as an underwriter and with
    respect to unsold allotments or subscriptions.
For investors outside the United States: Neither we nor any of
    the underwriters have taken any action to permit a public
    offering of the shares of our common stock or the possession or
    distribution of this prospectus in any jurisdiction where action
    for that purpose is required, other than the United States. You
    are required to inform yourselves about and to observe any
    restrictions relating to this offering and the distribution of
    this prospectus.
Table of Contents
PROSPECTUS
    SUMMARY
This summary highlights information contained elsewhere in
    this prospectus. This summary does not contain all of the
    information you should consider before investing in our common
    stock. Before you decide to invest in our common stock, you
    should read the entire prospectus carefully, including the
    "Risk Factors" section and the financial statements
    and related notes appearing at the end of this prospectus.
Our
    Company
We are a specialty pharmaceutical company focused on the
    development and commercialization of branded therapeutics for
    diseases of the central nervous system, including neurological
    and psychiatric disorders. Our most advanced product candidate,
    Zelrix, is a single-use patch applied to the arm or thigh for
    the treatment of migraine. Zelrix actively delivers sumatriptan
    through the skin in a controlled manner using our proprietary
    SmartRelief technology. Sumatriptan, currently available in
    oral, nasal and injectable formulations, is the most widely
    prescribed migraine medication. We designed Zelrix for patients
    who suffer from nausea or vomiting with migraines and for those
    who experience inconsistent relief or adverse events from their
    current treatment.
We successfully completed a pivotal Phase III clinical
    trial for Zelrix in July 2009 and expect to submit a New Drug
    Application, or NDA, to the United States Food and Drug
    Administration, or FDA, in the fourth quarter of 2010. Subject
    to FDA approval of our NDA, we plan to build our own specialty
    sales force in the U.S. to launch Zelrix in the first half
    of 2012.
We have two other proprietary product candidates in preclinical
    development that address large market opportunities: NP201 for
    the continuous symptomatic treatment of Parkinson's
    disease, and NP202 for the long-term treatment of schizophrenia
    and bipolar disorder. We expect to submit an Investigational New
    Drug Application, or IND, to the FDA in the first half of 2011
    for NP201 and in 2012 for NP202 in order to initiate human
    clinical trials of these product candidates.
Our
    Product Candidates
Zelrix
    for the treatment of acute migraine
Migraine is a debilitating neurological disease that affects
    approximately 28 million people in the U.S. Symptoms
    of migraine include moderate to severe headache pain, nausea and
    vomiting, photophobia, or abnormal sensitivity to light, and
    phonophobia, or abnormal sensitivity to sound. Most migraines
    last between four and 24 hours. Symptoms other than
    headache pain contribute significantly to the disability caused
    by acute migraine. In particular, nausea and vomiting during a
    migraine can be severe and incapacitating and prevent or
    discourage migraine patients, or migraineurs, from taking their
    migraine medication.
According to IMS Health Inc., or IMS, over 13 million
    prescriptions for the treatment of acute migraine were filled in
    the U.S. in 2009, with more than 90% of these prescriptions
    for triptans. Triptan sales in the U.S. in 2009 exceeded
    $2.0 billion, with approximately 123 million
    individual units sold. Currently, triptans constitute the most
    prescribed class of medication for the treatment of acute
    migraine, and sumatriptan is the most widely prescribed triptan.
We believe that most marketed migraine therapies have
    significant limitations. Zelrix is a transdermal patch designed
    to provide migraineurs fast onset and sustained relief through a
    tolerable, non-oral route of administration. We believe Zelrix
    offers a better alternative to migraineurs by providing the
    following benefits:
•
Circumventing nausea and vomiting.
According
    to a survey of over 500 respondents conducted by the National
    Headache Foundation in 2008, 90% of migraineurs have experienced
    nausea with a migraine and 59% of migraineurs have experienced
    vomiting with a migraine. In this survey, 48% of respondents who
    ever experienced nausea or vomiting with a migraine reported
    that the nausea or vomiting had a moderate to major impact on
    when or how they take migraine medications. The American Academy
    of Neurology guidelines recommend non-oral therapies for
    migraineurs who experience nausea or vomiting as significant
    migraine symptoms. Because Zelrix is administered transdermally,
    we believe
1
Table of Contents
that it will be attractive to migraineurs suffering from nausea
    or vomiting who might otherwise delay or avoid taking medication.
•
Increasing consistency of response.
According
    to a 2001 article by Dr. Michel Ferrari published in
The
    Lancet
, a peer-reviewed medical journal, clinical trials
    have demonstrated that at least 40% of migraineurs fail to
    respond consistently to oral triptans. We believe this results
    from a variety of causes, including low and inconsistent
    absorption of oral medication because of a compromised ability
    to digest, or decreased gastric motility. Because Zelrix does
    not depend on gastrointestinal absorption, we believe that it
    will provide more consistent relief than oral triptans.
•
Minimizing triptan adverse events.
According
    to a 2003 article by Dr. R. Michael Gallagher published in
Headache
, a peer-reviewed medical journal, 67% of
    migraineurs who use prescription migraine medication reported
    that they had delayed or avoided taking a prescription migraine
    medication due to concerns about adverse events. In our clinical
    trials, treatment with Zelrix resulted in a low incidence of
    triptan adverse events while effectively treating migraine.
We plan to develop marketing, sales and distribution
    capabilities for the commercial launch of Zelrix in the U.S.,
    including the hiring of a specialty sales force of approximately
    100 people after marketing approval. We expect to direct
    our marketing efforts to high potential prescribers of Zelrix,
    including neurologists, headache specialists and select other
    physicians. We may seek to further penetrate the
    U.S. market in the future by expanding our sales force or
    through collaborations with other pharmaceutical and
    biotechnology companies. We may also seek to commercialize
    Zelrix outside the U.S., although we currently plan to do so
    only with a partner.
NP201
    for the continuous symptomatic treatment of Parkinson's
    disease
According to the Parkinson's Disease Foundation,
    Parkinson's disease affects about one million people
    in the U.S. and more than four million people
    worldwide. Symptoms of Parkinson's disease can appear at
    any age, but the average age of onset is 60. According to IMS,
    2009 sales of Parkinson's disease therapies in the U.S.,
    European Union and Japan totaled approximately $3.6 billion.
We designed NP201 to provide continuous delivery of
    Parkinson's disease medication in an easy to administer and
    tolerable dose formulation. After administration, NP201 is
    designed to slowly release ropinirole, an FDA approved
    medication. Based on data from our preclinical studies, we
    believe that NP201 has the potential to provide continuous
    symptomatic relief for up to two months per dose and to
    significantly decrease the incidence of adverse events
    associated with current treatments. We plan to submit an IND to
    the FDA in the first half of 2011.
NP202
    for the long-term treatment of schizophrenia and bipolar
    disorder
According to the National Alliance on Mental Illness, in the
    U.S., schizophrenia affects over two million adults and
    bipolar disorder affects over ten million adults. In an
    attempt to improve patient compliance, physicians currently
    administer antipsychotic drugs through depot injections, which
    release medication over a longer period than conventional
    injections or oral medications.
We designed NP202 to provide continuous delivery of an FDA
    approved atypical antipsychotic medication in an easy to
    administer and tolerable dose formulation. We believe that NP202
    will provide a significant improvement over existing treatment
    options because we are designing and developing it to deliver up
    to three months of continuous medication with a single
    dose and be an easy to administer, pre-loaded, injectable
    product that can be stored at room temperature. We have
    developed NP202 prototype products, initiated pre-IND activities
    and plan to submit an IND to the FDA in 2012.
Our
    Proprietary Delivery Technologies
We hold exclusive worldwide rights to two proprietary drug
    delivery technologies: SmartRelief and LAD. Zelrix uses
    SmartRelief, while NP201 and NP202 both use our long-acting
    delivery, or LAD, technology.
2
Table of Contents
SmartRelief is our proprietary transdermal delivery technology
    based on iontophoresis, a non-invasive method of transporting a
    molecule through the skin by applying a mild electrical current.
    Unlike passive transdermal technologies, which rely on diffusion
    for medication delivery, SmartRelief controls the amount and
    rate of medication delivery. The SmartRelief technology
    facilitates active transdermal delivery, which is important for
    molecules, such as sumatriptan, that are not able to be
    delivered passively through the skin.
LAD is comprised of a biodegradable polymer matrix using
    commonly available medical polymers and an active drug. It is
    formed into a small implant for injection just below the skin.
    We designed LAD to improve the control, consistency and
    convenience of medication delivery.
Risks
    Associated with Our Business
Our business is subject to a number of risks of which you should
    be aware before making an investment decision. These risks are
    described in more detail in the "Risk Factors" section
    of this prospectus immediately following this prospectus
    summary. These risks include the following:
•
We have not received, and we may not receive, marketing approval
    for, or commercial revenues from, Zelrix or any other product
    candidate;
•
The commercial success of Zelrix and any other product candidate
    that we develop, if approved, will depend upon significant
    market acceptance among physicians and patients and the
    availability of adequate reimbursement from third party payors;
•
If we are unable to establish effective marketing and sales
    capabilities or enter into agreements with third parties to
    perform these functions, we will not be able to commercialize
    Zelrix or any other product candidate that we develop, if
    approved;
•
We have incurred significant operating losses since inception,
    which has raised substantial doubt regarding our ability to
    continue as a going concern; and
•
We use third parties to manufacture all of our product
    candidates, including Zelrix, and the machinery to produce the
    commercial supply of Zelrix must be designed, built and
    validated.
Our
    Corporate Information
We were incorporated under the laws of the State of Delaware in
    January 2005. Our principal executive offices are located at 227
    Washington Street, Suite 200, Conshohocken, Pennsylvania
    19428 and our telephone number is
(484) 567-0130.
Our website address is www.nupathe.com. The information
    contained on, or that can be accessed through, our website is
    not part of this prospectus. We have included our website
    address in this prospectus solely as an inactive textual
    reference.
In this prospectus, unless otherwise stated or the context
    otherwise indicates, references to "NuPathe,"
    "we," "us," "our" and similar
    references refer to NuPathe Inc. The name
    NuPathe
®
is our registered trademark.
    Zelrix
tm
,

    SmartRelief
tm
and
    LAD
tm
are our trademarks. All other trademarks, trade names and
    service marks appearing in this prospectus are the property of
    their respective owners.
This prospectus includes statistical and other industry and
    market data that we obtained from industry publications and
    research, surveys and studies conducted by third parties.
    Industry publications and third party research, surveys and
    studies generally indicate that their information has been
    obtained from sources believed to be reliable, although they do
    not guarantee the accuracy or completeness of such information.
    While we believe these industry publications and third party
    research, surveys and studies are reliable, we have not
    independently verified such data.
3
Table of Contents
THE
    OFFERING
Common stock offered by us
shares
Common stock to be outstanding after this offering
shares
Over-allotment option
We have granted the underwriters an option for 30 days from
    the date of this prospectus to purchase up
    to           additional
    shares of common stock to cover over-allotments.
Use of proceeds
We intend to use the net proceeds from this offering to complete
    the clinical development of, seek marketing approval for and, if
    approved, commercially launch Zelrix in the U.S., to continue
    preclinical and clinical development of NP201 and NP202 and for
    working capital and other general corporate purposes. See
    "Use of Proceeds" on page 34.
Proposed NASDAQ Global Market symbol
"PATH"
Risk factors
You should read the "Risk Factors" section of this
    prospectus for a discussion of factors to consider carefully
    before deciding to invest in shares of our common stock.
The number of shares of common stock to be outstanding after
    this offering is based on 3,143,905 shares of common stock
    outstanding as of April 30, 2010 and also includes:
•
61,824,121 shares of common stock issuable upon the
    automatic conversion of all outstanding shares of our preferred
    stock, including accrued dividends, upon the closing of this
    offering, assuming that the closing occurred on April 30,
    2010; and
•
shares
    of common stock issuable upon the automatic conversion of all
    principal and accrued interest outstanding under secured
    subordinated promissory notes that we issued and sold to
    investors in April 2010, or the April 2010 Convertible Notes,
    upon the closing of this offering, assuming an initial public
    offering price of $      per share, the
    midpoint of the price range set forth on the cover page of this
    prospectus, and that the closing occurred on April 30, 2010.
The number of shares of common stock to be outstanding after
    this offering excludes:
•
7,520,075 shares of common stock issuable upon the exercise
    of options outstanding as of April 30, 2010 at a weighted
    average exercise price of $0.23 per share;
•
1,126,298 shares of common stock issuable upon the exercise
    of warrants outstanding as of May 14, 2010 at a weighted
    average exercise price of $0.93 per share; and
•
846,020 additional shares of common stock available for future
    issuance as of April 30, 2010 under our 2005 Equity
    Compensation Plan, or our 2005 Plan.
Unless otherwise indicated, all information in this prospectus
    assumes:
•
No exercise of the outstanding options or warrants described
    above;
•
No exercise by the underwriters of their option to purchase up
    to           shares
    of common stock to cover over-allotments;
•
The automatic conversion of all outstanding shares of our
    preferred stock, including accrued dividends, into an aggregate
    of 61,824,121 shares of common stock upon the closing of
    this offering, assuming that the closing occurred on
    April 30, 2010;
•
The automatic conversion of all principal and accrued interest
    outstanding under the April 2010 Convertible Notes into an
    aggregate
    of           shares
    of common stock upon the closing of this
4
Table of Contents
offering, assuming an initial public offering price of
    $      per share, the midpoint of the
    price range set forth on the cover page of this prospectus, and
    that the closing occurred on April 30, 2010;
•
The warrants outstanding as of May 14, 2010 to purchase an
    aggregate of 1,126,298 shares of preferred stock have
    become, in accordance with their terms, warrants to purchase
    1,126,298 shares of common stock at an exercise price of
    $0.93 per share of common stock upon the closing of this
    offering; and
•
The restatement of our amended and restated certificate of
    incorporation and our bylaws upon the closing of this offering.
5
Table of Contents
SUMMARY
    FINANCIAL DATA
You should read the following summary financial data together
    with the "Capitalization," "Selected Financial
    Data" and "Management's Discussion and Analysis
    of Financial Condition and Results of Operations" sections
    of this prospectus and our financial statements and the related
    notes appearing at the end of this prospectus. We have derived
    the statement of operations data for the years ended
    December 31, 2007, 2008 and 2009 and for the period from
    January 7, 2005 (inception) through December 31, 2009
    and the balance sheet data as of December 31, 2009 from our
    audited financial statements appearing at the end of this
    prospectus. Our historical results for any prior period are not
    necessarily indicative of results to be expected in any future
    period.
See note 3(i) to our financial statements appearing at the
    end of this prospectus for information regarding computation of
    basic and diluted net loss per common share, unaudited pro forma
    basic and diluted net loss per common share and the unaudited
    pro forma weighted average basic and diluted common shares
    outstanding used in computing pro forma basic and diluted net
    loss per common share.
The unaudited pro forma balance sheet data set forth below give
    effect to:
•
The automatic conversion of all outstanding shares of our
    preferred stock, including accrued dividends, into an aggregate
    of 61,824,121 shares of common stock upon the closing of
    this offering, assuming that the closing occurred on
    April 30, 2010;
•
The receipt in April 2010 of gross proceeds of $10,062,500 upon
    the issuance of the April 2010 Convertible Notes and the
    automatic conversion of all principal and accrued interest
    outstanding under the April 2010 Convertible Notes into an
    aggregate
    of           shares
    of common stock upon the closing of this offering, assuming an
    initial public offering price of $     
    per share, the midpoint of the price range set forth on the
    cover page of this prospectus, and that the closing occurred on
    April 30, 2010;
•
The receipt in May 2010 of gross proceeds of $5,000,000 upon
    entering into a secured term loan facility, or the May 2010 Loan
    Facility, the issuance of warrants to purchase
    255,376 shares of Series B preferred stock, with an
    estimated fair value of $203,255, to the lenders under such
    facility and the repayment in full of the $782,000 outstanding
    as of December 31, 2009 under a term loan that we entered
    into in 2007; and
•
The warrants outstanding as of May 14, 2010 to purchase an
    aggregate of 1,126,298 shares of our preferred stock
    becoming, in accordance with their terms, warrants to purchase
    1,126,298 shares of common stock at an exercise price of
    $0.93 per share of common stock upon the closing of this
    offering and the reclassification of the warrant liability with
    respect to warrants outstanding as of December 31, 2009 to
    additional paid-in capital.
The pro forma as adjusted balance sheet data set forth below
    give further effect to the issuance and sale
    of           shares
    of common stock in this offering at an assumed initial public
    offering price of $      per share, the
    midpoint of the price range set forth on the cover page of this
    prospectus, after deducting estimated underwriting discounts and
    commissions and estimated offering expenses payable by us.
6
Table of Contents
January 7, 2005
(inception)
through
Year Ended December 31,
December 31,
2007
2008
2009
2009
(In thousands, except share and per share data)
Statement of Operations Data:
Operating expenses:
Research and development
$
7,761
$
8,815
$
11,310
$
31,788
Acquired in-process research and development
—
5,500
—
5,500
General and administrative
1,884
3,075
3,142
9,827
Total operating expenses
(9,645
)
(17,390
)
(14,452
)
(47,115
)
Interest income (expense), net
(30
)
(121
)
(1,289
)
(2,096
)
Loss before tax benefit
(9,675
)
(17,511
)
(15,741
)
(49,211
)
Income tax benefit
—
—
151
151
Net loss
(9,675
)
(17,511
)
(15,590
)
$
(49,060
)
Accretion of redeemable convertible preferred stock
(1,126
)
(2,330
)
(3,617
)
Net loss applicable to common stockholders
$
(10,801
)
$
(19,841
)
$
(19,207
)
Basic and diluted net loss per common share
$
(3.67
)
$
(6.49
)
$
(6.28
)
Weighted average basic and diluted common shares outstanding
2,947,005
3,059,137
3,060,000
Unaudited pro forma net loss
$
(15,590
)
Unaudited pro forma basic and diluted net loss per common share
$
Unaudited pro forma weighted average basic and diluted common
    shares outstanding
As of December 31, 2009
Pro Forma as
Actual
Pro Forma
Adjusted
(Unaudited)
(In thousands)
Balance Sheet Data:
Cash and cash equivalents
$
3,927
$
18,207
$
—
Working capital
1,527
16,590
—
Total assets
5,009
19,493
—
Long-term debt
—
5,000
—
Redeemable convertible preferred stock
55,538
—
—
Total stockholders' equity (deficit)
(54,474
)
11,957
—
Each $1.00 increase or decrease in the assumed initial public
    offering price of $      per share
    would increase or decrease each of cash and cash equivalents,
    working capital, total assets and total stockholders'
    equity on a pro forma as adjusted basis by approximately
    $      million, assuming that the
    number of shares of common stock offered by us, as set forth on
    the cover page of this prospectus, remains the same and after
    deducting estimated underwriting discounts and commissions and
    estimated offering expenses payable by us.
7
Table of Contents
RISK
    FACTORS
Investing in our common stock involves a high degree of risk.
    Before you decide to invest in our common stock, you should
    consider carefully the risks described below, together with the
    other information contained in this prospectus, including our
    financial statements and the related notes appearing at the end
    of this prospectus. We believe the risks described below are the
    risks that are material to us as of the date of this prospectus.
    If any of the following risks actually occur, our business,
    financial condition, results of operations and future growth
    prospects would likely be materially and adversely affected. In
    these circumstances, the market price of our common stock could
    decline, and you may lose all or part of your investment.
Risks
    Related to Development and Commercialization of Our Product
    Candidates
We are
    heavily dependent on the success of Zelrix. If we fail to obtain
    marketing approval for and commercialize Zelrix, or experience
    delays in doing so, our business will be materially
    harmed.
We have invested a significant portion of our efforts and
    financial resources in the development of our most advanced
    product candidate, Zelrix. Zelrix is the only product candidate
    for which we have conducted clinical trials, and to date we have
    not marketed, distributed or sold any products. Our ability to
    generate revenues in the near term is substantially dependent on
    our ability to develop and commercialize Zelrix. In the fourth
    quarter of 2010, we plan to submit a new drug application, or
    NDA, seeking approval to commercialize Zelrix for treatment of
    acute migraine. We cannot commercialize Zelrix prior to
    obtaining FDA approval. Even though Zelrix has completed its
    pivotal Phase III clinical trial with positive results,
    Zelrix is still, nonetheless, susceptible to the risks of
    failure inherent at any stage of drug development, including the
    appearance of unexpected adverse events and the FDA's
    determination Zelrix is not approvable. If we do not receive FDA
    approval for and commercialize Zelrix, we will not be able to
    generate product revenues in the foreseeable future, or at all.
As a company, we have never obtained marketing approval for or
    commercialized a drug. It is possible that the FDA may refuse to
    accept our NDA for substantive review or may review our data and
    conclude that our application is insufficient to obtain
    marketing approval of Zelrix. Before we submit our NDA, we must:
•
Complete two ongoing pharmacokinetic trials in healthy subjects
    and submit interim safety data from our two ongoing open label
    Phase III long-term safety trials, or our Phase III
    safety trials; and
•
Obtain a waiver from the FDA with respect to the conduct of a
    separate skin sensitization study or complete such a study.
In addition, the FDA has requested that we provide data in our
    NDA regarding an
in vitro
analytical testing method
    for Zelrix. However, to date, for technical reasons we have not
    been able to develop an appropriate
in vitro
analytical testing method for Zelrix, and we are working
    with the FDA to develop acceptable alternatives. Any
    difficulties or delays we experience in obtaining the data from
    our pharmacokinetic and Phase III safety trials will delay
    the submission of our NDA and the FDA's review of the NDA.
    In addition, delay or failure to develop an
in vitro
analytical testing method for Zelrix or reach agreement with the
    FDA on an alternative may delay marketing approval of Zelrix.
If, following submission, our NDA is not accepted for
    substantive review or approved, the FDA may require that we
    conduct additional clinical or preclinical trials, manufacture
    additional validation batches or develop additional analytical
    test methods before it will reconsider our application. If the
    FDA requires additional studies or data, we would incur
    increased costs and delays in the marketing approval process,
    which may require us to expend more resources than we have
    available. In addition, the FDA may not consider sufficient any
    additional required trials that we perform and complete.
Even if we believe that the data from our clinical trials and
    analytical testing methods support marketing approval of Zelrix
    in the U.S., the FDA may not agree with our analysis and approve
    our NDA. Any delay in obtaining, or an inability to obtain,
    marketing approvals would prevent us from commercializing
    Zelrix, generating revenues and achieving profitability.
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The
    commercial success of Zelrix and any other product candidates
    that we develop, if approved in the future, will depend upon
    significant market acceptance of these products among
    physicians, patients and third party payors.
As a company, we have never commercialized a product candidate
    for any indication. Even if any product candidate that we
    develop, including Zelrix, is approved by the appropriate
    regulatory authorities for marketing and sale, it may not gain
    acceptance among physicians, patients and third party payors. If
    our products for which we obtain marketing approval do not gain
    an adequate level of acceptance, we may not generate significant
    product revenues or become profitable. Market acceptance of
    Zelrix, and any other product candidates that we develop, by
    physicians, patients and third party payors will depend on a
    number of factors, some of which are beyond our control,
    including:
•
The efficacy, safety and other potential advantages in relation
    to alternative treatments;
•
The relative convenience and ease of administration;
•
The availability of adequate coverage or reimbursement by third
    parties, such as insurance companies and other healthcare
    payors, and by government healthcare programs, including
    Medicare and Medicaid;
•
The prevalence and severity of adverse events;
•
The cost of treatment in relation to alternative treatments,
    including generic products;
•
The extent and strength of marketing and distribution support;
•
The limitations or warnings contained in a product's FDA
    approved labeling; and
•
Distribution and use restrictions imposed by the FDA or to which
    we agree as part of a mandatory risk evaluation and mitigation
    strategy or voluntary risk management plan.
For example, even if the medical community accepts that Zelrix
    is safe and effective for its approved indications, physicians
    and patients may not immediately be receptive to Zelrix and may
    be slow to adopt it as an accepted treatment for acute migraine.
    In addition, even though we believe Zelrix has significant
    advantages, because no head-to-head trials comparing Zelrix to
    competing products have been conducted, it is unlikely that any
    labeling approved by the FDA will contain claims that Zelrix is
    safer or more effective than competitive products or will permit
    us to promote Zelrix as being superior to competing products.
    Further, the availability of numerous inexpensive generic forms
    of migraine therapy products may also limit acceptance of Zelrix
    among physicians, patients and third party payors. If Zelrix is
    approved but does not achieve an adequate level of acceptance
    among physicians, patients and third party payors, we may not
    generate meaningful revenues from Zelrix and we may not become
    profitable.
It
    will be difficult for us to profitably sell any of our product
    candidates that the FDA approves, including Zelrix, if
    reimbursement for such product candidate is
    limited.
Market acceptance and sales of Zelrix or any other product
    candidates that we develop will depend on reimbursement policies
    and may be affected by future healthcare reform measures.
    Government authorities and third party payors, such as private
    health insurers and health maintenance organizations, decide
    which medications they will pay for and establish reimbursement
    levels. A primary trend in the U.S. healthcare industry and
    elsewhere is cost containment. Government authorities and these
    third party payors have attempted to control costs by limiting
    coverage and the amount of reimbursement for particular
    medications. We cannot be sure that reimbursement will be
    available for Zelrix or any other product candidates that we
    develop and, if reimbursement is available, the level of
    reimbursement. Reimbursement may impact the demand for, or the
    price of, our products for which we obtain marketing approval.
    Numerous generic products may be available at lower prices than
    branded therapy products, such as Zelrix, if it is approved,
    which may also reduce the likelihood and level of reimbursement
    for our product candidates, including Zelrix. If reimbursement
    is not available or is available only to limited levels, we may
    not be able to successfully commercialize Zelrix or any other
    product candidates that we develop.
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If we
    are unable to establish effective marketing and sales
    capabilities or enter into agreements with third parties to
    market and sell our product candidates after they are approved,
    we may be unable to generate product revenues.
We currently do not have a commercial infrastructure for the
    marketing, sales and distribution of pharmaceutical products. In
    order to commercialize our products, we must build our
    marketing, sales and distribution capabilities or make
    arrangements with third parties to perform these services. If
    Zelrix is approved by the FDA, we plan to build a commercial
    infrastructure to launch Zelrix in the U.S., including a
    specialty sales force of approximately 100 people. We may
    seek to further penetrate the U.S. market in the future by
    expanding our sales force or through collaborations with other
    pharmaceutical or biotechnology companies. We may also seek to
    commercialize Zelrix outside the U.S., although we currently
    plan to do so only with a collaborator.
The establishment and development of our own sales force and
    related compliance plans to market any products we may develop
    will be expensive and time consuming and could delay any product
    launch, and we may not be able to successfully develop this
    capability. We, or our future collaborators, will have to
    compete with other pharmaceutical and biotechnology companies to
    recruit, hire, train and retain marketing and sales personnel.
    In the event we are unable to develop a marketing and sales
    infrastructure, we would not be able to commercialize Zelrix or
    any other product candidates that we develop, which would limit
    our ability to generate product revenues.
Companies such as ours often expand their sales force and
    marketing capabilities for a product prior to it being approved
    by the FDA so that the drug can be commercialized upon approval.
    Although our current plan is to hire most of our sales and
    marketing personnel only if Zelrix is approved by the FDA, we
    will incur expenses prior to product launch in recruiting this
    sales force and developing a marketing and sales infrastructure.
    If the commercial launch of Zelrix is delayed as a result of FDA
    requirements or other reasons, we would incur these expenses
    prior to being able to realize any revenue from product sales.
    Even if we are able to effectively hire a sales force and
    develop a marketing and sales infrastructure, our sales force
    and marketing teams may not be successful in commercializing
    Zelrix or any other product candidates that we develop.
To the extent we rely on third parties to commercialize any
    products for which we obtain marketing approval, we may receive
    less revenues than if we commercialized these products
    ourselves. In addition, we would have less control over the
    sales efforts of any other third parties involved in our
    commercialization efforts. In the event we are unable to
    collaborate with a third party marketing and sales organization,
    our ability to generate product revenues may be limited either
    in the U.S. or internationally.
We
    face significant competition from other pharmaceutical and
    biotechnology companies. Our operating results will suffer if we
    fail to compete effectively.
The pharmaceutical and biotechnology industries are intensely
    competitive and subject to rapid and significant technological
    change. Our major competitors include organizations such as
    major multinational pharmaceutical companies, established
    biotechnology companies and specialty pharmaceutical and generic
    drug companies. Many of our competitors have greater financial
    and other resources than we have, such as larger research and
    development staff and more extensive marketing and manufacturing
    organizations. As a result, these companies may obtain marketing
    approval more rapidly than we are able to and may be more
    effective in selling and marketing their products. Smaller or
    early stage companies may also prove to be significant
    competitors, particularly through collaborative arrangements
    with large, established companies.
Our competitors may succeed in developing, acquiring or
    licensing on an exclusive basis technologies and drug products
    that are more effective or less costly than Zelrix or any other
    drug candidate that we are currently developing or that we may
    develop, which could render our products obsolete and
    noncompetitive. We expect any products that we develop and
    commercialize to compete on the basis of, among other things,
    efficacy, safety, convenience of administration and delivery,
    price, the level of generic competition and the availability of
    reimbursement from government and other third party payors. We
    also expect to face
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competition in our efforts to identify appropriate collaborators
    or partners to help commercialize our product candidates in our
    target commercial markets.
The competition in the market for acute migraine medication is
    intense. The majority of marketed prescription products for
    treatment of acute migraine in the U.S. are in the triptan
    class in tablet, orally-disintegrating tablet, nasal spray and
    injectable therapies. The largest selling triptan is
    sumatriptan, with 2009 sales of approximately $800 million
    in the U.S., including approximately $200 million
    attributable to GlaxoSmithKline plc's, or GlaxoSmithKline,
    branded sumatriptan, Imitrex. There are at least eight other
    branded triptan therapies being sold by pharmaceutical and
    biotechnology companies, including Maxalt from Merck &
    Co., Inc., or Merck, and Treximet from GlaxoSmithKline. In July
    2009, the FDA approved Zogenix, Inc.'s Sumavel DosePro
    needle-free sumatriptan injection for the treatment of acute
    migraine and cluster headache.
If approved, Zelrix will face competition from inexpensive
    generic versions of sumatriptan and generic versions of other
    branded products of competitors that have lost or will lose
    their patent exclusivity. For example, we expect Amerge, the
    branded version of naratriptan, to lose patent protection in
    July 2010. In addition, we expect other triptan patents to
    expire between 2012 and 2025. Many of these products are
    manufactured and marketed by large pharmaceutical companies and
    are well accepted by physicians, patients and third party
    payors. Because of the low cost, health insurers likely would
    require or encourage use of, and consumers likely would use, a
    generic triptan prior to trying Zelrix.
In addition to marketed migraine medications, if approved,
    Zelrix may face competition from migraine product candidates in
    various stages of clinical development by both large and small
    companies. These include Merck's telcagepant, an orally
    administered calcitonin gene related peptide antagonist, and
    Levadex from MAP Pharmaceuticals, Inc., an inhaled formulation
    of dihydroergotamine, both for acute migraine, and Allergan,
    Inc.'s Botox for chronic migraine. Each of these has either
    completed or is in Phase III clinical development. Zelrix
    may also compete with other drug candidates that receive
    marketing approval before Zelrix. If we are unable to
    demonstrate the advantages of Zelrix over competing drugs and
    drug candidates, we will not be able to successfully
    commercialize Zelrix and our results of operations will suffer.
As with Zelrix, if approved, each of NP201 and NP202 will face
    competition from generic and branded products. Specifically,
    NP201, a biodegradable, subcutaneous, injectable polymer implant
    combined with ropinirole, will face competition from generic
    immediate release and extended release versions of ropinirole
    and the dopamine agonist pramiprexole, as well as from two
    continuous delivery medications, a levadopa gel and an
    injectable apomorphine. NP202, a biodegradable, subcutaneous,
    injectable polymer implant combined with an atypical
    antipsychotic medication, will face competition from a variety
    of branded and generic versions of antipsychotic medications, in
    addition to several other sustained delivery depot formulations
    of atypical antipsychotics.
As a result of all of these factors, our competitors may succeed
    in obtaining patent protection or FDA approval or discovering,
    developing and commercializing migraine and other therapies
    before we do.
Any
    failure or delay in preclinical studies or clinical trials for
    our product candidates may cause us to incur additional costs or
    delay or prevent the commercialization of our product candidates
    and could severely harm our business.
Before obtaining marketing approval for the sale of our product
    candidates, we must conduct, at our own expense, extensive
    preclinical tests and then clinical trials to demonstrate the
    safety and efficacy of our product candidates in humans.
    Clinical testing, in particular, is expensive, difficult to
    design and implement, can take many years to complete and is
    uncertain as to outcome. The outcome of preclinical studies and
    early clinical trials may not be predictive of the success of
    later clinical trials, and interim results of a clinical trial
    do not necessarily predict final results. Even if preclinical
    studies and early phase clinical trials succeed, it is necessary
    to conduct additional clinical trials in larger numbers of
    subjects taking the medication for longer periods before seeking
    FDA approval to market and sell a medication in the
    U.S. Clinical data is often susceptible to varying
    interpretations and analyses, and many companies that have
    believed their product candidates performed satisfactorily in
    clinical trials have nonetheless failed to obtain FDA approval
    for their products. A failure of one or more of our clinical
    trials can occur at any stage of testing.
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We may experience numerous unforeseen events during, or as a
    result of, the clinical trial process, which could delay or
    prevent us from receiving marketing approval or commercializing
    our product candidates, including the following:
•
Regulators or institutional review boards may not authorize us
    to commence a clinical trial or conduct a clinical trial at a
    prospective trial site;
•
Our clinical trials may produce negative or inconclusive
    results, and we may decide, or regulators may require us, to
    conduct additional clinical trials or we may abandon projects
    that we expect to be promising;
•
The number of subjects required for our clinical trials may be
    larger than we anticipate, enrollment in our clinical trials may
    be slower than we anticipate, or participants may drop out of
    our clinical trials at a higher rate than we anticipate;
•
We might have to suspend or terminate our clinical trials if the
    participants are being exposed to unacceptable health risks;
•
Regulators or institutional review boards may require that we
    hold, suspend or terminate clinical research for various
    reasons, including noncompliance with regulatory requirements or
    our clinical protocols;
•
Regulators may refuse to accept or consider data from clinical
    trials for various reasons, including noncompliance with
    regulatory requirements or our clinical protocols;
•
The cost of our clinical trials may be greater than we
    anticipate;
•
The supply or quality of our product candidates or other
    materials necessary to conduct our clinical trials may be
    insufficient or inadequate; and
•
The effects of our product candidates may not be the desired
    effects or the desired level of effect or may include
    undesirable side effects or the product candidates may have
    other unexpected characteristics.
A number of these risks remain applicable to our pharmacokinetic
    and Phase III safety trials required for our NDA submission
    for Zelrix.
Subject enrollment, which is a significant factor in the timing
    of clinical trials, is affected by a variety of factors,
    including the following:
•
The size and nature of the subject population;
•
The proximity of subjects to clinical sites;
•
The eligibility criteria for the trial;
•
The design of the clinical trial;
•
Competing clinical trials; and
•
Clinicians' and subjects' perceptions as to the
    potential advantages of the medication being studied in relation
    to other available therapies, including any new medications that
    may be approved for the indications we are investigating.
Furthermore, we plan to rely on clinical trial sites to ensure
    the proper and timely conduct of our clinical trials, and while
    we have agreements governing their committed activities, we have
    limited influence over their actual performance. Any delays or
    unanticipated problems during clinical testing, such as
    enrollment in our clinical trials being slower than we
    anticipate or participants dropping out of our clinical trials
    at a higher rate than we anticipate, could increase our costs,
    slow down our product development and approval process and
    jeopardize our ability to commence product sales and generate
    revenues.
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Serious
    adverse events or other safety risks could require us to abandon
    development and preclude or limit approval of our product
    candidates.
We may voluntarily suspend or terminate our clinical trials if
    at any time we believe that they present an unacceptable risk to
    participants. In addition, regulatory agencies or institutional
    review boards may at any time order the temporary or permanent
    discontinuation of our clinical trials or of investigators in
    the clinical trials if they believe that the clinical trials are
    not being conducted in accordance with applicable regulatory
    requirements, or that they present an unacceptable safety risk
    to participants. If we elect or are forced to suspend or
    terminate a clinical trial of any product candidates, the
    commercial prospects of such product candidates will be harmed
    and our ability to generate product revenues from any of these
    product candidates, if at all, will be delayed or eliminated.
Clinical trials for our product candidates involve testing in
    large subject populations, which could reveal a high prevalence
    of adverse events. If these effects include undesirable serious
    adverse events or have unexpected characteristics, we may need
    to abandon our development of these product candidates.
    Alternatively, the identification of serious adverse events or
    other significant safety risks could result in the imposition of
    approval requirements, such as labeling or distribution and use
    restrictions that limit the available market for our product
    candidates.
Even
    if Zelrix receives FDA marketing approval, we may not be able to
    secure marketing exclusivity in the U.S.
Although we plan to seek three years marketing exclusivity in
    the U.S. if we receive FDA approval for Zelrix, we may not
    be entitled to such marketing exclusivity if the FDA determines
    that our clinical investigations were not essential to the
    approval of the Zelrix NDA. This three year marketing
    exclusivity period, if granted, would be coterminous with any
    patent coverage for Zelrix. We also intend to seek an additional
    period of six months pediatric exclusivity in the U.S., but may
    not be able to secure such exclusivity if the FDA does not
    request pediatric trials for Zelrix or we are unable to complete
    the trials that the FDA requests. The six month pediatric
    exclusivity period, if granted, would be in addition to the term
    of any existing regulatory exclusivity or listed patent term. If
    we are unable to secure marketing exclusivity and any patents
    that we are issued do not provide sufficient protection, our
    business and ability to generate revenues may be harmed
    significantly.
If we
    fail to acquire, develop and commercialize product candidates
    other than Zelrix, our prospects for future growth and our
    ability to sustain profitability may be limited.
A key element of our strategy is to develop and commercialize a
    portfolio of product candidates in addition to Zelrix. To do so,
    we plan to obtain additional product candidates or technologies
    primarily through acquisitions or licenses. We may not be
    successful in our efforts to identify and develop additional
    product candidates, and any product candidates we do identify
    may not produce commercially viable drugs that safely and
    effectively treat their indicated conditions. To date, our
    efforts have yielded two product candidates in addition to
    Zelrix, both of which are currently in preclinical development.
Our development programs may initially show promise in
    identifying potential product leads, yet fail to produce product
    candidates for clinical development. In addition, identifying
    new treatment needs and product candidates requires substantial
    technical, financial and human resources on our part. If we are
    unable to maintain or secure additional development program
    funding or continue to devote substantial technical and human
    resources to such programs, we may have to delay or abandon
    these programs. Any product candidate that we successfully
    identify may require substantial additional development efforts
    prior to commercial sale, including preclinical studies,
    extensive clinical testing and approval by the FDA and
    applicable foreign regulatory authorities. All product
    candidates are susceptible to the risks of failure that are
    inherent in pharmaceutical product development.
We may be unable to license or acquire suitable product
    candidates or technologies from third parties for a number of
    reasons. In particular, the licensing and acquisition of
    pharmaceutical products is competitive. A number of more
    established companies are also pursuing strategies to license or
    acquire products. These
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established companies may have a competitive advantage over us
    due to their size, cash resources or greater clinical
    development and commercialization capabilities. In addition, we
    expect competition in acquiring product candidates to increase,
    which may lead to fewer suitable acquisition opportunities for
    us as well as higher acquisition prices.
Other factors that may prevent us from licensing or otherwise
    acquiring suitable product candidates include the following:
•
We may be unable to license or acquire the relevant technology
    on terms that would allow us to make an appropriate return from
    such product;
•
Companies that perceive us to be their competitors may be
    unwilling to assign or license their product rights to
    us; or
•
We may be unable to identify suitable products or product
    candidates within our areas of expertise.
Product
    liability lawsuits could divert our resources, result in
    substantial liabilities and reduce the commercial potential of
    any products that we may successfully develop.
The risk that we may be sued on product liability claims is
    inherent in the development of pharmaceutical products. We will
    face an even greater risk if we commercially sell any products
    that we develop. If we cannot successfully defend ourselves
    against claims that our product candidates, or any products we
    may commercialize, cause injuries, we will incur substantial
    liabilities. Regardless of merit or eventual outcome, these
    lawsuits may:
•
Expose us to adverse publicity;
•
Decrease demand for any products that we successfully develop;
•
Cause clinical trial participants to withdraw from clinical
    trials or be reluctant to enroll;
•
Divert our management from pursuing our business strategy;
•
Increase warnings on our product label;
•
Be costly to defend; and
•
Force us to limit or forgo further development and
    commercialization of these products.
Although we maintain general liability and product liability
    insurance with limits, subject to deductibles, of
    $2.0 million in the aggregate for general liability,
    $1.0 million in the aggregate for umbrella liability
    coverage for payments that exceed the general liability limits
    and $2.0 million in the aggregate for product liability,
    this insurance may not fully cover potential liabilities. The
    cost of any products liability litigation or other proceedings,
    even if resolved in our favor, could be substantial. In
    addition, inability to obtain or maintain sufficient insurance
    coverage at an acceptable cost or to otherwise protect against
    potential product liability claims could prevent or inhibit the
    development and commercial production and sale of our products,
    which could adversely affect our business, operating results and
    financial condition.
A
    variety of risks associated with our planned international
    business relationships could materially adversely affect our
    business.
We may enter into agreements with third parties for the
    development and commercialization of Zelrix and possibly other
    products in international markets. If we do so, we would be
    subject to additional risks related to entering into
    international business relationships, including:
•
Differing regulatory requirements for drug approvals in foreign
    countries;
•
Potentially reduced protection for intellectual property rights;
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•
The potential for so-called parallel importing, which is what
    happens when a local seller, faced with high or higher local
    prices, opts to import goods from a foreign market, with low or
    lower prices, rather than buying them locally;
•
Unexpected changes in tariffs, trade barriers and regulatory
    requirements;
•
Economic weakness, including inflation, or political instability
    in particular foreign economies and markets;
•
Compliance with tax, employment, immigration and labor laws for
    employees traveling abroad;
•
Foreign taxes;
•
Foreign currency fluctuations, which could result in increased
    operating expenses and reduced revenues, and other obligations
    incident to doing business in another country;
•
Workforce uncertainty in countries where labor unrest is more
    common than in the U.S.;
•
Production shortages resulting from any events affecting raw
    material supply or manufacturing capabilities abroad; and
•
Business interruptions resulting from geo-political actions,
    including war and terrorism, or natural disasters, including
    earthquakes, volcanoes, typhoons, floods, hurricanes and fires.
These and other risks may materially adversely affect our
    ability to attain or sustain profitable operations.
Risks
    Related to Our Financial Condition and Capital
    Requirements
We
    have incurred significant operating losses since inception and
    anticipate that we will incur continued losses for the
    foreseeable future. We may never become
    profitable.
As of December 31, 2009, we had an accumulated deficit of
    approximately $54.5 million. We are a development stage
    specialty pharmaceutical company with no products approved for
    commercial sale and, to date, have not generated any revenues.
    We have funded our operations to date primarily with the
    proceeds of the sale of convertible preferred stock, convertible
    notes and borrowings under debt facilities. We expect to
    continue to incur substantial additional operating losses for at
    least the next several years as we continue to develop our
    product candidates and seek marketing approval and, subject to
    obtaining such approval, the eventual commercialization of
    Zelrix and our other product candidates. In addition, we will
    incur additional costs of operating as a public company and, if
    we obtain marketing approval for Zelrix, will incur significant
    sales, marketing and outsourced manufacturing expenses. As a
    result, we expect to continue to incur significant and
    increasing losses for the foreseeable future.
To achieve and maintain profitability, we need to generate
    significant revenues from future product sales. This will
    require us to be successful in a range of challenging
    activities, including:
•
Obtaining marketing approval for the marketing of Zelrix and
    possibly other product candidates;
•
Commercializing Zelrix and any other product candidates for
    which we obtain marketing approval; and
•
Achieving market acceptance of Zelrix and any other product
    candidates for which we obtain marketing approval in the medical
    community and with patients and third party payors.
Zelrix will require additional clinical trials and evaluation,
    marketing approval, substantial investment and significant
    marketing efforts before its product sales generate any revenues
    for us. Because of the numerous risks and uncertainties
    associated with drug development and commercialization, we are
    unable to predict the extent of any future losses. We may never
    successfully commercialize any products, generate significant
    future revenues or achieve and sustain profitability.
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If we
    fail to obtain additional financing, we may not be able to
    complete development of and commercialize Zelrix or any other
    product candidates.
Our operations have consumed substantial amounts of cash since
    inception. We expect to continue to spend substantial amounts to:
•
Complete development of and seek marketing approval for Zelrix;
•
Launch and commercialize Zelrix and any other product candidates
    for which we obtain marketing approval; and
•
Continue our development programs to advance our internal
    product pipeline, which currently consists of two preclinical
    product candidates.
We will need substantial additional funding and may be unable to
    raise capital when needed or on attractive terms, which would
    force us to significantly delay, scale back or discontinue the
    development or commercialization of Zelrix or our other product
    candidates.
We expect that the net proceeds from this offering and our
    existing cash and cash equivalents will be sufficient to fund
    our operations and capital requirements for at least the
    next   months. We believe that these available
    funds will be sufficient to complete the development of Zelrix
    through FDA approval and to fund the expected commercial launch
    of Zelrix in the U.S. in the first half of 2012. However,
    changing circumstances may cause us to consume capital
    significantly faster than we currently anticipate, and we may
    need to spend more money than currently expected because of
    circumstances beyond our control.
Our future capital requirements will depend on many factors,
    including the following:
•
The timing of our submission to the FDA and outcome of the
    FDA's review of the NDA for Zelrix;
•
The extent to which the FDA may require us to perform additional
    clinical trials for Zelrix;
•
The timing and success of this offering;
•
The costs of our commercialization activities for Zelrix, if it
    is approved by the FDA;
•
The cost of purchasing manufacturing and other capital equipment
    for our potential products;
•
The scope, progress, results and costs of development for our
    other product candidates;
•
The cost, timing and outcome of regulatory review of our other
    product candidates;
•
The extent to which we acquire or invest in products, businesses
    and technologies;
•
The extent to which we choose to establish collaboration,
    co-promotion, distribution or other similar agreements for
    product candidates; and
•
The costs of preparing, submitting and prosecuting patent
    applications and maintaining, enforcing and defending
    intellectual property claims.
To the extent that our capital resources are insufficient to
    meet our future operating and capital requirements, we will need
    to finance our cash needs through public or private equity
    offerings, debt financings, corporate collaboration and
    licensing arrangements or other financing alternatives. The
    covenants under the May 2010 Loan Facility and the pledge of our
    assets as collateral limit our ability to obtain additional debt
    financing. We have no committed external sources of funds.
    Additional equity or debt financing or corporate collaboration
    and licensing arrangements may not be available on acceptable
    terms, if at all. If we are unable to raise additional capital
    in sufficient amounts or on terms acceptable to us, we will be
    prevented from pursuing acquisition, licensing, development and
    commercialization efforts and our ability to generate revenues
    and achieve or sustain profitability will be substantially
    harmed.
If we raise additional funds by issuing equity securities, our
    stockholders will experience dilution. Debt financing, if
    available, would result in increased fixed payment obligations
    and may involve agreements that include covenants limiting or
    restricting our ability to take specific actions, such as
    incurring additional debt,
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making capital expenditures or declaring dividends. Any debt
    financing or additional equity that we raise may contain terms,
    such as liquidation and other preferences, that are not
    favorable to us or our stockholders. If we raise additional
    funds through collaboration and licensing arrangements with
    third parties, it may be necessary to relinquish valuable rights
    to our technologies, future revenue streams or product
    candidates or to grant licenses on terms that may not be
    favorable to us.
Our
    recurring operating losses have raised substantial doubt
    regarding our ability to continue as a going
    concern.
Our recurring operating losses raise substantial doubt about our
    ability to continue as a going concern. As a result, our
    independent registered public accounting firm included an
    explanatory paragraph in its report on our financial statements
    as of and for the year ended December 31, 2009 with respect
    to this uncertainty. We have no current source of revenues to
    sustain our present activities, and we do not expect to generate
    revenues until, and unless, the FDA or other regulatory
    authorities approve Zelrix or our other product candidates and
    we successfully commercialize any such product candidates.
    Accordingly, our ability to continue as a going concern will
    require us to obtain additional financing to fund our
    operations. The perception of our ability to continue as a going
    concern may make it more difficult for us to obtain financing
    for the continuation of our operations and could result in the
    loss of confidence by investors, suppliers and employees.
Our
    indebtedness may limit cash flow available to invest in the
    ongoing needs of our business.
Upon closing of this offering, we will have $5.0 million
    principal amount of indebtedness outstanding under the May 2010
    Loan Facility. We may incur additional indebtedness beyond this
    amount, including, subject to our satisfaction of specified
    conditions and approval by the lenders in their sole discretion,
    up to $6.0 million under the May 2010 Loan Facility. Our
    indebtedness combined with our other financial obligations and
    contractual commitments could have significant adverse
    consequences, including:
•
Requiring us to dedicate a substantial portion of our cash
    resources to the payment of interest on, and principal of, our
    debt, which will reduce the amounts available to fund working
    capital, capital expenditures, product development efforts and
    other general corporate purposes;
•
Increasing our vulnerability to adverse changes in general
    economic, industry and competitive conditions and adverse
    changes in government regulation;
•
Limiting our flexibility in planning for, or reacting to,
    changes in our business and our industry; and
•
Placing us at a competitive disadvantage compared to our
    competitors that have less debt.
In addition, we are vulnerable to increases in the market rate
    of interest because amounts outstanding under the May 2010 Loan
    Facility bear interest at a variable rate. If the market rate of
    interest increases, we may have to pay additional interest on
    our outstanding debt, which would reduce cash available for our
    other business needs.
We may need external sources of funds to repay our indebtedness
    as it matures. We may not have sufficient funds or may be unable
    to arrange for additional financing to pay the amounts due under
    the May 2010 Loan Facility or any other borrowings. Funds
    from external sources may not be available on acceptable terms,
    if at all. In addition, a failure to comply with the covenants
    under the May 2010 Loan Facility or future indebtedness could
    result in an event of default. In the event of an acceleration
    of amounts due under our debt instruments as a result of an
    event of default or the occurrence of a mandatory prepayment
    event, we may not have sufficient funds or may be unable to
    arrange for additional financing to repay our indebtedness or to
    make any accelerated payments, and the lenders could seek to
    enforce security interests in the collateral securing such
    indebtedness. Because of the covenants under our existing debt
    instruments and the pledge of our assets as collateral, we have
    a limited ability to obtain additional debt financing.
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We
    have a limited operating history, which makes it difficult to
    evaluate our business and growth prospects.
We were incorporated in Delaware in January 2005. Our operations
    to date have been limited to organizing and staffing our
    company, conducting product development activities for Zelrix
    and performing preclinical development of our other product
    candidates. As a company, we have not yet demonstrated an
    ability to obtain marketing approval for or commercialize a
    product candidate. Consequently, any predictions about our
    future performance may not be as accurate as they could be if we
    had a history of successfully developing and commercializing
    pharmaceutical products as a company.
In addition, as a new business, we may encounter unforeseen
    expenses, difficulties, complications, delays and other known
    and unknown factors. We will need to transition from a company
    with a development focus to a company capable of supporting
    commercial activities. We may not be successful in such a
    transition.
Risks
    Related to Our Dependence on Third Parties
We use
    third parties to manufacture all of our product candidates,
    including Zelrix, and the machinery to produce the commercial
    supply of Zelrix must be designed, built and validated. This may
    increase the risk that we will not have sufficient quantities of
    our product candidates or such quantities at an acceptable cost,
    which could result in clinical development and commercialization
    of our product candidates being delayed, prevented or
    impaired.
We do not own or operate, and have no plans to establish, any
    manufacturing facilities for our product candidates. We have
    limited personnel with experience in drug manufacturing and we
    lack the resources and the capabilities to manufacture any of
    our product candidates on a clinical or commercial scale.
We currently outsource all manufacturing of our preclinical and
    clinical product candidates to third parties, including
    sumatriptan and key components of Zelrix, typically without any
    guarantee that there will be sufficient supplies to fulfill our
    requirements or that we may obtain such supplies on acceptable
    terms. Any delays in obtaining adequate supplies with respect to
    our preclinical and clinical product candidates may delay the
    development or commercialization of Zelrix or our other product
    candidates.
In addition, we do not currently have any agreements with third
    party manufacturers for the long-term commercial supply of our
    product candidates. We may be unable to enter agreements for
    commercial supply with third party manufacturers, or may be
    unable to do so on acceptable terms. Even if we enter into these
    agreements, the various manufacturers of each product candidate
    will likely be single source suppliers to us for a significant
    period of time.
In particular, LTS Lohmann Therapie–Systeme AG, or LTS,
    manufactures Zelrix using sumatriptan and components that we
    purchase from third parties. Although LTS has considerable
    experience in the manufacturer of passive transdermal drug
    patches, it does not have such experience in manufacturing
    active transdermal patches such as Zelrix. In order for LTS to
    produce our commercial supply of Zelrix, LTS must successfully
    complete the following:
•
Transfer technology and production capabilities from its German
    facility where our clinical supply has been produced to its
    manufacturing facility in New Jersey;
•
Assemble the commercial scale manufacturing equipment for Zelrix
    using components purchased from third party suppliers; and
•
Test and validate the newly-assembled machinery and production
    process.
The machinery that LTS will use to produce the commercial supply
    of Zelrix will be customized to the particular manufacturing
    specifications of Zelrix and does not exist currently. If LTS is
    unable to assemble and validate this equipment, or to validate
    the production process at its New Jersey facility, in each case
    in a timely manner, our ability to launch and commercialize
    Zelrix will be compromised significantly. If this customized
    equipment malfunctions at any time during the production
    process, the time it may take LTS to
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secure replacement parts, to undertake repairs and to revalidate
    the equipment and process could limit our ability to meet the
    commercial demand for Zelrix.
Reliance on third party manufacturers subjects us to risks that
    would not affect us if we manufactured the product candidates
    ourselves, including:
•
Reliance on the third parties for regulatory compliance and
    quality assurance;
•
The possible breach of the manufacturing agreements by the third
    parties because of factors beyond our control;
•
The possibility of termination or nonrenewal of the agreements
    by the third parties because of our breach of the manufacturing
    agreement or based on their own business priorities; and
•
The disruption and costs associated with changing suppliers.
Our product candidates may compete with other products and
    product candidates for access to manufacturing facilities. There
    are a limited number of manufacturers that operate under current
    good manufacturing practice, or cGMP, regulations and that are
    both capable of manufacturing for us and willing to do so. If
    our existing third party manufacturers, or the third parties
    that we engage in the future to manufacture a product for
    commercial sale or for our clinical trials, should cease to
    continue to do so for any reason, we likely would experience
    delays in obtaining sufficient quantities of our product
    candidates for us to meet commercial demand or to advance our
    clinical trials while we identify and qualify replacement
    suppliers. If for any reason we are unable to obtain adequate
    supplies of our product candidates or the drug substances used
    to manufacture them, it will be more difficult for us to develop
    our product candidates and compete effectively.
Our suppliers are subject to regulatory requirements, covering
    manufacturing, testing, quality control, manufacturing, and
    record keeping relating to our product candidates, and subject
    to ongoing inspections by the regulatory agencies. Failure by
    any of our suppliers to comply with applicable regulations may
    result in long delays and interruptions to our manufacturing
    capacity while we seek to secure another supplier that meets all
    regulatory requirements.
We may
    rely on third parties to conduct aspects of our clinical trials.
    If these third parties do not successfully carry out their
    contractual duties or meet expected deadlines, we may be delayed
    in obtaining or ultimately not be able to obtain marketing
    approval to commercialize Zelrix or any other product
    candidates.
We currently rely on contract research organizations, or CROs,
    for some aspects of our clinical trials, including data
    management, statistical analysis and electronic compilation of
    our NDA. We may enter into additional agreements with CROs to
    obtain additional resources and expertise in an attempt to
    accelerate our progress with regard to ongoing clinical and
    preclinical programs. Entering into relationships with CROs
    involves substantial cost and requires extensive management time
    and focus. In addition, typically there is a transition period
    when a CRO commences work. As a result, delays may occur, which
    may materially impact our ability to meet our desired clinical
    development timelines and ultimately have a material adverse
    impact on our operating results, financial condition or future
    prospects.
As CROs are not our employees, we cannot control whether or not
    they devote sufficient time and resources to our ongoing
    clinical and preclinical programs in which they are engaged to
    perform. If the CROs we engage do not successfully carry out
    their contractual duties or obligations or meet expected
    deadlines, if they need to be replaced, or if the quality or
    accuracy of the data they provide is compromised due to the
    failure to adhere to regulatory requirements, or for other
    reasons, our development programs may be extended, delayed or
    terminated, and we may not be able to obtain marketing approval
    for or successfully commercialize Zelrix or any other product
    candidates that we develop. As a result, our financial results
    and the commercial prospects for Zelrix and any other product
    candidates that we develop would be harmed, our costs could
    increase and our ability to generate revenues could be delayed.
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Any
    collaboration arrangements that we may enter into in the future
    may not be successful, which could adversely affect our ability
    to develop and commercialize our product
    candidates.
We may seek collaboration arrangements with pharmaceutical or
    biotechnology companies for the development or commercialization
    of our product candidates in the future. We may enter into such
    arrangements on a selective basis depending on the merits of
    retaining commercialization rights for ourselves as compared to
    entering into selective collaboration arrangements with leading
    pharmaceutical or biotechnology companies for each product
    candidate, both in the U.S. and internationally. We will
    face, to the extent that we decide to enter into collaboration
    agreements, significant competition in seeking appropriate
    collaborators. Moreover, collaboration arrangements are complex
    and time consuming to negotiate, document and implement. We may
    not be successful in our efforts to establish and implement
    collaborations or other alternative arrangements should we so
    chose to enter into such arrangements. The terms of any
    collaborations or other arrangements that we may establish may
    not be favorable to us.
Any future collaborations that we enter into may not be
    successful. The success of our collaboration arrangements will
    depend heavily on the efforts and activities of our
    collaborators. Collaborators generally have significant
    discretion in determining the efforts and resources that they
    will apply to these collaborations.
Disagreements between parties to a collaboration arrangement
    regarding clinical development and commercialization matters can
    lead to delays in the development process or commercializing the
    applicable product candidate and, in some cases, termination of
    the collaboration arrangement. These disagreements can be
    difficult to resolve if neither of the parties has final
    decision making authority.
Collaborations with pharmaceutical or biotechnology companies
    and other third parties often are terminated or allowed to
    expire by the other party. Any such termination or expiration
    would adversely affect us financially and could harm our
    business reputation.
Risks
    Related to Regulatory Matters
If we
    are unable to obtain marketing approval for Zelrix or our other
    product candidates, we will not be able to commercialize our
    product candidates and our business will be substantially
    harmed.
Our product candidates and the activities associated with their
    development and commercialization, including their testing,
    manufacture, safety, efficacy, recordkeeping, labeling, storage,
    approval, advertising, promotion, sale and distribution, are
    subject to comprehensive regulation by the FDA and other
    regulatory agencies in the U.S. and by comparable
    authorities in other countries. Failure to obtain marketing
    approval for a product candidate will prevent us from
    commercializing the product candidate. As a company, we have not
    received approval from the FDA or demonstrated our ability to
    obtain marketing approval for any drugs that we have developed
    or are developing. Securing FDA approval requires the submission
    of extensive preclinical and clinical data and supporting
    information to the FDA for each therapeutic indication to
    establish the product candidate's safety and efficacy.
    Securing FDA approval also requires the submission of
    information about the product manufacturing process to, and
    inspection of manufacturing facilities by, the FDA. Our other
    product candidates may not be effective, may be only moderately
    effective or may prove to have undesirable or unintended side
    effects, toxicities or other characteristics that may preclude
    our obtaining marketing approval or prevent or limit commercial
    use.
The process of obtaining marketing approvals is expensive and
    often takes many years, if approval is obtained at all, and can
    vary substantially based upon a variety of factors, including
    the type, complexity and novelty of the product candidates
    involved and the nature of the disease or condition to be
    treated. We intend to seek approval of Zelrix and likely other
    product candidates pursuant to Section 505(b)(2) of the
    Federal Food, Drug, and Cosmetic Act, or FDCA, in the U.S.,
    which enables an NDA applicant to rely in part on findings of
    safety and efficacy of a product already approved by the FDA. We
    may fail to obtain marketing approval for Zelrix or any other
    product candidates for many reasons, including the following:
•
We may not be able to demonstrate to the satisfaction of the FDA
    or comparable foreign regulatory authorities that a product
    candidate is safe and effective for any indication;
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•
The results of clinical trials may not meet the level of
    statistical or clinical significance required by the FDA or
    comparable foreign regulatory authorities for approval;
•
The FDA or comparable foreign regulatory authorities may
    disagree with the number, design, conduct or implementation of
    our clinical trials;
•
We may not be able to demonstrate that a product
    candidate's clinical and other benefits outweigh its safety
    risks;
•
We may not be able to demonstrate that a product candidate
    provides an advantage over current standard of care or future
    competitive therapies in development;
•
The FDA or comparable foreign regulatory authorities may
    disagree with our interpretation of data from preclinical
    studies or clinical trials;
•
The FDA or comparable foreign regulatory authorities may not
    accept data generated at our clinical trial sites;
•
The data collected from clinical trials of any product
    candidates that we develop may not be sufficient to support the
    submission of an NDA or other submission or to obtain marketing
    approval in the U.S. or elsewhere;
•
The FDA may determine that we have identified the wrong
    reference listed drug or drugs or that approval of our 505(b)(2)
    application for Zelrix or any other product candidate is blocked
    by patent or non-patent exclusivity of the reference listed drug
    or drugs; and
•
The FDA or comparable foreign regulatory authorities may
    identify deficiencies in the manufacturing processes or
    facilities of third party manufacturers with which we enter into
    agreements for clinical and commercial supplies.
This lengthy approval process, as well as the unpredictability
    of future clinical trial results, may result in our failing to
    obtain marketing approval to market Zelrix or any future product
    candidates, which would significantly harm our business, results
    of operations and prospects.
Even
    if we obtain marketing approval for Zelrix or any of our other
    product candidates, we will continue to face extensive
    regulatory requirements and our products may face future
    development and regulatory difficulties.
Even if marketing approval in the U.S. is obtained, the FDA
    may still impose significant restrictions on a product's
    indicated uses or marketing, including risk evaluation and
    mitigation strategies, or impose ongoing requirements, including
    with respect to:
•
Post-market surveillance, post-market studies or post-market
    clinical trials;
•
Labeling, packaging, storage, distribution, safety surveillance,
    advertising, promotion, recordkeeping and reporting of safety
    and other post-market information;
•
Monitoring and reporting adverse events and instances of the
    failure of a product to meet the specifications in the NDA;
•
Changes to the approved product, product labeling or
    manufacturing process;
•
Advertising and other promotional material; and
•
Disclosure of clinical trial results on publicly available
    databases.
In addition, manufacturers of drug products and their facilities
    are subject to continual review and periodic inspections by the
    FDA and other regulatory authorities for compliance with cGMP
    regulations. The distribution, sale and marketing of our
    products are subject to a number of additional requirements,
    including:
•
State wholesale drug distribution laws and the distribution of
    our product samples to physicians must comply with the
    requirements of the Prescription Drug Marketing Act;
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•
Sales, marketing and scientific or educational grant programs
    must comply with the anti-kickback and fraud and abuse
    provisions of the Social Security Act, the transparency
    provision of the Patient Protection and Affordable Care Act and
    an associated reconciliation bill that became law in
    March 2010, which we refer to collectively as the Health
    Care Reform Law, the False Claims Act and similar state laws;
•
Pricing and rebate programs must comply with the Medicaid rebate
    requirements of the Omnibus Budget Reconciliation Act of 1990
    and the Veteran's Health Care Act of 1992; and
•
If products are made available to authorized users of the
    Federal Supply Schedule of the General Services Administration,
    additional laws and requirements apply.
All of these activities are also potentially subject to federal
    and state consumer protection and unfair competition laws.
If we or any third parties involved in our commercialization
    efforts fail to comply with applicable regulatory requirements,
    a regulatory agency may:
•
Issue warning letters or untitled letters asserting that we are
    in violation of the law;
•
Seek an injunction or impose civil or criminal penalties or
    monetary fines;
•
Suspend or withdraw marketing approval;
•
Suspend any ongoing clinical trials;
•
Refuse to approve pending applications or supplements to
    applications submitted by us;
•
Suspend or impose restrictions on operations, including costly
    new manufacturing requirements;
•
Seize or detain products, refuse to permit the import or export
    of products, or require us to initiate a product recall;
•
Refuse to allow us to enter into supply contracts, including
    government contracts;
•
Impose civil monetary penalties; or
•
Pursue civil or criminal prosecutions and fines against our
    company or responsible officers.
Any government investigation of alleged violations of law could
    require us to expend significant time and resources in response,
    and could generate negative publicity. The occurrence of any
    event or penalty described above may inhibit our ability to
    commercialize our product candidates and generate revenues.
Even
    if we obtain marketing approval for Zelrix or any of our other
    product candidates, adverse effects discovered after approval
    could limit the commercial profile of any approved
    product.
If we obtain marketing approval for Zelrix or any other product
    candidate that we develop, we or others may later discover,
    after use in a larger number of subjects for longer periods of
    time than in clinical trials, that our products could have
    adverse effect profiles that limit their usefulness or require
    their withdrawal. This discovery could have a number of
    potentially significant negative consequences, including:
•
Regulatory authorities may withdraw their approval of the
    product;
•
Regulatory authorities may require the addition of labeling
    statements, such as black box or other warnings or
    contraindications;
•
Regulatory authorities may require us to issue specific
    communications to healthcare professionals, such as "Dear
    Doctor Letters;"
•
Regulatory authorities may impose additional restrictions on
    marketing and distribution of the products;
•
Regulatory authorities may issue negative publicity regarding
    the product, including safety communications;
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•
We may be required to change the way the product is
    administered, conduct additional clinical studies or restrict
    the distribution of the product;
•
We could be sued and held liable for harm caused to
    subjects; and
•
Our reputation may suffer.
Any of these events could prevent us from maintaining market
    acceptance of the affected product candidate and could
    substantially increase the costs of commercializing our product
    candidates.
We
    will need FDA approval of our proposed trade name, Zelrix, and
    any failure or delay associated with such approval may delay the
    commercialization of Zelrix.
Any trade name we intend to use for our product candidates will
    require approval from the FDA regardless of whether we have
    secured a formal trademark registration from the
    U.S. Patent and Trademark Office, or USPTO. The FDA
    typically conducts a rigorous review of proposed trade names,
    including an evaluation of potential for confusion with other
    trade names and medical error. The FDA may also object to a
    trade name if it believes the name inappropriately implies
    medical claims. We intend to submit the proposed trade name
    Zelrix to the FDA for approval. If the FDA objects to our
    proposed trade name, we may be required to adopt an alternative
    name for our product candidate. Even after approval, the FDA may
    request that we adopt an alternative name for the product if
    adverse event reports indicate a potential for confusion with
    other trade names and medical error. If we are required to adopt
    an alternative name, the commercialization of Zelrix could be
    delayed or interrupted, which would limit our ability to
    commercialize Zelrix and generate revenues.
If the
    FDA does not approve the manufacturing facilities of LTS or any
    future third party manufacturers for commercial production, we
    may not be able to commercialize Zelrix or any of our other
    product candidates.
The facilities used by LTS and any of our future manufacturers
    to manufacture Zelrix must be approved by the FDA after we
    submit our NDA to the FDA and before approval of Zelrix. We do
    not control the manufacturing process of Zelrix and are
    completely dependent on third party manufacturers for compliance
    with the FDA's requirements for manufacture of Zelrix. If
    our manufacturers cannot successfully manufacture material
    components and finished products that conform to our
    specifications and the FDA's strict regulatory
    requirements, they will not be able to secure FDA approval for
    their manufacturing facilities. If the FDA does not approve
    these facilities for the commercial manufacture of Zelrix, or
    the facilities of any of our other product candidates, we may
    need to find alternative manufacturing facilities, which would
    result in significant delays of up to several years in obtaining
    FDA approval for Zelrix, or any of our other product candidates.
    We would incur substantial additional costs as a result of any
    such delays, including with respect to finding alternative
    manufacturing facilities.
Even
    if our product candidates receive marketing approval in the
    U.S., we may never receive marketing approval or commercialize
    our products outside the U.S.
In order to market Zelrix or any other product candidate outside
    the U.S., we must obtain separate marketing approvals and comply
    with numerous and varying regulatory requirements of other
    countries regarding safety and efficacy and governing, among
    other things, clinical trials and commercial sales, pricing and
    distribution of our product candidates. The time required to
    obtain approval in other countries might differ from and be
    longer than that required to obtain FDA approval. The marketing
    approval process in other countries may include all of the risks
    associated with obtaining FDA approval in the U.S., as well as
    other risks. For example, legislation analogous to
    Section 505(b)(2) of the FDCA in the U.S., which relates to
    the ability of an NDA applicant to use published data not
    developed by such applicant, does not exist in other countries.
    In territories where data is not freely available, we may not
    have the ability to commercialize our products without
    negotiating rights from third parties to refer to their clinical
    data in our regulatory applications, which could require the
    expenditure of significant additional funds. Further, we may be
    unable to obtain rights to the necessary clinical data and may
    be required to develop our own proprietary safety and
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effectiveness dossiers. In addition, in many countries outside
    the U.S., it is required that a product receives pricing and
    reimbursement approval before the product can be commercialized.
    This can result in substantial delays in such countries.
Marketing approval in one country does not ensure marketing
    approval in another, but a failure or delay in obtaining
    marketing approval in one country may have a negative effect on
    the regulatory process in others. In addition, we may be subject
    to fines, suspension or withdrawal of marketing approvals,
    product recalls, seizure of products, operating restrictions and
    criminal prosecution if we fail to comply with applicable
    foreign regulatory requirements. If we fail to comply with
    regulatory requirements in international markets or to obtain
    and maintain required approvals, our target market will be
    reduced and our ability to realize the full market potential of
    our product candidates will be harmed.
Our
    relationships with customers and payors will be subject to
    applicable anti-kickback, fraud and abuse and other healthcare
    laws and regulations, which could expose us to criminal
    sanctions, civil penalties, contractual damages, reputational
    harm and diminished profits and future earnings.
Healthcare providers, physicians and others play a primary role
    in the recommendation and prescription of any products for which
    we obtain marketing approval. Our future arrangements with third
    party payors and customers will expose us to broadly applicable
    fraud and abuse and other healthcare laws and regulations that
    may constrain the business or financial arrangements and
    relationships through which we market, sell and distribute our
    products for which we obtain marketing approval. Restrictions
    under applicable federal and state healthcare laws and
    regulations, include the following:
•
The federal healthcare anti-kickback statute prohibits, among
    other things, persons from knowingly and willfully soliciting,
    offering, receiving or providing remuneration, directly or
    indirectly, in cash or in kind, to induce or reward either the
    referral of an individual for, or the purchase, order or
    recommendation of, any good or service, for which payment may be
    made under federal healthcare programs such as Medicare and
    Medicaid;
•
The federal False Claims Act imposes criminal and civil
    penalties, including civil whistleblower or qui tam actions,
    against individuals or entities for knowingly presenting, or
    causing to be presented, to the federal government, claims for
    payment that are false or fraudulent or making a false statement
    to avoid, decrease, or conceal an obligation to pay money to the
    federal government;
•
The federal Health Insurance Portability and Accountability Act
    of 1996, as amended by the Health Information Technology for
    Economic and Clinical Health Act, imposes criminal and civil
    liability for executing a scheme to defraud any healthcare
    benefit program and also imposes obligations, including
    mandatory contractual terms, with respect to safeguarding the
    privacy, security and transmission of individually identifiable
    health information;
•
The federal false statements statute prohibits knowingly and
    willfully falsifying, concealing or covering up a material fact
    or making any materially false statement in connection with the
    delivery of or payment for healthcare benefits, items or
    services;
•
The federal transparency requirements under the Health Care
    Reform Law requires manufacturers of drugs, devices, biologics,
    and medical supplies to report to the Department of Health and
    Human Services information related to physician payments and
    other transfers of value and physician ownership and investment
    interests; and
•
Analogous state laws and regulations, such as state
    anti-kickback and false claims laws and transparency laws, may
    apply to sales or marketing arrangements and claims involving
    healthcare items or services reimbursed by non-governmental
    third party payors, including private insurers, and some state
    laws require pharmaceutical companies to comply with the
    pharmaceutical industry's voluntary compliance guidelines
    and the relevant compliance guidance promulgated by the federal
    government in addition to requiring drug manufacturers to report
    information related to payments to physicians and other health
    care providers or marketing expenditures and drug pricing.
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Efforts to ensure that our business arrangements with third
    parties will comply with applicable healthcare laws and
    regulations could be costly. It is possible that governmental
    authorities will conclude that our business practices may not
    comply with current or future statutes, regulations or case law
    involving applicable fraud and abuse or other healthcare laws
    and regulations. If our operations, including anticipated
    activities conducted by our sales team in the sale of Zelrix,
    are found to be in violation of any of these laws or any other
    governmental regulations that may apply to us, we may be subject
    to significant civil, criminal and administrative penalties,
    damages, fines, exclusion from government funded healthcare
    programs, such as Medicare and Medicaid, and the curtailment or
    restructuring of our operations. If any of the physicians or
    other providers or entities with whom we expect to do business
    are found to be not in compliance with applicable laws, they may
    be subject to criminal, civil or administrative sanctions,
    including exclusions from government funded healthcare programs.
Recently
    enacted and future legislation may increase the difficulty and
    cost for us to obtain marketing approval of and commercialize
    our product candidates and affect the prices we may
    obtain.
In the U.S. and some foreign jurisdictions, there have been
    a number of legislative and regulatory changes and proposed
    changes regarding the healthcare system that could prevent or
    delay marketing approval of our product candidates, restrict or
    regulate post-approval activities and affect our ability to
    profitably sell our products for which we obtain marketing
    approval.
In the U.S., the Medicare Prescription Drug, Improvement, and
    Modernization Act of 2003, or Medicare Modernization Act,
    changed the way Medicare covers and pays for pharmaceutical
    products. The legislation expanded Medicare coverage for drug
    purchases by the elderly and introduced a new reimbursement
    methodology based on average sales prices for physician
    administered drugs. In addition, this legislation provided
    authority for limiting the number of drugs that will be covered
    in any therapeutic class. Cost reduction initiatives and other
    provisions of this legislation could decrease the coverage and
    price that we receive for any approved products. While the
    Medicare Modernization Act applies only to drug benefits for
    Medicare beneficiaries, private payors often follow Medicare
    coverage policy and payment limitations in setting their own
    reimbursement rates. Therefore, any reduction in reimbursement
    that results from the Medicare Modernization Act may result in a
    similar reduction in payments from private payors.
More recently, in March 2010, President Obama signed into law
    the Health Care Reform Law, a sweeping law intended to broaden
    access to health insurance, reduce or constrain the growth of
    healthcare spending, enhance remedies against fraud and abuse,
    add new transparency requirements for health care and health
    insurance industries, impose new taxes and fees on the health
    industry and impose additional health policy reforms. Effective
    October 1, 2010, the Health Care Reform Law revises the
    definition of "average manufacturer price" for
    reporting purposes, which could increase the amount of Medicaid
    drug rebates to states once the provision is effective. Further,
    beginning in 2011, the new law imposes a significant annual fee
    on companies that manufacture or import branded prescription
    drug products. Substantial new provisions affecting compliance
    have also been enacted, which may require us to modify our
    business practices with health care practitioners. We will not
    know the full effects of the Health Care Reform Law until
    applicable federal and state agencies issue regulations or
    guidance under the new law. Although it is too early to
    determine the effect of the Health Care Reform Law, the new law
    appears likely to continue the pressure on pharmaceutical
    pricing, especially under the Medicare program, and may also
    increase our regulatory burdens and operating costs.
Legislative and regulatory proposals have been made to expand
    post-approval requirements and restrict sales and promotional
    activities for pharmaceutical products. We are not sure whether
    additional legislative changes will be enacted, or whether the
    FDA regulations, guidance or interpretations will be changed, or
    what the impact of such changes on the marketing approvals of
    our product candidates, if any, may be. In addition, increased
    scrutiny by the United States Congress of the FDA's
    approval process may significantly delay or prevent marketing
    approval, as well as subject us to more stringent product
    labeling and post-marketing testing and other requirements.
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Risks
    Related to Intellectual Property
We may
    not be able to rely on our intellectual property to protect our
    products in the marketplace.
Our success depends, in large part, on our ability to protect
    our competitive position through patents, trade secrets,
    trademarks and other intellectual property rights. The patent
    positions of pharmaceutical and biotechnology companies,
    including our company, are uncertain and involve complex
    questions of law and fact for which important legal issues
    remain unresolved or may change. As a result of recent court
    decisions, the requirements for patentability of inventions in
    the U.S. have become more stringent, including stricter
    requirements that inventions be non-obvious and that patent
    applications provide an adequate written description of the
    invention. These court decisions may have the effect of
    narrowing the types of medical treatments that are patentable.
The patent we have licensed and patents that may be licensed by
    or issued to us in the future may not provide us with any
    competitive advantage. Our patents may be challenged by third
    parties in patent litigation, or in patent reexamination or
    opposition proceedings, which are becoming widespread in the
    pharmaceutical industry. In particular, it is not uncommon for
    potential competitors to challenge the validity of patents
    protecting new pharmaceutical products shortly after the
    products receive FDA approval. Alternatively, it is possible
    that third parties with products that are very similar to ours
    will circumvent our issued patents by purposely developing
    products or processes that avoid our patent claims. Our patent
    protection may be limited because of any of the following:
•
Our patents may not be broad or strong enough to prevent
    competition from identical or similar products;
•
We may be required to disclaim part of the term of some patents;
•
There may be prior art of which we are not aware that may affect
    the validity or enforceability of a patent claim;
•
There may be prior art of which we are aware, which we do not
    believe affects the validity or enforceability of a claim, but
    which, nonetheless ultimately may be found to affect the
    validity or enforceability of a claim;
•
If challenged, a court could determine that our issued patents
    are not valid or enforceable;
•
A court could determine that a competitor's technology or
    product does not infringe our patents; and
•
Our patents and patent applications could irretrievably lapse
    due to failure to pay fees or otherwise comply with regulations,
    or could be subject to compulsory licensing.
We do not currently own any issued U.S. or foreign patents
    covering any of our product candidates or technology. We have
    licensed one issued U.S. patent that relates to an
    iontophoresis drug delivery system. We and our licensors have
    filed and are actively pursuing applications for patents in the
    U.S. and in foreign jurisdictions. However, pending patent
    applications may not result in the issuance of patents or the
    scope of patent protection that we have requested, and we may
    not develop additional proprietary products which are
    patentable. Further, if we encounter delays in our development
    or clinical trials, the period of time during which we could
    market our products under patent protection would be reduced.
Because the composition of matter patent covering the active
    pharmaceutical ingredient of Zelrix has expired, competitors
    will be able to offer and sell products with the same active
    pharmaceutical ingredient as Zelrix so long as these competitors
    do not infringe any other patents that may be issued to or
    licensed by us, including any product, formulation and method of
    use patents, or violate any marketing exclusivity period that
    may be granted. Similarly, the composition of matter patents
    covering the active ingredients of our NP201 and NP202 product
    candidates have expired, and competitors will be able to offer
    and sell products with the same active pharmaceutical
    ingredients as these product candidates products so long as
    these competitors do not infringe any other patents that we hold
    or may obtain in the future, including any product, formulation
    and method of use patents, or violate any marketing exclusivity
    period that may be granted.
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Patents covering new products or formulations incorporating a
    generic active pharmaceutical ingredient cannot prevent
    competitors from commercializing the original products and
    formulations. In addition, method of use patents, in particular,
    are more difficult to enforce than composition of matter patents
    because of the risk of off label sale or use of the subject
    compounds. Physicians are permitted to prescribe an approved
    product for uses that are not described in the product's
    labeling. Although off label prescriptions may infringe our
    method of use patents, if issued, the practice is common across
    medical specialties and such infringement is difficult to
    prevent or prosecute. Off label sales would limit our ability to
    generate revenue from the sale of our product candidates, if
    approved for commercial sale. In addition, if a third party were
    able to design around any issued product, method, formulation or
    other patent and create a different product not covered by our
    patents, if issued, we would likely be unable to prevent that
    third party from manufacturing and marketing its product.
We rely on third parties to protect the intellectual property we
    license, including trade secrets, patents, and know-how, and we
    may not have any input or control over the filing, prosecution
    or enforcement of such intellectual property rights. Any
    resulting patents may be invalid or unenforceable. Any
    enforcement of intellectual property rights, or defense of any
    claims asserting the invalidity thereof, may be subject to the
    cooperation of the third parties.
If we
    fail to comply with our obligations in our intellectual property
    licenses with third parties, we could lose license rights that
    are important to our business.
We are a party to a number of license agreements and may enter
    into additional licenses in the future. If we fail to comply
    with the obligations under a license agreement or otherwise
    breach the license agreement, the licensor may have the right to
    terminate the license, in which event we might not be able to
    market any product that is covered by any previously licensed
    patents.
For example, we are party to a license agreement with the
    University of Pennsylvania, or Penn, pursuant to which we
    license from Penn patent applications and other intellectual
    property related to the LAD technology to develop and
    commercialize licensed products, including NP201 and NP202, and
    a license agreement with SurModics Pharmaceuticals, Inc., or
    SurModics, pursuant to which we license from SurModics
    intellectual property to make, have made, use, sell, import and
    export NP201. We are obligated to pay milestone and royalty
    payments under each agreement in addition to other obligations.
    The triggering of milestone payments to Penn or SurModics
    depends on factors relating to the clinical and regulatory
    development and commercialization of NP201 and NP202, many of
    which are beyond our control. We may become obligated to make a
    milestone payment when we do not have the cash on hand to make
    such payment, which could require us to delay our clinical
    trials, curtail our operations, scale back our commercialization
    and marketing efforts or seek additional capital to meet these
    obligations on terms unfavorable to us.
Our failure to comply with the requirements of these license
    agreements, including our milestone payment obligations, could
    result in the termination of such agreements, in which case we
    might not be able to develop or market any product that is
    covered by the license. Even if we contest any such termination
    and are ultimately successful, our results of operations and
    stock price could suffer.
Our
    ability to pursue the development and commercialization of
    Zelrix is significantly dependent upon obtaining a license of
    LTS's intellectual property.
Our development and license agreement with LTS provides that if
    we enter into a commercial manufacturing agreement with LTS, LTS
    will have the exclusive right to manufacture Zelrix and LTS will
    grant us an exclusive, worldwide, royalty-free license under
    LTS's intellectual property to use, import, sell, market
    and distribute Zelrix. We may not enter into a commercial
    manufacturing agreement with LTS on commercially reasonable
    terms, if at all. If we do not enter into a commercial
    manufacturing agreement with LTS, we may not have access to
    LTS's proprietary technology and know-how to manufacturer
    Zelrix. In this situation, we would need to develop equivalent
    or alternative intellectual property, which will significantly
    delay our commercialization of Zelrix and entail significant
    additional cost.
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We may
    infringe the intellectual property rights of others, which may
    prevent or delay our product development efforts and stop us
    from commercializing or increase the costs of commercializing
    our products.
Our commercial success depends significantly on our ability to
    operate without infringing the patents and other intellectual
    property rights of third parties. There could be issued patents
    of which we are not aware that our products infringe. There also
    could be patents that we believe we do not infringe, but that we
    may ultimately be found to infringe. Moreover, patent
    applications are in some cases maintained in secrecy until
    patents are issued. The publication of discoveries in the
    scientific or patent literature frequently occurs substantially
    later than the date on which the underlying discoveries were
    made and patent applications were filed. Because patents can
    take many years to issue, there may be currently pending
    applications of which we are unaware that may later result in
    issued patents that our products infringe. For example, pending
    applications may exist that provide support or can be amended to
    provide support for a claim that results in an issued patent
    that our product infringes.
Third parties may assert that we are employing their proprietary
    technology without authorization. If a court held that any third
    party patents cover our products, the holders of any such
    patents may be able to block our ability to commercialize our
    products unless we obtained a license under the applicable
    patent or patents, or until such patents expire. We may not be
    able to enter into licensing arrangements or make other
    arrangements at a reasonable cost or on reasonable terms. Any
    inability to secure licenses or alternative technology could
    result in delays in the introduction of our products or lead to
    prohibition of the manufacture or sale of products by us.
If we
    are unable to protect the confidentiality of our proprietary
    information and know-how, the value of our technology and
    products could be significantly diminished.
In addition to patents, we rely on trade secrets and proprietary
    know-how to protect our intellectual property. We generally
    require our employees, consultants, outside scientific
    collaborators and sponsored researchers and other advisors to
    enter into confidentiality agreements. These agreements provide
    that all confidential information developed or made known to the
    individual during the course of the individual's
    relationship with us is to be kept confidential and not
    disclosed to third parties except in specific circumstances. In
    the case of our employees, the agreements also typically provide
    that all inventions resulting from work performed for us,
    utilizing our property or relating to our business and conceived
    or completed during employment are our exclusive property to the
    extent permitted by law. Where appropriate, agreements we obtain
    with our consultants also typically contain similar assignment
    of invention provisions.
These agreements may not provide meaningful protection or
    adequate remedies in the event of unauthorized use or disclosure
    of our proprietary information. Involuntary disclosure or
    misappropriation by third parties of our confidential
    proprietary information could enable competitors to quickly
    duplicate or surpass our technological achievements, thus
    eroding our competitive position. In addition, it is possible
    that third parties could independently develop proprietary
    information and techniques substantially similar to ours or
    otherwise gain access to our trade secrets.
Risks
    Related to Employee Matters and Managing Growth
If we
    are not successful in attracting and retaining highly qualified
    personnel, including our current senior executive team, we may
    not be able to successfully implement our business
    strategy.
Our ability to compete in the highly competitive pharmaceutical
    and biotechnology industries depends in large part upon our
    ability to attract and retain highly qualified managerial,
    scientific and medical personnel. Competition for skilled
    personnel in our market is very intense because of the numerous
    pharmaceutical and biotechnology companies that seek similar
    personnel. These companies may have greater financial and other
    resources, offer a greater opportunity for career advancement
    and have a longer history in the industry than we do. We also
    experience competition for the hiring of our scientific and
    clinical personnel from universities and research institutions.
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We are highly dependent on Jane H. Hollingsworth, our Chief
    Executive Officer, and Terri B. Sebree, our President. Despite
    our efforts to retain valuable employees, members of our
    management, scientific and medical teams may terminate their
    employment with us on short notice. We have formal employment
    agreements with Ms. Hollingsworth and Ms. Sebree that
    include reasonable notice periods for terminations of
    employment. Besides these agreements, all other employees'
    employment is at-will, which means that any of these employees
    could leave our employment at any time. We maintain "key
    person" insurance for each of Ms. Hollingsworth and
    Ms. Sebree. The total death benefit under each policy is
    $2.0 million and we are the only named beneficiary and
    owner of the policies. The policies have an initial term of
    ten years and are subject to renewal annually thereafter.
    We do not maintain "key person" insurance for any of
    our other employees. The loss of the services of any of our
    executive officers or other key employees could potentially harm
    our business, operating results or financial condition.
We
    will need to grow our organization, and we may experience
    difficulties in managing this growth, which could disrupt our
    operations.
As of April 30, 2010, we employed 21 full-time
    employees. We expect to expand our employee base for managerial,
    operational, sales, marketing, financial and other resources.
    Future growth would impose significant added responsibilities on
    members of management, including the need to identify, recruit,
    maintain, motivate and integrate additional employees. Also, our
    management may need to divert a disproportionate amount of its
    attention away from our
day-to-day
activities and devote a substantial amount of time to managing
    these growth activities. We may not be able to effectively
    manage the expansion of our operations which may result in
    weaknesses in our infrastructure, give rise to operational
    mistakes, loss of business opportunities, loss of employees and
    reduced productivity among remaining employees. Our expected
    growth could require significant capital expenditures and may
    divert financial resources from other projects, such as the
    anticipated commercialization of Zelrix or development of
    additional product candidates. If our management is unable to
    effectively manage our expected growth, our expenses may
    increase more than expected, our ability to generate or increase
    our revenues could be reduced and we may not be able to
    implement our business strategy. Our future financial
    performance and our ability to commercialize Zelrix and our
    other product candidates and compete effectively will depend, in
    part, on our ability to effectively manage any future growth.
Risks
    Related to this Offering and Ownership of Our Common
    Stock
The
    market price of our common stock may be highly volatile, and you
    may not be able to resell your shares at or above the initial
    public offering price.
Prior to this offering, there has not been a public market for
    our common stock. If an active trading market for our common
    stock does not develop following this offering, you may not be
    able to sell your shares quickly or at the market price. The
    initial public offering price for the shares will be determined
    by negotiations between us and representatives of the
    underwriters and may not be indicative of prices that will
    prevail in the subsequent trading market.
The trading price of our common stock is likely to be volatile.
    Our stock price could be subject to wide fluctuations in
    response to a variety of factors, including the following:
•
Any delay in submitting our NDA for Zelrix and any adverse
    development or perceived adverse development with respect to the
    FDA's review of such NDA, including the FDA's refusal
    to accept the NDA for substantive review or a request for
    additional information;
•
The commercial success of Zelrix, if approved by the FDA;
•
Results of clinical trials of our product candidates or those of
    our competitors;
•
Changes or developments in laws or regulations applicable to our
    product candidates;
•
Introduction of competitive products or technologies;
•
Failure to meet or exceed financial projections we provide to
    the public;
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•
Actual or anticipated variations in quarterly operating results;
•
Failure to meet or exceed the estimates and projections of the
    investment community;
•
The perception of the pharmaceutical industry by the public,
    legislatures, regulators and the investment community;
•
General economic and market conditions and overall fluctuations
    in U.S. equity markets;
•
Developments concerning our sources of manufacturing supply;
•
Disputes or other developments relating to patents or other
    proprietary rights;
•
Additions or departures of key scientific or management
    personnel;
•
Issuances of debt, equity or convertible securities;
•
Changes in the market valuations of similar companies; and
•
The other factors described in this "Risk Factors"
    section.
In addition, the stock market in general, and the market for
    small pharmaceutical and biotechnology companies in particular,
    have experienced extreme price and volume fluctuations that have
    often been unrelated or disproportionate to the operating
    performance of these companies. Broad market and industry
    factors may negatively affect the market price of our common
    stock, regardless of our actual operating performance.
Our
    principal stockholders and management own a significant
    percentage of our stock and will be able to exert significant
    control over matters subject to stockholder
    approval.
Upon closing of this offering, our executive officers, directors
    and 5% stockholders and their affiliates will beneficially own
    approximately
% of our
    outstanding voting stock. As a result, these stockholders will
    have significant influence and may be able to determine all
    matters requiring stockholder approval. For example, these
    stockholders may be able to control elections of directors,
    amendments of our organizational documents, or approval of any
    merger, sale of assets, or other major corporate transaction.
    This concentration of ownership could delay or prevent any
    acquisition of our company on terms that other stockholders may
    desire.
If you
    purchase our common stock in this offering, you will incur
    immediate and substantial dilution in the book value of your
    shares.
The initial public offering price is substantially higher than
    the net tangible book value per share of our common stock.
    Investors purchasing common stock in this offering will pay a
    price per share that substantially exceeds the book value of our
    tangible assets after subtracting our liabilities. As a result,
    investors purchasing common stock in this offering will incur
    immediate dilution of $
per
    share, assuming an initial public offering price of
    $
per share, the midpoint
    of the price range set forth on the cover page of this
    prospectus. Further, investors purchasing common stock in this
    offering will contribute approximately
% of the total amount
    invested by stockholders since our inception, but will own only
    approximately
% of the
    shares of our common stock outstanding.
This dilution is due to the substantially lower price paid by
    our investors who purchased shares prior to this offering as
    compared to the price offered to the public in this offering,
    and the exercise of stock options granted to our employees. In
    addition, as of April 30, 2010, options to purchase
    7,520,075 shares of our common stock at a weighted average
    exercise price of $0.23 per share and warrants exercisable for
    up to 870,922 shares of our preferred stock at an exercise
    price of $0.93 per share were outstanding. The exercise of any
    of these options or warrants would result in additional
    dilution. As a result of the dilution to investors purchasing
    shares in this offering, investors may receive significantly
    less than the purchase price paid in this offering, if anything,
    in the event of a liquidation or sale of our company.
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Sales
    of a substantial number of shares of our common stock in the
    public market by our existing stockholders could cause our stock
    price to fall.
Sales of a substantial number of shares of our common stock in
    the public market or the perception that these sales might
    occur, could depress the market price of our common stock and
    could impair our ability to raise adequate capital through the
    sale of additional equity securities. We are unable to predict
    the effect that sales may have on the prevailing market price of
    our common stock.
Substantially all of our existing stockholders are subject to
lock-up
agreements with the underwriters of this offering that restrict
    the stockholders' ability to transfer shares of our common
    stock for at least 180 days from the date of this
    prospectus, subject to certain exceptions. The
lock-up
agreements limit the number of shares of common stock that may
    be sold immediately following the public offering. Subject to
    certain limitations, approximately
shares
    will become eligible for sale upon expiration of the
lock-up
period. In addition, shares issued or issuable upon exercise of
    options and warrants vested as of the expiration of the
lock-up
period will be eligible for sale at that time. Sales of stock by
    these stockholders could have a material adverse effect on the
    market price of our common stock.
Certain holders of shares of our common stock are entitled to
    rights with respect to the registration of their shares under
    the Securities Act of 1933, as amended, or the Securities Act,
    subject to the
180-day
lock-up
arrangement described above. Registration of these shares under
    the Securities Act would result in the shares becoming freely
    tradable without restriction under the Securities Act, except
    for shares held by our affiliates as defined in Rule 144
    under the Securities Act. Any sales of securities by these
    stockholders could have a material adverse effect on the trading
    price of our common stock.
Our
    management will have broad discretion in the use of the net
    proceeds from this offering and may not use them
    effectively.
Our management will have broad discretion in the application of
    the net proceeds from this offering and our stockholders will
    not have the opportunity as part of their investment decision to
    assess whether the net proceeds are being used appropriately.
    Because of the number and variability of factors that will
    determine our use of the net proceeds from this offering, their
    ultimate use may vary substantially from their currently
    intended use. The failure by our management to apply these funds
    effectively could harm our business. Pending their use, we may
    invest the net proceeds from this offering in short-term,
    investment-grade, interest-bearing instruments and U.S.
    government securities. These investments may not yield a
    favorable return to our stockholders.
Our
    ability to use our net operating loss carryforwards and certain
    other tax attributes may be limited.
Under Section 382 of the Internal Revenue Code of 1986, as
    amended, or the Code, if a corporation undergoes an
    "ownership change," generally defined as a greater
    than 50% change by value in its equity ownership over a three
    year period, the corporation's ability to use its
    pre-change net operating loss carryforwards and other pre-change
    tax attributes, such as research tax credits, to offset its
    post-change income may be limited. We believe that, with our
    initial public offering, our most recent private placement and
    other transactions that have occurred over the past three years,
    we may have triggered an ownership change limitation. We may
    also experience ownership changes in the future as a result of
    subsequent shifts in our stock ownership. As a result, if we
    generate taxable income, our ability to use our pre-change net
    operating loss carryforwards to offset U.S. federal taxable
    income may be subject to limitations, which could result in
    increased future tax liability to us.
Because
    we do not intend to pay dividends on our common stock, your
    returns will be limited to any increase in the value of our
    stock.
We have never declared or paid any cash dividends on our capital
    stock. We currently intend to retain all available funds and any
    future earnings to support our operations and finance the growth
    and development of our business and do not anticipate declaring
    or paying any cash dividends on our common stock for the
    foreseeable future. Any return to stockholders will therefore be
    limited to the appreciation of their stock.
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Some
    provisions of our charter documents and Delaware law may have
    anti-takeover effects that could discourage an acquisition of us
    by others, even if an acquisition would be beneficial to our
    stockholders, and may prevent attempts by our stockholders to
    replace or remove our current management.
Provisions in our restated certificate of incorporation and our
    bylaws that will become effective following the closing of this
    offering, as well as provisions of the Delaware General
    Corporation Law, or DGCL, could make it more difficult for a
    third party to acquire us or increase the cost of acquiring us,
    even if doing so would benefit our stockholders, including
    transactions in which stockholders might otherwise receive a
    premium for their shares. These provisions include:
•
Authorizing the issuance of "blank check" preferred
    stock, the terms of which may be established and shares of which
    may be issued without stockholder approval;
•
Prohibiting stockholder action by written consent, thereby
    requiring all stockholder actions to be taken at a meeting of
    our stockholders;
•
Eliminating the ability of stockholders to call a special
    meeting of stockholders; and
•
Establishing advance notice requirements for nominations for
    election to the board of directors or for proposing matters that
    can be acted upon at stockholder meetings.
These provisions may frustrate or prevent any attempts by our
    stockholders to replace or remove our current management by
    making it more difficult for stockholders to replace members of
    our board of directors, which is responsible for appointing the
    members of our management. In addition, we are subject to
    Section 203 of the DGCL, which generally prohibits a
    Delaware corporation from engaging in any of a broad range of
    business combinations with an interested stockholder for a
    period of three years following the date on which the
    stockholder became an interested stockholder, unless such
    transactions are approved by our board of directors. This
    provision could have the effect of delaying or preventing a
    change of control, whether or not it is desired by or beneficial
    to our stockholders.
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SPECIAL
    NOTE REGARDING FORWARD-LOOKING STATEMENTS
This prospectus contains forward-looking statements that involve
    substantial risks and uncertainties. All statements, other than
    statements of historical facts, contained in this prospectus,
    including statements regarding our strategy, future operations,
    future financial position, future revenue, projected costs,
    prospects, plans and objectives of management, are
    forward-looking statements. The words "may,"
    "will," "could," "would,"
    "should," "expect," "intend,"
    "plan," "anticipate," "believe,"
    "estimate," "predict," "project,"
    "potential," "continue," "ongoing"
    and similar expressions are intended to identify forward-looking
    statements, although not all forward-looking statements contain
    these identifying words.
The forward-looking statements in this prospectus include, among
    other things, statements about:
•
Our plans to develop and commercialize Zelrix and our other
    product candidates;
•
The timing of, and our ability to obtain, marketing approval of
    Zelrix and our other product candidates;
•
Our ongoing and planned preclinical studies and clinical trials;
•
The rate and degree of market acceptance of Zelrix and any other
    future products;
•
The size and growth of the potential markets for Zelrix and our
    other product candidates and our ability to serve those markets;
•
Our commercialization and marketing capabilities;
•
Our ability to obtain and maintain intellectual property
    protection;
•
Regulatory developments in the U.S. and foreign countries;
•
The performance of third party manufacturers;
•
Our ability to acquire or license suitable product candidates or
    technologies from third parties;
•
The accuracy of our estimates regarding expenses and capital
    requirements; and
•
The loss of key scientific or management personnel.
We may not actually achieve the plans, intentions or
    expectations described in our forward-looking statements and you
    should not place undue reliance on our forward-looking
    statements. Actual results or events could differ materially
    from the plans, intentions and expectations described in the
    forward-looking statements we make. We have included important
    factors in the cautionary statements included in this
    prospectus, particularly in the "Risk Factors"
    section, that we believe could cause actual results or events to
    differ materially from those expressed or implied by our
    forward-looking statements. Furthermore, if our forward-looking
    statements prove to be inaccurate, the inaccuracy may be
    material. In light of the significant uncertainties in these
    forward-looking statements, you should not regard these
    statements as a representation or warranty by us or any other
    person that we will achieve our objectives and plans in any
    specified timeframe, or at all.
You should read this prospectus and the documents that we
    reference in this prospectus and have filed as exhibits to the
    registration statement of which this prospectus is a part
    completely and with the understanding that our actual future
    results may be materially different from what we expect. The
    information contained in this prospectus is accurate only as of
    the date of this prospectus, regardless of the time of delivery
    of this prospectus or any sale of our common stock. We do not
    assume any obligation to update any forward-looking statements.
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USE OF
    PROCEEDS
We estimate that the net proceeds from our issuance and sale of
shares
    of common stock in this offering will be approximately
    $
million, assuming an
    initial public offering price of
    $
per share, the midpoint
    of the price range set forth on the cover page of this
    prospectus, after deducting estimated underwriting discounts and
    commissions and estimated offering expenses payable by us. If
    the underwriters exercise their over-allotment option in full,
    we estimate that our net proceeds from this offering will be
    approximately $
million.
Each $1.00 increase or decrease in the assumed initial public
    offering price of $
per
    share would increase or decrease the net proceeds to us from
    this offering by approximately
    $
million, assuming
    that the number of shares of common stock offered by us, as set
    forth on the cover page of this prospectus, remains the same and
    after deducting estimated underwriting discounts and commissions
    and estimated offering expenses payable by us.
We anticipate using the net proceeds from this offering as
    follows:
•
Approximately $
million to
    complete the clinical development of, seek marketing approval
    for and, if approved, commercially launch Zelrix in the U.S.;
•
Approximately $
million to
    continue preclinical and clinical development of NP201 and
    NP202; and
•
The balance for working capital and other general corporate
    purposes, which may include the acquisition or licensing of
    other products or technologies or the acquisition of other
    businesses in the biotechnology or specialty pharmaceuticals
    industry.
This anticipated use of net proceeds from this offering
    represents our intentions based upon our current plans and
    business conditions. The amounts and timing of our actual
    expenditures may vary significantly depending on numerous
    factors, including: the timing of our NDA submission to the FDA
    for Zelrix; the extent to which the FDA may require us to
    perform additional clinical trials for Zelrix; the costs of our
    commercialization activities for Zelrix, if it is approved by
    the FDA; the cost, timing and outcome of the development of our
    other product candidates; the extent to which we acquire or
    invest in products, businesses and technologies; the extent to
    which we establish collaboration or other similar agreements;
    the cost of preparing and prosecuting patent applications and
    enforcing and defending intellectual property claims; and any
    unforeseen or underestimated cash needs. As a result, our
    management will retain broad discretion over the allocation of
    the net proceeds from this offering. In addition, our
    anticipated use of proceeds does not reflect the potential
    impact of any future acquisitions, mergers, dispositions, joint
    ventures or investments that we may make. We have no current
    understandings, agreements or commitments for any material
    acquisitions or licenses of any products, businesses or
    technologies.
Following this offering, we believe that our available funds
    will be sufficient to complete the development of Zelrix through
    FDA approval and to fund the expected commercial launch of
    Zelrix in the U.S. in the first half of 2012. It is
    possible that we will not achieve the progress that we expect
    with respect to Zelrix because the actual costs and timing of
    development and marketing approval are difficult to predict and
    are subject to substantial risks and delays. We have no
    committed external sources of funds. To the extent that the net
    proceeds from this offering and our other capital resources are
    insufficient to complete clinical development of, obtain
    marketing approval for and, if approved, commercially launch
    Zelrix, we will need to finance our cash needs through public or
    private equity offerings, debt financings, corporate
    collaboration and licensing arrangements or other financing
    alternatives.
Pending our use of the net proceeds from this offering, we
    intend to invest the net proceeds in a variety of capital
    preservation investments, including short-term,
    investment-grade, interest-bearing instruments and
    U.S. government securities.
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DIVIDEND
    POLICY
We have never declared or paid any cash dividends on our capital
    stock. We currently intend to retain all available funds and any
    future earnings to support our operations and finance the growth
    and development of our business. We do not intend to pay cash
    dividends on our common stock for the foreseeable future.
35
Table of Contents
CAPITALIZATION
The following table sets forth our cash and cash equivalents and
    our capitalization as of December 31, 2009:
•
On an actual basis;
•
On a pro forma basis to give effect to:
•
the automatic conversion of all outstanding shares of our
    preferred stock, including accrued dividends, into an aggregate
    of 61,824,121 shares of common stock upon the closing of
    this offering, assuming that the closing occurred on
    April 30, 2010;
•
the receipt in April 2010 of gross proceeds of $10,062,500 upon
    the issuance of the April 2010 Convertible Notes and the
    automatic conversion of all principal and accrued interest
    outstanding under the April 2010 Convertible Notes into an
    aggregate
    of           shares
    of common stock upon the closing this offering, assuming an
    initial public offering price of $     
    per share, the midpoint of the price range set forth on the
    cover page of this prospectus, and that the closing occurred on
    April 30, 2010;
•
the receipt in May 2010 of gross proceeds of $5,000,000 upon
    entering into the May 2010 Loan Facility, the issuance of
    warrants to purchase 255,376 shares of Series B
    preferred stock, with an estimated fair value of $203,255, to
    the lenders under such facility and the repayment in full of the
    $782,000 outstanding as of December 31, 2009 under a term
    loan that we entered into in 2007; and
•
the warrants outstanding as of May 14, 2010 to purchase an
    aggregate of 1,126,298 shares of our preferred stock
    becoming, in accordance with their terms, warrants to purchase
    1,126,298 shares of common stock at an exercise price of $0.93
    per share of common stock upon the closing of this offering and
    the reclassification of the warrant liability with respect to
    warrants outstanding as of December 31, 2009 to additional
    paid-in capital; and
•
On a pro forma as adjusted basis to give further effect to the
    issuance and sale
    of           shares
    of common stock in this offering at an assumed initial public
    offering price of $      per share, the
    midpoint of the price range set forth on the cover page of this
    prospectus, after deducting estimated underwriting discounts and
    commissions and estimated offering expenses payable by us.
The pro forma as adjusted information set forth below is
    illustrative only and our capitalization following the closing
    of this offering will be adjusted based on the actual initial
    public offering price and other terms of this offering
    determined at pricing. You should read this table together with
    the "Management's Discussion and Analysis of Financial
    Condition and Results of Operations" section of this
    prospectus and our financial statements and the related notes
    appearing at the end of this prospectus.
36
Table of Contents
As of December 31, 2009
Pro Forma
Actual
Pro Forma
as Adjusted
(In thousands, except share data)
Cash and cash equivalents
$
3,927
$
18,207
$
Debt outstanding
$
818
$
5,036
$
—
Warrant liability
626
—
—
Redeemable convertible preferred stock, $0.001 par value;
    71,745,055 shares authorized and 53,096,340 shares
    issued and outstanding, actual; none, pro forma and pro forma as
    adjusted
55,538
—
—
Stockholder's equity (deficit):
Common stock, $0.001 par value; 90,830,376 shares
    authorized and 3,131,250 shares issued and outstanding,
    actual; 90,830,376 shares authorized
    and          shares
    issued and outstanding, pro forma; 90,830,376 shares authorized
    and          shares
    issued and outstanding, pro forma as adjusted
3
64
—
Additional paid-in capital
—
66,370
—
Deficit accumulated during the development stage
(54,477
)
(54,477
)
—
Total stockholders' equity (deficit)
(54,474
)
11,957
—
Total capitalization
$
2,508
$
16,993
$
Each $1.00 increase or decrease in the assumed initial public
    offering price of
    $          
    per share would increase or decrease each of cash and cash
    equivalents, additional paid-in capital, total
    stockholders' equity and total capitalization on a pro
    forma as adjusted basis by approximately
    $      million, assuming that the
    number of shares of common stock offered by us, as set forth on
    the cover page of this prospectus, remains the same and after
    deducting estimated underwriting discounts and commissions and
    estimated offering expenses payable by us.
The table above does not include:
•
7,620,042 shares of common stock issuable upon the exercise
    of options outstanding as of December 31, 2009 at a
    weighted average exercise price of $0.23 per share;
•
1,126,298 shares of common stock issuable upon the exercise
    of warrants outstanding as of May 14, 2010 at a weighted
    average exercise price of $0.93 per share; and
•
758,708 additional shares of common stock available for future
    issuance as of December 31, 2009 under our 2005 Plan.
37
Table of Contents
DILUTION
If you invest in our common stock in this offering, your
    ownership interest will be diluted immediately to the extent of
    the difference between the public offering price per share of
    common stock and the pro forma net tangible book value per share
    of common stock after this offering.
Our historical net tangible book value of common stock as of
    December 31, 2009 was $1.1 million, or $0.34 per share
    of common stock. Historical net tangible book value per share
    represents the amount of our total tangible assets less total
    liabilities, divided by the total number of shares of common
    stock outstanding.
After giving effect, upon the closing of this offering, to the
    automatic conversion of all outstanding shares of our preferred
    stock, including accrued dividends, into an aggregate of
    61,824,121 shares of common stock and the automatic
    conversion of all principal and accrued interest outstanding
    under the April 2010 Convertible Notes into an aggregate
    of           shares
    of common stock, assuming an initial public offering price of
    $      per share, the midpoint of the
    price range set forth on the cover page of this prospectus, and
    that the closing occurred on April 30, 2010, our pro forma
    net tangible book value as of December 31, 2009 would have
    been
    $           million,
    or $      per share of common stock.
After giving effect to our issuance and sale
    of           shares
    of common stock in this offering at an assumed initial public
    offering price of $      per share, the
    midpoint of the price range set forth on the cover page of this
    prospectus, and after deducting estimated underwriting discounts
    and commissions and estimated offering expenses payable by us,
    our pro forma as adjusted net tangible book value as of
    December 31, 2009 would have been
    $      million, or
    $      per share of common stock. This
    represents an immediate increase in pro forma net tangible book
    value of $      per share to our
    existing stockholders and an immediate dilution of
    $           in
    pro forma net tangible book value per share to new investors
    purchasing shares of common stock in this offering.
Dilution per share to new investors purchasing shares of common
    stock in this offering is determined by subtracting pro forma as
    adjusted net tangible book value per share after this offering
    from the initial public offering price per share paid by new
    investors. The following table illustrates this dilution on a
    per share basis:
Assumed initial public offering price per share of common stock
$
Historical net tangible book value per share as of
    December 31, 2009
$
0.34
Decrease in net tangible book value per share attributable to
    the conversion of outstanding preferred stock and April 2010
    Convertible Notes
Pro forma net tangible book value per share as of
    December 31, 2009
Increase in net tangible book value per share attributable to
    new investors
Pro forma as adjusted net tangible book value after this offering
Dilution per share to new investors
$
Each $1.00 increase or decrease in the assumed initial public
    offering price of $      per share
    would increase or decrease our pro forma as adjusted net
    tangible book value by approximately
    $          ,
    our pro forma as adjusted net tangible book value per share by
    $          
    and dilution per share to new investors purchasing shares of
    common stock in this offering by
    $          ,
    assuming that the number of shares of common stock offered by
    us, as set forth on the cover page of this prospectus, remains
    the same and after deducting estimated underwriting discounts
    and commissions and estimated offering expenses payable by us.
If the underwriters exercise their over-allotment option in
    full, the pro forma as adjusted net tangible book value per
    share after giving effect to this offering would be
    $      per share and the dilution in
    pro forma as adjusted net tangible book value per share to new
    investors would be $      per share.
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Table of Contents
The following table summarizes, on a pro forma basis as
    described above as of December 31, 2009, the differences
    between the number of shares of common stock purchased from us,
    the total effective cash consideration paid and the average
    price per share paid by our existing stockholders and by new
    investors purchasing shares of common stock in this offering at
    an assumed initial public offering price of
    $          
    per share, the midpoint of the price range set forth on the
    cover page of this prospectus, before deducting estimated
    underwriting discounts and commissions and estimated offering
    expenses payable by us:
Average
Shares Purchased
Total Consideration
Price per
Number
Percent
Amount
Percent
Share
Existing stockholders
%
$
%
$
New investors
Total
%
$
%
Each $1.00 increase or decrease in the assumed initial public
    offering price of $      per share
    would increase or decrease the total consideration paid by new
    investors by $      million and
    increase or decrease the percentage of total consideration paid
    by new investors purchasing shares of common stock in this
    offering by approximately     %,
    assuming that the number of shares offered by us, as set forth
    on the cover page of this prospectus, remains the same.
If the underwriters exercise their over-allotment option in
    full, our existing stockholders would
    own          %
    and new investors would own     % of
    the total number of shares of common stock outstanding after
    this offering.
The tables and calculations set forth above are based on the
    number of shares of common stock outstanding after the closing
    of this offering and assumes no exercise of any outstanding
    options or warrants. To the extent that options or warrants are
    exercised, there will be further dilution to new investors.
The above information excludes:
•
7,620,042 shares of common stock issuable upon the exercise
    of options outstanding as of December 31, 2009 at a
    weighted average exercise price of $0.23 per share;
•
1,126,298 shares of common stock issuable upon the exercise
    of warrants outstanding as of May 14, 2010 at a weighted
    average exercise price of $0.93 per share; and
•
758,708 additional shares of common stock available for
    future issuance as of December 31, 2009 under our 2005 Plan.
39
Table of Contents
SELECTED
    FINANCIAL DATA
You should read the following selected financial data together
    with the "Capitalization" and "Management's
    Discussion and Analysis of Financial Condition and Results of
    Operations" sections of this prospectus and our financial
    statements and the related notes appearing at the end of this
    prospectus. We have derived the statement of operations data for
    the years ended December 31, 2007, 2008 and 2009 and the
    balance sheet data as of December 31, 2008 and 2009 from
    our audited financial statements appearing at the end of this
    prospectus. We have derived the statement of operations data for
    the period from January 7, 2005 (inception) through
    December 31, 2005 and year ended December 31, 2006 and
    the balance sheet data as of December 2005, 2006 and 2007 from
    our audited financial statements not included in this
    prospectus. Our historical results for any prior period are not
    necessarily indicative of results to be expected in any future
    period.
See note 3(i) to our financial statements appearing at the
    end of this prospectus for information regarding computation of
    basic and diluted net loss per common share, unaudited pro forma
    basic and diluted net loss per common share and the unaudited
    pro forma weighted average basic and diluted common shares
    outstanding used in computing pro forma basic and diluted net
    loss per common share.
January 7, 2005
(inception) to
December 31,
Year Ended December 31,
2005
2006
2007
2008
2009
(In thousands, except share and per share data)
Statement of Operations Data:
Operating expenses:
Research and development
$
692
$
3,209
$
7,761
$
8,815
$
11,310
Acquired in-process research and development
—
—
—
5,500
—
General and administrative
364
1,363
1,884
3,075
3,142
Total operating expenses
(1,056
)
(4,572
)
(9,645
)
(17,390
)
(14,452
)
Interest income (expense), net
(12
)
(644
)
(30
)
(121
)
(1,289
)
Loss before tax benefit
(1,068
)
(5,216
)
(9,675
)
(17,511
)
(15,741
)
Income tax benefit
—
—
—
—
151
Net loss
(1,068
)
(5,216
)
(9,675
)
(17,511
)
(15,590
)
Accretion of redeemable convertible preferred stock
—
(341
)
(1,126
)
(2,330
)
(3,617
)
Net loss applicable to common stockholders
$
(1,068
)
$
(5,557
)
$
(10,801
)
$
(19,841
)
$
(19,207
)
Basic and diluted net loss per common share
$
(0.44
)
$
(2.03
)
$
(3.67
)
$
(6.49
)
$
(6.28
)
Weighted average basic and diluted common shares outstanding
2,445,342
2,740,927
2,947,005
3,059,137
3,060,000
Unaudited pro forma net loss
$
(15,590
)
Unaudited pro forma basic and diluted net loss per common share
$
Unaudited pro forma weighted average basic and diluted common
    shares outstanding
As of December 31,
2005
2006
2007
2008
2009
(In thousands)
Balance Sheet Data:
Cash and cash equivalents
$
1,003
$
5,211
$
3,830
$
8,368
$
3,927
Working capital
652
4,347
1,304
6,285
1,527
Total assets
1,109
5,400
4,462
9,776
5,009
Long-term debt
1,600
—
1,628
782
—
Redeemable convertible preferred stock
—
10,164
16,270
41,809
55,538
Total stockholders' deficit
(851
)
(5,716
)
(16,458
)
(36,141
)
(54,474
)
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Table of Contents
MANAGEMENT'S
    DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
You should read the following discussion and analysis of our
    financial condition and results of operations together with our
    financial statements and related notes appearing at the end of
    prospectus. In addition to historical information, some of the
    information contained in this discussion and analysis or set
    forth elsewhere in this prospectus, including information with
    respect to our plans and strategy for our business and related
    financing, contains forward-looking statements that involve
    risks, uncertainties and assumptions. Our actual results may
    differ materially from those anticipated or implied in these
    forward-looking statements as a result of important factors
    described in the cautionary statements included in this
    prospectus, particularly in the "Risk Factors"
    section.
Overview
We are a specialty pharmaceutical company focused on the
    development and commercialization of branded therapeutics for
    diseases of the central nervous system, including neurological
    and psychiatric disorders. Our most advanced product candidate,
    Zelrix, is an active, single-use transdermal sumatriptan patch
    that we are developing for the treatment of acute migraine.
    Zelrix uses our proprietary SmartRelief technology. We
    successfully completed a pivotal Phase III clinical trial
    for Zelrix in July 2009 and expect to submit an NDA to the FDA
    in the fourth quarter of 2010. Before we submit our NDA, we must
    complete two ongoing pharmacokinetic trials in healthy subjects
    and obtain interim data from two Phase III safety trials.
    Subject to the approval of our NDA, we plan to build our own
    specialty sales force in the U.S. to launch Zelrix. We have
    two other proprietary product candidates in preclinical
    development that address large market opportunities, NP201 for
    the continuous symptomatic treatment of Parkinson's disease
    and NP202 for the long-term treatment of schizophrenia and
    bipolar disorder.
We were incorporated in the State of Delaware in January 2005
    and are a development stage company. Since our inception, we
    have invested a significant portion of our efforts and financial
    resources in the development of Zelrix. Zelrix is the only
    product candidate for which we have conducted clinical trials,
    and to date we have not marketed, distributed or sold any
    products. As a result, we have generated no revenue and have
    never been profitable. Our net loss was $15.6 million for
    the year ended December 31, 2009 and $17.5 million for
    the year ended December 31, 2008. As of December 31,
    2009, we had an accumulated deficit of $54.5 million.
We expect to continue to incur substantial additional operating
    losses for at least the next several years as we continue to
    develop our product candidates and seek marketing approval and,
    subject to obtaining such approval, the eventual
    commercialization of Zelrix and our other products candidates.
    If we obtain marketing approval for Zelrix, we will incur
    significant sales, marketing and outsourced manufacturing
    expenses. In addition, we expect to incur additional expenses to
    add operational, financial and information systems and
    personnel, including personnel to support our planned product
    commercialization efforts. We also expect to incur significant
    costs to comply with corporate governance, internal controls and
    similar requirements applicable to us as a public company
    following the closing of this offering. Our results may vary
    depending on many factors, including the progress and results of
    our preclinical studies and clinical trials, our ability to
    obtain marketing approval of Zelrix and our other product
    candidates and, if approved, our ability to commercialize these
    products and achieve market acceptance of these products among
    physicians, patients and third party payors.
We have funded our operations to date primarily with the
    proceeds of the sale of convertible preferred stock, convertible
    notes and borrowings under debt facilities. From inception
    through December 31, 2009, we have received net proceeds of
    $48.0 million from the sale of convertible preferred stock
    and convertible notes. As of December 31, 2009, we had
    $0.8 million of debt outstanding under a term loan that we
    entered into in 2007.
In April 2010, we received gross proceeds of $10.1 million
    from the sale of the April 2010 Convertible Notes. Further, in
    May 2010, we entered into the May 2010 Loan Facility under which
    $5.0 million was advanced on the closing date. We used a
    portion of the proceeds that we received on the closing date of
    the
41
Table of Contents
May 2010 Loan Facility to repay all outstanding amounts under
    the term loan that we entered into in 2007. The April 2010
    Convertible Notes and the May 2010 Loan Facility are described
    in more detail under "— Liquidity and Capital
    Resources."
Our recurring losses and negative cash flows from operations
    raise substantial doubt about our ability to continue as a going
    concern. As a result, our independent registered public
    accounting firm included an explanatory paragraph regarding this
    uncertainty in its report on our financial statements as of and
    for the year ended December 31, 2009. We have no current
    source of revenues to sustain our present activities, and we do
    not expect to generate revenues until, and unless, the FDA or
    other regulatory agencies approve Zelrix or any other of our
    product candidates and we successfully commercialize any such
    product candidates. Accordingly, our ability to continue as a
    going concern will require us to obtain additional financing to
    fund our operations.
Financial
    Overview
Research
    and Development Expenses
Our research and development expenses consist of expenses
    incurred in developing, testing and seeking marketing approval
    of our product candidates, including:
•
Expenses associated with regulatory submissions, preclinical
    development, clinical trials and manufacturing;
•
Personnel related expenses, such as salaries, benefits, travel
    and other related expenses, including stock-based compensation;
•
Payments made to third party investigators who perform research
    and development on our behalf;
•
Payments to third party contract research organizations,
    contractor laboratories and independent contractors;
•
Expenses incurred to obtain technology licenses if the
    technology licensed has not reached technological feasibility
    and has no alternative future use; and
•
Facility, maintenance and other related expenses.
We expense all research and development costs as incurred.
    Preclinical development expenses and clinical trial expenses for
    our product candidates are a significant component of our
    current research and development expenses. Product candidates in
    later stage clinical development, such as Zelrix, generally have
    higher research and development expenses than those in earlier
    stages of development, primarily due to the increased size and
    duration of the clinical trials. We track and record information
    regarding external research and development expenses for each
    study or trial that we conduct. From time to time, we use third
    party contract research organizations, contractor laboratories
    and independent contractors in preclinical studies. We recognize
    the expenses associated with third parties performing these
    services for us in our preclinical studies based on the
    percentage of each study completed at the end of each reporting
    period. We coordinate clinical trials through a number of
    contracted investigational sites and recognize the associated
    expense based on a number of factors, including actual and
    estimated subject enrollment and visits, direct pass-through
    costs and other clinical site fees.
From our inception in January 2005 through December 31,
    2009, we incurred research and development expenses of
    $31.8 million, of which $22.4 million related to the
    development of Zelrix. We incurred research and development
    expenses associated with the development of Zelrix of
    $8.2 million in 2009 and $5.6 million in 2008.
    Additionally, in 2008 we incurred $5.5 million of acquired
    in-process research and development expenses in connection with
    our acquisition of a patent application utilized in Zelrix. In
    addition, pursuant to this transaction, we obtained a perpetual,
    worldwide, exclusive, royalty-free license, with the right to
    grant sublicenses, including issued U.S. Patent
    No. 6,745,071, as described in more detail under
    "Business — Intellectual Property and
    Exclusivity." Salaries and related expenses included in
    research and development expenses were $2.4 million in 2009
    and $6.0 million since our inception. We do not allocate
    salaries and related expenses to individual projects, trials or
    studies or to specific product candidates.
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Table of Contents
We expect that our research and development expenses in 2010
    will be higher than in 2009 as a result of the full enrollment
    of the Phase III safety trials for Zelrix and the increased
    regulatory work related to the NDA that we expect to submit for
    Zelrix during the fourth quarter of 2010. We also expect to
    incur additional research and development expenses in 2010 as we
    accelerate the development of NP201 and NP202. These
    expenditures are subject to numerous uncertainties regarding
    timing and cost to completion. Completion of our preclinical
    development and clinical trials may take several years or more
    and the length of time generally varies according to the type,
    complexity, novelty and intended use of a product candidate. The
    cost of clinical trials may vary significantly over the life of
    a project as a result of differences arising during clinical
    development, including, among others:
•
The number of sites included in the trials;
•
The length of time required to enroll suitable subjects;
•
The size of subject populations participating in the trials;
•
The duration of subject
follow-ups;
•
The development stage of the product candidates; and
•
The efficacy and safety profile of the product candidates.
Neither Zelrix nor any of our other product candidates has
    received FDA approval. In order for the FDA to approve a product
    candidate, the FDA must conclude that clinical data establishes
    the safety and efficacy of such product candidate. We currently
    anticipate submitting an NDA for Zelrix in the fourth quarter of
    2010. As a result of the uncertainties discussed above, we are
    unable to determine the duration and completion costs of our
    development projects or when and to what extent we will generate
    revenues from the commercialization and sale of an approved
    product candidate.
General
    and Administrative Expenses
General and administrative expenses consist primarily of
    salaries, benefits and other related costs, including
    stock-based compensation, for personnel serving in our
    executive, finance, accounting, legal, market research and human
    resource functions. Our general and administrative expenses also
    include facility and related costs not included in research and
    development expenses, professional fees for legal, including
    patent-related expenses, consulting, tax and accounting
    services, insurance, depreciation and general corporate
    expenses. We expect that our general and administrative expenses
    will increase with the continued development and potential
    commercialization of our product candidates.
We expect that our general and administrative expenses in 2010
    will be higher than in 2009 as a result of greater expenses
    relating to our operations as a public company, including
    increased costs for the hiring of additional personnel, and for
    payment to outside consultants, including lawyers and
    accountants, to comply with additional regulations, corporate
    governance, internal control and similar requirements applicable
    to public companies, as well as increased costs for insurance.
    Additionally, we plan to increase spending related to building a
    commercial infrastructure for the anticipated launch of Zelrix
    in the U.S. in the first half of 2012. However, in an
    effort to control our spending related to commercialization
    efforts, we currently plan to hire most of our sales and
    marketing personnel only if Zelrix is approved by the FDA.
Interest
    Income and Interest Expense
Interest income consists of interest earned on our cash and cash
    equivalents. Interest expense consists primarily of cash and
    non-cash interest costs related to our outstanding debt.
    Additionally, in connection with some of our debt financings, we
    issued warrants, the fair value of which we recorded as deferred
    financing costs. We amortize these deferred financing costs over
    the lives of the loans as interest expense in our statement of
    operations. Excluding the impact of non-cash interest costs, we
    expect interest expense to increase in 2010 compared with 2009
    as a result of the April 2010 Convertible Notes and the May 2010
    Loan Facility.
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Net
    Operating Losses and Tax Loss Carryforwards
For the year ended December 31, 2009, our net loss was
    $15.6 million. We have incurred cumulative net losses of
    $49.1 million from inception through December 31,
    2009. As of December 31, 2009, we had approximately
    $43.4 million of federal and state net operating loss
    carryforwards available to offset future taxable income. These
    federal and state net operating loss carryforwards will begin to
    expire in 2024. Due to the uncertainty of our ability to realize
    the benefit of any net operating loss carryforwards, the
    deferred tax asset related to these carryforwards has been fully
    offset by a valuation allowance at December 31, 2009.
The closing of this offering, together with private placements
    and other transactions that have occurred since our inception,
    may trigger, or may have already triggered, an "ownership
    change" pursuant to Section 382 of the Code. If an
    ownership change is triggered, it will limit our ability to use
    some of our net operating loss carryforwards. In addition, since
    we will need to raise substantial additional funding to finance
    our operations, we may undergo further ownership changes in the
    future, which could further limit our ability to use net
    operating loss carryforwards. As a result, if we generate
    taxable income, our ability to use some of our net operating
    loss carryforwards to offset U.S. federal taxable income may be
    subject to limitations, which could result in increased future
    tax liability to us.
Critical
    Accounting Policies and Use of Estimates
We have based our management's discussion and analysis of
    our financial condition and results of operations on our
    financial statements, which have been prepared in accordance
    with accounting principles generally accepted in the
    U.S. The preparation of these financial statements requires
    us to make estimates that affect the reported amounts of assets
    and liabilities and the disclosure of contingent assets and
    liabilities at the date of the financial statements as well as
    the reported expenses during the reporting periods. On an
    ongoing basis, we evaluate our estimates and judgments,
    including those related to clinical trial expenses and
    stock-based compensation. We base our estimates on historical
    experience and on various other factors that we believe to be
    appropriate under the circumstances. Actual results may differ
    from these estimates under different assumptions or conditions.
While our significant accounting policies are more fully
    discussed in note 3 to our financial statements appearing
    at the end of this prospectus, we believe that the following
    accounting policies are critical to the process of making
    significant judgments and estimates in the preparation of our
    financial statements. We have reviewed these critical accounting
    policies and estimates with the audit committee of our board of
    directors.
Research
    and Development Expenses
We rely heavily on third parties to conduct preclinical and
    clinical trials, as well as for the manufacture of our clinical
    trial supplies. At the end of each reporting period, we compare
    the payments made to each service provider to the estimated
    progress towards completion of the related project. Factors that
    we consider in preparing these estimates include the number of
    subjects enrolled in studies, milestones achieved and other
    criteria related to the efforts of our vendors. These estimates
    are subject to change as additional information becomes
    available. Depending on the timing of payments to vendors and
    estimated services provided, we record net prepaid or accrued
    expenses related to these costs. We calculate expenses incurred
    for the manufacture of our clinical supplies using our estimate
    of costs and capitalize these expenses on our balance sheet to
    the extent we hold clinical supply materials on hand to be
    distributed for use in our clinical trials. We expense these
    costs as the supplies are consumed in the trials.
Stock-Based
    Compensation
We use the Black-Scholes option-pricing model to value our stock
    option awards. The Black-Scholes option-pricing model requires
    the input of subjective assumptions, including the expected life
    of stock options and stock price volatility. As a private
    company, we do not have sufficient history to estimate the
    expected life of our options or the volatility of our common
    stock price. We use the "simplified method," as
    allowed under the Securities and Exchange Commission's, or
    SEC, accounting guidance, to determine the expected life, which
    is the midpoint between an option's vesting date and
    contractual term. We use comparable public
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Table of Contents
companies as a basis for our expected volatility to calculate
    the fair value of our option grants. We intend to continue to
    consistently apply this process using comparable companies until
    a sufficient amount of historical information regarding the
    volatility of our own share price becomes available. The
    risk-free interest rate is based on U.S. Treasury
    instruments with a remaining term equal to the expected term of
    the option. The assumptions used in calculating the fair value
    of stock options represent our best estimate and involve
    inherent uncertainties and the application of our judgment. As a
    result, if factors change and we use different assumptions,
    stock-based compensation could be materially different in the
    future.
The fair value of our common stock underlying grants of common
    stock options and restricted stock was determined by our board
    of directors or compensation committee pursuant to authority
    delegated by our board of directors and represents the most
    important factor in determining the value of our stock-based
    compensation. In the absence of a public trading market for our
    common stock, our board of directors or compensation committee
    was required to estimate the fair value of our common stock at
    the grant date of our stock-based awards.
Prior to December 2006, our board of directors or our
    compensation committee estimated the fair value of our common
    stock considering the following factors:
•
The nature and history of our business;
•
The general economic outlook and the outlook for the life
    sciences industry;
•
Our financial condition and results of operations, including
    important developments in our operations, most significantly
    relating to the clinical development of our most advanced
    product candidate, Zelrix;
•
Our ability to pay dividends;
•
Whether or not we had goodwill or other intangible value;
•
Our past transactions in common stock and preferred
    stock; and
•
The stock prices of other publicly traded companies engaged in
    lines of business that are the same or similar to ours.
Beginning in December 2006, our compensation committee obtained
    independent third party valuations to assist it in estimating
    the fair value of our common stock. These valuations took into
    account clinical and other notable milestones with respect to
    Zelrix. The first independent third party valuation of our
    common stock took place following the sale of Series A
    preferred stock in August 2006 when we engaged an independent
    third party valuation firm to assist our compensation committee
    in determining the fair value of our common stock as of
    December 31, 2006. In connection with the sale of
    Series B preferred stock in July 2008, and in anticipation
    of the grant of a significant number of stock options covering
    our common stock in the third quarter of 2008, we again engaged
    an independent third party valuation firm to assist our
    compensation committee in determining the fair value of our
    common stock as of July 8, 2008.
The following table summarizes the proceeds from the issuance of
    our preferred stock through April 30, 2010:
Number
Issuance
Date
of Shares
Net Proceeds
(In millions)
Series A preferred stock
August and October 2006
11,546,161
$
9.7
Series A preferred stock
October 2007
5,376,345
5.0
Series B preferred stock
April and July 2008
25,282,556
23.2
Series B preferred stock
August 2009
10,891,278
10.1
53,096,340
$
48.0
Although we sold all of the shares of Series A and
    Series B preferred stock at a price of $0.93 per share, our
    compensation committee did not believe that the value placed on
    these shares of preferred stock provided a direct indication of
    the fair value of our common stock because the preferred stock
    is entitled to preferences, rights and protections that are not
    applicable to our common stock. As of December 31, 2009,
    because of
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these preferences, the holders of the Series A and
    Series B preferred stock were entitled to receive a
    liquidation preference of $56.2 million and to participate
    with the common stockholders on an as-converted basis in the
    remaining value of our company.
In order to estimate the fair value of our common stock, we
    estimated the aggregate fair value of our common stock and
    preferred stock, which we refer to as our aggregate equity
    value, and then allocated this value between our preferred stock
    and common stock using a Black-Scholes call option method, as
    described in more detail below. In addition, we applied an
    illiquidity discount to our estimate of the fair value of our
    common stock to account for the heightened level of risk of our
    shares compared to shares of comparable, publicly traded
    companies.
In estimating our aggregate equity value, we used methodologies
    and assumptions consistent with the American Institute of
    Certified Public Accountants Practice Guide, or the AICPA
    Practice Guide,
Valuation of Privately-Held-Company Equity
    Securities Issued as Compensation
. The primary methodologies
    that we used to determine our aggregate equity value were a
    market-based approach and an asset-based approach.
•
Under the market-based approach, we calculated the valuation
    multiples relative to the total assets, equity and
cash-on-hand
for comparable, publicly traded companies. We then applied those
    multiples to our assets, equity and
cash-on-hand
as of the valuation date.
•
Under the asset-based approach, we calculated the fair value of
    our assets based on an estimate of how much it might cost a
    third party to replace or replicate our assets. This approach is
    based on the concept that a prudent investor would pay no more
    for an asset than the amount it would cost the investor to
    replace the asset with a new asset. In addition, this method
    assumes that a buyer of our company would be willing to pay us
    for the cost that the buyer would incur to replicate our
    investment in our product candidates. Accordingly, under this
    method, we estimated our aggregate equity value as the sum of
    the market value of our net tangible assets and the cumulative
    research and development cost that we incurred on Zelrix and our
    other product candidates through the valuation date.
We then allocated the aggregate equity value between the common
    stock and the preferred stock using a Black-Scholes call option
    pricing method. Under this method, we estimated the fair value
    of our common stock as the net value of a series of call
    options, representing the present value of the expected future
    returns to the common stockholders. We considered the rights of
    the common stockholders to be equivalent to a call option on our
    future value in excess of the aggregate liquidation preferences
    payable on Series A and Series B preferred stock, with
    adjustments to account for the rights retained by the preferred
    stockholders related to any value in excess of the applicable
    liquidation preferences. Using this method, we valued the common
    stock by estimating the value of a share of common stock in each
    of these call option rights.
As discussed above, we then reduced the value of the common
    stock using this approach by applying an illiquidity discount to
    account for the heightened level of risk associated with our
    shares compared to that of comparable, publicly traded companies.
The December 31, 2006 valuation of our common stock was
    based on an aggregate equity value of $8.5 million. The
    value allocated to the common stock after applying the call
    option allocation methodology and a 35% illiquidity discount was
    $0.18 per share. Our compensation committee believed the
    increase in the estimated fair value of common stock from $0.12
    per share prior to December 2006 to $0.18 per share was
    appropriate in light of the continued progress of Zelrix in its
    preclinical development program as of December 2006, coupled
    with the initial sale of Series A preferred stock in August
    2006 at $0.93 per share.
The July 8, 2008 valuation of our common stock was based on
    an aggregate equity value of $30.2 million. The value
    allocated to the common stock after applying the call option
    allocation methodology and a 35% illiquidity discount was $0.24
    per share. The increase in the aggregate equity value compared
    to the December 31, 2006 valuation reflected our sale of
    additional Series A preferred stock in October 2007, the
    initial sale of Series B preferred stock in July 2008 and
    the continued investment in, and advancement of, our product
    candidates. In particular, in the first quarter of 2008, we
    successfully completed a Phase I proof of concept study for
    Zelrix that provided encouraging pharmacokinetic data that was a
    predicate for continued development.
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On each grant date subsequent to December 31, 2006, our
    compensation committee considered the most current independent
    valuation that had been completed and the continued validity of
    that valuation given the progress, if any, that we had made in
    the development of Zelrix and our other product candidates,
    external market factors and other conditions, as discussed
    above. The following table summarizes our stock-based awards
    issued since our inception to December 31, 2009. We have
    not issued any stock-based awards since December 31, 2009.
Per Share Fair
Per Share
Value of
Fair Value of
Number of Awards
Issuance Date
Preferred Stock
Common
    Stock
(1)
Common Stock
Options
(2)
Total
1/1/2005 - 6/30/2005
—
$
0.08
110,000
—
110,000
7/1/2005 - 12/31/2005
—
0.10
—
277,710
277,710
1/1/2006 - 6/30/2006
—
0.12
420,000
(3)
130,000
550,000
7/1/2006 - 12/31/2006
$
0.93
0.18
495,000
(3)
375,847
870,847
1/1/2007 - 6/30/2007
0.93
0.18
—
170,000
170,000
7/1/2007 - 12/31/2007
0.93
0.18
—
377,500
377,500
1/1/2008 - 6/30/2008
0.93
0.18
—
115,000
115,000
7/1/2008 - 12/31/2008
0.93
0.24
—
5,889,569
5,889,569
1/1/2009 - 6/30/2009
0.93
0.24
—
464,700
464,700
7/1/2009 - 12/31/2009
0.93
0.24
—
84,000
84,000
1,025,000
7,884,326
8,909,326
(1)
The per share estimated fair value of our common stock as
    determined by our compensation committee as of the date of the
    grant, taking into account various factors and including the
    results, if applicable, of independent third party valuations of
    our common stock as discussed above.
(2)
All options were granted with an exercise price equal to the
    then fair value of our common stock.
(3)
Represents restricted common stock awards subject to vesting
    criteria.
Results
    of Operations
Comparison
    of Years Ended December 31, 2008 and 2009
Research
    and Development Expenses
Research and development expenses for the years ended
    December 31, 2008 and 2009 were comprised of the following:
Year Ended
Increase
December 31,
(Decrease)
2008
2009
$
%
(In thousands)
Clinical development, regulatory and manufacturing expenses
$
4,257
$
7,081
$
2,824
66
%
Research and preclinical expenses
2,172
1,385
(787
)
(36
)
Compensation and related expenses
1,950
2,388
438
22
Facilities and related expenses
436
456
20
5
$
8,815
$
11,310
$
2,495
28
Research and development expenses increased by
    $2.5 million, or 28%, to $11.3 million in 2009 from
    $8.8 million in 2008. This increase resulted primarily from
    a $3.2 million increase in costs related to our pivotal
    Phase III clinical trial and our Phase III safety
    trials for Zelrix and a $0.4 million increase in
    compensation costs, offset by a $0.6 million decrease in
    preclinical expenses, reflecting our focus on our Phase III
    clinical program for Zelrix, and a $0.6 million decrease in
    manufacturing expenses. The increase in compensation costs in
    2009 primarily reflected our addition of research and
    development personnel,
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particularly in the areas of quality assurance, regulatory and
    medical, throughout 2008. The costs of these additional
    personnel were reflected as a full year of expense in 2009. The
    decrease in preclinical expense in 2009 primarily reflected the
    completion of our preclinical NP201 study in the first half of
    2009, which had been ongoing throughout 2008. The decrease in
    manufacturing expenses in 2009 primarily reflected prototype
    development work in 2008 for NP201 that did not recur in 2009.
Research and development expenses by program for the years ended
    December 31, 2008 and 2009 are presented below:
Year Ended
Increase
December 31,
(Decrease)
2008
2009
$
%
(In thousands)
Zelrix
$
5,590
$
8,183
$
2,593
46
%
NP201
743
244
(499
)
(67
)
Development expenses — general
2,482
2,883
401
16
$
8,815
$
11,310
$
2,495
28
The significant increase in spending on Zelrix in 2009 was
    primarily due to the continuation of our Phase III clinical
    program. As we completed and analyzed the results of our
    preclinical trial for NP201, our spending on NP201 declined by
    67% in 2009. Personnel related expenses, including salaries and
    benefits, are included in the table above as general development
    expenses as we do not allocate these costs to specific product
    candidates.
Acquired
    In-Process Research and Development Expenses
In July 2008, we entered into an asset purchase and license
    agreement with Travanti Pharma Inc., or Travanti. Pursuant to
    the terms of the Travanti agreement, we paid $5.5 million
    to Travanti for the purchase of a patent application, and a
    worldwide license in the field of migraine to additional
    intellectual property, directed to transdermal delivery of
    anti-migraine medications using an active delivery patch. We
    recognized the purchase price in our statement of operations for
    the year ended December 31, 2008 as acquired in-process
    research and development because additional research and
    development efforts and marketing approval in the U.S. is
    required in order to commercialize Zelrix, which utilizes this
    patent application.
General
    and Administrative Expenses
General and administrative expenses were $3.1 million in
    both 2009 and 2008. Although general and administrative
    compensation expenses increased by $0.4 million in 2009
    due, in part, to the hiring of a chief financial officer in the
    fourth quarter of 2008, this increase was offset by decreases of
    $0.2 million in legal expenses, $0.1 million in market
    research expenses and $0.1 million in other general
    expenses.
Interest
    Income/Expense
Interest income decreased to $30,000 in 2009 from $158,000 in
    2008 due to lower average cash and cash equivalent balances,
    consisting primarily of bank deposits and money market mutual
    funds invested in short-term corporate and government
    obligations, and lower yields on investments.
Interest expense increased to $1.3 million in 2009 from
    $0.3 million in 2008 primarily as a result of the non-cash
    beneficial conversion feature and the fair value of the warrants
    issued in connection with the issuance of convertible debt in
    July 2009. This convertible debt converted into shares of
    Series B preferred stock in August 2009.
Income
    Tax Benefit
In 2009, we recognized an income tax benefit of $151,000 related
    to the sale of Pennsylvania research and development tax credits
    to a third party buyer.
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Comparison
    of Years Ended December 31, 2007 and 2008
Research
    and Development Expenses
Research and development expenses for the years ended
    December 31, 2007 and 2008 were comprised of the following:
Year Ended
Increase
December 31,
(Decrease)
2007
2008
$
%
(In thousands)
Clinical development, regulatory and manufacturing expenses
$
5,063
$
4,257
$
(806
)
(16
)%
Research and preclinical expenses
1,347
2,172
825
61
Compensation and related expenses
1,098
1,950
852
78
Facilities and related expenses
253
436
183
72
$
7,761
$
8,815
$
1,054
14
Research and development expenses increased by
    $1.1 million, or 14%, to $8.8 million in 2008 from
    $7.8 million in 2007. This increase resulted primarily from
    a $0.7 million increase in preclinical expenses related to
    toxicology studies for Zelrix and preclinical studies for NP201
    that were initiated in 2008, a $0.9 million increase in
    compensation costs and a $0.2 million increase in
    facilities and related expenses, offset by a $0.6 million
    decrease in manufacturing expenses and a $0.2 million
    decrease in regulatory costs due to the submission of our IND
    for Zelrix in 2007. The increase in compensation costs in 2008
    primarily reflected our addition of research and development
    personnel, particularly in the areas of quality assurance,
    regulatory and medical, throughout 2008. The increase in
    facilities and related expenses in 2008 resulted from the
    leasing of our new corporate headquarters in Conshohocken,
    Pennsylvania in March 2008. The decrease in manufacturing
    expenses in 2008 primarily reflected our substantial completion
    of the formulation and test method development for Zelrix in
    2007.
Research and development expenses by program for the years ended
    December 31, 2007 and 2008 are presented below:
Year Ended
Increase
December 31,
(Decrease)
2007
2008
$
%
(In thousands)
Zelrix
$
5,837
$
5,590
$
(247
)
(4
)%
NP201
559
743
184
33
Development expenses — general
1,365
2,482
1,117
82
$
7,761
$
8,815
$
1,054
14
The decrease in spending on Zelrix in 2008 is described in more
    detail above. The increase in spending on NP201 in 2008
    specifically related to a preclinical study that we initiated in
    2008. As also described above, our increased research and
    development headcount in 2008 was the primary reason for the
    increase in general research and development expenses in 2008.
General
    and Administrative Expenses
General and administrative expenses increased by
    $1.2 million, or 63%, to $3.1 million in 2008 from
    $1.9 million in 2007. This increase resulted primarily from
    a $0.5 million increase in compensation expenses associated
    with additional headcount, a $0.2 million increase in
    market research expenses, a $0.2 million increase in legal
    expenses and a $0.3 million increase in facility related
    expenses due to the leasing of our new corporate headquarters in
    March 2008.
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Interest
    Income/Expense
Interest income decreased to $158,000 in 2008 from $223,000 in
    2007 due to lower average cash and cash equivalent balances and
    lower yields on investments.
Interest expense increased to $278,000 in 2008 from $253,000 in
    2007 due to a full year of expense related to a term loan
    entered into in March 2007 for $2.5 million.
Liquidity
    and Capital Resources
Since our inception in 2005, we have devoted most of our cash
    resources to research and development and general and
    administrative activities primarily related to the development
    of Zelrix. We have financed our operations primarily with the
    proceeds of the sale of convertible preferred stock and
    convertible notes and borrowings under debt facilities. To date,
    we have not generated any revenues from the sale of products,
    and we do not anticipate generating any revenues from the sale
    of Zelrix until at least 2012. We have incurred losses and
    generated negative cash flows from operations since inception.
    As of December 31, 2009, our principal sources of liquidity
    were our cash and cash equivalents, which totaled
    $3.9 million. Our working capital was $1.5 million as
    of December 31, 2009.
Equity
    Financings
From inception through December 31, 2009, we have received
    net proceeds of $48.0 million from the sale of convertible
    preferred stock and convertible notes. The various issuances of
    our preferred stock are described in more detail under
    "— Critical Accounting Policies and Use of
    Estimates — Stock-Based Compensation."
Debt
    Facilities
As of December 31, 2009, we had $0.8 million of debt
    outstanding under a term loan that we entered into in 2007. In
    April 2010, we received gross proceeds of $10.1 million
    from the sale of the April 2010 Convertible Notes. These notes
    bear interest at 8% per year and are due on December 31,
    2010, if not converted prior to such date. The outstanding
    principal balance and accrued interest on the April 2010
    Convertible Notes will convert into shares of common stock upon
    the closing of this offering at a conversion price equal to 80%
    of the price to the public in this offering.
In May 2010, we entered into the May 2010 Loan Facility to fund
    our working capital requirements. Under the May 2010 Loan
    Facility, $5.0 million was advanced on the closing date,
    which we refer to as the Term A Loan, and, upon our receipt of
    at least $30.0 million in unrestricted net cash proceeds
    from the sale of equity securities, including pursuant to this
    offering, the private sale of equity or convertible debt
    securities, or upfront payments from a joint venture or
    partnership, we will have a
12-month
period during which we may request an additional
    $6.0 million in funding, which we refer to as the Term B
    Loan. We refer to the Term A and Term B Loans together as the
    Term Loans. The funding of the Term B Loan is subject to our
    compliance with the terms of the May 2010 Loan Facility,
    including the continued accuracy of our representations and
    warranties contained therein, and is at the lenders' sole
    discretion. The Term Loans have a scheduled maturity date in
    August 2013. The May 2010 Loan Facility is secured by
    substantially all of our assets, excluding intellectual
    property, which is subject to a negative pledge prohibiting the
    granting of liens thereon to any third party.
We used $0.4 million of the proceeds from the Term A Loan
    to repay all outstanding amounts owed under the term loan that
    we entered into in 2007. Amounts outstanding under the May 2010
    Loan Facility bear interest at LIBOR plus 8.75% per year, with a
    LIBOR floor of 3%. Until June 2011, the Term Loans only require
    monthly payments of interest. Thereafter, the Term Loans will
    amortize on a straight line basis, and we will be required to
    pay 27 equal monthly installments of principal and interest
    through the maturity date.
The May 2010 Loan Facility does not contain any financial
    covenants, although it does contain operating covenants,
    including covenants restricting our ability to incur additional
    indebtedness, pay dividends or other distributions, effect a
    sale of any part of our business and merge with or acquire
    another company. The May
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2010 Loan Facility also includes customary events of default,
    including upon the occurrence of a payment default, a covenant
    default, a material adverse change and our insolvency. Further,
    the May 2010 Loan Facility provides for a three day cure period
    for a breach of payment obligations other than payment of
    principal and interest, for which no cure period is provided. A
    ten day cure period, which may be extended to up to 30 days
    in certain circumstances, is also provided for defaults that do
    not (1) constitute an event of default under the May 2010
    Loan Facility, (2) breach specified affirmative covenants
    or (3) breach a negative covenant.
In connection with the Term A Loan, we issued the lenders
    warrants to purchase 255,376 shares of Series B
    preferred stock at an exercise price of $0.93 per share.
    The number of shares exercisable under the warrant will
    automatically increase by up to an additional
    306,452 shares of Series B preferred stock if the Term
    B Loan is funded in full. The warrants have a ten year exercise
    period and include a put option right in favor of the lenders in
    connection with certain major corporate events, events of
    default and maturity of the May 2010 Loan Facility. Upon the
    closing of this offering, in accordance with their terms, the
    put option right will terminate and the outstanding warrants
    will automatically become exercisable for 255,376 shares of
    common stock at an exercise price of $0.93 per share of common
    stock.
Future
    Capital Requirements
We expect that the net proceeds from this offering and our
    existing cash and cash equivalents will be sufficient to fund
    our operations and capital requirements, including payment
    obligations under our outstanding debt, for at least the next
months. We believe that these available
    funds will be sufficient to complete the development of Zelrix
    through FDA approval and to fund the expected commercial launch
    of Zelrix in the U.S. in the first half of 2012. However,
    it is difficult to predict our spending relative to Zelrix and
    our other product candidates prior to obtaining FDA approval.
    Moreover, changing circumstances may cause us to expend cash
    significantly faster than we currently anticipate, and we may
    need to spend more cash than currently expected because of
    circumstances beyond our control.
Our expectations regarding future cash requirements do not
    reflect the potential impact of any future acquisitions,
    mergers, dispositions, joint ventures or investments that we
    make in the future. We have no current understandings,
    agreements or commitments for any material acquisitions or
    licenses of any products, businesses or technologies. We may
    need to raise substantial additional capital in order to engage
    in any of these types of transactions.
We expect to continue to incur substantial additional operating
    losses for at least the next several years as we continue to
    develop our product candidates and seek marketing approval and,
    subject to obtaining such approval, the eventual
    commercialization of Zelrix and our other products candidates.
    If we obtain marketing approval for Zelrix, we will incur
    significant sales, marketing and outsourced manufacturing
    expenses. In addition, we expect to incur additional expenses to
    add operational, financial and information systems and
    personnel, including personnel to support our planned product
    commercialization efforts. We also expect to incur significant
    costs to comply with corporate governance, internal controls and
    similar requirements applicable to us as a public company
    following the closing of this offering.
Our future use of operating cash and capital requirements will
    depend on many forward-looking factors, including the following:
•
The timing of our submission to the FDA, and outcome of the
    FDA's review, of the NDA for Zelrix;
•
The extent to which the FDA may require us to perform additional
    clinical trials for Zelrix;
•
The timing and success of this offering;
•
The costs of our commercialization activities for Zelrix, if it
    is approved by the FDA;
•
The cost of purchasing manufacturing and other capital equipment
    for our potential products;
•
The scope, progress, results and costs of development for our
    other product candidates;
•
The cost, timing and outcome of regulatory review of our other
    product candidates;
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•
The extent to which we acquire or invest in products, businesses
    and technologies;
•
The extent to which we choose to establish collaboration,
    co-promotion, distribution or other similar agreements for
    product candidates; and
•
The costs of preparing, submitting and prosecuting patent
    applications and maintaining, enforcing and defending
    intellectual property claims.
To the extent that our capital resources are insufficient to
    meet our future operating and capital requirements, we will need
    to finance our cash needs through public or private equity
    offerings, debt financings, corporate collaboration and
    licensing arrangements or other financing alternatives. The
    covenants under the May 2010 Loan Facility and the pledge of our
    assets as collateral limit our ability to obtain additional debt
    financing. We have no committed external sources of funds.
    Additional equity or debt financing or corporate collaboration
    and licensing arrangements may not be available on acceptable
    terms, if at all.
If we raise additional funds by issuing equity securities, our
    stockholders will experience dilution. Debt financing, if
    available, would result in increased fixed payment obligations
    and may involve agreements that include covenants limiting or
    restricting our ability to take specific actions, such as
    incurring additional debt, making capital expenditures or
    declaring dividends. Any debt financing or additional equity
    that we raise may contain terms, such as liquidation and other
    preferences, that are not favorable to us or our stockholders.
    If we raise additional funds through collaboration and licensing
    arrangements with third parties, it may be necessary to
    relinquish valuable rights to our technologies, future revenue
    streams or product candidates or to grant licenses on terms that
    may not be favorable to us.
Cash
    Flows
The following table summarizes our cash flows from operating,
    investing and financing activities for the years ended
    December 31, 2007, 2008 and 2009:
Year Ended December 31,
2007
2008
2009
(In thousands)
Statement of Cash Flows Data:
Total cash provided by (used in):
Operating activities
$
(8,629
)
$
(12,274
)
$
(13,568
)
Investing activities
(36
)
(5,627
)
(29
)
Financing activities
7,284
22,439
9,155
Increase (decrease) in cash and cash equivalents
$
(1,381
)
$
4,538
$
(4,442
)
Operating
    Activities
Net cash used in operating activities for the year ended
    December 31, 2009 was $13.6 million, an increase of
    $1.3 million from the year ended December 31, 2008.
    This increase was primarily due to a $3.2 million increase
    in research and development expenses for our pivotal
    Phase III clinical trial and our Phase III safety
    trials for Zelrix, partially offset by a $0.6 million
    decrease in manufacturing expenses and a $0.6 million
    decrease in preclinical development expenses, as described in
    more detail under "— Results of Operations."
    Net cash used in operating activities for the year ended
    December 31, 2008 was $12.3 million, an increase of
    $3.6 million from the year ended December 31, 2007.
    This increase was primarily due to the $2.2 million
    increase in operating expenses in 2008, as described in more
    detail under "— Results of Operations," and
    $0.7 million for prepaid clinical supplies that we
    purchased in 2008 for use in future clinical trials.
We expect cash used in operating activities to increase in 2010
    as compared to 2009 due to an expected increase in our operating
    losses associated with the Phase III safety trials for
    Zelrix and costs associated with the expected submission of an
    NDA for Zelrix during the fourth quarter of 2010 and the
    expected acceleration of our preclinical development programs.
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Investing
    Activities
Cash used in investing activities for the purchase of property
    and equipment was $29,000 in 2009, $127,000 in 2008 and $36,000
    in 2007. Additionally, in 2008 we expended $5.5 million in
    connection with our acquisition of a patent application utilized
    in Zelrix and a worldwide license in the field of migraine to
    additional intellectual property.
Financing
    Activities
Cash provided by financing activities for the year ended
    December 31, 2009 was $9.2 million, reflecting
    $10.1 million of net proceeds from the sale of
    Series B preferred stock, partially offset by scheduled
    debt repayments of $0.9 million.
Cash provided by financing activities for the year ended
    December 31, 2008 was $22.4 million, reflecting
    $23.2 million of net proceeds from the sale of
    Series B preferred stock, partially offset by scheduled
    debt repayments of $0.9 million.
Cash provided by financing activities for the year ended
    December 31, 2007 was $7.3 million, reflecting
    $5.0 million of net proceeds from the sale of Series B
    preferred stock and $2.4 million, net of issuance costs,
    from a term loan that we entered into in 2007, partially offset
    by scheduled debt repayments of $0.1 million.
Off-Balance
    Sheet Arrangements
We do not have any off-balance sheet arrangements, except for
    operating leases, or relationships with unconsolidated entities
    or financial partnerships, such as entities often referred to as
    structured finance or special purpose entities.
Contractual
    Obligations
The following table summarizes our contractual obligations as of
    December 31, 2009:
Payments Due by Period
2011 and
2013 and
2015 and
Contractual
    Obligations
(1)
Total
2010
2012
2014
Thereafter
(In thousands)
Debt
    obligations
(2)
$
818
$
818
—
—
—
Interest payments on debt
42
42
—
—
—
License maintenance
    fees
(3)
330
30
$
100
$
100
$
100
Operating lease obligations
1,143
346
708
89
—
$
2,333
$
1,236
$
808
$
189
$
100
(1)
This table does not include any contingent milestone or royalty
    payments that may become payable to third parties under license
    agreements because the timing and likelihood of such payments
    are not known.
(2)
This table does not reflect the $10.1 million outstanding
    principal balance under the April 2010 Convertible Notes and the
    $5.0 million outstanding principal balance under the May
    2010 Loan Facility. Outstanding principal and accrued interest
    under the April 2010 Convertible Notes automatically convert
    into shares of common stock upon the closing of this offering.
    The terms of the repayment of the May 2010 Loan Facility are
    described in more detail under "— Liquidity and
    Capital Resources — Debt Facilities."
(3)
Under an agreement with Penn, we are required to pay annual
    license maintenance fees up to $50,000 until the first
    commercial sale of the first licensed product. In 2010, the
    annual fee is $30,000. After 2010, the annual fee is $50,000.
    Because we cannot currently estimate when the first sale of the
    licensed product will occur, we have shown payments only through
    2016.
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In addition to the contractual commitments reflected in the
    table above, we have agreed to pay Penn aggregate milestone
    payments of up to $950,000, per licensed product, upon the
    achievement of specified development and regulatory milestones
    related to each licensed product that contains ropinirole and
    other specified active ingredients, including the active
    ingredients in NP201 and NP202, and royalties in the low single
    digits on worldwide net sales of such licensed products. We and
    Penn have agreed to negotiate the milestone payments and
    royalties payable for each licensed product that contains an
    active ingredient other than those currently specified in the
    agreement. We are unable to determine the timing of the
    achievement of these milestones or whether and when we will
    commercialize and generate any sales for a licensed product.
    Also, the terms of our agreement with Penn requires that we
    expend at least $250,000 annually towards the development and
    commercialization of licensed products, until the first
    commercial sale of the first licensed product.
We have also entered into a license agreement with SurModics
    under which we have agreed to pay SurModics aggregate milestone
    payments of up to $4.75 million upon the first achievement
    of specified development, regulatory and sales level milestones
    related to the first clinical indication approved by a
    regulatory authority for NP201. We must also pay an additional
    single milestone payment upon regulatory approval of each
    additional clinical indication for NP201 and royalties in the
    low single digits on worldwide net sales of commercial product.
    We are unable to determine the timing of the achievement of
    these milestones or whether and when we will commercialize and
    generate any sales for a licensed product.
Recent
    Accounting Pronouncements
We have adopted new accounting guidance on fair value
    measurements effective January 1, 2008, for financial
    assets and liabilities. In addition, effective January 1,
    2009, we adopted this guidance as it relates to nonfinancial
    assets and liabilities that are not recognized or disclosed at
    fair value in the financial statements on at least an annual
    basis. This guidance defines fair value as the price that would
    be received to sell an asset or paid to transfer a liability,
    referred to as the exit price, in an orderly transaction between
    market participants at the measurement date. The guidance
    outlines a valuation framework and creates a fair value
    hierarchy in order to increase the consistency and comparability
    of fair value measurements and the related disclosures. The
    adoption of this guidance did not have a material impact on our
    financial statements.
In June 2008, the Financial Accounting Standards Board, or FASB,
    issued new guidance related to assessing whether an
    equity-linked financial instrument (or embedded feature) is
    indexed to an entity's own stock for the purposes of
    determining whether such equity-linked financial instrument (or
    embedded feature) is subject to derivative accounting. We
    adopted this new guidance effective January 1, 2009. The
    adoption of this guidance did not have a material impact on our
    financial statements.
In May 2009, the FASB issued a new standard regarding subsequent
    events. The standard provides guidance on management's
    assessment of subsequent events and incorporates this guidance
    in accounting literature. The guidance is effective
    prospectively for interim and annual periods ending after
    June 15, 2009. We adopted this guidance beginning with the
    interim period ended June 30, 2009. The adoption of this
    guidance did not have a material impact on our financial
    statements.
In April 2009, the FASB issued a staff position requiring fair
    value disclosures in both interim and annual financial
    statements in order to provide more timely information about the
    effects of current market conditions on financial instruments.
    The guidance is effective for interim and annual periods ending
    after June 15, 2009. We adopted this guidance beginning
    with the issuance of our September 30, 2009 financial
    statements. The adoption of this guidance did not have a
    material impact on our financial statements.
In June 2009, the FASB Accounting Standards Codification, or
    ASC, was issued, effective for financial statements issued for
    interim and annual periods ending after September 15, 2009.
    The ASC supersedes literature of the FASB, Emerging Issues Task
    Force and other sources. The ASC did not change
    U.S. generally accepted accounting principles. The adoption
    of this guidance did not have a material impact on our financial
    statements.
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Quantitative
    and Qualitative Disclosures about Market Risk
The primary objective of our investment activities is to
    preserve our capital to fund operations. We also seek to
    maximize income from our investments without assuming
    significant risk. Our exposure to market risk is confined to our
    cash and cash equivalents. As of December 31, 2009, we had
    cash and cash equivalents of $3.9 million. We do not engage
    in any hedging activities against changes in interest rates.
    Because of the short-term maturities of our cash and cash
    equivalents, we do not believe that an increase in market rates
    would have any significant impact on the realized value of our
    investments, but may increase the interest expense associated
    with our debt.
We have no operations outside the U.S. We do, however, have
    an agreement with a manufacturer in Germany whereby the
    manufacturer provides services to us related to the production
    and assembly of Zelrix. Because of this agreement, we are
    subject to the fluctuations in the value of the Euro. We paid
    $2.1 million in 2008 and $1.2 million in 2009 to this
    vendor. We are currently in the process of transferring these
    manufacturing activities to the U.S. and anticipate that
    all of our commercial manufacturing activities will be located
    in the U.S. following this transfer, thereby substantially
    eliminating our exposure to the fluctuation in the Euro.
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BUSINESS
Overview
We are a specialty pharmaceutical company focused on the
    development and commercialization of branded therapeutics for
    diseases of the central nervous system, including neurological
    and psychiatric disorders. Our most advanced product candidate,
    Zelrix, is an active, single-use transdermal sumatriptan patch
    that we are developing for the treatment of acute migraine.
    Zelrix uses our proprietary SmartRelief technology. We
    successfully completed a pivotal Phase III clinical trial
    for Zelrix in July 2009 and expect to submit a New Drug
    Application, or NDA, to the United States Food and Drug
    Administration, or FDA, in the fourth quarter of 2010. Before we
    submit our NDA, we must complete two ongoing pharmacokinetic
    trials in healthy subjects and obtain interim data from two
    ongoing open label Phase III long-term safety trials, or
    our Phase III safety trials. Subject to the approval of our
    NDA, we plan to build our own specialty sales force in the
    U.S. to launch Zelrix. We have two other proprietary
    product candidates in preclinical development that address large
    market opportunities, NP201 for the continuous symptomatic
    treatment of Parkinson's disease and NP202 for the
    long-term treatment of schizophrenia and bipolar disorder.
Migraine affects approximately 28 million people in the
    U.S. In 2009, according to IMS Health Inc., or IMS,
    U.S. sales of prescription products for migraine exceeded
    $2 billion, over 96% of which were for a class of
    medication called triptans.
During a migraine, most migraine patients, or migraineurs,
    suffer from one or more significant gastrointestinal problems,
    which include nausea, vomiting and a compromised ability to
    digest, known as decreased gastric motility. Nausea and vomiting
    impede the use of oral medications, while reduced gastric
    motility can result in inconsistent efficacy. According to a
    survey with over 500 respondents conducted by the National
    Headache Foundation in 2008, 90% of migraineurs have experienced
    nausea with a migraine and 59% of migraineurs have experienced
    vomiting with a migraine. In this survey, 48% of respondents who
    ever experienced nausea or vomiting with a migraine reported
    that the nausea or vomiting had a moderate to major impact on
    when or how they take migraine medications.
The American Academy of Neurology, or AAN, guidelines recommend
    a non-oral route of administration for patients who experience
    nausea or vomiting as significant symptoms. Despite this
    recommendation and the prevalence of nausea and vomiting, IMS
    reported that non-oral formulations comprised only 4% of triptan
    units sold in the U.S. in 2009. Current non-oral migraine
    treatments, limited to nasal spray and injectable formulations,
    are often poorly tolerated and associated with frequent adverse
    events. There is no patch approved for the treatment of
    migraine. We believe that Zelrix will provide an attractive
    alternative to migraineurs, especially those experiencing nausea
    and vomiting, inconsistent relief from oral treatments or
    adverse events associated with triptan use.
In addition to Zelrix, we are developing other product
    candidates that target opportunities where we believe improved
    medication delivery can address significant central nervous
    system medical needs. Based on preclinical testing, we believe
    that NP201 and NP202, both of which use our long-acting
    delivery, or LAD, technology, will be able to deliver stable
    medication levels for multiple months with a single
    administration.
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Our
    Product Candidates
The following table summarizes key information about our
    existing product candidates. We hold worldwide commercialization
    rights to all of our product candidates.
Product
Candidate
Indication(s)
Description
Development Status
Zelrix
Acute migraine
Active, single-use sumatriptan
•
Expected NDA submission during fourth quarter of 2010.
transdermal patch
•
Pivotal Phase III clinical trial completed.
•
Two ongoing Phase III safety trials.
•
Two ongoing pharmacokinetic trials in healthy subjects.
NP201
Parkinson's disease
Ropinirole two-month implant
•
Expected Investigational New Drug submission during first half
    of 2011.
•
Preclinical proof of concept completed.
NP202
Schizophrenia and bipolar disorder
Atypical antipsychotic three-month implant
•
Expected Investigational New Drug submission in 2012.
•
Prototype development in progress.
Migraine
    Market
Overview
Migraine is a debilitating neurological disease that affects
    approximately 28 million people in the U.S. Symptoms
    of migraine include moderate to severe headache pain, nausea and
    vomiting, photophobia, or abnormal sensitivity to light, and
    phonophobia, or abnormal sensitivity to sound. Most migraines
    last between four and 24 hours, but some last as long as
    three days. According to an article by Dr. Richard Lipton
    published in 2007 in
Neurology
, a peer-reviewed medical
    journal, 63% of migraineurs experience between one and four
    migraines per month, and 31% of migraineurs experience three or
    more migraines per month. Migraineurs are limited in their daily
    function during a migraine and often seek dark, quiet
    surroundings until the migraine has passed.
According to an article, also by Dr. Richard Lipton,
    published in 2001 in
Headache
, a peer-reviewed medical
    journal, which we refer to as Lipton, over 18% of women and over
    6% of men in the U.S. experience migraines. Lipton further
    reported that migraines are most common in the working
    population, from 25 to 55 years old, and can be
    sufficiently serious to cause migraineurs to miss work or
    school. According to an article by Dr. Kevin Hawkins
    published in 2008 in
Headache
, estimated direct medical
    expenditures for migraine, including outpatient costs,
    pharmaceutical costs, inpatient costs and emergency department
    costs, exceed $11.0 billion per year in the U.S.
According to IMS, over 13 million prescriptions for
    medications indicated for acute migraine were filled in the
    U.S. in 2009. More than 90% of these prescriptions were for
    triptans. Triptan sales in the U.S. in 2009 exceeded
    $2.0 billion, with approximately 123 million
    individual units sold.
Migraine-Associated
    Nausea and Vomiting
Symptoms other than headache pain contribute significantly to
    the disability caused by acute migraine. In particular, nausea
    and vomiting during a migraine can be severe and incapacitating.
    According to an article by Dr. Stephen Silberstein
    published in 1995 in
Headache
, 92% of migraineurs have
    experienced nausea at least once during a migraine, and 56% of
    these migraineurs experience nausea in a majority of migraines.
    Silberstein also reported that 68% of migraineurs have
    experienced vomiting at least once during a migraine, and 32% of
    these migraineurs experience vomiting in a majority of
    migraines. Accordingly, these data indicate
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that 52% of all migraineurs experience nausea in a majority of
    migraines and 22% of all migraineurs experience vomiting in a
    majority of migraines.
Treatment
    of Acute Migraine
The FDA has approved acute migraine prescription medications in
    four classes:
•
Triptans, including a triptan combination;
•
Ergotamines and dihydroergotamine, or DHE;
•
Analgesic combinations; and
•
A non-steroidal anti-inflammatory drug, or NSAID, which has not
    yet commercially launched.
Currently, triptans constitute the most prescribed class of
    medication for the treatment of acute migraine in the
    U.S. Sumatriptan, approved by the FDA in 1992, is the most
    widely prescribed triptan, according to IMS.
The following table summarizes U.S. unit and dollar sales
    information for 2009, by product class, for prescription
    products indicated for the treatment of acute migraine, based on
    IMS data:
2009 Units
Route of
Sold
(1)
2009 Sales
Product Class
Key Product Brands (Drug)
Administration
(% Total)
(% Total)
Triptan
•
Generic sumatriptan and
Imitrex
Tablet, orally disintegrating
122.9 million
(69.2%)
$2.1 billion
(96.8%)
•
Maxalt (rizatriptan)
tablet, nasal
•
Zomig (zolmitriptan)
spray, injection
•
Relpax (eletriptan)
•
Treximet (sumatriptan/naproxen)
Analgesic Combination
•
Epidrin, Midrin, Migrazone and generics (isometheptene mucate,
    dichloralphenazone, acetaminophen)
Capsule
48.4 million
(27.2%)
$15.0 million
(0.7%)
•
Prodrin
(
acetaminophen, caffeine, isometheptene)
Ergotamine
•
Migranal
(dihydroergotamine)
Nasal spray, injection,
6.4 million
(3.6%)
$54.4 million
(2.5%)
•
DHE-45 and generics
tablet
(dihydroergotamine)
suppository
•
Cafergot and generics (dihydroergotamine, caffeine)
(1)
A unit represents a single dose of each medication.
As of December 31, 2009, there were seven commercially
    available triptan medications in the U.S. utilizing a
    variety of routes of administration: tablet, orally
    disintegrating tablet, nasal spray and injection. According to
    IMS, oral triptans, in tablet and orally disintegrating tablet
    formulations, accounted for 96% of triptan units sold in the
    U.S. in 2009, while non-oral triptans, in nasal spray and
    injectable formulations, accounted for only 4% of such triptan
    units.
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Limitations
    of Current Treatments for Acute Migraine
We believe that most marketed migraine therapies are subject to
    significant limitations, including:
•
Administration challenges from nausea and
    vomiting.
Patients with nausea often delay taking
    medication until the nausea subsides, may skip treatment
    altogether or, in extreme cases, force themselves to vomit.
    According to a survey conducted by the National Headache
    Foundation in 2008, 48% of respondents who ever experienced
    nausea or vomiting with a migraine reported that the nausea or
    vomiting had a moderate to major impact on when or how they take
    migraine medications. In the same survey, some migraineurs
    reported they delay taking migraine medication until nausea
    subsides, while others reported they avoid taking their migraine
    medication altogether because of nausea or vomiting. This runs
    contrary to well-accepted clinical practice, which stresses the
    importance of treating migraines without delay.
•
Poor or inconsistent relief.
According to a
    2001 article by Dr. Michel Ferrari published in
The
    Lancet
, a peer-reviewed medical journal, clinical trials
    have demonstrated that at least 40% of migraineurs fail to
    respond consistently to oral triptans. Based on data from
    multiple published third party clinical trials, we believe
    patients' failure to respond consistently results from a
    variety of causes, including low and inconsistent absorption of
    oral medication because of reduced gastric motility.
•
Fear of adverse events.
Many patients avoid or
    delay treatment because they fear adverse events, including
    triptan adverse events. Triptan adverse events include chest
    tightness, chest heaviness, numbness of the extremities,
    paresthesias, or tingling, and panic. The incidence of triptan
    adverse events is 47% for injection and up to 14% for oral
    sumatriptan. According to a 2003 article by Dr. R. Michael
    Gallagher published in
Headache
, 67% of migraine patients
    who use prescription migraine medication reported that they had
    delayed or avoided taking a prescription migraine medication due
    to concerns about adverse events.
As a result of these limitations, we believe that many
    migraineurs are dissatisfied with currently marketed
    medications. According to an article by Dr. Marcelo Bigal
    published in 2007 in
Headache
, over 80% of patients
    currently using a triptan have used a different triptan in the
    past and over 48% have used two or more different triptans or
    different formulations of the same triptan in the past. Bigal
    also reported that 79% of migraineurs stated that they would try
    a new medication.
Our
    Solution: Zelrix
We designed Zelrix specifically to overcome these limitations.
    Zelrix is an active, single-use sumatriptan transdermal patch
    that is applied during a migraine. Zelrix provides controlled
    delivery of sumatriptan through a non-oral route of
    administration. This approach is consistent with the AAN
    guidelines that recommend non-oral therapies for migraineurs who
    experience nausea or vomiting as significant migraine symptoms.
Zelrix
    Design
Zelrix utilizes SmartRelief, our proprietary transdermal
    delivery technology. SmartRelief consists of a controlled
    delivery technology that uses a mild electrical current to
    actively deliver medication through the skin in a process called
    iontophoresis. To use Zelrix, a patient applies the patch to the
    upper arm or thigh and presses a button. A small light on the
    patch indicates that the patch is delivering medication. Zelrix
    actively delivers sumatriptan for four hours. The patient may
    remove the patch whenever convenient after the dosing period.
Potential
    Benefits of Zelrix
We believe that Zelrix overcomes the limitations of currently
    marketed migraine medications by:
•
Circumventing nausea and vomiting.
Because
    Zelrix is administered transdermally, we believe that it will be
    an attractive alternative for migraineurs suffering from nausea
    or vomiting who might otherwise delay or avoid taking medication.
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•
Increasing consistency of response.
Zelrix
    does not depend on gastrointestinal absorption. As a result, we
    believe that Zelrix will provide more consistent relief than
    oral triptans.
•
Minimizing triptan adverse events.
Zelrix
    tightly controls the delivery of sumatriptan. As a result and
    based on our clinical trial experience, we believe that Zelrix
    use will result in a low incidence of triptan adverse events
    while effectively treating migraine.
Patches have been used in the U.S. for decades for the
    transdermal delivery of various medications for a wide variety
    of indications, including nicotine addiction, birth control and
    pain relief. Because of the potential benefits of Zelrix and the
    familiarity of physicians and patients with patches, we believe
    that this route of administration of medication will be readily
    accepted by migraineurs.
Our
    Zelrix Development Program
We expect to submit an NDA for Zelrix to the FDA in the fourth
    quarter of 2010 under Section 505(b)(2) of the Federal
    Food, Drug, and Cosmetic Act, or FDCA. In addition to our Zelrix
    data, under Section 505(b)(2), our NDA submission will rely
    on existing published data and the FDA's previous finding
    of the safety and effectiveness of Imitrex. Before submitting
    our NDA, we are required to complete our two ongoing
    pharmacokinetic trials in healthy subjects and obtain interim
    data from our two Phase III safety trials as described
    below.
Our clinical trial program for Zelrix consists of:
•
Six completed Phase I clinical trials;
•
One completed pivotal Phase III clinical trial;
•
Two ongoing pharmacokinetic trials in healthy subjects; and
•
Two ongoing Phase III safety trials.
We established the primary and key secondary efficacy endpoints
    for our pivotal Phase III clinical trial for Zelrix based
    on discussions with the FDA. We believe, also based on our
    discussions with the FDA, that we are not required to conduct a
    second pivotal Phase III clinical trial for Zelrix.
As part of our NDA submission for Zelrix, the FDA indicated that
    it will require that we provide long-term clinical data for
    patients treated for six months and patients treated for one
    year. We plan to conduct an interim analysis of data from
    patients enrolled in our Phase III safety trials in order
    to be able to include these required data in our NDA submission.
In addition, because Zelrix will be applied to the skin, the FDA
    requested that we conduct a skin sensitization study. We are
    collecting skin sensitization data in our two Phase III
    safety trials. Because we are collecting these data, we
    requested a waiver from the FDA with respect to conducting a
    separate skin sensitization study. If the FDA does not grant
    this waiver, we will conduct the separate skin sensitization
    study prior to submitting our NDA.
The FDA also requested that we provide data in our NDA regarding
    an
in vitro
analytical testing method for Zelrix to
    confirm the amount of medication delivered. An
in vitro
analytical test is usually conducted on artificial tissue.
    To date, we have not successfully developed this test because
    Zelrix is designed to operate only on living tissue. We are
    working with the FDA to develop acceptable alternatives.
Pivotal
    Phase III Clinical Trial
Our pivotal Phase III clinical trial for Zelrix was a
    randomized, double-blind, placebo-controlled trial designed to
    compare the safety and efficacy of Zelrix to an active
    transdermal placebo patch in patients with acute migraine. The
    inclusion criteria for the trial required that, in the three
    months prior to being randomized into the trial, patients
    generally had experienced moderate to severe pain during a
    migraine, had experienced migraines for at least one year and
    had reported from one to six migraines per month. Patients
    remained in the
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trial until they treated one migraine with a patch or two months
    after randomization into the trial, whichever occurred first.
The primary efficacy endpoint for the trial was the proportion
    of patients treated with Zelrix who were headache pain free at
    two hours after patch application compared to patients treated
    with placebo. Using a standard migraine diary, patients rated
    their baseline headache pain severity immediately prior to
    applying a patch using a four-point scale, with zero for no
    pain, one for mild pain, two for moderate pain and three for
    severe pain. Patients applied a patch only if they rated their
    baseline headache pain severity as a two (moderate) or three
    (severe). Patients also rated the presence or absence of nausea,
    photophobia and phonophobia immediately prior to applying a
    patch. After patch application, patients recorded headache pain
    severity and presence or absence of nausea, photophobia and
    phonophobia at 0.5, 1, 2, 3, 4, 6, 12 and 24 hours.
Pivotal trials for all previously FDA approved triptans have
    used pain relief, which means reduction from severe or moderate
    pain to mild or no pain, as a primary efficacy endpoint. We
    believe pain free, which required the patient to record zero
    (none) with respect to headache pain severity, is a more
    exacting standard than pain relief.
The key secondary endpoints for our pivotal Phase III
    clinical trial were:
•
The proportion of patients treated with Zelrix who were nausea
    free at two hours after patch application compared to patients
    treated with placebo;
•
The proportion of patients treated with Zelrix who were
    photophobia free at two hours after patch application compared
    to patients treated with placebo; and
•
The proportion of patients treated with Zelrix who were
    phonophobia free at two hours after patch application compared
    to patients treated with placebo.
Safety assessments in the trial included:
•
Adverse event assessments;
•
Investigator skin irritation examination scores; and
•
Subject skin irritation self-examination scores.
In this trial, we treated 469 patients at 38 investigative
    sites in the U.S. The patient demographics of this trial
    were similar to those reported in other large scale migraine
    clinical trials. The Zelrix patient population included 197
    women and 37 men. The placebo patient population included 201
    women and 34 men. Each patient population had a mean age of
    approximately 41 years.
We completed this trial in July 2009. Zelrix met each of the
    primary and key secondary endpoints with statistical
    significance. The following table summarizes the analysis of the
    primary endpoint, headache pain free at two hours and selected
    secondary endpoints:
Zelrix
Placebo
ITT
    Analysis
(1)
Patients
Patients
Symptom Two Hours After Patch Application —
    LOCF
(2)
226 Total
%
228 Total
%
% Difference
p
value
(3)
Headache pain free
40
17.7
%
21
9.2
%
8.5
%
0.0092
Headache pain relief
119
52.9
65
28.6
24.3
<0.0001
Nausea free
189
83.6
144
63.2
20.4
<0.0001
Photophobia free
116
51.3
83
36.4
14.9
0.0028
Phonophobia free
125
55.3
89
39.0
16.3
0.0002
(1)
Intent-to-Treat
Analysis: Patients are analyzed in the groups to which they were
    randomized, regardless of whether they received or adhered to
    the allocated treatment. ITT analysis provides unbiased
    comparisons among the treatment groups and is the primary
    statistical analysis used by the FDA.
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(2)
Last Observation Carried Forward: Last observation carried
    forward is a method to address missing data. For each
    individual, missing values are replaced by the last observed
    value of that variable.
(3)
The results of a clinical trial are statistically significant if
    they are unlikely to have occurred by chance. We determined the
    statistical significance of the trial results based on a widely
    used, conventional statistical method that establishes the
p
value of the results. The FDA requires a
p
value of
    0.05 or less to demonstrate statistical significance.
In addition to achieving statistically significant results for
    the primary and key secondary endpoints, Zelrix also
    demonstrated statistically significant results for a number of
    other secondary endpoints, including:
•
Headache pain relief within one hour.
Zelrix
    demonstrated statistically significant headache pain relief at
    one hour after patch application, with 29% of Zelrix patients
    experiencing headache pain relief as compared to 19% of placebo
    patients
(p = 0.0123)
. While not statistically
    significant, 38% more Zelrix patients than placebo patients
    experienced pain relief in 30 minutes, 29 of 226 Zelrix patients
    compared to 21 of 228 placebo patients.
•
Sustained pain relief.
In a retrospective
    analysis we conducted, for those patients who experienced pain
    relief at two hours, Zelrix demonstrated statistically
    significant sustained pain relief at each measurement point from
    two hours through 24 hours after patch application, with
    34% of Zelrix patients experiencing sustained pain relief as
    compared to 21% of placebo patients
(p = 0.0015)
. For
    purposes of this analysis, we defined patients with sustained
    relief as patients with no pain or mild pain at all measurement
    points from two hours through 24 hours after patch
    application and who had not taken rescue medication.
•
Freedom from nausea within one hour.
Zelrix
    demonstrated statistically significant freedom from nausea at
    one hour after patch application, with 71% of Zelrix patients
    being nausea free as compared to 58% of placebo patients
(p =
    0.0251)
.
•
Freedom from migraine.
Zelrix demonstrated
    statistically significant freedom from migraine at two hours
    after patch application, with 16% of Zelrix patients being
    migraine free as compared to 8% of placebo patients
(p =
    0.0135)
. Freedom from migraine means the absence of
    headache, nausea, photophobia and phonophobia.
•
Decreased use of rescue medication.
Zelrix
    demonstrated a statistically significant difference in the
    number of patients that used pain or nausea rescue medication
    during the 24 hours after patch application, with 40% of
    Zelrix patients using rescue medication as compared to 60% of
    placebo patients
(p <0.0001)
. Rescue medications are
    any additional medications taken by the patient to relieve
    symptoms of migraine after patch application.
A total of 117 patients, or 50% of patients, receiving
    Zelrix and 103 patients, or 44% of patients, receiving the
    placebo patch experienced at least one treatment-emergent
    adverse event, which is an event that was not present prior to
    patch application or a worsening of either the intensity or
    frequency of a symptom following patch application. The most
    common adverse events reported in the trial among patients
    receiving Zelrix related to the application site and included
    application site pain and application site tingling. There were
    no deaths or serious adverse events in this trial. Zelrix
    demonstrated skin tolerability typical of other transdermal
    products, with mild to moderate redness generally present upon
    patch removal.
Patients receiving Zelrix exhibited a low incidence of triptan
    adverse events, with 1.7% experiencing atypical sensations and
    1.7% experiencing pain and other pressure sensations. Patients
    described all of these adverse events to be of mild intensity,
    except for one adverse event, which a patient described as
    "cold sensation head" of moderate intensity.
Ongoing
    Open Label Phase III Long-Term Safety Trials
We are conducting two Phase III safety trials, both of
    which we initiated in the first quarter of 2009, to evaluate the
    safety of Zelrix in the treatment of acute migraine over
    12 months. Patient eligibility requirements in these trials
    are similar to the requirements for our completed pivotal
    Phase III clinical trial. These two trials
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are fully enrolled with a total of 714 patients at 34
    investigative sites in the U.S. As of April 30, 2010,
    we had treated over 5,000 migraines with Zelrix in these trials.
As part of our NDA submission for Zelrix, the FDA indicated that
    it will require that we provide long-term clinical data for
    patients treated for six months and patients treated for one
    year. We plan to conduct an interim analysis of data from
    patients enrolled in our Phase III safety trials in order
    to be able to include these required data in our NDA.
Phase
    I Clinical Trials
We have completed six Phase I clinical trials of Zelrix. In four
    of these Phase I clinical trials, we evaluated Zelrix prototypes
    and design characteristics in healthy adult subjects to
    establish proof of concept. In the fifth Phase I clinical trial,
    we compared the pharmacokinetics of Zelrix to oral Imitrex in
    patients with migraine. Pharmacokinetics refers to a drug's
    absorption, distribution and metabolism in, and excretion from,
    the body and measures, among other things, bioavailability of a
    drug, or concentration of drug in the plasma.
In the sixth Phase I clinical trial, we compared the
    pharmacokinetics of Zelrix to three routes of administration of
    Imitrex in healthy adult subjects: 20 mg nasal spray,
    100 mg tablet and 6 mg injection. As intended,
    treatment with Zelrix resulted in sumatriptan plasma levels
    between the levels of 20 mg Imitrex nasal spray and the
    100 mg Imitrex oral tablet. After Zelrix application,
    sumatriptan absorption in plasma reached therapeutic levels
    within 30 minutes. In addition, in this trial, treatment with
    Zelrix resulted in less variability in sumatriptan plasma levels
    than either 100 mg oral tablet or 20 mg nasal spray
    formulations, supporting our belief that transdermal
    administration provides more predictable delivery by bypassing
    absorption through the gastrointestinal system.
At the time of patch removal, more than 75% of subjects had no
    or minimal skin redness, and within 48 hours following
    patch removal, all subjects had no or minimal skin redness. We
    also evaluated adverse events by different routes of
    administration. The trial categorized adverse events as either
    "Atypical Sensations" or "Pain and Pressure
    Sensations." The following table sets forth each of these
    adverse events by category for each route of administration:
Summary of Triptan Adverse Events
Adverse Event
Number of Subjects Reporting Event (%)
Nasal
Injection
Oral
Spray
Zelrix
Categorization
Preferred Term
(23 Subjects)
(23 Subjects)
(23 Subjects)
(17 Subjects)
Atypical Sensation
Any adverse events
14
(60.9
%)
2
(8.7
%)
—
—
Burning sensation mucosal
3
(13.0
%)
—
—
—
Ear discomfort
1
(4.3
%)
—
—
—
Facial pain
1
(4.3
%)
—
—
—
Feeling hot
2
(8.7
%)
—
—
—
Flushing
6
(26.1
%)
—
—
—
Head discomfort
1
(4.3
%)
1
(4.3
%)
—
—
Hot flush
3
(13.0
%)
1
(4.3
%)
—
—
Sensation of heaviness
1
(4.3
%)
—
—
—
Sensation of pressure
1
(4.3
%)
—
—
—
Pain and Pressure Sensation
Any adverse events
2
(8.7
%)
4
(17.4
%)
—
—
Neck pain
—
2
(8.7
%)
—
—
Sensation of heaviness
1
(4.3
%)
1
(4.3
%)
—
—
Sensation of pressure
1
(4.3
%)
1
(4.3
%)
—
—
In subjects treated with oral and injectable sumatriptan, all of
    the triptan adverse events occurred in subjects with sumatriptan
    plasma levels exceeding 50 nanograms per milliliter. In this
    trial, the maximum
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sumatriptan plasma level observed for subjects receiving Zelrix
    reached therapeutic levels, but did not exceed 50 nanograms per
    milliliter. We believe the ability of Zelrix to control
    sumatriptan plasma levels within this dosing range explains why
    subjects receiving Zelrix in this trial did not experience
    triptan adverse events.
Ongoing
    Pharmacokinetic Trials in Healthy Subjects
We are conducting two additional pharmacokinetic trials in
    healthy subjects. One is designed to evaluate the
    pharmacokinetics of Zelrix in the young and elderly; the other
    is designed to evaluate the bioavailability of Zelrix. Each
    clinical trial will enroll approximately 60 subjects and must be
    completed prior to submitting our NDA.
Commercial
    Strategy
If Zelrix is approved by the FDA, we plan to build a commercial
    infrastructure to launch Zelrix in the U.S., including a
    specialty sales force of approximately 100 people. We
    expect to direct our marketing efforts at high potential
    prescribers of Zelrix, including neurologists, headache
    specialists and select other physicians. We believe a sales
    force of this size will enable us to address a significant
    portion of the commercial opportunity for Zelrix. We may seek to
    further penetrate the U.S. market in the future by
    expanding our sales force or through collaborations with other
    pharmaceutical or biotechnology companies. This would enable us
    to target additional physicians who are high prescribers of
    migraine medications.
Once we establish our commercial infrastructure, we may acquire
    additional products to market and sell or collaborate with
    pharmaceutical or biotechnology companies to market and sell
    their products using our sales force. We may also seek to
    commercialize Zelrix outside the U.S., although we currently
    plan to do so only with a collaborator.
Pipeline
    Products
In addition to migraine, we also seek to identify other market
    opportunities in central nervous system disorders for which
    improved medication delivery can address significant medical
    needs. Our current research and development pipeline consists of
    two preclinical product candidates, one for the treatment of
    Parkinson's disease and one for the treatment of
    schizophrenia and bipolar disorder.
NP201:
    Product candidate for the continuous symptomatic treatment of
    Parkinson's disease
Parkinson's disease is a progressive, degenerative disease
    characterized by movement symptoms such as tremor or trembling
    in the hands, arms, and legs; rigidity of the limbs and trunk;
    slowness of movement; and impaired balance and coordination.
    According to the Parkinson's Disease Foundation,
    Parkinson's disease affects about one million people in the
    U.S. and more than four million people worldwide. Although
    symptoms of Parkinson's disease can appear at any age, the
    average age of onset is 60.
The loss of neurons in the brain that help to control movement
    causes Parkinson's disease. These neurons produce dopamine,
    a neurotransmitter that transmits signals that control movement.
    Currently, no cure exists for Parkinson's disease.
    Symptomatic treatments rely on the replacement of dopamine
    through either levodopa, which the brain converts to dopamine,
    or dopamine agonists, which mimic dopamine. According to IMS,
    2009 sales of Parkinson's disease therapies in the U.S.,
    European Union and Japan totaled approximately $3.6 billion.
Multiple challenges complicate the treatment of Parkinson's
    disease. Intermittent dosing of oral medications leads to
    periods of "on" after dosing and periods of
    "off" as the medication wears off. During
    "on" periods, excessive levels of medication can
    produce adverse events, primarily abnormal movements. During
    "off" periods, low levels of medication lead to poor
    efficacy. In addition, Parkinson's disease is a progressive
    disease, which causes patients to become less responsive to
    their medication over time and more sensitive to excessive drug
    levels. Experts believe that intermittent dosing may exacerbate
    the progression of disease and result in more frequent and
    severe adverse events.
The majority of Parkinson's disease patients currently use
    oral medications that require administration one to three times
    per day, exposing the patient to varying medication levels. The
    intermittent dosing of oral
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medications further complicates treatment, as patients
    experience periods of "on" after dosing and periods of
    "off" as the medication wears off. Some scientists
    believe that intermittent dosing may hasten the progression of
    Parkinson's disease by causing harm to the remaining
    dopamine receptors. Multiple third party studies suggest that
    continuous medication delivery can alleviate the symptoms of
    Parkinson's disease without inducing the abnormal movements
    caused by too much medication.
Only two Parkinson's disease medications currently provide
    for continuous delivery, and neither is approved in the
    U.S. Duodopa is a levodopa gel marketed by Solvay S.A. that
    requires the surgical insertion of a tube into the
    patient's small intestine. APO-go is an injectable
    apomorphine marketed by Britannia Pharmaceuticals Limited that
    requires the patient to wear a pump around his or her waist.
    Because both APO-go and Duodopa are difficult to administer,
    they are generally reserved for complicated and difficult to
    control patients.
We designed NP201 to provide continuous delivery of
    Parkinson's disease medication in an easy to administer and
    tolerable dose formulation. NP201 consists of our LAD technology
    combined with ropinirole, a generic, FDA approved dopamine
    agonist also known as Requip. After administration, NP201 is
    designed to slowly dissolve while releasing ropinirole.
We have studied NP201 in several animal models. We believe the
    data from these studies suggest that NP201 can provide
    continuous, stable medication levels for up to two months. In
    addition, we completed a proof of concept study in a
    well-accepted animal model of Parkinson's disease that we
    believe suggests NP201 has the potential to provide continuous
    symptomatic relief for up to two months per dose and to
    significantly decrease the incidence of adverse events
    associated with current treatments.
In March 2010, we met with the FDA to discuss our development
    plan for NP201. Based on this meeting, we believe that we can
    submit an NDA for NP201 under Section 505(b)(2) of the FDCA
    and that the FDA will require only a single successful pivotal
    Phase III clinical trial for approval. We plan to initiate
    an acute toxicology study for NP201 in the second half of 2010
    and to submit an Investigational New Drug Application, or IND,
    in the first half of 2011.
NP202:
    Product candidate for the long-term treatment of schizophrenia
    and bipolar disorder
Schizophrenia is a life-long serious psychiatric illness that
    causes people to lose touch with reality and often interferes
    with their ability to think clearly, manage emotions, make
    decisions and relate to others. Bipolar disorder, or manic
    depression, is another life-long psychiatric illness that causes
    extreme shifts in mood, energy and functioning. These changes
    may be subtle or dramatic and typically vary greatly over the
    course of a person's life as well as among individuals.
According the National Alliance on Mental Illness, schizophrenia
    affects over two million adults in the U.S., while bipolar
    disorder affects over ten million adults in the
    U.S. According to an article by Dr. Eric Wu published
    in 2005 in
The Journal of Clinical Psychiatry
, a
    peer-reviewed medical journal, as of 2002 the estimated direct
    health care costs of schizophrenia in the U.S. were
    $22.7 billion, including outpatient care, medications and
    long-term care.
Patient compliance with medication has been a long-standing
    problem in the treatment of schizophrenia. As reported in an
    article by Dr. Jeffrey Lieberman published in 2005 in
The New England Journal of Medicine
, a peer-reviewed
    medical journal, the Clinical Antipsychotic Trials in
    Intervention Effectiveness, or CATIE, study, conducted between
    2001 and 2004, indicated that 74% of schizophrenia patients
    become non-compliant with their medication within 18 months
    of commencing the use of medication. According to an article by
    Patricia Thieda published in 2003 in
Psychiatric
    Services
, a peer-reviewed medical journal, schizophrenia
    patients with poor compliance are more than twice as likely to
    experience relapse than patients with good compliance. We
    believe medication compliance represents a significant
    opportunity for improved treatments.
In an attempt to improve patient compliance, physicians
    administer antipsychotic drugs through depot injections. Depot
    injections release medication over a longer period than
    conventional injections or oral medications. Depot injection
    products include Risperdal Consta and Invega Sustenna, both
    marketed by Johnson & Johnson, and Zyprexa Relprew,
    marketed by Eli Lilly & Co. These drugs provide two to
    four weeks of therapy per dose.
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We believe that NP202 potentially could provide a significant
    improvement over existing treatment options for patients
    suffering from schizophrenia or bipolar disorder because:
•
We are developing NP202 to provide up to three months of
    continuous delivery of an atypical antipsychotic with a single
    dose. Currently available products provide therapy for only two
    to four weeks, resulting in frequent physician visits and
    increasing the risk of non-compliance;
•
We are designing NP202 to allow a physician to remove the
    implant at any time during the dosing period. With currently
    available injectable products, physicians and patients cannot
    stop therapy, which may discourage some physicians and patients
    concerned about adverse events; and
•
We are developing NP202 as an easy to administer, pre-loaded
    injectable product that can be stored at room temperature.
    Risperdal Consta, the leading depot injectable product, must be
    prepared and mixed prior to administration.
We have developed NP202 prototype products, initiated pre-IND
    activities and plan to submit an IND to the FDA in 2012.
Our
    Proprietary Delivery Technologies
Our current drug development activities use two proprietary
    medication delivery technologies: SmartRelief and LAD. Zelrix
    incorporates SmartRelief, while NP201 and NP202 both incorporate
    LAD. We own exclusive worldwide rights to both technologies.
SmartRelief
    Technology
SmartRelief is our proprietary transdermal medication delivery
    technology based on iontophoresis, a non-invasive method of
    actively transporting molecules, such as sumatriptan, that are
    not able to be delivered passively through the skin.
    Iontophoresis involves the application of a mild electrical
    current to the skin through two reservoirs. One reservoir
    contains ionized, or charged, medication. The other reservoir
    contains a counter ion, commonly sodium chloride, or salt. When
    a current is applied, medication molecules travel out of the
    reservoir into the skin, where blood vessels absorb and disburse
    them throughout the body.
Unlike passive transdermal technologies, which rely on diffusion
    for medication delivery, iontophoresis controls the amount and
    rate of medication delivery. Iontophoresis enables transdermal
    delivery of a variety of medications that cannot be delivered
    passively through the skin. It is possible to deliver a variety
    of different medications, including proteins and peptides, using
    iontophoresis. The FDA has approved two pharmaceutical products
    incorporating iontophoresis, Johnson & Johnson's
    IONSYS system and Vyteris, Inc.'s LidoSite topical system
    for analgesia, and multiple iontophoretic medical devices.
Long-Acting
    Delivery Technology
We designed LAD to improve the control, consistency and
    convenience of medication delivery. LAD is comprised of a
    biodegradable polymer matrix using commonly available medical
    polymers and an active drug, combined to form a small implant
    for injection just below the skin. We also have designed LAD to
    allow a physician to remove it using a minor surgical procedure
    if a decision is made to stop therapy.
To date, we have tested several neuropsychiatric compounds
    formulated with LAD in multiple animal models. Based on these
    studies, we believe LAD has the potential to treat patients for
    one to three months with a single dose of a therapy. As a
    result, we believe LAD has the potential, depending upon the
    indication, to improve one or more of efficacy, medication
    compliance and incidence of adverse events. We have not yet
    tested LAD in humans.
Manufacturing
We currently have no manufacturing facilities and limited
    personnel with manufacturing experience. We currently use, and
    expect to depend on, third party contract manufacturers to
    manufacture Zelrix and our other product candidates for our
    preclinical and clinical needs and, if we obtain marketing
    approval for our product
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candidates, for commercial supply. We believe our reliance on
    contract manufacturing helps us control our expenses, as the
    construction, maintenance and insurance of pharmaceutical
    manufacturing facilities requires significant capital.
We have established an internal quality control and quality
    assurance program, including a set of standard operating
    procedures and specifications consistent with current Good
    Manufacturing Practices, or cGMP. The cGMP requirements govern
    quality control of the manufacturing process and documentation
    policies and procedures. We depend on our third party contract
    manufacturers for continued compliance with cGMP requirements.
Multiple pharmaceutical manufacturers produce sumatriptan, the
    active ingredient in Zelrix. We currently purchase sumatriptan
    from two suppliers and the various components of SmartRelief
    from multiple manufacturers, all on a purchase order basis.
Under the terms of a development and license agreement that we
    entered into in September 2007, LTS Lohmann
    Therapie-Systeme AG, or LTS, manufactures Zelrix, including
    the incorporation of SmartRelief. We pay fees to LTS for
    manufacturing development, preparation of manufacturing
    documentation for our NDA, manufacture of our clinical supplies
    and preparation for commercial manufacturing. We expect to enter
    into a commercial manufacturing agreement for Zelrix with LTS.
    In such event, the machinery that LTS would use to produce the
    commercial supply of Zelrix would be customized to the
    particular manufacturing specifications of Zelrix and does not
    exist currently. LTS would design this machinery and assemble it
    from components manufactured by third party suppliers.
We purchase preclinical supplies of NP201, consisting of LAD and
    the active ingredient, ropinirole, from SurModics
    Pharmaceuticals, Inc., or SurModics. Ropinirole is generic and
    available from multiple sources.
Competition
The pharmaceutical and biotechnology industries are intensely
    competitive and subject to rapid and significant technological
    change. Our major competitors include organizations such as
    major multinational pharmaceutical companies, established
    biotechnology companies and specialty pharmaceutical and generic
    drug companies. Many of our competitors have greater financial
    and other resources than we have, such as larger research and
    development staffs and more extensive marketing and
    manufacturing organizations. As a result, these companies may
    obtain marketing approval more rapidly than we are able and may
    be more effective in selling and marketing their products.
    Smaller or early stage companies may also prove to be
    significant competitors, particularly through collaborative
    arrangements with large, established companies.
Our competitors may succeed in developing, acquiring or
    licensing on an exclusive basis technologies and drug products
    that are more effective or less costly than Zelrix or any other
    drug candidate that we are currently developing or that we may
    develop, which could render our products obsolete and
    noncompetitive. We expect any products that we develop and
    commercialize to compete on the basis of, among other things,
    efficacy, safety, convenience of administration and delivery,
    price, the level of generic competition and the availability of
    reimbursement from government and other third party payors. We
    also expect to face competition in our efforts to identify
    appropriate collaborators or partners to help commercialize our
    product candidates in our target commercial markets.
We anticipate Zelrix will compete with currently marketed
    triptans, including Imitrex (sumatriptan), Maxalt (rizatriptan),
    Zomig (zolmitriptan), Relpax (eletriptan), Axert (almotriptan),
    Frova (frovatriptan), Amerge (naratriptan), Treximet
    (sumatriptan/naproxen) and Sumavel DosePro (sumatriptan). In
    addition, we anticipate competition from generic sumatriptan,
    the active ingredient in Imitrex, and generic versions of other
    branded triptans that have lost or will lose their patent
    exclusivity. For example, we expect Amerge, the branded version
    of naratriptan, to lose patent protection in July 2010. In
    addition, we expect other triptan patents to expire between 2012
    and 2025. Many of these products are manufactured and marketed
    by large pharmaceutical companies and are well accepted by
    physicians, patients and third party payors. Because of the low
    cost, health insurers likely would require or encourage use of,
    and consumers likely would use, a generic
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triptan prior to trying Zelrix. If approved, Zelrix will also
    compete with other currently approved products, including
    analgesic combinations, NSAIDs and ergotamines.
If approved, we believe that Zelrix's features, including
    its convenient, non-oral route of administration, controlled
    delivery of medication and consistent dosing, will differentiate
    it from existing migraine treatments, particularly for
    migraineurs suffering from nausea or vomiting.
In addition to marketed migraine medications, both large and
    small companies have migraine product candidates in various
    stages of clinical development. These include Merck &
    Co., Inc.'s telcagepant, an orally administered calcitonin
    gene related peptide antagonist, and Levadex from MAP
    Pharmaceuticals, Inc., an inhaled formulation of
    dihydroergotamine, both for acute migraine, and Allergan,
    Inc.'s Botox for chronic migraine. Each of these has either
    completed or is in Phase III clinical development.
Our strategy to compete in the migraine market includes:
•
Elevating physician awareness of current treatment limitations
    and impact on patients;
•
Emphasizing differentiating features of Zelrix; and
•
Building on physician experience with sumatriptan.
As with Zelrix, if approved, each of NP201 and NP202 will face
    competition from generic and branded products. Specifically,
    NP201 will face competition from generic immediate release and
    extended release versions of ropinirole and the dopamine agonist
    pramiprexole, as well as from two continuous delivery
    medications, a levadopa gel and an injectable apomorphine. NP202
    will face competition from a variety of branded and generic
    versions of antipsychotic medications, in addition to several
    other sustained delivery depot formulations of atypical
    antipsychotics.
License
    and Development Agreements
Our material license and development agreements are described
    below.
Travanti
    Pharma Inc.
In July 2008, we entered into an asset purchase and license
    agreement with Travanti Pharma Inc., or Travanti. In May 2009,
    Teikoku Pharma USA, Inc. acquired Travanti. Pursuant to the
    terms of the Travanti agreement, we paid $5.5 million to
    Travanti for the purchase of a patent application, including all
    supporting documentation and priority documents, that is
    directed to transdermal delivery of anti-migraine medications
    using an active delivery patch. Under the agreement, we granted
    Travanti a nonexclusive, royalty-free, perpetual, worldwide
    license to use the purchased patent application, and the
    invention covered by such patent application, outside the field
    of migraine.
In addition, under the Travanti agreement, we obtained a
    perpetual, worldwide, exclusive, royalty-free license, with the
    right to grant sublicenses, under Travanti's patent rights,
    including issued U.S. Patent No. 6,745,071, as
    described in more detail under "— Intellectual
    Property and Exclusivity," and know-how that relate
    generally to specified iontophoresis technology to develop, make
    and commercialize migraine products. If we make improvements
    that directly relate to such Travanti patents and patent
    applications, Travanti will hold a nonexclusive, royalty-free,
    perpetual, worldwide license to use such improvements outside
    the field of migraine.
LTS
    Lohmann Therapie-Systeme AG
In September 2007, we entered into a development and license
    agreement with LTS, which was amended as of April 2008 and
    February 2009. Under the development and license agreement, LTS
    agreed to perform development activities relating to Zelrix in
    accordance with an agreed upon development plan. LTS must use
    commercially reasonable efforts to provide us with supplies for
    our clinical trials and also has provided us with supplies for
    our non-clinical use. We agreed to pay LTS for their services on
    an hourly basis.
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Pursuant to the terms of the development and license agreement,
    each party exclusively owns any inventions related to such
    party's existing intellectual property that arise out of
    the development program. The parties jointly own any joint
    inventions that arise out of the development program not solely
    based on one party's existing intellectual property. Each
    party grants to the other a non-exclusive, royalty-free license
    under its respective intellectual property for the sole purpose
    of developing Zelrix. If we execute a commercial manufacturing
    agreement for Zelrix with LTS, LTS will have the exclusive right
    to manufacture Zelrix and LTS will grant us an exclusive,
    worldwide, royalty-free license under LTS's intellectual
    property to use, import, sell, market and distribute, or have
    imported, sold, marketed or distributed, Zelrix under the
    manufacturing agreement between LTS and us. If we do not execute
    a commercial manufacturing agreement with LTS, we may not have
    access to LTS's proprietary technology and know-how
    necessary to develop, manufacture or commercialize Zelrix.
An invention relating solely to our intellectual property arose
    in connection with the development and license agreement, and we
    filed a patent application covering that invention.
The development and license agreement remains in effect until
    the parties execute a commercial manufacturing agreement or
    until either party terminates the agreement by its terms. We may
    terminate the development and license agreement at any time upon
    60 days notice to LTS. In addition, either party may
    terminate the agreement if the other party materially breaches
    the agreement and fails to cure the breach during a
60-day
cure
    period. Either party may terminate the agreement if the
    development committee established under the agreement determines
    that it is not feasible to develop a product as anticipated
    under the development plan.
University
    of Pennsylvania
We entered into a patent license agreement with the University
    of Pennsylvania, or Penn, which became effective in July 2006
    and was amended in May 2007. Under the patent license agreement,
    Penn granted to us exclusive, worldwide rights under specified
    Penn patent applications, and patents issuing therefrom, to
    make, use and sell products using LAD. Under the agreement, we
    have the right to sublicense, subject to specified conditions,
    including the payment of sublicense fees.
The patent license agreement requires that we use commercially
    reasonable efforts to develop and commercialize licensed
    products. We must submit development plans annually for products
    we intend to develop. We must also commit at least $250,000
    annually towards the development and commercialization of
    licensed products, until the first commercial sale of the first
    licensed product.
Under the patent license agreement, we have paid Penn license
    initiation, transaction, amendment and maintenance fees totaling
    $100,000 in the aggregate and must pay Penn annual license
    maintenance fees up to $50,000 until the first commercial sale
    of the first licensed product. In addition, we have agreed to
    pay Penn aggregate milestone payments of up to $950,000 upon the
    achievement of specified development and regulatory milestones
    related to each licensed product that contains ropinirole or
    other specified active ingredients, including the active
    ingredients in NP201 and NP202, and royalties in the low single
    digits on worldwide net sales of such licensed products. We and
    Penn have agreed to negotiate the milestone payments and
    royalties payable for each licensed product that contains an
    active ingredient other than those currently specified in the
    agreement. If we grant a sublicense of our rights under the Penn
    patent rights to a third party, we must pay Penn a specified
    portion of certain income received from such third party
    sublicensee.
The patent license agreement, and our obligation to pay
    royalties to Penn, will terminate, on a product by product
    basis, on the later of the expiration or abandonment of the last
    Penn patent or ten years after the first commercial sale of a
    licensed product if no patent issues from the patent
    applications licensed from Penn under the agreement. We may
    terminate the agreement at any time upon 60 days notice to Penn.
    Penn may terminate the agreement in connection with our uncured
    breach, bankruptcy or insolvency.
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SurModics
    Pharmaceuticals Feasibility Agreement and License
    Agreement
In March 2007, we entered into a feasibility agreement with
    SurModics (formerly known as Brookwood Pharmaceuticals, Inc.),
    pursuant to which SurModics performed evaluation, development
    and formulation work for NP201 and provided us with preclinical
    supplies of NP201. In September 2009, we exercised an option
    under the feasibility agreement to enter into a license
    agreement with SurModics. The feasibility agreement has since
    concluded.
In September 2009, we entered into a license agreement with
    SurModics, pursuant to which we received an exclusive worldwide
    license, with the right to sublicense, under SurModics'
    intellectual property, including its interest in joint
    inventions developed under the feasibility agreement, to make,
    have made, use, sell, import and export products covered by the
    license agreement, including NP201, comprised of a
    biodegradable, preformed, macroscopic implant device consisting
    of ropinirole, as the sole active pharmaceutical ingredient,
    incorporated into the controlled delivery system developed or
    optimized under the feasibility agreement. We granted SurModics
    an exclusive, perpetual, worldwide, royalty-free license under
    our interest in joint inventions for uses that do not relate to
    products covered by the agreement or include any of our existing
    technology or confidential information. We also granted
    SurModics a right of first negotiation to manufacture clinical
    supplies of covered products. If we and SurModics enter into
    such clinical manufacturing agreement, SurModics has a right of
    first negotiation to manufacture commercial supplies of covered
    products.
Under the license agreement, we have agreed to pay SurModics
    aggregate milestone payments of up to $4.75 million upon
    the first achievement of specified development, regulatory and
    sales level milestones related to the first clinical indication
    approved by a regulatory authority for covered products. We must
    also pay an additional milestone payment upon regulatory
    approval of each additional clinical indication for covered
    products and royalties in the low single digits on worldwide net
    sales of commercial product. In countries where a valid
    SurModics patent claim does not cover the product, the
    applicable royalty rate decreases. If we do not enter into a
    commercial manufacturing agreement with SurModics, the
    applicable royalty rate will increase, though it will remain in
    the low single digits.
Under the license agreement we are responsible for developing
    and obtaining regulatory approval for covered products. We have
    agreed to use commercially reasonable efforts to actively
    develop and obtain regulatory approvals to market a covered
    product, including NP201, in major markets throughout the world.
    In addition, we have agreed to comply with specific diligence
    milestones to obtain such regulatory approval and to develop and
    commercialize a covered product in the U.S.
The license agreement and our obligation to pay SurModics
    royalties will terminate on a country by country basis on the
    later of the date on which a valid SurModics patent claim no
    longer covers the product or an agreed period after the first
    commercial sale of the product in such country. Thereafter the
    license will become an exclusive, perpetual fully
paid-up
license.
We have the right to terminate the license agreement for any
    reason at any time upon ninety days notice to SurModics. Either
    party has the right to terminate the agreement in connection
    with the other party's uncured material breach, bankruptcy
    or insolvency. SurModics may either terminate the license
    agreement or make it non-exclusive if we fail to meet the agreed
    upon diligence milestones or otherwise fail to use commercially
    reasonable efforts to develop and obtain regulatory approval for
    a covered product.
Intellectual
    Property and Exclusivity
We seek to protect our product candidates and our technology
    through a combination of patents, trade secrets, proprietary
    know-how, FDA exclusivity and contractual restrictions on
    disclosure.
Patents
    and Patent Applications
Our policy is to seek to protect the proprietary position of our
    product candidates by, among other methods, filing U.S. and
    foreign patent applications related to our proprietary
    technology, inventions and improvements that are important to
    the development of our business. U.S. patents generally
    have a term of 20 years from the date of nonprovisional
    filing. Because patent protection is not available for the
    active
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pharmaceutical ingredient compounds included in our current
    product candidates, we will need to rely primarily on the
    protections afforded by device, formulation and method of use
    patents.
As of April 30, 2010, we exclusively license one issued
    U.S. patent and its foreign counterparts, and own six
    U.S. patent applications, as well as corresponding Patent
    Cooperation Treaty, or PCT, applications and their foreign
    counterparts, which relate to Zelrix.
Our licensed issued U.S. Patent No. 6,745,071, owned
    by Travanti, is generally directed towards wearable
    iontophoretic devices, including Zelrix, that are prepackaged as
    complete self-contained units that include an active
    pharmaceutical ingredient to be administered, a provision for
    isolating moisture sources from the electrodes and from the
    power source during storage to optimize shelf stability, and a
    simple, user-friendly mechanism to transfer the active
    pharmaceutical ingredient and counter ion reservoirs to the
    electrodes. The expiration date for this patent is in 2023.
    There are corresponding foreign patent applications pending in
    Australia, Canada, China, Europe, Japan and Korea which will
    also expire in 2023 if issued. Under the Travanti asset purchase
    and license agreement, we also have a perpetual, worldwide,
    exclusive, royalty-free license, in the field of migraine, to
    Travanti patents, patent applications and know-how that relate
    generally to iontophoresis.
Our six U.S. pending patent applications are generally
    directed to:
•
Methods and devices for treating migraine using integrated
    iontophoretic patches, including Zelrix;
•
Active ingredient reservoir formulations, including the Zelrix
    formulation; and
•
Electronic control systems and methods for use of the same in
    delivering an active for an integrated iontophoretic patch,
    including Zelrix.
Four of the U.S. applications currently have pending
    international applications. We have corresponding foreign patent
    applications in Australia, Brazil, Canada, China, Europe, Japan,
    Mexico, New Zealand, South Africa, Asia, India and Israel
    for one of these applications. The remaining two
    U.S. applications are related provisional applications and
    have yet to be foreign filed. If the four non-provisional
    U.S. applications and their foreign corresponding
    applications issue, we generally expect these patents to expire
    between 2027 and 2029. The two U.S. provisional
    applications, if pursued in non-provisional and foreign
    corresponding applications, and if issued, would generally be
    expected to expire in 2030.
Additionally, as of April 30, 2010, we own or exclusively
    license one issued U.S. patent and nine U.S. patent
    applications, as well as corresponding PCT patent applications
    and their foreign counterparts, relating to our LAD pipeline
    product candidates. The U.S. patent, and seven
    non-provisional U.S. applications and their corresponding
    foreign applications, if issued, are generally expected to
    expire between 2021 and 2027. The remaining two
    U.S. provisional applications, if pursued in
    non-provisional and foreign corresponding applications, and if
    issued, would generally be expected to expire in 2030. These
    patents and patent applications include claims generally
    directed to the LAD technology, as well as the use of the LAD
    technology in conjunction with various medications in the
    treatment of certain neurological and psychiatric diseases,
    including Parkinson's disease, schizophrenia and bipolar
    disorder.
Under the LTS development and license agreement and the
    SurModics license agreement, we have rights to LTS's and
    SurModics' proprietary processing and manufacturing
    technologies related to our product candidates.
FDA
    Marketing Exclusivity
The FDA may grant three years of marketing exclusivity in the
    U.S. for the approval of new and supplemental NDAs,
    including Section 505(b)(2) NDAs, for, among other things,
    new indications, dosages or dosage forms of an existing drug, if
    new clinical investigations that were conducted or sponsored by
    the applicant are essential to the approval of the application.
    Additionally, six months of marketing exclusivity in the
    U.S. is available under Section 505A of the FDCA if,
    in response to a written request from the FDA, a sponsor submits
    and the agency accepts requested information relating to the use
    of the approved drug in the pediatric population. This six month
    pediatric exclusivity period is not a standalone exclusivity
    period, but
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rather is added to any existing patent or non-patent exclusivity
    period for which the drug product is eligible. Based on our
    clinical trial program for Zelrix, we plan to seek three years
    of marketing exclusivity upon receipt of FDA approval for
    Zelrix. We may also seek an additional period of six months
    exclusivity from the FDA if the FDA requests, and we
    successfully complete, pediatric clinical trials for Zelrix.
Trade
    Secrets and Proprietary Information
We seek to protect our proprietary information, including our
    trade secrets and proprietary know-how, by requiring our
    employees, consultants and other advisors to execute
    confidentiality agreements upon the commencement of their
    employment or engagement. These agreements generally provide
    that all confidential information developed or made known during
    the course of the relationship with us be kept confidential and
    not be disclosed to third parties except in specific
    circumstances. In the case of our employees, the agreements also
    typically provide that all inventions resulting from work
    performed for us, utilizing our property or relating to our
    business and conceived or completed during employment shall be
    our exclusive property to the extent permitted by law. Where
    appropriate, agreements we obtain with our consultants also
    typically contain similar assignment of invention obligations.
    Further, we require confidentiality agreements from entities
    that receive our confidential data or materials.
Government
    Regulation
Federal
    Food, Drug and Cosmetic Act
Prescription drug products are subject to extensive pre- and
    post-market regulation by the FDA, including regulations that
    govern the testing, manufacturing, distribution, safety,
    efficacy, approval, labeling, storage, record keeping,
    reporting, advertising and promotion of such products under the
    FDCA, and its implementing regulations, and by comparable
    agencies and laws in foreign countries. Failure to comply with
    applicable FDA or other regulatory requirements may result in
    civil or criminal penalties, recall or seizure of products,
    partial or total suspension of production or withdrawal of the
    product from the market. The FDA must approve any new unapproved
    drug or dosage form, including a new use of a previously
    approved drug, prior to marketing in the U.S. All
    applications for FDA approval must contain, among other things,
    information relating to safety and efficacy, pharmaceutical
    formulation, stability, manufacturing, processing, packaging,
    labeling and quality control.
New
    Drug Applications
Generally, the FDA must approve any new drug before marketing of
    the drug occurs in the U.S. This process generally involves:
•
Completion of preclinical laboratory and animal testing in
    compliance with the FDA's Good Laboratory Practice, or GLP,
    regulations;
•
Submission to the FDA of an IND application for human clinical
    testing, which must become effective before human clinical
    trials may begin in the U.S.;
•
Performance of human clinical trials, including adequate and
    well-controlled clinical trials, to establish the safety and
    efficacy of the proposed drug product for each intended use;
•
Satisfactory completion of an FDA pre-approval inspection of the
    product's manufacturing facility or facilities to assess
    compliance with the FDA's cGMP regulations; and
•
Submission to, and approval by, the FDA of an NDA application.
The preclinical and clinical testing and approval process
    requires substantial time, effort and financial resources, and
    we cannot be certain that the FDA will grant approvals for any
    of our product candidates on a timely basis, if at all.
    Preclinical tests include laboratory evaluation of product
    chemistry, formulation and stability, as well as studies to
    evaluate toxicity in animals. The results of preclinical tests,
    together with manufacturing information and analytical data,
    comprise a part of an IND application submission to the FDA. The
    IND automatically becomes effective 30 days after receipt
    by the FDA, unless the FDA, within the
30-day
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time period, raises concerns or questions about the conduct of
    the clinical trial, including concerns regarding exposure of
    human research subjects to unreasonable health risks. In such a
    case, the IND sponsor and the FDA must resolve any outstanding
    concerns before the clinical trial can begin. Our submission of
    an IND may not result in FDA authorization to commence a
    clinical trial. In addition, the FDA requires a separate
    submission to an existing IND for each successive clinical trial
    conducted during product development. Further, an independent
    institutional review board, or IRB, covering each medical center
    proposing to conduct the clinical trial must review and approve
    the plan for any clinical trial before it commences at that
    center and it must monitor the clinical trial until completed.
    The FDA, the IRB or the sponsor may suspend a clinical trial at
    any time, or from time to time, on various grounds, including a
    finding that the subjects or patients are being exposed to an
    unacceptable health risk. As a separate amendment to an IND, a
    sponsor may submit a request for a special protocol assessment,
    or SPA, from the FDA. Under the SPA procedure, a sponsor may
    seek the FDA's agreement on the design, conduct and
    analyses of, among other things, a clinical trial intended to
    form the primary basis of an efficacy claim. If the FDA agrees
    in writing, it may not change its agreement after the clinical
    trial begins, except in limited circumstances, such as upon
    identification of a substantial scientific issue essential to
    determining the safety and effectiveness of a product candidate
    after commencement of a Phase III clinical trial. If the
    clinical trial succeeds, the sponsor can ordinarily rely on it
    as the primary basis for approval with respect to effectiveness.
    Clinical testing also must satisfy extensive Good Clinical
    Practice, or GCP, regulations, including regulations for
    informed consent, IRB review and approval and IND submission.
For purposes of an NDA submission and approval, typically, the
    conduct of human clinical trials occurs in the following three
    pre-market sequential phases, which may overlap:
•
Phase I:
Sponsors initially conduct clinical
    trials in a limited population to test the product candidate for
    safety, dose tolerance, absorption, metabolism, distribution and
    excretion in healthy humans or, on occasion, in patients, such
    as cancer patients.
•
Phase II:
Sponsors conduct clinical trials
    generally in a limited patient population to identify possible
    adverse effects and safety risks, to determine the efficacy of
    the product for specific targeted indications and to determine
    dose tolerance and optimal dosage. Sponsors may conduct multiple
    Phase II clinical trials to obtain information prior to
    beginning larger and more extensive Phase III clinical
    trials.
•
Phase III:
These include expanded controlled
    and uncontrolled trials, including pivotal clinical trials. When
    Phase II evaluations suggest the effectiveness of a dose
    range of the product and acceptability of such product's
    safety profile, sponsors undertake Phase III clinical
    trials in larger patient populations to obtain additional
    information needed to evaluate the overall benefit and risk
    balance of the drug and to provide an adequate basis to develop
    labeling.
In addition, sponsors may conduct Phase IV clinical trials
    after the FDA approves a drug. In some cases, the FDA may
    condition approval of an NDA for a product candidate on the
    sponsor's agreement to conduct additional clinical trials
    to further assess the drug's safety or effectiveness after
    NDA approval. Such post approval trials are typically referred
    to as Phase IV clinical trials.
Sponsors submit the results of product development, preclinical
    studies and clinical trials to the FDA as part of an NDA. NDAs
    must also contain extensive manufacturing information and
    proposed labeling. Upon receipt, the FDA initially reviews the
    NDA to determine whether it is sufficiently complete to initiate
    a substantive review. If the FDA identifies deficiencies that
    would preclude substantive review, the FDA will refuse to accept
    the NDA and will inform the sponsor of the deficiencies that
    must be corrected prior to resubmission. If the FDA accepts the
    submission for substantive review, the FDA typically reviews the
    NDA in accordance with established time frames. Under the
    Prescription Drug User Fee Act, or PDUFA, the FDA agrees to
    specific goals for NDA review time through a two-tiered
    classification system, Priority Review and Standard Review. For
    a Priority Review application, the FDA aims to complete the
    initial review cycle in six months. Standard Review applies to
    all applications that are not eligible for Priority Review. The
    FDA aims to complete Standard Review NDAs within a
ten-month
timeframe. We anticipate that the FDA will grant our product
    candidates a Standard Review. Review processes often extend
    significantly beyond anticipated
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completion dates due to FDA requests for additional information
    or clarification, difficulties scheduling an advisory committee
    meeting or FDA workload issues. The FDA may refer the
    application to an advisory committee for review, evaluation and
    recommendation as to the application's approval. The
    recommendations of an advisory committee do not bind the FDA,
    but the FDA generally follows such recommendations.
If an NDA does not satisfy applicable regulatory criteria, the
    FDA may deny approval of an NDA or may require, among other
    things, additional clinical data or an additional pivotal
    Phase III clinical trial. Even if such data are submitted,
    the FDA may ultimately decide that the NDA does not satisfy the
    criteria for approval. Data from clinical trials are not always
    conclusive and the FDA may interpret data differently than we
    do. The FDA could also require a risk evaluation and mitigation
    strategy, or REMS, plan to mitigate risks, which could include
    medication guides, physician communication plans, or elements to
    assure safe use, such as restricted distribution methods,
    patient registries and other risk minimization tools. The FDA
    also may condition approval on, among other things, changes to
    proposed labeling, a commitment to conduct one or more
    post-market studies or clinical trials and the correction of
    identified manufacturing deficiencies, including the development
    of adequate controls and specifications.
After approval, the NDA sponsor must comply with comprehensive
    requirements governing, among other things, manufacturing,
    marketing activities, distribution, annual reporting and adverse
    event reporting. If new safety issues are identified following
    approval, the FDA can require the NDA sponsor to revise the
    approved labeling to reflect the new safety information; conduct
    post-market studies or clinical trials to assess the new safety
    information; and implement a REMS program to mitigate
    newly-identified risks. In addition, if after approval the FDA
    determines that the product does not meet applicable regulatory
    requirements or poses unacceptable safety risks, the FDA may
    take other regulatory actions, including requesting a product
    recall or initiating suspension or withdrawal of the NDA
    approval.
Drugs may be marketed only for approved indications and in
    accordance with the provisions of the approved label. Further,
    if we modify a drug, including any changes in indications,
    labeling or manufacturing processes or facilities, the FDA may
    required us to submit and obtain FDA approval of a new or
    supplemental NDA, which may require us to develop additional
    data or conduct additional preclinical studies and clinical
    trials.
Under PDUFA, NDA applicants must pay significant NDA user fees
    upon submission. In addition, manufacturers of approved
    prescription drug products must pay annual establishment and
    product user fees.
Section 505(b)(2)
    New Drug Applications
As an alternate path to FDA approval, particularly for
    modifications to drug products previously approved by the FDA,
    an applicant may submit an NDA under Section 505(b)(2) of
    the FDCA. Section 505(b)(2) was enacted as part of the Drug
    Price Competition and Patent Term Restoration Act of 1984, also
    known as the Hatch-Waxman Act, and permits the submission of an
    NDA where at least some of the information required for approval
    comes from clinical trials not conducted by or for the applicant
    and for which the applicant has not obtained a right of
    reference. The FDA interprets Section 505(b)(2) of the FDCA
    to permit the applicant to rely upon the FDA's previous
    findings of safety and effectiveness for an approved product.
    The FDA may also require companies to perform additional
    clinical trials or measurements to support any change from the
    previously approved product. The FDA may then approve the new
    product candidate for all or some of the label indications for
    which the referenced product has been approved, as well as for
    any new indication sought by the Section 505(b)(2)
    applicant.
To the extent that a Section 505(b)(2) NDA relies on
    clinical trials conducted for a previously approved drug product
    or the FDA's prior findings of safety and effectiveness for
    a previously approved drug product, the 505(b)(2) applicant must
    submit patent certifications in its 505(b)(2) application with
    respect to any patents listed for the approved product on which
    the application relies in the FDA's publication, Approved
    Drug Products with Therapeutic Equivalence Evaluations, commonly
    referred to as the Orange Book. Specifically, the applicant must
    certify for each listed patent that (1) the required patent
    information has not been filed; (2) the listed patent has
    expired; (3) the listed patent has not expired, but will
    expire on a particular date and approval is not sought until
    after patent expiration; or (4) the listed patent is
    invalid, unenforceable or will not be infringed by the proposed
    new product. A certification that the new product will not
    infringe the
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previously approved product's listed patent or that such
    patent is invalid or unenforceable is known as a
    Paragraph IV certification. If the applicant does not
    challenge one or more listed patents through a Paragraph IV
    certification, the FDA will not approve the
    Section 505(b)(2) NDA application until all the
    unchallenged listed patents claiming the referenced product have
    expired. Further, the FDA will also not accept or approve, as
    applicable, a Section 505(b)(2) NDA application until any
    non-patent exclusivity, such as exclusivity for obtaining
    approval of a New Chemical Entity, listed in the Orange Book for
    the referenced product, has expired.
If the 505(b)(2) NDA applicant has provided a Paragraph IV
    certification to the FDA, the applicant must also send notice of
    the Paragraph IV certification to the owner of the
    referenced NDA for the previously approved product and relevant
    patent holders within 20 days after the 505(b)(2) NDA has
    been accepted for submission by the FDA. The NDA and patent
    holders may then initiate a patent infringement suit against the
    505(b)(2) applicant. Under the FDCA, the filing of a patent
    infringement lawsuit within 45 days of receipt of the
    notification regarding a Paragraph IV certification
    automatically prevents the FDA from approving the
    Section 505(b)(2) NDA for 30 months, or until a court
    deems the patent unenforceable, invalid or not infringed,
    whichever is earlier. Moreover, in cases where a 505(b)(2)
    application containing a Paragraph IV certification is
    submitted during a previously approved drug's five year
    exclusivity period, the 30-month period is automatically
    extended to prevent approval of the 505(b)(2) application until
    the date that is seven and one-half years after approval of the
    previously approved reference product. The court also has the
    ability to shorten or lengthen either the 30 month or the
    seven and one-half year period if either party is found not to
    be reasonably cooperating in expediting the litigation. Thus,
    the Section 505(b)(2) applicant may invest a significant
    amount of time and expense in the development of its product
    only to be subject to significant delay and patent litigation
    before its product may be commercialized. Alternatively, if the
    NDA applicant or relevant patent holder does not file a patent
    infringement lawsuit within the specified 45 day period,
    the 30 month stay will not prevent approval of the
    505(b)(2) application.
Notwithstanding the approval of many products by the FDA
    pursuant to Section 505(b)(2), over the last few years,
    some pharmaceutical companies and others have objected to the
    FDA's interpretation of Section 505(b)(2). If the FDA
    changes its interpretation of Section 505(b)(2), or if the
    FDA's interpretation is successfully challenged in court,
    this could delay or even prevent the FDA from approving any
    Section 505(b)(2) NDA that we submit.
In the NDA submissions for our product candidates, we intend to
    follow the development and approval pathway permitted under the
    FDCA that we believe will maximize the commercial opportunities
    for these product candidates.
International
    Regulation
In addition to regulations in the U.S., we will be subject to a
    variety of foreign regulations governing clinical trials and
    commercial sales and distribution of any future products.
    Whether or not we obtain FDA approval for a product, we must
    obtain approval by the comparable regulatory authorities of
    foreign countries before we can commence clinical trials or
    marketing of the product in those countries. The approval
    process varies from country to country, and the time may be
    longer or shorter than that required for FDA approval. The
    requirements governing the conduct of clinical trials, product
    licensing, pricing and reimbursement vary greatly from country
    to country.
For example, under European Union regulatory systems, sponsors
    may submit marketing authorizations either under a centralized
    or mutual recognition procedure. The centralized procedure
    provides for the grant of a single marketing authorization that
    is valid for all European Union member states. The mutual
    recognition procedure provides for mutual recognition of
    national approval decisions. Under this procedure, the holder of
    a national marketing authorization may submit an application to
    the remaining member states. Within 90 days of receiving
    the applications and assessment report, each member state must
    decide whether to recognize approval.
In addition to regulations in Europe and the U.S., we will be
    subject to a variety of foreign regulations governing clinical
    trials and commercial distribution of any future products.
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Third
    Party Payor Coverage and Reimbursement
Although none of our product candidates have been commercialized
    for any indication, if the FDA approves these products for
    marketing, commercial success of our product candidates will
    depend, in part, upon the availability of coverage and
    reimbursement from third party payors at the federal, state and
    private levels. Government payor programs, including Medicare
    and Medicaid, private health care insurance companies and
    managed care plans have attempted to control costs by limiting
    coverage and the amount of reimbursement for particular
    procedures or drug treatments. The United States Congress and
    state legislatures from time to time propose and adopt
    initiatives aimed at cost containment, which could impact our
    ability to sell our products profitably.
For example, in March 2010, President Obama signed into law the
    Patient Protection and Affordable Care Act and the associated
    reconciliation bill, which we refer to collectively as the
    Health Care Reform Law, a sweeping law intended to broaden
    access to health insurance, reduce or constrain the growth of
    healthcare spending, enhance remedies against fraud and abuse,
    add new transparency requirements for health care and health
    insurance industries, impose new taxes and fees on the health
    industry and impose additional health policy reforms. Effective
    October 1, 2010, the Health Care Reform Law revises the
    definition of "average manufacturer price" for
    reporting purposes, which could increase the amount of Medicaid
    drug rebates to states once the provision is effective. Further,
    beginning in 2011, the new law imposes a significant annual fee
    on companies that manufacture or import branded prescription
    drug products. Substantial new provisions affecting compliance
    have also been enacted, which may require us to modify our
    business practices with health care practitioners. We will not
    know the full effects of the Health Care Reform Law until
    applicable federal and state agencies issue regulations or
    guidance under the new law. Although it is too early to
    determine the effect of the Health Care Reform Law, the new law
    appears likely to continue the pressure on pharmaceutical
    pricing, especially under the Medicare program, and may also
    increase our regulatory burdens and operating costs. Moreover,
    in the coming years, additional changes could be made to
    governmental healthcare programs that could significantly impact
    the success of our products.
The cost of pharmaceuticals continues to generate substantial
    governmental and third party payor interest. We expect that the
    pharmaceutical industry will experience pricing pressures due to
    the trend toward managed health care, the increasing influence
    of managed care organizations and additional legislative
    proposals. Our results of operations could be adversely affected
    by current and future health care reforms.
Some third party payors also require pre-approval of coverage
    for new or innovative devices or drug therapies before they will
    reimburse health care providers that use such therapies. While
    we cannot predict whether any proposed cost-containment measures
    will be adopted or otherwise implemented in the future, the
    announcement or adoption of these proposals could have a
    material adverse effect on our ability to obtain adequate prices
    for our product candidates and operate profitably.
Manufacturing
    Requirements
We and our third party manufacturers must comply with applicable
    FDA regulations relating to FDA's cGMP regulations. The
    cGMP regulations include requirements relating to organization
    of personnel, buildings and facilities, equipment, control of
    components and drug product containers and closures, production
    and process controls, packaging and labeling controls, holding
    and distribution, laboratory controls, records and reports, and
    returned or salvaged products. The manufacturing facilities for
    our products must meet cGMP requirements to the satisfaction of
    the FDA pursuant to a pre-approval inspection before we can use
    them to manufacture our products. We and our third party
    manufacturers are also subject to periodic inspections of
    facilities by the FDA and other authorities, including
    procedures and operations used in the testing and manufacture of
    our products to assess our compliance with applicable
    regulations. Failure to comply with statutory and regulatory
    requirements subjects a manufacturer to possible legal or
    regulatory action, including warning letters, the seizure or
    recall of products, injunctions, consent decrees placing
    significant restrictions on or suspending manufacturing
    operations and civil and criminal penalties. Adverse experiences
    with the product must be reported to the FDA and could result in
    the imposition of market restrictions through labeling changes
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or in product removal. Product approvals may be withdrawn if
    compliance with regulatory requirements is not maintained or if
    problems concerning safety or efficacy of the product occur
    following approval.
Other
    Regulatory Requirements
With respect to post-market product advertising and promotion,
    the FDA imposes a number of complex regulations on entities that
    advertise and promote pharmaceuticals, which include, among
    other things, standards for
direct-to-consumer
advertising, off-label promotion, industry-sponsored scientific
    and educational activities and promotional activities involving
    the Internet. The FDA has very broad enforcement authority under
    the FDCA, and failure to abide by these regulations can result
    in penalties, including the issuance of a warning letter
    directing entities to correct deviations from FDA standards, a
    requirement that future advertising and promotional materials be
    pre-cleared by the FDA, civil money penalties and state and
    federal civil and criminal investigations and prosecutions.
We are also subject to various laws and regulations regarding
    laboratory practices, the experimental use of animals and the
    use and disposal of hazardous or potentially hazardous
    substances in connection with our research. In each of these
    areas, as above, government agencies have broad regulatory and
    enforcement powers, including the ability to levy fines and
    civil penalties.
In addition, drug manufacturers also are subject to federal and
    state requirements and restrictions concerning interactions with
    physicians and other health care professionals, internal
    compliance programs, and transparency reporting requirements,
    including, for example, reporting of physician payments and
    other transfers of value, reporting of physician ownership or
    investment interests, reporting of marketing expenditures and
    clinical trial registration and reporting of clinical trial
    results on the publicly available clinical trial databank
    maintained by the National Institutes of Health at
    www.ClinicalTrials.gov.
Legal
    Proceedings
We are not currently a party to any legal proceeding.
Employees
As of April 30, 2010, we employed 21 full-time
    employees, of which 14 were engaged in research and development
    and clinical trials and seven were engaged in administration,
    finance, marketing and business development. None of our
    employees are represented by a labor union and we consider our
    employee relations to be good.
Facilities
Our corporate headquarters are located in Conshohocken,
    Pennsylvania, where we occupy approximately 11,075 square
    feet of office space. Our lease term expires March 31, 2013.
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MANAGEMENT
Executive
    Officers, Directors and Key Employee
The following table sets forth information regarding our
    executive officers, directors and key employee as of
    April 30, 2010:
Name
Age
Position
Executive Officers and Directors
Jane H. Hollingsworth
52
Chief Executive Officer and Director
Terri B. Sebree
52
President
Keith A. Goldan
39
Vice President and Chief Financial Officer
Gerald W. McLaughlin
42
Vice President Commercial Operations
Ezra H. Felker
40
Vice President Business Development
Michael
    Cola
(1)(3)
50
Director
Jeanne
    Cunicelli
(2)
43
Director
Michael C.
    Diem, MD
(2)
40
Director
John H.
    Dillon, II
(2)
68
Director
Richard S.
    Kollender
(3)
40
Director
Gary J.
    Kurtzman, MD
(3)
55
Director
Key Employee
Mark W. Pierce, MD, PhD
61
Vice President and Chief Scientific Officer
(1)
Chairman of the board of directors.
(2)
Member of the audit committee.
(3)
Member of the compensation committee.
Jane H. Hollingsworth
is one of our founders and has
    served as a director and our Chief Executive Officer since
    January 2005. Prior to founding our company,
    Ms. Hollingsworth co-founded and served as Executive Vice
    President, Secretary and General Counsel of Auxilium
    Pharmaceuticals, Inc., or Auxilium, a specialty pharmaceutical
    company. Prior to co-founding Auxilium, Ms. Hollingsworth
    served as Vice President, Secretary and General Counsel of IBAH,
    Inc., or IBAH, a multinational contract research organization.
    Earlier in her career, Ms. Hollingsworth practiced law at
    the law firm of Montgomery, McCracken, Walker &
    Rhoads. Ms. Hollingsworth holds a BA from Gettysburg College and
    a JD from the Villanova University School of Law.
    Ms. Hollingsworth's legal background and widespread
    experience in the pharmaceutical industry provide significant
    expertise that she uses to advise our board of directors in
    evaluating regulatory, financial and other matters, which we
    believe makes her a valuable member of our board.
Terri B. Sebree
is one of our founders and has served as
    our President since February 2005. Prior to founding our
    company, Ms. Sebree served as Senior Vice President,
    Development of Auxilium. Prior to joining Auxilium,
    Ms. Sebree served as Executive Vice President,
    U.S. Operations at IBAH. Prior to that, Ms. Sebree served
    in a variety of management roles with Abbott Laboratories for
    over nine years. Ms. Sebree holds a BS from Texas A&M
    University.
Keith A. Goldan, CPA
has served as our Vice President and
    Chief Financial Officer since November 2008. Previously,
    Mr. Goldan served as Chief Financial Officer of PuriCore
    plc, a medical technology company listed on the London Stock
    Exchange, from October 2004 through October 2008. Mr. Goldan
    also served as a member of PuriCore's board of directors.
    Prior to that, Mr. Goldan served as Vice President and
    Chief Financial Officer of Biosyn, Inc., a specialty
    pharmaceutical company, and in a variety of roles with
    ViroPharma Incorporated, Century Capital Associates, a specialty
    consulting firm with a focus on capital strategy for healthcare
    clients, and the Healthcare & Life Sciences Practice
    of KPMG LLP. Mr. Goldan holds a BA from the Robert H. Smith
    School of Business at the University of Maryland and an MBA from
    The Wharton School at the University of Pennsylvania.
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Gerald W. McLaughlin
has served as our Vice President
    Commercial Operations since September 2007. Previously,
    Mr. McLaughlin served in a variety of roles at Endo
    Pharmaceuticals, a specialty pharmaceutical company, including
    Senior Director, Strategic Marketing from January 2007 through
    August 2007, Regional Sales Director from July 2005 through
    December 2006, Group Marketing Director, Pain Products from
    November 2002 through June 2005 and Marketing Director. Prior to
    that, Mr. McLaughlin served in a variety of marketing and
    sales roles at Merck for 11 years. Mr. McLaughlin
    holds a BA from Dickinson College and an MBA from Villanova
    University.
Ezra H. Felker
has served as our Vice President Business
    Development since January 2006. Previously, Mr. Felker
    served as an Entrepreneur in Residence at BioAdvance, an
    initiative of the Commonwealth of Pennsylvania committed to
    funding early stage life sciences companies, from June 2005
    through December 2005. Prior to that, Mr. Felker served as
    Associate Vice President, BTG Ventures at BTG International
    Inc., Manager, Business Development at Icagen, Inc. and as a
    protein chemist at Hybritech and Biosite Diagnostics.
    Mr. Felker holds a BS from the University of California,
    San Diego and an MBA from the Weatherhead School of
    Management at Case Western Reserve University.
Michael Cola
has served as the Chairman of our board of
    directors since December 2006. Mr. Cola has served as
    President, Specialty Pharmaceuticals at Shire plc, or Shire, a
    global specialty pharmaceutical company, since June 2005. Prior
    to joining Shire, Mr. Cola served as Group President of
    Safeguard Scientifics, Inc., or Safeguard, a holding company for
    growth stage technology and life sciences companies, and in a
    variety of positions at AstraZeneca and AstraMerck, including
    Vice President, Global Clinical Operations. Mr. Cola has also
    served on the board of directors of Clarient, Inc., a publicly
    traded company. Mr. Cola holds a BA in biology and physics
    from Ursinus College and an MS in biomedical science from Drexel
    University. Mr. Cola has more than 20 years of
    international pharmaceutical industry experience.
    Mr. Cola's extensive expertise in pharmaceutical
    product development, commercialization and marketing, as well as
    his involvement in the development of public pharmaceutical
    companies, have provided him with a broad perspective on
    operations and make him a valuable asset to our board of
    directors. Furthermore, Mr. Cola's leadership
    abilities make him particularly well qualified to be our
    Chairman.
Jeanne Cunicelli
has served as one of our directors since
    August 2006. Ms. Cunicelli has served as an Investment
    Partner at Bay City Capital LLC, a venture capital firm with a
    focus on the life sciences industry, since January 2004.
    Ms. Cunicelli joined Bay City Capital LLC as a Consultant
    in 1997. She is a member of the board of trustees, the Chairman
    of the investment committee and serves on the finance committee
    of the University of San Francisco. Ms. Cunicelli
    holds a BS in cognitive psychology from Carnegie Mellon
    University and an MBA from the University of San Francisco.
    Ms. Cunicelli's position with Bay City Capital has
    resulted in her gaining valuable experience in evaluating the
    financial performance and operations of companies in our
    industry, which we believe makes her a valuable member of our
    board of directors.
Michael C. Diem, MD
has served as one of our directors
    since July 2008. Dr. Diem has served as a Partner at SR
    One, Limited, or SR One, the venture capital subsidiary of
    GlaxoSmithKline, since September 2008. Dr. Diem joined SR
    One as an associate in July 2005. Prior to joining SR One,
    Dr. Diem was an associate at Frantz Medical Ventures and
    practiced as an attending physician. Dr. Diem holds a BA in
    biological sciences from Rutgers University, an MD from the
    University of Medicine and Dentistry of New Jersey-Robert Wood
    Johnson Medical School and an MBA from the Weatherhead School of
    Management at Case Western Reserve University, completed his
    residency training at Duke University Medical Center and is an
    alumnus of the Kauffman Fellows Program. Dr. Diem's
    scientific, medical and pharmaceutical background, as well as
    his investment experience, enable him to advise our board of
    directors on a wide range of strategic and other financial
    transactions, which makes him a valuable member of our board.
John H. Dillon, II
, has served as one of our
    directors since March 2006. Mr. Dillon has served as Managing
    Director and Chief Executive Officer of BioVerum Partners LLC, a
    healthcare consulting firm, since 2006. Before retiring in
    August 2004, Mr. Dillon served as Executive Vice President,
    Corporate Development and Senior Vice President, Marketing at
    Auxilium, where he managed all pre-launch and launch activities
    for Auxilium's first commercial product. Prior to joining
    Auxilium, Mr. Dillon served for more than 20 years in a
    variety of positions at SmithKline Beecham Corporation,
    including Vice President and Director of Worldwide
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Business Development, where he managed business development and
    strategic product planning. He has also served on the board of
    directors and as a member of the audit committee for Encysive
    Pharmaceuticals Inc., a publicly traded company. Mr. Dillon
    holds a BA in history from Lafayette College and an MBA from The
    Wharton School at the University of Pennsylvania. His extensive
    expertise in marketing and product development, as well as his
    background in business and strategic planning, have enabled him
    to advise our board of directors on a wide range of strategic,
    operations, marketing and development matters, which we believe
    makes him an asset to our board.
Richard S. Kollender
has served as one of our directors
    since December 2007. Mr. Kollender has served as a Partner
    at Quaker BioVentures, a venture capital firm with a focus on
    the life sciences industry, since October 2005. Mr.
    Kollender joined Quaker BioVentures as a Principal in 2003.
    Prior to joining Quaker BioVentures, Mr. Kollender served in a
    variety of sales, marketing and worldwide business development
    positions at GlaxoSmithKline, as an Investment Manager at SR One
    and as a Certified Public Accountant with KPMG LLP, with a
    significant emphasis on the healthcare and emerging businesses
    sectors. Mr. Kollender holds a BA from Franklin and
    Marshall College in Accounting and Business Administration and
    an MBA from the University of Chicago. Mr. Kollender's
    strong accounting background, pharmaceutical commercial
    experience and financial experience in the healthcare and
    emerging business sectors qualify him to serve as a member of
    our board of directors.
Gary J. Kurtzman, MD
has served as one of our directors
    since August 2006. Dr. Kurtzman has served as a Vice
    President at Safeguard since June 2006. Dr. Kurtzman is also a
    Managing Director in Safeguard's Life Science Group.
    Previously, he served in a variety of roles at BioAdvance from
    July 2002 until June 2006, with his most recent position being
    Managing Director and Chief Operating Officer. Dr. Kurtzman
    currently serves on the board of directors of Tengion, Inc., a
    publicly traded biotechnology company, and is a lecturer in
    health care management at The Wharton School at the University
    of Pennsylvania, where he teaches bioentrepreneurship.
    Dr. Kurtzman holds a BS from Stanford University, an MD
    from Washington University and completed post-doctoral training
    at the National Heart, Lung and Blood Institute and Stanford
    University. Dr. Kurtzman's strong background of
    service on the boards of directors of numerous biotechnology
    companies and his position as a managing director in an
    organization that provides capital to biotechnology companies
    make him a valuable member of our board of directors who will
    assist in the development of our growth strategy and business
    plans.
Mark W. Pierce, MD, PhD
has served as our Vice President
    and Chief Scientific Officer since October 2006. Previously,
    Dr. Pierce served as a Senior Vice President of
    Pfizer's Global Research and Development from July 2002
    through October 2005. Dr. Pierce holds a BA and a PhD from
    Northwestern University and an MD from Northwestern University
    Medical School. He received his postgraduate training in
    internal medicine at the Peter Bent Brigham Hospital and
    Massachusetts General Hospital in Boston. Dr. Pierce was
    previously an Instructor in Medicine and Associate Professor of
    Medicine at Harvard Medical School.
Board
    Composition and Election of Directors
Our board of directors currently consists of seven directors. In
    accordance with our restated certificate of incorporation, to be
    in effect upon the closing of this offering, our board of
    directors may establish from time to time by resolution the
    authorized number of directors. Upon the closing of this
    offering, eight directors will be authorized to serve on our
    board of directors. All of our directors are elected annually
    for a one-year
term until the next annual meeting of
    stockholders.
Under applicable NASDAQ Marketplace Rules, a director will only
    qualify as an "independent director" if, in the
    opinion of our board of directors, that person does not have a
    relationship that would interfere with the exercise of
    independent judgment in carrying out the responsibilities of a
    director.
Our board of directors has determined that each of our
    directors, with the exception of Ms. Hollingsworth, is an
    "independent director" as defined under
    Rule 5605(a)(2) of The NASDAQ Marketplace Rules. In making
    such determination, the board of directors considered the
    relationships that each such non-employee director has with our
    company and all other facts and circumstances that the board of
    directors deemed relevant in determining their independence,
    including the beneficial ownership of our capital stock by
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each non-employee director. In considering the independence of
    the directors listed above, our board of directors considered
    the association of our directors with the holders of more than
    five percent of our common stock. There are no family
    relationships among any of our directors or executive officers.
Board
    Leadership Structure and Board's Role in Risk
    Oversight
The positions of our chairman of the board and chief executive
    officer are separated. Separating these positions allows our
    chief executive officer to focus on our
day-to-day
business, while allowing the chairman of the board to lead the
    board of directors in its fundamental role of providing advice
    to and independent oversight of management. Our board of
    directors recognizes the time, effort and energy that the chief
    executive officer must devote to her position in the current
    business environment, as well as the commitment required to
    serve as our chairman, particularly as the board of
    directors' oversight responsibilities continue to grow. Our
    board of directors also believes that this structure ensures a
    greater role for the independent directors in the oversight of
    our company and active participation of the independent
    directors in setting agendas and establishing priorities and
    procedures for the work of our board of directors. This
    leadership structure also is preferred by a significant number
    of our stockholders. Our board of directors believes its
    administration of its risk oversight function has not affected
    its leadership structure.
Although our restated bylaws that will be in effect upon the
    closing of this offering will not require that our chairman and
    chief executive officer positions be separate, our board of
    directors believes that having separate positions is the
    appropriate leadership structure for us at this time and
    demonstrates our commitment to good corporate governance.
Risk is inherent with every business, and how well a business
    manages risk can ultimately determine its success. We face a
    number of risks, including those described under "Risk
    Factors." Our board of directors is actively involved in
    oversight of risks that could affect us. This oversight is
    conducted primarily through committees of the board of
    directors, as disclosed in the descriptions of each of the
    committees below, but the full board of directors has retained
    responsibility for general oversight of risks. Our board of
    directors satisfies this responsibility through full reports by
    each committee chair regarding the committee's
    considerations and actions, as well as through regular reports
    directly from officers responsible for oversight of particular
    risks within our company. Our board of directors believes that
    full and open communication between management and the board of
    directors is essential for effective risk management and
    oversight.
Board
    Committees
Our board of directors has an audit committee and a compensation
    committee and, as of the closing of this offering, will have a
    nominating and corporate governance committee. Upon the closing
    of this offering, each of these committees will operate under a
    charter that has been approved by our board of directors.
Audit
    Committee
Our audit committee consists of Ms. Cunicelli,
    Mr. Dillon and Dr. Diem. Mr. Dillon serves as the
    chair of our audit committee. Upon the closing of this offering,
    the responsibilities of the audit committee will include, among
    other things:
•
Evaluating the performance, independence and qualifications of
    our independent auditors and determining whether to retain our
    existing independent auditors or engage new independent auditors;
•
Reviewing and approving the engagement of our independent
    auditors to perform audit services and any permissible non-audit
    services;
•
Monitoring the rotation of partners of our independent auditors
    on our engagement team as required by law;
•
Reviewing our annual and quarterly financial statements and
    reports and discussing the statements and reports with our
    independent auditors and management;
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•
Reviewing with our independent auditors and management
    significant issues that arise regarding accounting principles
    and financial statement presentation, and matters concerning the
    scope, adequacy and effectiveness of our financial controls;
•
Reviewing with management and our auditors any earnings
    announcements and other public announcements regarding material
    developments;
•
Establishing procedures for the receipt, retention and treatment
    of complaints received by us regarding financial controls,
    accounting or auditing matters and other matters;
•
Preparing the audit committee report that the SEC requires in
    our annual proxy statement;
•
Reviewing the disclosures of the chief executive officer and
    chief financial officer during their certification process for
    our
Form 10-K
and
Form 10-Q
filings with the SEC;
•
Reviewing and providing oversight with respect to any related
    party transactions and monitoring compliance with our code of
    ethics;
•
Reviewing our investment, risk assessment and management and
    accounting policies on a periodic basis;
•
Reviewing the adequacy of our audit committee charter on a
    periodic basis; and
•
Reviewing and evaluating the performance of the audit committee,
    including compliance of the audit committee with its charter.
Our board of directors has determined that each of the directors
    serving on our audit committee is independent within the meaning
    of The NASDAQ Marketplace Rules and Rule
10A-3
under
    the Securities Exchange Act of 1934, as amended, or the Exchange
    Act. In addition, our board of directors has determined that
qualifies as an audit committee financial expert within the
    meaning of SEC regulations and The NASDAQ Marketplace Rules. In
    making this determination, our board has considered the formal
    education and nature and scope of his/her
previous
    experience, coupled with past and present service on various
    audit committees. Both our independent auditors and management
    periodically meet privately with our audit committee.
Compensation
    Committee
Our compensation committee consists of Mr. Cola,
    Mr. Kollender and Dr. Kurtzman. Mr. Kollender
serves as the chair of our compensation committee. Upon the
    closing of this offering, the responsibilities of the
    compensation committee will include, among other things:
•
Reviewing, approving and, in the case of our chief executive
    officer, recommending to our board of directors the compensation
    and other terms of employment of our executive officers,
    including the terms of any employment agreements, severance
    arrangements, change in control protections and any other
    compensatory arrangements;
•
Reviewing, approving and, in the case of our chief executive
    officer, recommending to our board of directors performance
    goals and objectives relevant to the compensation of our
    executive officers and assessing their performance against these
    goals and objectives;
•
Evaluating and approving the equity incentive plans,
    compensation plans and similar programs advisable for us, as
    well as modification or termination of existing plans and
    programs;
•
Evaluating, approving and, in the case of our chief executive
    officer, recommending to our board of directors the type and
    amount of compensation to be paid or awarded to board members;
•
Administering our equity incentive plans;
•
Establishing policies with respect to equity compensation
    arrangements;
•
Reviewing the competitiveness of our executive compensation
    programs and evaluating the effectiveness of our compensation
    policy and strategy in achieving expected benefits to us;
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•
Reviewing with management our disclosures under the
    "Compensation Discussion and Analysis" section and
    recommending to the full board of directors inclusion in our
    periodic reports to be filed with the SEC;
•
Preparing the report that the SEC requires in our annual proxy
    statement;
•
Reviewing the adequacy of our compensation committee charter on
    a periodic basis; and
•
Reviewing and evaluating the performance of our compensation
    committee.
Nominating
    and Corporate Governance Committee
Upon the closing of this offering, we will establish a
    nominating and corporate governance committee on which we expect
,
and
will initially serve.
will serve as the chair of our nominating and corporate
    governance committee. Upon the closing of this offering, the
    responsibilities of the nominating and corporate governance
    committee will include, among other things:
•
Identifying, reviewing, evaluating, nominating and recommending
    candidates to serve on our board of directors;
•
Determining the minimum qualifications for service on our board
    of directors;
•
Evaluating director performance on the board of directors and
    applicable committees of the board;
•
Considering nominations by stockholders of candidates for
    election to our board of directors;
•
Considering and assessing the independence of members of our
    board of directors;
•
Developing, as appropriate, a set of corporate governance
    principles, and reviewing and recommending to our board of
    directors any changes to such principles;
•
Periodically reviewing our policy statements to determine their
    adherence to our code of business conduct and ethics and
    considering any request by our directors or executive officers
    for a waiver from such code;
•
Reviewing the adequacy of its charter on a periodic
    basis; and
•
Evaluating the performance of our nominating and corporate
    governance committee.
Compensation
    Committee Interlocks and Insider Participation
No member of our compensation committee has ever been an officer
    or employee of ours. None of our officers currently serves, or
    has served during the last completed year, on our compensation
    committee or the board of directors of any other entity that has
    one or more of its officers serving as a member of our board of
    directors or compensation committee. Prior to establishing our
    compensation committee, our full board of directors made
    decisions relating to compensation of our officers.
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EXECUTIVE
    COMPENSATION
Compensation
    Discussion and Analysis
In this Compensation Discussion and Analysis, we address the
    compensation determinations and the rationale for those
    determinations relating to our chief executive officer, our
    chief financial officer and our next three most highly
    compensated executive officers who were serving as executive
    officers as of December 31, 2009. We refer to these
    executive officers collectively as our "named executive
    officers." Our named executive officers for the year ended
    December 31, 2009 are:
•
Jane H. Hollingsworth, Chief Executive Officer;
•
Terri B. Sebree, President;
•
Keith A. Goldan, Vice President and Chief Financial Officer;
•
Gerald W. McLaughlin, Vice President Commercial
    Operations; and
•
Ezra H. Felker, Vice President Business Development.
Objectives
    and Philosophy of Executive Compensation
The primary objective of our executive compensation program, as
    established by the compensation committee of our board of
    directors, is to attract, retain and motivate individuals who
    possess knowledge, experience and skills that we believe are
    important to the advancement of our business of developing and
    commercializing branded therapeutics for diseases of the central
    nervous system, including neurological and psychiatric disorders.
Specifically, our compensation programs are designed to:
•
Attract and retain individuals with superior ability and
    managerial experience;
•
Align executive officers' incentives with our corporate
    strategies, business objectives and the long-term interests of
    our stockholders; and
•
Increase the incentive to achieve key strategic performance
    measures by linking incentive award opportunities to the
    achievement of performance objectives in these areas and by
    providing a portion of total compensation opportunities for
    executive officers in the form of direct ownership in our
    company.
To achieve these objectives, we seek to provide a competitive
    compensation package that ties a substantial portion of the
    executive's overall compensation to both our company
    objectives and the executive's individual performance. Base
    salary increases and annual performance bonuses are tied to our
    company and individual performance in relation to competitive
    market conditions. Equity awards are primarily used to promote
    long-term stockholder value and employee retention through the
    use of multi-year vesting schedules that provide an incentive to
    the executive to remain in the employ of the company through the
    end of the vesting period in order to share in any increase in
    the value of our company over time.
Determination
    of Executive Compensation
Our compensation committee oversees our compensation and benefit
    plans and policies, administers our equity incentive plans and
    reviews and approves annually all compensation decisions
    relating to all executive officers.
When determining our executive compensation policies, reviewing
    the performance of our executive officers and establishing
    compensation levels and programs, our compensation committee
    considers recommendations from Ms. Hollingsworth, our chief
    executive officer, regarding the compensation for executive
    officers other than herself. Ms. Hollingsworth does not
    participate in determining the amount of her own compensation.
    With the exception of our chief executive officer, our
    compensation committee has the final authority regarding the
    overall compensation structure for our executive officers. In
    the case of Ms. Hollingsworth, our compensation committee
    evaluates Ms. Hollingsworth's performance, with
    significant input and recommendations from the chairman of our
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compensation committee, and recommends compensation levels to
    the board of directors, which sets her compensation.
Prior to this offering, we have not used a peer group to engage
    in benchmarking in determining our total compensation or the
    primary components of compensation for our executive officers.
    In reviewing compensation levels for 2009 and 2010, our
    compensation committee reviewed survey information for private
    life sciences companies published in CompStudy, an annual survey
    of compensation for executives at more than 700 private life
    sciences and technology companies conducted by J. Robert Scott
    in partnership with Ernst & Young LLP. As a survey
    participant, we had access to survey data, which we used to
    provide information to our compensation committee in setting
    compensation.
In the future, we expect that our compensation committee will
    engage a compensation consultant, establish comprehensive
    policies and guidelines for executive compensation and conduct
    competitive benchmarking against a peer group of public
    companies established in consultation with the compensation
    consultant.
Elements
    of Executive Compensation
The compensation for our executive officers consists of the
    following principal elements:
•
Base salary;
•
Annual performance bonuses; and
•
Long-term incentives in the form of equity grants.
We do not have a formal or informal policy or target for
    allocating compensation between long-term and short-term
    compensation, cash and non-cash compensation, or among different
    forms of non-cash compensation. Our compensation committee has
    balanced our need to preserve cash with the expectations of
    those we hope to recruit and retain as executives. In the
    future, we may adjust the mix of cash and non-cash compensation
    if required by competitive market conditions for attracting and
    retaining skilled personnel.
We have set salary levels and the size of annual performance
    bonuses based on individual performance and by comparison to
    market survey data in CompStudy. Equity grant awards have been
    our primary form of long-term incentive and retention benefits,
    which have the benefit of not requiring a cash outlay from our
    company. We use awards of equity as a significant component of
    the initial compensation incentive when we hire executive
    officers. We have generally made equity grants to existing
    executives at times when we have raised capital from new
    investors, and not as a part of annual compensation. Our equity
    awards to executive officers generally have vesting schedules
    over four years, which we believe results in a retention
    incentive for our executives. If an executive voluntarily leaves
    our employ before the completion of the vesting period, then
    that executive would not receive any benefit from the non-vested
    portion of his or her award.
Base
    Salary
We generally establish base salaries for our executive officers
    based on the scope of their responsibilities and the amount and
    type of work experience prior to joining us, taking into account
    competitive market compensation paid by other companies for
    similar positions. In general, our compensation committee
    reviews base salaries annually based on these factors to adjust
    salaries to reflect current market levels. We may also adjust
    base salaries from time to time during the year in connection
    with promotions or in light of changes in market conditions. For
    2009 and 2010, the base salaries for our named executive
    officers are set forth in the table below:
2009
2010
Named Executive Officer
Base Salary
Base Salary
Jane H. Hollingsworth
$
304,756
$
320,000
Terri B. Sebree
280,000
293,000
Keith A. Goldan
275,000
280,000
Gerald W. McLaughlin
206,876
216,500
Ezra H. Felker
196,833
216,500
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In setting salary levels for 2009 and 2010, our compensation
    committee had a goal of setting target compensation for our
    named executive officers at levels the committee believed to be
    competitive for companies of similar size and stage of
    development operating in the life sciences industry. To
    accomplish this, our compensation committee reviewed CompStudy
    survey information for private therapeutics companies with 20 to
    40 employees, revenue of up to $40 million and between two
    to five rounds of outside investor financing. Salary levels for
    our named executive officers for 2010 were increased, based on
    the position and industry experience of the individual, to
    provide them generally with a level of total compensation in the
mid-range
for comparable positions. Salaries for 2009 were increased on
    the same basis, from 2008 salaries of $295,880 for
    Ms. Hollingsworth, $262,500 for Ms. Sebree, $200,850
    for Mr. McLaughlin and $191,100 for Mr. Felker.
    Mr. Goldan's 2008 salary of $275,000 was negotiated at
    the time he was hired in November 2008 and remained at the same
    level for 2009.
Annual
    Performance Bonus Compensation
We pay annual performance bonuses to reward the performance
    achievements of our named executive officers. We generally pay
    these bonuses in cash, and an executive must be employed by us
    on the pay date to receive a bonus. Each named executive officer
    is assigned a targeted maximum payout, expressed as a percentage
    of his or her base salary for the year, which varies by their
    role with us. Each named executive officer's annual
    performance bonus is generally determined based on our
    achievement of company objectives and the executive
    officer's individual performance goals. For 2009, our chief
    executive officer's annual performance bonus was determined
    solely based on attainment of company objectives. Our board of
    directors and compensation committee determined that this was
    appropriate given our chief executive officer's
    responsibility for the overall direction and success of our
    business. Our company objectives generally relate to the
    achievement of preestablished performance goals based on
    company-wide business objectives. Individual performance goals
    are based on either key operational objectives, functional
    objectives within the executive's area of responsibility,
    or a combination of operational and functional objectives. If
    our company's or an executive officer's performance
    does not meet one or more of the objectives established for the
    year, then the portion of annual performance bonus attributable
    to that objective will not be paid.
The performance objectives are generally objectively
    determinable and measurable and their outcomes are uncertain at
    the time established. When we set the 2009 objectives, we
    considered them to be ambitious, but attainable and designed to
    cause annual performance bonus payments to reflect meaningful
    performance requirements.
Our compensation committee authorizes annual performance bonuses
    to the executive officers, other than the chief executive
    officer, in amounts that are commensurate with each executive
    officer's targeted maximum annual performance bonus and the
    result achieved by the end of the year. Prior to this offering,
    our compensation committee has authorized our chief executive
    officer to establish individual performance goals for each other
    executive officer on a basis consistent with compensation
    objectives for the year. At the end of the year, our chief
    executive officer assesses the achievement of the objectively
    determinable individual performance goals of the executive
    officers, other than herself, reports her findings to our
    compensation committee and submits recommendations for annual
    performance bonus payouts for the approval of our compensation
    committee. Our compensation committee reviews our chief
    executive officer's analysis and in its sole discretion may
    accept or reject, in whole or in part, the recommendations of
    Ms. Hollingsworth.
For our chief executive officer, our compensation committee
    assesses the achievement of the objectively determinable
    performance goals and reports its findings and annual
    performance bonus recommendations to our board of directors. In
    its sole discretion, our board of directors may accept or
    reject, in whole or in part, the annual performance bonus
    recommendations of our compensation committee. For 2009, our
    board of directors reviewed and accepted our compensation
    committee's annual performance bonus recommendation with
    respect to Ms. Hollingsworth.
As discussed above, Ms. Hollingsworth's 2009 annual
    performance bonus award payout was based 100% on the achievement
    of our company objectives. The 2009 annual performance bonuses
    for each of the other named executive officers was based 75% on
    the achievement of company objectives and 25% on the
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achievement of individual performance objectives. Our
    compensation committee establishes our company objectives for
    each fiscal year prior to the end of the first quarter of the
    year and determines a separate weighting for each of our company
    objectives. For 2009, our company objectives, including their
    weightings, are set forth below:
•
Successfully complete our pivotal Phase III clinical trial
    for Zelrix (weighted 50%);
•
Facilitate a significant transaction involving our company or
    Zelrix (weighted 25%); and
•
Raise capital in 2009 through new investors (weighted 25%).
For 2009, we completed our pivotal Phase III clinical trial
    for Zelrix but did not achieve the other two company objectives.
    As a result, in March 2010, Ms. Hollingsworth was paid 50%
    of her 2009 targeted annual performance bonus. All other named
    executive officers were allocated 50% of the company objective
    portion of their 2009 annual performance bonus award payout.
As discussed above, our chief executive officer established
    individual performance objectives for each other executive
    officer at approximately the same time as the company objectives
    were established. Each component of the individual performance
    goals was assigned equal weight for 2009.
Ms. Sebree's 2009 individual performance goals
    consisted entirely of operational objectives related to:
•
Completing pivotal Phase III clinical trial for Zelrix;
•
Establishing commercial manufacturing arrangements for Zelrix;
•
Preparing an NDA for Zelrix; and
•
Implementing preclinical studies for NP201.
Mr. Goldan's 2009 individual performance goals
    consisted of the same operational objectives as Ms. Sebree
    and functional objectives related to:
•
Developing and implementing financing arrangements;
•
Improving financial controls, financial management, budgeting
    and forecasting; and
•
Managing information technology, facilities, human resources and
    treasury functions.
Mr. McLaughlin's 2009 individual performance goals
    consisted entirely of functional objectives related to:
•
Developing plans for commercial launch of Zelrix;
•
Developing marketing plans for Zelrix, including packaging and
    market research;
•
Establishing support for Zelrix with key opinion leaders; and
•
Engaging in efforts to identify new product candidates and
    partnering opportunities.
Mr. Felker's 2009 individual performance goals
    consisted of the same operational objectives as Ms. Sebree
    and functional objectives related to:
•
Engaging in efforts to identify partnering opportunities;
•
Establishing manufacturing relationships for Zelrix;
•
Developing strategies for continued enhancement of migraine
    patch design; and
•
Creating strategies for development and partnering of NP201.
The compensation committee assessed the performance of these
    named executive officers against the individual performance
    metrics and determined they achieved the following percentages
    for individual performance: Ms. Sebree, 56%,
    Mr. Goldan, 58%, Mr. McLaughlin, 80%, and
    Mr. Felker, 50%.
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Taking into account the relative weighting of the corporate and
    individual performance goals, with 75% for corporate goals and
    25% for individual performance goals for the named executive
    officers other than Ms. Hollingsworth, and the achievement of
    these goals on a percentage basis as described above, we paid
    each named executive officer the following 2009 annual
    performance bonus in 2010:
2009 Annual Performance Bonus
Maximum as
Maximum
Actual
% of 2009
Bonus
% of Maximum
Bonus
Named Executive Officer
Base Salary
Amount
Achieved
Payout
Jane H. Hollingsworth
40
%
$
121,902
50
%
$
60,952
Terri B. Sebree
30
84,000
52
43,680
Keith A. Goldan
30
82,500
52
42,900
Gerald W. McLaughlin
25
51,719
58
29,997
Ezra H. Felker
25
49,208
50
24,604
For 2010, the compensation committee has set the following
    maximum annual performance bonus amounts:
2010 Annual Performance Bonus
Maximum as
Maximum
% of 2010
Bonus
Named Executive Officer
Base Salary
Amount
Jane H. Hollingsworth
40
%
$
128,000
Terri B. Sebree
35
102,500
Keith A. Goldan
30
84,000
Gerald W. McLaughlin
30
65,950
Ezra H. Felker
30
65,950
The compensation committee established the maximum annual
    performance bonus amounts for 2010 so that total annual
    compensation for the named executive officer was in the
    mid-range based on position and experience of the CompStudy
    survey, which resulted in an increase in the maximum bonus as a
    percentage of 2010 salary for Ms. Sebree, Mr. McLaughlin and Mr.
    Felker.
Long-Term
    Incentive Compensation
We believe that long-term performance is enhanced through stock
    and equity awards that reward our executives for maximizing
    stockholder value over time and that align the interests of our
    employees and management with those of stockholders. Our
    compensation committee believes that the use of equity awards
    offers an effective way to align the interests of our executive
    officers with our stockholders because equity ownership ties a
    significant portion of an executive's potential
    compensation to the market price of our stock. Prior to this
    offering, we have used stock options and, to a very limited
    degree, restricted stock, as the primary long-term equity
    incentive vehicle. Our last grants of restricted stock were in
    2006 when the fair value of our stock was lower and the awards
    had less income tax consequence to the executive upon vesting.
    Since then, we have made option grants to executive officers who
    are newly hired, and generally made stock option grants to
    existing executives at times when we have raised capital from
    new investors.
We expect to continue to use equity awards as a long-term
    incentive vehicle, with vesting based on multi-year periods and,
    perhaps, performance-based goals. These equity awards may be in
    the form of stock options, restricted stock or restricted stock
    units. We believe that:
•
The opportunity to receive future equity awards provides an
    incentive for executives to deliver superior performance;
•
The vesting period of equity awards helps retain executives;
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•
Equity awards are inherently performance-based because the value
    our executives realize from the equity award depends on the
    success of our business and any increase in the market price of
    our common stock following this offering; and
•
Equity awards help to provide a balance to the overall executive
    compensation program as base salary and our annual performance
    bonus program focus on short-term compensation, while equity
    grants reward executives for increases in stockholder value over
    the longer term.
Our 2005 Equity Compensation Plan, or our 2005 Plan, authorizes
    us to grant a wide variety of equity awards, including stock
    options, restricted stock, restricted stock units, stock
    appreciation rights, or SARs, and other stock-based awards to
    our employees and executive officers as well as non-employee
    members of our board of directors and certain consultants and
    advisors to the company. Our 2005 Plan is described in more
    detail under "— Employee Benefit Plans."
We have not generally used equity compensation in our annual
    performance bonus program. We have typically paid these bonuses
    in cash. To preserve cash, however, our compensation committee
    did not pay cash bonuses for 2008. The compensation committee
    instead granted fully vested stock options to our named
    executive officers in January 2009. The compensation committee
    determined the grant amounts based on a subjective analysis of
    the performance and the relative position of each executive in
    the management team, and not based on specific performance goals
    for 2008. Our named executive officers received fully vested
    stock options to purchase the following number of shares of
    common stock: Ms. Hollingsworth —
    67,000 shares; Ms. Sebree —
    60,000 shares; Mr. McLaughlin —
    48,000 shares; and Mr. Felker —
    36,000 shares. Mr. Goldan did not receive an option
    grant because he had recently joined us in November 2008, at
    which time he received a new hire option grant.
Our board of directors has adopted a new 2010 Omnibus Incentive
    Compensation Plan, or our 2010 Plan, which we expect to be
    approved by our stockholders prior to this offering and is
    described in more detail under "— Employee
    Benefit Plans." Immediately following the closing of this
    offering, our 2010 Plan will replace our existing 2005 Plan for
    use in granting future equity awards, including stock options,
    restricted stock, restricted stock units, SARs and other
    stock-based awards, including equity grants intended to qualify
    as "qualified performance-based compensation" under
    Section 162(m) of the Code, to our executive officers and
    our other employees, as well as non-employee members of our
    board of directors and our consultants and advisors. Our 2010
    Plan also provides for the grant of cash awards to our named
    executive officers that are considered "qualified
    performance-based compensation" under Section 162(m)
    of the Code.
Our board of directors has delegated oversight of the
    administration of our equity compensation plans to our
    compensation committee. We do not have any equity security
    ownership guidelines or requirements for our executive officers.
    We do not have any program, plan or obligation that requires us
    to grant equity compensation on specified dates. The
    compensation committee considers and approves equity awards to
    executive officers based upon a review of competitive
    compensation data, its assessment of individual performance, a
    review of each executive's existing long-term incentives
    and retention considerations.
The exercise price of stock options is the fair value of our
    common stock as determined by our board of directors or
    compensation committee on the date of grant. Our stock options
    typically vest over a four-year period, either monthly over 48
    months or with 25% vesting 12 months after the vesting
    commencement date and the remainder vesting monthly thereafter
    over a three-year period, subject to continued employment or
    association with us, and generally expire ten years after the
    date of grant. Incentive stock options also include terms
    necessary to assure compliance with the applicable provision of
    the Code.
Because we have not been a public company, we have not made
    equity grants in connection with the release or withholding of
    material non-public information. However, we intend to implement
    policies to ensure that equity awards are granted at fair market
    value on the date that the grant action occurs.
Other
    Benefits
Executive officers are eligible to participate in all of our
    employee benefit plans, such as medical, dental, vision, group
    life, short and long-term disability, and our 401(k) plan, in
    each case on the same basis as other
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employees, subject to applicable laws. We also provide vacation
    and other paid holidays to all employees, including our
    executive officers.
Tax
    Considerations
As discussed above, our compensation committee considers the tax
    and accounting treatment associated with the cash and equity
    awards it makes, although these considerations are not
    dispositive. Section 162(m) of the Code places a limit of
    $1.0 million per person on the amount of compensation that
    we may deduct in any year with respect to each of our named
    executive officers. There is an exemption from the
    $1.0 million limitation for performance-based compensation
    that meets certain requirements. Since we are a privately held
    corporation, Section 162(m) does not currently apply to our
    compensation. Under the transition rules, in general,
    compensation paid under a plan that existed while we are private
    is exempt from the $1.0 million deduction limit until the
    third annual meeting of our stockholders following this
    offering. We will take these transition rules into account when
    awarding compensation to our named executive officers. Following
    this offering, grants of options or SARs under our 2010 Plan are
    intended to qualify for the exemption. Grants of restricted
    shares or stock units that are made in the future under our 2010
    Plan may qualify for the exemption if vesting is contingent on
    the attainment of objectives based on the performance criteria
    set forth in the plan and if certain other requirements are
    satisfied. Grants of restricted shares or stock units that vest
    solely on the basis of service cannot qualify for the exemption.
    In addition, the terms of our 2010 Plan contemplate that cash
    performance bonuses made in the future may qualify for the
    exemption. To maintain flexibility in compensating officers in a
    manner designed to promote varying company goals, our
    compensation committee has not adopted a policy requiring all
    compensation to be deductible. Our compensation committee may
    approve compensation or changes to plans, programs or awards
    that may cause the compensation or awards to exceed the
    limitation under Section 162(m) if it determines that
    action is appropriate and in our best interests.
Summary
    Compensation Table
The following table sets forth information for the year ended
    December 31, 2009 regarding compensation awarded to or
    earned by our named executive officers.
Non-Equity
Incentive
Option
Plan
All Other
Salary
Awards
(1)
Compensation
(2)
Compensation
(3)
Total
Name and Principal Position
Year
($)
($)
($)
($)
($)
Jane H. Hollingsworth
2009
$
304,483
$
11,377
$
60,952
$
8,705
$
385,517
Chief Executive Officer
Terri B. Sebree
2009
279,462
10,188
43,680
8,705
342,035
President
Keith A. Goldan
2009
275,000
—
42,900
8,718
326,618
Vice President and Chief Financial Officer
Gerald W. McLaughlin
2009
206,690
8,150
29,997
7,555
252,392
Vice President Commercial Operations
Ezra H. Felker
2009
196,657
6,113
24,604
7,221
234,595
Vice President Business Development
(1)
Amounts reflect the grant date fair value of option awards
    granted in 2009 in accordance with FASB ASC Topic 718, or
    ASC 718, formerly Statement of Financial Accounting
    Standards No. 123R. Our named executive officers will only
    realize compensation to the extent the market price of our
    common stock is greater than the exercise price of such stock
    options. For information regarding assumptions underlying the
    valuation of equity awards, see note 8 to our financial
    statements appearing at the end of this prospectus.
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(2)
Amounts represent annual performance bonus compensation earned
    for the year ended December 31, 2009 based on
    pre-established performance objectives. Annual performance bonus
    compensation for 2009 was paid in 2010. Our annual performance
    bonus program is described in more detail under
    "— Compensation Discussion and
    Analysis — Annual Performance Bonus Compensation."
(3)
Amounts include the premium amounts paid by us for life
    insurance and long-term disability insurance coverage for the
    named executive officer, plus the employer matching
    contributions made on behalf of the named executive officer to
    our 401(k) plan.
Grants of
    Plan-Based Awards
The following table sets forth information regarding grants of
    plan-based awards to the named executive officers during the
    year ended December 31, 2009. Annual performance bonus
    amounts paid in respect of the non-equity plan incentive awards
    for 2009 are reported in the Summary Compensation Table under
    the Non-Equity Incentive Plan Compensation column.
All Other
Option
Grant
Awards:
Exercise
Date Fair
Estimated Future Payouts Under
Number of
or Base
Value of
Non-Equity Incentive
Securities
Price of
Stock and
Plan
    Awards
(1)
Underlying
Option
Option
Grant
Threshold
Target
Maximum
Options
(2)
Awards
(3)
Awards
(4)
Name
Date
($)
($)
($)
(#)
($/Sh)
($)
Jane H. Hollingsworth
1/29/2009
—
—
—
67,000
$
0.24
$
11,377
1/29/2009
—
—
$
121,902
—
—
—
Terri B. Sebree
1/29/2009
—
—
—
60,000
0.24
10,188
1/29/2009
—
—
84,000
—
—
—
Keith A. Goldan
1/29/2009
—
—
82,500
—
—
—
Gerald W. McLaughlin
1/29/2009
—
—
—
48,000
0.24
8,150
1/29/2009
—
—
51,719
—
—
—
Ezra H. Felker
1/29/2009
—
—
—
36,000
0.24
6,113
1/29/2009
—
—
49,208
—
—
—
(1)
Amounts represent maximum payouts for 2009 annual performance
    bonuses determined by our compensation committee for each named
    executive as a percentage of 2009 base salary.
(2)
Amounts represent 2008 annual incentive compensation that was
    paid in January 2009 in the form of fully vested stock options.
(3)
Amounts represent the fair value of our common stock as
    determined in good faith by our compensation committee on the
    date of the grant.
(4)
Amounts reflect the aggregate grant date fair value of the
    awards calculated in accordance with ASC 718.
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Outstanding
    Equity Awards at December 31, 2009
The following table sets forth information regarding outstanding
    equity awards granted to our named executive officers that
    remain outstanding as of December 31, 2009. Equity awards
    made to our named executive officers are described in more
    detail under "— Compensation Discussion and
    Analysis — Long-Term Incentive Compensation."
Option Awards
Stock Awards
Number of
Number of
Number of
Market Value
Securities
Securities
Shares or
of Shares or
Underlying
Underlying
Option
Units of
Units of
Unexercised
Unexercised
Exercise
Option
Stock That
Stock That
Options (#)
Options (#)
Price
Expiration
Have Not
Have Not
Name
Exercisable
Unexercisable
($)
Date
Vested
    (#)
(1)
Vested
    ($)
(2)
Jane H. Hollingsworth
100,000
—
$
0.10
7/19/2015
—
—
665,789
1,214,088
(3)
0.24
9/11/2018
—
—
67,000
—
0.24
1/29/2019
—
—
—
—
—
—
25,000
$
6,000
Terri B. Sebree
100,000
—
0.10
7/19/2015
—
—
373,322
680,764
(3)
0.24
9/11/2018
—
—
60,000
—
0.24
1/29/2019
—
—
—
—
—
—
25,000
6,000
Keith A. Goldan
199,780
599,342
(4)
0.24
12/15/2018
—
—
Gerald W. McLaughlin
91,000
91,000
(5)
0.18
9/20/2017
—
—
161,956
295,333
(3)
0.24
9/11/2018
—
—
48,000
—
0.24
1/29/2019
—
—
Ezra H. Felker
75,000
25,000
(6)
0.12
1/2/2016
—
—
78,750
26,250
(7)
0.18
10/12/2016
—
—
132,560
241,729
(3)
0.24
9/11/2018
—
—
36,000
—
0.24
1/29/2019
—
—
—
—
—
—
15,000
3,600
(1)
All restricted stock awards were granted on March 16, 2006
    and vest based on the achievement of performance factors.
(2)
The market value of the restricted stock awards is based on the
    fair value of $0.24 per share of our common stock as of
    December 31, 2009, as determined in good faith by our
    compensation committee.
(3)
Such stock option vests in equal monthly increments over the
    48-month period following September 11, 2008.
(4)
Such stock option vested 25% on November 3, 2009 and the
    remainder vests in equal monthly increments over the 36-month
    period following November 3, 2009.
(5)
Such stock option vested 25% on each of September 20, 2007
    and 2009 and vests 25% on each of September 20, 2010 and
    2011.
(6)
Such stock option vested 25% on each of January 2, 2007,
    2008, 2009 and 2010.
(7)
Such stock option vested 25% on each of October 12, 2007,
    2008 and 2009 and vests 25% on October 12, 2010.
Option
    Exercises and Stock Vested
None of our named executive officers exercised stock options or
    had restricted stock vest during 2009. On April 27, 2009,
    Ms. Hollingsworth forfeited 378,000 shares of restricted
    stock and Ms. Sebree forfeited 117,000 shares of
    restricted stock pursuant to the performance-based vesting terms
    of their August 31, 2006
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restricted stock grant agreements, which were not met. Equity
    awards made to the named executive officers are described in
    more detail under "— Compensation Discussion and
    Analysis — Long-Term Incentive Compensation."
Pension
    Benefits
None of our named executive officers participate in or have
    account balances in qualified or non-qualified defined benefit
    plans sponsored by us. Our compensation committee may elect to
    adopt qualified or non-qualified benefit plans in the future if
    it determines that doing so is in our best interests.
Nonqualified
    Deferred Compensation
None of our named executive officers participate in or have
    account balances in nonqualified defined contribution plans or
    other nonqualified deferred compensation plans maintained by us.
    Our compensation committee may elect to provide our officers and
    other employees with non-qualified defined contribution or other
    nonqualified deferred compensation benefits in the future if it
    determines that doing so is in our best interests.
Employee
    Benefit Plans
2005
    Plan and 2010 Plan
Our board of directors previously adopted our 2005 Plan, which
    was approved by stockholders effective as of July 19, 2005,
    to provide for the grant of incentive stock options,
    nonqualified stock options, stock awards, stock units, SARs and
    other equity-based awards to employees, certain consultants and
    advisors and non-employee members of the board.
On          ,
    2010, our board of directors adopted our 2010 Plan, which was
    approved by our stockholders
    on          ,
    2010. Our 2010 Plan will become effective immediately prior to
    the effective date of the registration statement for this
    offering. Our 2010 Plan provides for the grant of incentive
    stock options, nonqualified stock options, stock awards, stock
    units, performance units, SARs and other stock-based awards to
    employees, certain consultants and advisors and non-employee
    members of the board. Our 2010 Plan will also provide for the
    grant of equity awards intended to qualify as "qualified
    performance-based compensation" for purposes of
    Section 162(m) of the Code and for the payment of bonus
    awards in cash to selected executive employees that are also
    intended to so qualify.
As of the effective date of our 2010 Plan, our 2005 Plan will be
    merged with and into our 2010 Plan and no additional grants will
    be made thereafter under our 2005 Plan. Outstanding grants under
    our 2005 Plan will continue in effect according to their terms
    as in effect before our 2010 Plan merger, and the shares with
    respect to outstanding grants under our 2005 Plan will be issued
    or transferred under our 2010 Plan.
Except as provided in the description below with respect to the
    definition of a change of control under our 2005 Plan, the
    descriptions provided below regarding incentive stock options,
    nonqualified stock options, stock awards, stock units, SARs and
    other stock-based awards under our 2010 Plan are also applicable
    to the terms of such awards under our 2005 Plan. Our 2005 Plan
    does not provide for payment of performance units or cash bonus
    awards.
Under our 2005 Plan, a change of control occurs if:
•
A person, entity or affiliated group (with certain exceptions)
    acquires more than 50% of our then outstanding voting securities;
•
A transaction in which we merge into another entity is
    consummated unless the holders of our voting shares immediately
    prior to the merger have at least 50% of the combined voting
    power of the securities in the merged entity or its parent;
•
We sell or dispose of all or substantially all of our assets; or
•
We are liquidated or dissolved.
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2010
    Plan
Introduction.
The purpose of our 2010 Plan is
    to attract and retain employees, non-employee directors and
    consultants and advisors. Our 2010 Plan provides for the
    issuance of incentive stock options, nonqualified stock options,
    stock awards, stock units, performance units, SARs and other
    stock-based awards. Our 2010 Plan also provides for the issuance
    of annual bonus awards, intended to qualify as "qualified
    performance-based compensation" for purposes of
    Section 162(m) of the Code, to selected executive
    employees. Our 2010 Plan is intended to provide an incentive to
    participants to contribute to our economic success by aligning
    the economic interests of participants with those of our
    stockholders.
Administration.
Our 2010 Plan will be
    administered by our compensation committee, and our compensation
    committee will determine all of the terms and conditions
    applicable to grants under our 2010 Plan. Our compensation
    committee will also determine who will receive grants under our
    2010 Plan and the number of shares of common stock that will be
    subject to grants, except that grants to members of our
    compensation committee must be authorized by a disinterested
    majority of our board of directors.
Awards.
Our 2010 Plan authorizes the issuance
    or transfer of up
    to           shares
    of common stock, which includes the number of shares that are
    subject to outstanding grants under our 2005 Plan and shares
    that remain available for issuance under our 2005 Plan. During
    the term of our 2010 Plan, the share reserve will automatically
    increase on the first trading day in January each calendar year,
    beginning in calendar year 2011, by an amount equal to the
    lesser of     % of the total number of
    outstanding shares of common stock on the last trading day in
    December in the prior calendar year
    or          
    shares. In no event will any such annual increase
    exceed           shares.
If any options or SARs, including options and SARs granted under
    our 2005 Plan, terminate, expire or are canceled, forfeited,
    exchanged or surrendered without having been exercised or if any
    stock awards, stock units or other stock-based awards, including
    awards granted under our 2005 Plan, are forfeited, terminated or
    otherwise not paid in full, the shares subject to such grants
    will again be available for purposes of our 2010 Plan. In
    addition, if any shares of our common stock are surrendered in
    payment of the exercise price of an option or stock appreciation
    right, the number of shares available for issuance under our
    2010 Plan will be reduced only by the net number of shares
    actually issued upon exercise and not by the total number of
    shares under which such option or stock appreciation right is
    exercised. If shares of our common stock otherwise issuable
    under our 2010 Plan are withheld in satisfaction of the
    withholding taxes incurred in connection with the issuance,
    vesting or exercise of any grant or the issuance of our common
    stock, then the number of shares of our common stock available
    for issuance under our 2010 Plan shall be reduced by the net
    number of shares issued, vested or exercised under such grant.
    If any grants are paid in cash, and not in shares of our common
    stock, any shares of our common stock subject to such grants
    will also be available for future grants.
Our 2010 Plan also contains annual limits
    of           shares
    for all grants measured in shares of common stock and
    $     , for all grants measured in cash
    dollars. Both limits are subject to adjustment as described in
    our 2010 Plan.
Adjustments.
In connection with stock splits,
    stock dividends, recapitalizations and certain other events
    affecting common stock, our compensation committee will make
    adjustments as it deems appropriate in the maximum number of
    shares of common stock reserved for issuance as grants, the
    maximum number of shares of common stock that any individual
    participating in our 2010 Plan may be granted in any year, the
    number and kind of shares covered by outstanding grants, the
    kind of shares that may be issued or transferred under our 2010
    Plan, and the price per share or market value of any outstanding
    grants.
Eligibility.
All of our employees are eligible
    to receive grants under our 2010 Plan. In addition, our
    non-employee directors and consultants and advisors who perform
    services for us may receive grants under our 2010 Plan.
Vesting.
Our compensation committee determines
    the vesting of awards granted under our 2010 Plan.
Options.
Under our 2010 Plan, our compensation
    committee will determine the exercise price of the options
    granted and may grant options to purchase shares of common stock
    in such amounts as it determines.
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Our compensation committee may grant options that are intended
    to qualify as incentive stock options under Section 422 of
    the Code, or nonqualified stock options, which are not intended
    to so qualify. Incentive stock options may only be granted to
    employees. Anyone eligible to participate in our 2010 Plan may
    receive a grant of nonqualified stock options. The exercise
    price of a stock option granted under our 2010 Plan cannot be
    less than the fair market value of a share of our common stock
    on the date the option is granted. If an incentive stock option
    is granted to a 10% stockholder, the exercise price cannot be
    less than 110% of the fair market value of a share of our common
    stock on the date the option is granted. The exercise price for
    any option is generally payable in cash; in certain
    circumstances as permitted by our compensation committee, by the
    surrender of shares of our common stock with an aggregate fair
    market value on the date the option is exercised equal to the
    exercise price; by payment through a broker in accordance with
    procedures established by the Federal Reserve Board; by
    surrender of the vested portion of the option to us for an
    appreciation distribution payable in shares of our common stock
    with a fair market value at the time of the option surrender
    equal to the dollar amount by which the then fair market value
    of the shares of our common stock subject to the surrendered
    portion exceeds the aggregate exercise price. The term of an
    option cannot exceed ten years from the date of grant, except
    that if an incentive stock option is granted to a 10%
    stockholder, the term cannot exceed five years from the date of
    grant.
Except as provided in the grant instrument or as otherwise
    determined by our compensation committee, an option may only be
    exercised while a grantee is employed by or providing service to
    us or during an applicable period after termination of
    employment or service.
Stock Awards.
Under our 2010 Plan, our
    compensation committee may grant stock awards. A stock award is
    an award of our common stock that may be subject to restrictions
    as our compensation committee determines. The restrictions, if
    any, may lapse over a specified period of employment or based on
    the satisfaction of pre-established criteria, in installments or
    otherwise, as our compensation committee may determine. Except
    to the extent restricted under the grant instrument relating to
    the stock award, a grantee will have all of the rights of a
    stockholder as to those shares, including the right to vote and
    the right to receive dividends or distributions on the shares.
    All unvested stock awards are forfeited if the grantee's
    employment or service is terminated for any reason, unless our
    compensation committee determines otherwise.
Stock Units.
Under our 2010 Plan, our
    compensation committee may grant stock units to anyone eligible
    to participate in our 2010 Plan. Stock units are phantom units
    that represent shares of our stock. Stock units become payable
    on terms and conditions determined by our compensation committee
    and will be payable in cash or shares of our stock as determined
    by our compensation committee. All unvested stock units are
    forfeited if the grantee's employment or service is
    terminated for any reason, unless our compensation committee
    determines otherwise.
Performance Units.
Under our 2010 Plan, our
    compensation committee may grant performance units to anyone
    eligible to participate in our 2010 Plan. Performance units
    represent a participating interest in a special bonus pool tied
    to the attainment of pre-established corporate performance
    objectives based on one or more performance goals or the right
    to receive a targeted dollar amount tied to the attainment of
    pre-established corporate performance objectives based on one or
    more performance goals. The amount of the bonus pool and the
    targeted dollar amounts may vary based on the level at which the
    applicable performance objectives are attained. The value of
    each performance unit which becomes due and payable upon the
    attained level of performance shall be determined by dividing
    the amount of the resulting bonus pool, if any, by the total
    number of performance units issued and outstanding at the
    completion of the applicable performance period or based on the
    threshold, target and maximum amounts that may be paid if the
    performance goals are met. Performance units become payable on
    the attainment of the applicable performance objectives as
    determined by our compensation committee and will be payable in
    cash, in shares of common stock, or in a combination of cash and
    shares of common stock, as determined by our compensation
    committee. All unvested performance units are forfeited if the
    grantee's employment or service is terminated for any
    reason, unless the committee determines otherwise.
Other Stock-Based Awards.
Under our 2010 Plan,
    our compensation committee may grant other types of awards that
    are based on, measured by or payable to anyone eligible to
    participate in our 2010 Plan in shares
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of common stock, including SARs. Our compensation committee will
    determine the terms and conditions of such awards, including the
    base amount of a SAR, which will not be less than the fair
    market value of a share of our common stock on the date the SAR
    is granted. Other stock-based awards may be payable in cash,
    shares of common stock or a combination of the two.
Dividend Equivalents.
Under our 2010 Plan, our
    compensation committee may grant dividend equivalents in
    connection with grants of stock units or other stock-based
    awards made under our 2010 Plan. Dividend equivalents entitle
    the grantee to receive amounts equal to ordinary dividends that
    are paid on the shares underlying a grant while the grant is
    outstanding. Our compensation committee will determine whether
    dividend equivalents will be paid currently or credited to a
    bookkeeping account as a dollar amount or in the form of stock
    units. Dividend equivalents may be paid in cash, in shares of
    common stock or in a combination of the two. Our compensation
    committee will determine whether dividend equivalents will be
    conditioned upon the exercise, vesting or payment of the grant
    to which they relate and the other terms and conditions of the
    grant.
Qualified Performance-Based Compensation.
Our
    2010 Plan permits our compensation committee to impose
    performance goals that must be met with respect to grants of
    stock awards, stock units, performance units, other stock-based
    awards and dividend equivalents that are intended to meet the
    exception for qualified performance-based compensation under
    Section 162(m) of the Code. Prior to or soon after the
    beginning of a performance period, our compensation committee
    will establish the performance goals that must be met, the
    applicable performance periods, the amounts to be paid if the
    performance goals are met and any other conditions.
The performance goals, to the extent designed to meet the
    requirements of Section 162(m) of the Code, will be based
    on one or more of the following criteria: cash flow; earnings
    (including gross margin, earnings before interest and taxes,
    earnings before taxes, earnings before interest, taxes,
    depreciation, amortization and charges for stock-based
    compensation, earnings before interest, taxes, depreciation and
    amortization, and net earnings); earnings per share; growth in
    earnings or earnings per share; stock price; return on equity or
    average stockholder equity; total stockholder return or growth
    in total stockholder return either directly or in relation to a
    comparative group; return on capital; return on assets or net
    assets; revenue, growth in revenue or return on sales; income or
    net income; operating income, net operating income or net
    operating income after tax; operating profit or net operating
    profit; operating margin; return on operating revenue or return
    on operating profit; regulatory filings; regulatory approvals;
    litigation and regulatory resolution goals; other operational,
    regulatory or departmental objectives; budget comparisons,
    growth in stockholder value relative to established indexes, or
    another peer group or peer group index; development and
    implementation of strategic plans
and/or
organizational restructuring goals; development and
    implementation of risk and crisis management programs;
    improvement in workforce diversity; compliance requirements and
    compliance relief; safety goals; productivity goals; workforce
    management and succession planning goals; economic value-added
    (including typical adjustments consistently applied from
    generally accepted accounting principles required to determine
    economic value-added performance measures); measures of customer
    satisfaction, employee satisfaction or staff development;
    development or marketing collaborations, formations of joint
    ventures or partnerships or the completion of other similar
    transactions intended to enhance our revenue or profitability or
    enhance its customer base; merger and acquisitions; and other
    similar criteria consistent with the foregoing.
If dividend equivalents are granted as qualified
    performance-based compensation, the maximum amount of dividend
    equivalents that may be accrued by a grantee in a calendar year
    is $1.0 million.
Change of Control.
If we experience a change
    of control, unless our compensation committee determines
    otherwise, all outstanding options and SARs will automatically
    accelerate and become fully exercisable, the restrictions and
    conditions on all outstanding stock awards will immediately
    lapse and all grantees holding stock units, performance units,
    dividend equivalents and other equity-based awards will
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receive a payment in settlement of such grants in an amount
    determined by our compensation committee. Our compensation
    committee may also provide that:
•
Grantees will be required to surrender their outstanding stock
    options and SARs in exchange for a payment, in cash or shares of
    common stock, equal to the difference between the exercise price
    and the fair market value of the underlying shares of common
    stock;
•
After grantees have the opportunity to exercise their stock
    options and SARs, any unexercised stock options and SARs will be
    terminated on the date determined by our compensation committee;
    or
•
All outstanding stock options and SARs not exercised will be
    assumed or replaced with comparable options or rights by the
    surviving corporation (or a parent or subsidiary of the
    surviving corporation) and other outstanding grants will be
    converted to similar grants of the surviving corporation (or a
    parent or subsidiary of the surviving corporation) as determined
    by our compensation committee.
In general terms, a change of control under our 2010 Plan occurs
    if:
•
A person, entity or affiliated group, with certain exceptions,
    acquires more than 50% of our then outstanding voting securities;
•
We merge into another entity unless the holders of our voting
    shares immediately prior to the merger have at least 50% of the
    combined voting power of the securities in the merged entity or
    its parent;
•
We merge into another entity and the members of the board of
    directors prior to the merger would not constitute a majority of
    the board of the merged entity or its parent;
•
We sell or dispose of all or substantially all of our assets;
•
We are liquidated or dissolved; or
•
A majority of the members of our board of directors is replaced
    during any
12-month
period or less by directors whose appointment or election is not
    endorsed by a majority of the incumbent directors.
Cash Bonus Awards.
Our 2010 Plan authorizes
    our compensation committee to grant cash bonus awards, which are
    intended to qualify as "qualified performance-based
    compensation" for purposes of Section 162(m) of the
    Code, to executive employees as selected by our compensation
    committee. Our compensation committee will impose and specify
    the performance goals that must be met with respect to the grant
    of cash bonus awards and the performance period for the
    performance goals. To satisfy the requirements of
    Section 162(m) of the Code for qualified performance-based
    compensation, our compensation committee will establish in
    writing the performance goals that must be met in order to
    receive payment for the bonus award, the maximum amounts to be
    paid if the performance goals are met, performance threshold
    levels that must be met to receive payment for the bonus award,
    and any other conditions our compensation committee determines
    and to be consistent with the requirements of
    Section 162(m) of the Code.
Our compensation committee will use performance goals based on
    one or more criteria as described above for qualified
    performance-based compensation.
Separate and apart from the cash bonus awards, our compensation
    committee may also grant to selected executive employees other
    bonuses which may be based on individual performance, our
    performance, or such other criteria as determined by our
    compensation committee.
Deferrals.
Our compensation committee may
    permit or require grantees to defer receipt of the payment of
    cash or the delivery of shares of common stock that would
    otherwise be due to the grantee in connection with a grant under
    our 2010 Plan. Our compensation committee will establish the
    rules and procedures applicable to any such deferrals,
    consistent with the requirements of Section 409A of the
    Code.
Repricing.
Our compensation committee may
    cancel, with the consent of the affected holders, any or all of
    the outstanding options or SARs, including options or SARs
    transferred from our 2005 Plan, and in exchange for (i) new
    options or SARs with an exercise price or base amount per share
    not less than the fair market value per share of our common
    stock on the new grant date or (ii) cash or shares of our
    common
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stock. Our compensation committee shall also have the authority,
    with the consent of the affected holders, to reduce the exercise
    price or base amount of one or more outstanding options or SARs
    to the then current fair market value per share of our common
    stock or issue new options or SARs with a lower exercise price
    or base amount.
Amendment; Termination.
Our board of directors
    may amend or terminate our 2010 Plan at any time; except that
    our stockholders must approve any amendment if such approval is
    required in order to comply with the Code, applicable laws, or
    applicable stock exchange requirements. Unless terminated sooner
    by our board or extended with stockholder approval, our 2010
    Plan will terminate on the day immediately preceding the tenth
    anniversary of the date on which the underwriting agreement
    related to this offering is signed.
Foreign Participants.
If any individual who
    receives a grant under our 2010 Plan is subject to taxation in
    countries other than the U.S., our 2010 Plan provides that our
    compensation committee may make grants to such individuals on
    such terms and conditions as our compensation committee
    determines appropriate to comply with the laws of the applicable
    countries.
Outstanding Grants.
Our compensation committee
    has previously approved the grant of options to the following
    executive officers at an exercise price equal to the initial
    public offering price as shown in the following table:
2010
    Employee Stock Purchase Plan
Introduction.
Our 2010 Employee Stock Purchase
    Plan, or our ESPP, was adopted by our board of directors
    on          ,
    2010 and approved by our stockholders
    on          ,
    2010. Our ESPP will become effective immediately prior to the
    effective date of the registration statement for this offering.
    Our ESPP permits eligible employees to purchase shares of our
    common stock through after-tax payroll deductions. It is
    intended that the ESPP meets the requirements for an
    "employee stock purchase plan" under Section 423
    of the Code.
Share
    Reserve.
shares
    of common stock, representing     % of
    our outstanding common stock, are initially reserved for
    issuance under our ESPP. During the term of our ESPP, the
    reserve will automatically increase on the first trading day in
    January each calendar year, beginning in calendar year 2011, by
    an amount equal to the lesser of     %
    of the total number of outstanding shares of common stock
    outstanding on the last trading day in December of the prior
    calendar year
    or           shares.
    In no event will any such annual increase
    exceed           shares.
    All of the foregoing share limits are subject to adjustment as
    described below.
Adjustments.
In connection with stock splits,
    stock dividends, recapitalizations and other events affecting
    our common stock, our compensation committee will make
    adjustments as it deems appropriate to the maximum number and
    class of securities issuable under our ESPP, the maximum number
    and class of securities purchasable per participant on any
    interim purchase date, the maximum number and class of
    securities purchasable in total by all participants on any
    interim purchase date, and the number and class of securities
    and the price per share in effect under each outstanding option,
    in order to prevent the dilution or enlargement of benefits
    thereunder.
Eligibility.
Each of our employees that adopt
    our ESPP who are regularly scheduled to work more than
    20 hours per week and for more than five months per
    calendar year will be eligible to participate in our ESPP. Under
    the Code requirements, an employee who owns 5% or more of the
    total combined voting power of all classes of our stock is not
    eligible to participate. For purposes of determining who is a 5%
    owner, attribution of ownership rules apply, and shares of stock
    subject to outstanding options are taken into account. Eligible
    employees may not participate in more than one offering period
    at a time.
Offering Period.
Under our ESPP, there will be
    a series of overlapping offering periods, each 24 months
    long with interim purchase intervals approximately every six
    months. The first offering period will begin on the effective
    date of this initial public offering of our common stock and
    will end
    on          ,
    20  . Purchase intervals will run
    from          
    to          
    and
    from          
    to          ,
    except that the first purchase interval will run from the
    effective date of the initial public offering of our common
    stock until
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,
    20  . Unless our compensation committee determines
    otherwise prior to the beginning of an offering period, each
    subsequent offering period will begin
    on          
    and will end
    on          ,
    24 months later. If any of the designated dates are not a
    business day, the purchase date will be moved to the next
    business day.
Reset Feature.
If the fair market value of our
    common stock on any interim purchase date is less than the fair
    market value of our common stock on the first day of the
    offering period, the participants in the offering period will,
    immediately after the purchase of shares on such interim
    purchase date, be transferred from that offering period into the
    next offering period that commences after the interim purchase
    date.
Participation.
Each eligible employee who
    elects to participate in an offering period will be granted an
    option to purchase shares of common stock on the first day of
    the offering period. The option will automatically be exercised
    on each interim purchase date during the offering period based
    on the employee's accumulated contributions to our ESPP.
    The purchase price for each share of stock during the initial
    offering period will be equal to 85% of the lesser of the
    initial public offering price of our common stock or the fair
    market value of our stock on the interim purchase date. For each
    subsequent offering period, the purchase price of each share of
    common stock under our ESPP will be equal to 85% of the lesser
    of the fair market value per share of our common stock on the
    first day of the offering period or the fair market value of our
    stock on each interim purchase date. Participants will generally
    be permitted to allocate up to 10% of their compensation to
    purchase common stock under our ESPP.
Initial Election Period.
The first offering
    period will begin on the effective date of the registration
    statement for this offering. For the first offering period, all
    eligible employees will be automatically enrolled in our ESPP
    prior to the commencement of the offering period at a
    contribution rate equal
    to          %
    of their compensation. Shortly after the first offering period
    commences, but prior to the first interim purchase date,
    participants will be able to elect to continue their
    participation in our ESPP, withdraw from participation in our
    ESPP or reduce the amount they contribute to our ESPP.
Termination of Employment.
Participants may
    modify or end their participation in our ESPP at any time during
    any offering period. Participation ends automatically upon
    termination of employment or if the participant ceases to be an
    eligible employee.
Maximum Number of Purchasable Shares.
The
    maximum number of shares that a participant may purchase on any
    interim purchase date may not
    exceed           shares
    and the maximum number of shares purchasable in the aggregate by
    all participants in our ESPP on any one interim purchase date
    may not
    exceed           shares,
    subject to adjustment by our compensation committee prior to the
    beginning of the offering period and subject to adjustments as
    described above. In addition, no participant may purchase more
    than $25,000 worth of common stock during each calendar year
    under our ESPP.
Change of Control.
If we experience a change
    of control while our ESPP is in effect, all outstanding options
    under our ESPP will automatically be exercised immediately prior
    to the effective date of any change of control and the purchase
    price for each share of common stock under our ESPP on such
    purchase date will be equal to 85% of the lesser of the fair
    market value per share of our common stock on the first day of
    the offering period in which the participant is enrolled or the
    fair market value of our stock immediately prior to the change
    of control. If a change of control occurs, the limitation on the
    aggregate number of shares that all participants may purchase on
    the purchase date will not apply.
In general terms, a change of control under our ESPP occurs in
    the same circumstances described above with respect to our 2010
    Plan.
Plan Administration.
Our ESPP will be
    administered by our compensation committee.
Amendment; Termination.
Our board of directors
    may amend or terminate our ESPP at any time, with such amendment
    or termination to become effective immediately following the
    close of an interim purchase date. However, our board of
    directors may not amend our ESPP without stockholder approval if
    such amendment increases the number of shares of common stock
    issuable under our ESPP except for permissible adjustments in
    the event of changes in our capitalization, alters the purchase
    price formula to reduce the purchase price payable
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for shares purchasable under our ESPP, or modifies the
    eligibility requirements under our ESPP. Unless sooner
    terminated by our board of directors, our ESPP will terminate
    upon the earliest of:
•
,
    2020;
•
The date all shares available for issuance under our ESPP have
    been issued; or
•
The date all options are exercised in connection with a change
    of control.
401(k)
    Plan
We maintain a defined contribution employee retirement plan for
    our employees. Our 401(k) plan is intended to qualify as a
    tax-qualified plan under Section 401 of the Code so that
    contributions to our 401(k) plan, and income earned on such
    contributions, are not taxable to participants until withdrawn
    or distributed from the 401(k) plan. Our 401(k) plan provides
    that each participant may contribute up to 90% of his or her
    pre-tax compensation, up to a statutory limit, which is $16,500
    for 2010. Participants who are at least 50 years old can
    also make
"catch-up"
contributions, which in 2010 may be up to an additional
    $5,500 above the statutory limit. Under our 401(k) plan, each
    employee is fully vested in his or her deferred salary
    contributions. Employee contributions are held and invested by
    the plan's trustee. Our 401(k) plan also permits us to make
    discretionary contributions and matching contributions, subject
    to established limits and a vesting schedule. For 2009, we made
    an employer matching contribution equal to 50% of employee
    deferral contributions up to a maximum deferral rate of 6% of
    compensation.
Non-Employee
    Director Compensation
The following table sets forth information regarding the total
    compensation paid to our current non-employee directors during
    the year ended December 31, 2009 for their service on our
    board of directors. The compensation amounts presented in the
    table below are historical and are not indicative of the amounts
    we may pay our directors in the future. Directors who are also
    our employees receive no additional compensation for their
    services as directors and are not set forth in the table below.
    After this offering, each non-employee director will be entitled
    to receive an annual fee. The chairpersons of our audit
    committee, compensation committee and nominating and corporate
    governance compensation committee will each receive an
    additional annual fee. Committee members who are not
    chairpersons will also receive an annual fee. We also reimburse
    non-employee directors for reasonable expenses incurred in
    connection with attending board of director and committee
    meetings.
Fees Earned
or Paid
Option
in Cash
Awards
Total
Name
($)
($)
(1)
($)
Michael Cola
—
$
1,720
$
1,720
Jeanne Cunicelli
—
—
—
Michael C. Diem, MD
—
—
—
John H. Dillon, II
—
1,720
1,720
Richard S. Kollender
—
—
—
Gary J. Kurtzman, MD
—
—
—
(1)
Amounts reflect the grant date fair value of option awards
    granted in accordance with ASC 718. The aggregate number of
    shares subject to each director's outstanding option awards
    as of December 31, 2009 was as follows:
    Mr. Cola — 265,000 and
    Mr. Dillon — 90,000. Ms. Cunicelli,
    Dr. Diem, Mr. Kollender and Dr. Kurtzman did not
    hold any options at December 31, 2009. For information
    regarding assumptions underlying the valuation of equity awards,
    see note 8 to our financial statements appearing at the end
    of this prospectus.
Limitation
    of Liability and Indemnification
Our restated certificate of incorporation, which will become
    effective upon the closing of this offering, limits the
    liability of directors to the maximum extent permitted by
    Delaware law. Delaware law
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provides that directors of a corporation will not be personally
    liable for monetary damages for breach of their fiduciary duties
    as directors, except for liability for any:
•
Breach of their duty of loyalty to the corporation or its
    stockholders;
•
Act or omission not in good faith or that involves intentional
    misconduct or a knowing violation of law;
•
Unlawful payment of dividends or redemption of shares; or
•
Transaction from which the directors derived an improper
    personal benefit.
These limitations of liability do not apply to liabilities
    arising under federal securities laws and do not affect the
    availability of equitable remedies such as injunctive relief or
    rescission.
Our bylaws, which will become effective upon the closing of this
    offering, provide that we will indemnify our directors and
    executive officers, and may indemnify other officers, employees
    and other agents, to the fullest extent permitted by law. Our
    bylaws also permit us to secure insurance on behalf of any
    officer, director, employee or other agent for any liability
    arising out of his or her actions in connection with their
    services to us, regardless of whether our bylaws permit such
    indemnification. We have obtained a policy of directors'
    and officers' liability insurance.
We have entered into separate indemnification agreements with
    our directors in addition to the indemnification provided for in
    our bylaws. These agreements, among other things, require us to
    indemnify our directors for certain expenses, including
    attorneys' fees, judgments, fines and settlement amounts
    incurred by a director in any action or proceeding arising out
    of their services as one of our directors or any subsidiaries or
    any other company or enterprise to which the person provides
    services at our request.
At present, there is no pending litigation or proceeding
    involving any of our directors or executive officers as to which
    indemnification is required or permitted, and we are not aware
    of any threatened litigation or proceeding that may result in a
    claim for indemnification.
Insofar as indemnification for liabilities arising under the
    Securities Act may be permitted to directors, executive officers
    or persons controlling us, we have been informed that in the
    opinion of the SEC such indemnification is against public policy
    as expressed in the Securities Act and is therefore
    unenforceable.
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TRANSACTIONS
    WITH RELATED PERSONS
The following is a description of transactions since
    January 1, 2007 to which we have been a party, in which the
    amount involved in the transaction exceeds $120,000, and in
    which any of our directors, executive officers or beneficial
    owners of more than five percent of our voting securities, or
    affiliates or immediate family members of any of our directors,
    executive officers or beneficial owners of more than five
    percent of our voting securities, had or will have a direct or
    indirect material interest. We believe the terms obtained or
    consideration that we paid or received, as applicable, in
    connection with the transactions described below were comparable
    to terms available or the amounts that would be paid or
    received, as applicable, from unrelated third parties.
Convertible
    Note Financings
In July 2009, we sold $1,934,183 in gross principal amount of
    subordinated convertible promissory notes, or the 2009
    Convertible Notes, in a private placement to certain of our
    existing investors. In August 2009, pursuant to the terms of the
    2009 Convertible Notes, all principal and interest due under the
    2009 Convertible Notes was converted into shares of
    Series B preferred stock. At the time of conversion,
    pursuant to the terms of the 2009 Convertible Notes, warrants to
    purchase an aggregate of 736,514 shares of Series B
    preferred stock were issued to the holders of such notes. This
    purchase is described in more detail under "—Preferred
    Stock Financings."
Purchasers of the 2009 Convertible Notes included two of our
    executive officers and certain holders of more than five percent
    of our capital stock, or entities affiliated with them. The
    following table sets forth the amount purchased by each such
    party of the 2009 Convertible Notes, and the warrants received
    in connection with the conversion of such notes:
Warrant to Purchase
Shares of Series B
Initial Principal
Preferred Stock
Participants
Amount of Note
Upon Conversion
5% Stockholders:
Quaker BioVentures II, L.P. and its affiliates
$
855,638
325,817
Safeguard Delaware, Inc.
394,910
150,377
SR One, Limited
329,092
125,314
Battelle Ventures, L.P. and its affiliates
197,456
75,189
Birchmere Ventures III, L.P. and its affiliates
142,606
54,303
Executive Officers:
Jane H. Hollingsworth
3,291
1,253
Ezra H. Felker
2,962
1,128
In April 2010, we sold $10.1 million in gross principal
    amount of the April 2010 Convertible Notes, in a private
    placement to certain of our existing investors. The April 2010
    Convertible Notes accrue interest at a rate equal to 8% per
    annum, compounding monthly, and have a maturity date of
    December 31, 2010, unless converted prior thereto. The
    April 2010 Convertible Notes are automatically convertible into
    common stock at a 20% discount to the initial public offering
    price. They also are convertible into shares of Series B
    preferred stock if we experience a change of control or shares
    of preferred equity securities sold in a financing of at least
    $10.0 million prior to the closing of this offering.
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Purchasers of the April 2010 Convertible Notes included two of
    our executive officers and certain holders of more than five
    percent of our capital stock, or entities affiliated with them.
    The following table sets forth the amount purchased by each such
    party of the April 2010 Convertible Notes:
Initial Principal
Participants
Amount of Note
5% Stockholders:
Quaker BioVentures II, L.P. and its affiliates
$
3,396,226
Safeguard Delaware, Inc.
2,716,981
SR One, Limited
1,132,075
Battelle Ventures, L.P. and its affiliates
1,358,491
Birchmere Ventures III, L.P. and its affiliates
1,396,227
Executive Officers:
Jane H. Hollingsworth
50,000
Keith A. Goldan
7,500
Preferred
    Stock Financings
In August 2006, we entered into a Series A Preferred Stock
    Purchase Agreement pursuant to which we issued and sold to
    investors an aggregate of 19,610,677 shares of
    Series A preferred stock in four separate closings from
    August 2006 through April 2008, at a purchase price of $0.93 per
    share, or the Series A Preferred Stock Financing. The
    aggregate consideration for the Series A Preferred Stock
    Financing included $15,000,000 in cash and $2,590,343 in
    aggregate principal and interest due under convertible
    promissory notes held by existing investors, which pursuant to
    the terms of such notes, was converted into shares of
    Series A preferred stock.
The following table sets forth the shares of Series A
    preferred stock issued to our executive officers and holders of
    more than five percent of our capital stock and their
    affiliates, and the breakdown of the purchase price paid for
    such shares in the Series A Preferred Stock Financing by
    such persons:
Purchase Price for Series A Shares
Shares of
Financed by
Series A
Amounts Due
Preferred
Under Existing
Participants
Stock Issued
Paid in Cash
Convertible Notes
5% Stockholders:
Safeguard Delaware, Inc.
6,451,612
$
5,999,999
—
Battelle Ventures, L.P. and its affiliates
3,225,806
2,550,000
—
Birchmere Ventures III, L.P. and its affiliates
4,301,076
3,573,334
—
BioAdvance Ventures, L.P.
2,150,538
2,000,000
—
Executive Officers:
Jane H. Hollingsworth
143,668
—
$
106,889
In July 2008, we entered into a Series B Preferred Stock
    Purchase Agreement pursuant to which we issued and sold to
    investors an aggregate of 33,485,663 shares of
    Series B preferred stock in three separate closings from
    July 2008 through August 2009, at a purchase price of $0.93 per
    share, or the Series B Preferred Stock Financing. The
    aggregate consideration paid in the Series B Preferred
    Stock Financing included $29,184,643 in cash and $1,957,023 in
    aggregate principal and interest due under the 2009 Convertible
    Notes, which, pursuant to the terms of the 2009 Convertible
    Notes was converted into shares of Series B preferred
    stock. In addition, 2,688,171 shares of Series A
    preferred stock that were acquired in a prior financing by
    certain persons participating in the Series B Preferred
    Stock Financing were exchanged for an equal number of shares of
    Series B preferred stock.
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The following table sets forth the shares of Series B
    preferred stock issued to our executive officers and holders of
    more than five percent of our capital stock and their
    affiliates, and the breakdown of the purchase price paid for
    such shares in the Series B Preferred Stock Financing by
    such persons:
Purchase Price for Series B Shares
Financed by
Shares of
Amounts Due
Represented
Series B
Under the 2009
by Exchange
Preferred
Convertible
of Series A
Participants
Stock Issued
Paid in Cash
Notes
Shares
5% Stockholders:
Quaker BioVentures II, L.P. and its affiliates
14,336,918
$
12,134,258
$
865,742
358,423
Safeguard Delaware, Inc.
7,526,881
5,600,427
399,573
1,075,268
SR One, Limited
5,376,344
4,667,022
332,978
—
Battelle Ventures, L.P. and its affiliates
3,763,441
2,800,213
199,788
537,634
Birchmere Ventures III, L.P. and its affiliates
3,046,595
2,022,377
144,290
716,846
Executive Officers:
Jane H. Hollingsworth
53,763
46,670
3,330
—
Keith A. Goldan
26,882
25,000
—
—
Ezra H. Felker
48,387
42,003
2,997
—
These stockholders and their equity holdings are described in
    more detail under "Principal Stockholders."
The following table sets forth the members of our board of
    directors as of April 30, 2010 that are associated with the
    holders of more than five percent of our capital stock.
Director
5% Stockholder
Jeanne Cunicelli
Birchmere Ventures III, L.P. and its affiliates
Michael C. Diem, MD
SR One, Limited
Richard S. Kollender
Quaker BioVentures II, L.P. and its affiliates
Gary J. Kurtzman, MD
Safeguard Delaware, Inc.
Investor
    Rights Agreement and Stockholders Agreement
In connection with our various preferred stock financings, we
    entered into our amended and restated investor rights agreement,
    or our Investor Rights Agreement, and our amended and restated
    stockholders agreement, or our Stockholders Agreement,
    containing voting rights, information rights, rights of first
    refusal, preemptive rights and registration rights, among other
    things, with certain holders of preferred stock and certain
    holders of common stock. The Stockholders Agreement will
    automatically terminate upon the closing of this offering. The
    registration rights in our Investor Rights Agreement are
    described in more detail under "Description of Capital
    Stock — Registration Rights."
Stock
    Option and Restricted Stock Grant Awards to Executive Officers
    and Directors
We have granted stock options and restricted stock to certain of
    our executive officers and directors, as described in more
    detail under "Executive Compensation."
Indemnification
    Agreements
We have entered into indemnification agreements with each of our
    directors, as described in more detail under "Executive
    Compensation — Limitation of Liability and
    Indemnification."
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Policies
    and Procedures for Transactions with Related Persons
In connection with this offering, our board of directors is
    adopting written policies and procedures for the review of any
    transaction, arrangement or relationship in which we are a
    participant, the amount involved exceeds $120,000 and one of our
    executive officers, directors, director nominees or 5%
    stockholders, or their immediate family members, each of whom we
    refer to as a "related person," has a direct or
    indirect material interest." Transactions involving
    compensation for services provided to us as an employee,
    director, consultant or similar capacity by a related person
    will not be covered by this policy.
Under the policy, where a transaction has been identified as a
    related person transaction, management must present information
    regarding the proposed related person transaction to our audit
    committee, or, where review by our audit committee would be
    inappropriate, to another independent body of our board of
    directors, for review. The presentation must include a
    description of, among other things, the material facts, the
    direct and indirect interests of the related persons, the
    benefits of the transaction to us and whether any alternative
    transactions are available. To identify related person
    transactions in advance, we rely on information supplied by our
    executive officers, directors and certain significant
    stockholders. In considering related person transactions, our
    audit committee or other independent body of our board of
    directors takes into account the relevant available facts and
    circumstances including:
•
The risks, costs and benefits to us;
•
The impact on a director's independence in the event the
    related person is a director, immediate family member of a
    director or an entity with which a director is affiliated;
•
The terms of the transaction;
•
The availability of other sources for comparable services or
    products; and
•
The terms available to or from, as the case may be, unrelated
    third parties or to or from our employees generally.
In the event a director has an interest in the proposed
    transaction, the director must recuse himself or herself from
    the deliberations and approval. Our policy requires that, in
    reviewing a related-person transaction, our audit committee or
    other independent body of our board of directors must consider,
    in light of known circumstances, whether the transaction is in,
    or is not inconsistent with, the best interests of us and our
    stockholders, as our audit committee or other independent body
    of our board of directors determines in the good faith exercise
    of its discretion. We did not previously have a formal policy
    concerning transactions with related persons.
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PRINCIPAL
    STOCKHOLDERS
The following table sets forth information regarding beneficial
    ownership of our common stock outstanding as of April 30,
    2010 by:
•
Each person, or group of affiliated persons, known by us to
    beneficially own more than 5% of our common stock;
•
Each of our directors;
•
Each of our named executive officers; and
•
All of our directors and executive officers as a group.
The number of shares and percentage of shares beneficially owned
    before the offering shown in the table is based on a total
    of           shares
    of common stock, which includes:
•
3,143,905 shares of common stock outstanding as of
    April 30, 2010, including 71,250 shares of unvested
    restricted stock;
•
61,824,121 shares of common stock issuable upon the
    conversion of all outstanding shares of our preferred stock,
    including accrued dividends, upon the closing of this offering,
    assuming that the closing occurred on April 30,
    2010; and
•
shares
    of common stock issuable upon the automatic conversion of all
    principal and accrued interest outstanding under the April 2010
    Convertible Notes upon the closing of this offering, assuming an
    initial public offering price of $    per share, the
    midpoint of the price range set forth on the cover page of this
    prospectus, and that the closing occurred on April 30, 2010.
The number of shares and percentage of shares beneficially owned
    after the offering also gives effect to the issuance by us
    of           shares
    of common stock in this offering.
Each individual or entity shown in the table has furnished
    information to us with respect to beneficial ownership. We have
    determined beneficial ownership in accordance with the rules and
    regulations of the SEC, which generally attribute beneficial
    ownership of our common stock and other securities to those
    persons who possess sole or shared voting power or investment
    power with respect to such securities. Shares of our common
    stock subject to options or warrants that are currently
    exercisable or exercisable within 60 days of April 30,
    2010, are considered outstanding and beneficially owned by the
    person holding the options or warrants for the purpose of
    calculating the percentage ownership of that person but not for
    the purpose of calculating the percentage ownership of any other
    person. Unless otherwise indicated, the persons or entities
    identified in the table have sole voting and investment power
    with respect to all shares shown as beneficially owned by them,
    subject to applicable community property laws.
Except as otherwise noted in the table, the address for each
    person or entity listed in the table is
c/o NuPathe
Inc., 227 Washington Street, Suite 200, Conshohocken,
    Pennsylvania 19428.
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Number of
Percentage of Shares
Shares
Beneficially Owned
Beneficially
Before
After
Name and Address of Beneficial Owner
Owned
Offering
Offering
5% Stockholders:
Quaker BioVentures II, L.P. and its
    affiliates
(1)
%
%
Cira Center
2929 Arch Street
Philadelphia, PA
19104-2868
Safeguard Delaware,
    Inc.
(2)
1105 N. Market St.
Suite 1300
Wilmington, DE 19801
Birchmere Ventures III, L.P. and its
    affiliates
(3)
2835 East Carson Street, Suite 208
Pittsburgh, PA 15203
Battelle Ventures, L.P. and its
    affiliates
(4)
103 Carnegie Center, Suite 100
Princeton, NJ 08540
SR One,
    Limited
(5)
161 Washington Street, Suite 500
Conshohocken, PA 19428
Executive Officers and Directors:
Jane H.
    Hollingsworth
(6)
Terri B.
    Sebree
(7)
Keith A.
    Goldan
(8)
Gerald W.
    McLaughlin
(9)
Ezra H. Felker
(10)
Michael
    Cola
(11)
Jeanne
    Cunicelli
(12)
Michael C. Diem,
    MD
(13)
John H.
    Dillon, II
(14)
Richard S.
    Kollender
(15)
Gary J. Kurtzman,
    MD
(16)
All executive officers and directors as a group (11 persons)
(1)
Includes with respect to Quaker BioVentures II, L.P., or Quaker,
    (a) 12,903,226 shares of common stock issuable upon
    the automatic conversion of 12,903,226 shares of Series B
    preferred stock, (b) 1,453,085 shares of common stock
    that represent accrued dividends on such Series B preferred
    stock
,
(c) 300,754 shares of common stock
    issuable upon the exercise of a warrant within 60 days of
    April 30, 2010 and
    (d)           shares
    of common stock issuable upon the automatic conversion of all
    principal and accrued interest outstanding under the April 2010
    Convertible Note held by Quaker upon the closing of this
    offering, assuming an initial public offering price of
    $      per share, the midpoint of the
    price range set forth on the cover page of this prospectus, and
    that the closing occurred on April 30, 2010.
Includes with respect to BioAdvance Ventures, L.P., or
    BioAdvance, (a) 1,792,115 shares of common stock
    issuable upon the automatic conversion of 1,792,115 shares of
    Series A preferred stock, (b) 1,433,692 shares of
    common stock issuable upon the automatic conversion of 1,433,692
    shares of Series B preferred stock,
    (c) 644,428 shares of common stock that represent
    accrued dividends on such Series A and Series B
    preferred stock and (d) 25,063 shares of common stock
    issuable upon the exercise of a warrant within 60 days of
    April 30, 2010.
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Richard S. Kollender, a member of our board of directors, serves
    in a variety of roles related to Quaker and BioAdvance.
    Mr. Kollender is a Vice President of Quaker BioVentures
    Management, LLC, which is the general partner of Quaker
    BioVentures Management, L.P., which is the management company
    for Quaker. Mr. Kollender is also a Vice President of
    Quaker BioVentures Capital II, LLC, which is the general
    partner of Quaker BioVentures Capital II, L.P., which
    is the general partner of Quaker. Mr. Kollender is also a
    partner of Quaker BioVentures Management, L.P. and a
    limited partner of Quaker BioVentures Capital II Joint Venture,
    L.P., which is a limited partner of Quaker BioVentures
    Capital II, L.P.
Mr. Kollender is also a Vice President of Quaker BioAdvance
    Management, LLC, the general partner of Quaker BioAdvance
    Management, L.P., which is the manager of BioAdvance. Mr.
    Kollender is also a partner of Quaker Joint Venture, which is a
    limited partner of Quaker BioVentures Capital, L.P., which is a
    limited partner of BioAdvance GP I, L.P., which is the general
    partner of BioAdvance.
Mr. Kollender disclaims beneficial ownership of the shares of
    capital stock held by Quaker and BioAdvance, except to the
    extent of his pecuniary interest therein.
(2)
Consists of (a) 5,376,344 shares of common stock
    issuable upon the automatic conversion of 5,376,344 shares
    of Series A preferred stock, (b) 7,526,881 shares
    of common stock issuable upon the automatic conversion of
    7,526,881 shares of Series B preferred stock,
    (c) 2,287,360 shares of common stock that represent
    accrued dividends on such Series A and Series B
    preferred stock, (d) 150,377 shares of common stock
    issuable upon the exercise of a warrant within 60 days of
    April 30, 2010 and (e)
shares
    of common stock issuable upon the automatic conversion of all
    principal and accrued interest outstanding under the April 2010
    Convertible Note held by Safeguard Delaware, Inc., or Safeguard
    Delaware, upon the closing of this offering, assuming an initial
    public offering price of
    $
per share, the midpoint of
    the price range set forth on the cover page of this prospectus,
    and that the closing occurred on April 30, 2010.
Gary J. Kurtzman, MD, a member of our board of directors, is a
    Vice President and Managing Director of Safeguard, which is the
    parent of Safeguard Delaware. Dr. Kurtzman disclaims
    beneficial ownership of the shares of capital stock held by
    Safeguard, except to the extent of his pecuniary interest
    therein.
(3)
Includes with respect to Birchmere Ventures III TSIB, L.P.,
    or Birchmere TSIB, (a) 1,290,323 shares of common
    stock issuable upon the automatic conversion of
    1,290,323 shares of Series A preferred stock,
    (b) 1,096,775 shares of common stock issuable upon the
    automatic conversion of 1,096,775 shares of Series B
    preferred stock, (c) 471,440 shares of common stock
    that represent accrued dividends on such Series A and
    Series B preferred stock, (d) 19,549 shares of
    common stock issuable upon the exercise of a warrant within
    60 days of April 30, 2010 and (e)
shares
    of common stock issuable upon the automatic conversion of all
    principal and accrued interest outstanding under the April 2010
    Convertible Note held by Birchmere TSIB upon the closing of this
    offering, assuming an initial public offering price of
    $
per share, the midpoint of
    the price range set forth on the cover page of this prospectus,
    and that the closing occurred on April 30, 2010.
Includes with respect to Birchmere Ventures III, L.P., or
    Birchmere, (a) 2,293,907 shares of common stock
    issuable upon the automatic conversion of 2,293,907 shares
    of Series A preferred stock, (b) 1,949,820 shares
    of common stock issuable upon the automatic conversion of
    1,949,820 shares of Series B preferred stock,
    (c) 838,115 shares of common stock that represent
    accrued dividends on such Series A and Series B
    preferred stock, (d) 34,754 shares of common stock
    issuable upon the exercise of a warrant within 60 days of
    April 30, 2010 and (e)
shares
    of common stock issuable upon the automatic conversion of all
    principal and accrued interest outstanding under the April 2010
    Convertible Note held by Birchmere upon the closing of this
    offering, assuming an initial public offering price of
    $
per share, the midpoint
    of the price range set forth on the cover page of this
    prospectus, and that the closing occurred on April 30, 2010.
Jeanne Cunicelli, a member of our board of directors, is an
    Investment Partner of Bay City Capital LLC, which is the manager
    of BV3GP Investors, LLC, which is the managing member of BV3
    LLC, which is the general partner of BV3 Management LP, which is
    the general partner of Birchmere and the general partner of
    Birchmere TSIB. Ms. Cunicelli disclaims beneficial
    ownership of the shares of capital stock
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held by the funds managed by Bay City Capital LLC, except to the
    extent of her pecuniary interest therein.
(4)
Includes with respect to Battelle Ventures, L.P., or Battelle,
    (a) 2,274,194 shares of common stock issuable upon the
    automatic conversion of 2,274,194 shares of Series A
    preferred stock, (b) 3,387,097 shares of common stock
    issuable upon the automatic conversion of 3,387,097 shares
    of Series B preferred stock, (c) 985,845 shares
    of common stock that represent accrued dividends on such
    Series A and Series B preferred stock,
    (d) 67,670 shares of common stock issuable upon the
    exercise of a warrant within 60 days of April 30, 2010
    and (e)
shares
    of common stock issuable upon the automatic conversion of all
    principal and accrued interest outstanding under the
    April 2010 Convertible Note held by Battelle upon the
    closing of this offering, assuming an initial public offering
    price of $
per share, the
    midpoint of the price range set forth on the cover page of this
    prospectus, and that the closing occurred on April 30, 2010.
Includes with respect to Innovation Valley Partners, LP, or IVP,
    (a) 413,978 shares of common stock issuable upon the
    automatic conversion of 413,978 shares of Series A
    preferred stock, (b) 376,344 shares of common stock
    issuable upon the automatic conversion of 376,344 shares of
    Series B preferred stock, (c) 155,766 shares of
    common stock that represent accrued dividends on such
    Series A and Series B preferred stock,
    (d) 7,519 shares of common stock issuable upon the
    exercise of a warrant within 60 days of April 30, 2010
    and (e)
shares
    of common stock issuable upon the automatic conversion of all
    principal and accrued interest outstanding under the April 2010
    Convertible Note held by IVP upon the closing of this offering,
    assuming an initial public offering price of
    $
per share, the midpoint
    of the price range set forth on the cover page of this
    prospectus, and that the closing occurred on April 30, 2010.
(5)
Consists of (a) 5,376,344 shares of common stock
    issuable upon the automatic conversion of 5,376,344 shares of
    Series B preferred stock, (b) 620,939 shares of
    common stock that represent accrued dividends on such
    Series B preferred stock, (c) 125,314 shares of
    common stock issuable upon the exercise of a warrant within
    60 days of April 30, 2010 and (d)
shares
    of common stock issuable upon the automatic conversion of all
    principal and accrued interest outstanding under the April 2010
    Convertible Note held by SR One upon the closing of this
    offering, assuming an initial public offering price of
    $
per share, the midpoint
    of the price range set forth on the cover page of this
    prospectus, and that the closing occurred on April 30, 2010.
Michael C. Diem, MD, a member of our board of directors, is a
    Partner of SR One. Dr. Diem disclaims beneficial ownership
    of the shares of capital stock held by SR One, except to the
    extent of his pecuniary interest therein.
(6)
Consists of (a) 1,350,000 shares of common stock
,
which includes 25,000 shares of unvested restricted
    stock, 50,000 shares of common stock held by Jane
    Hollingsworth 2000 Irrevocable Family Trust I, and
    50,000 shares of common stock held by Bradford
    Hollingsworth 2000 Irrevocable Family Trust I,
    (b) 143,668 shares of common stock issuable upon the
    automatic conversion of 143,668 shares of Series A
    preferred stock, (c) 53,763 shares of common stock
    issuable upon the automatic conversion of 53,763 shares of
    Series B preferred stock, (d) 48,394 shares of
    common stock that represent accrued dividends on such
    Series A and Series B preferred stock,
    (e) 1,067,774 shares of common stock issuable upon the
    exercise of stock options within 60 days of April 30,
    2010, (f) 1,253 shares of common stock issuable upon
    the exercise of a warrant within 60 days of April 30,
    2010 and (g)
shares
    of common stock issuable upon the automatic conversion of all
    principal and accrued interest outstanding under the April 2010
    Convertible Note held by Ms. Hollingsworth upon the closing
    of this offering, assuming an initial public offering price of
    $
per share, the midpoint
    of the price range set forth on the cover page of this
    prospectus, and that the closing occurred on April 30, 2010.
Ms. Hollingsworth disclaims beneficial ownership of the
    shares held by the Jane Hollingsworth 2000 Irrevocable Family
    Trust I and the Bradford Hollingsworth 2000 Irrevocable
    Family Trust I.
(7)
Consists of 1,350,000 shares of common stock, which
    includes 25,000 shares of unvested restricted stock and
    665,082 shares of common stock issuable upon the exercise
    of stock options within 60 days of April 30, 2010.
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(8)
Consists of (a) 26,882 shares of common stock issuable
    upon the automatic conversion of 26,882 shares of Series B
    preferred stock, (b) 3,212 shares of common stock that
    represent accrued dividends on such Series B preferred
    stock, (c) 299,670 shares of common stock issuable
    upon the exercise of stock options within 60 days of
    April 30, 2010 and (d)
shares
    of common stock issuable upon the automatic conversion of all
    principal and accrued interest outstanding under the April 2010
    Convertible Note held by Mr. Goldan upon the closing of
    this offering, assuming an initial public offering price of
    $
per share, the midpoint
    of the price range set forth on the cover page of this
    prospectus, and that the closing occurred on April 30, 2010.
(9)
Consists of 358,117 shares of common stock issuable upon
    the exercise of stock options within 60 days of
    April 30, 2010.
(10)
Consists of (a) 60,000 shares of common stock, which
    includes 15,000 shares of unvested restricted stock,
    (b) 48,387 shares of common stock issuable upon the
    automatic conversion of 48,387 shares of Series B
    preferred stock held by Mr. Felker in his IRA account,
    (c) 5,588 shares of common stock that represent
    accrued dividends on such Series B preferred stock,
    (d) 394,096 shares of common stock issuable upon the
    exercise of stock options within 60 days of April 30,
    2010 and (e) 1,128 shares of common stock issuable
    upon the automatic conversion of 1,128 shares of
    Series B preferred stock issuable to Mr. Felker's
    IRA account upon the exercise of a warrant within 60 days
    of April 30, 2010.
(11)
Consists of 187,083 shares of common stock issuable upon
    the exercise of stock options within 60 days of
    April 30, 2010.
(12)
Jeanne Cunicelli is an Investment Partner of Bay City Capital
    LLC, which is the manager of BV3GP Investors, LLC, which is the
    managing member of BV3 LLC, which is the general partner of BV3
    Management LP, which is the general partner of Birchmere and the
    general partner of Birchmere TSIB. Ms. Cunicelli may be
    considered to have beneficial ownership of the Bay City Capital
    LLC funds' interest in us. Ms. Cunicelli disclaims
    beneficial ownership of all such shares, except to the extent of
    her pecuniary interest therein. See note 3 above.
(13)
Michael C. Diem, MD is a Partner of SR One and may be considered
    to have beneficial ownership of SR One's interest in
    us. Dr. Diem disclaims beneficial ownership of all such
    shares, except to the extent of his pecuniary interest therein.
    See note 5 above.
(14)
Consists of 50,000 shares of common stock and
    51,145 shares of common stock issuable upon the exercise of
    stock options within 60 days of April 30, 2010.
(15)
Richard S. Kollender serves in a variety of roles related to
    Quaker and BioAdvance, and Mr. Kollender may be considered
    to have beneficial ownership of Quaker's and
    BioAdvance's interests in us. Mr. Kollender disclaims
    beneficial ownership of all such shares, except to the extent of
    his pecuniary interest therein. See note 1 above.
(16)
Gary J. Kurtzman, MD, is a Vice President and Managing Director
    of Safeguard and may be considered to have beneficial ownership
    of Safeguard Delaware's interest in us. Dr. Kurtzman
    disclaims beneficial ownership of all such shares, except to the
    extent of his pecuniary interest therein. See note 2 above.
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DESCRIPTION
    OF CAPITAL STOCK
General
The following description of our capital stock and provisions of
    our restated certificate of incorporation and our bylaws are
    summaries, and are qualified by reference to the provisions of
    our restated certificate of incorporation and our bylaws that
    will be in effect upon the closing of this offering. We have
    filed forms of these documents as exhibits to the registration
    statement for this offering. The description of our capital
    stock reflects changes to our capital structure that will occur
    upon the closing of this offering.
Upon the closing of this offering, our authorized capital stock
    will consist of
shares
    of common stock, par value $0.001 per share, and
shares
    of undesignated preferred stock.
As of April 30, 2010, we had issued and outstanding:
•
3,143,905 shares of common stock held by 12 stockholders of
    record, which included 71,250 shares of unvested restricted
    stock; and
•
53,096,340 shares in the aggregate of Series A and
    Series B preferred stock, which, together with accrued
    dividends thereon, are automatically convertible into
    61,824,121 shares of common stock upon the closing of this
    offering, assuming that the closing occurred on April 30,
    2010.
As of April 30, 2010, we also had outstanding:
•
Options to purchase an aggregate of 7,520,075 shares of
    common stock under our 2005 Plan at a weighted average exercise
    price of $0.23 per share;
•
An aggregate of $10,109,081 of principal and accrued interest
    under the April 2010 Convertible Notes, which is automatically
    convertible
    into          shares
    of common stock upon the closing of this offering, assuming an
    initial public offering price of $     
    per share, the midpoint of the price range set forth on the
    cover page of this prospectus, and that the closing occurred on
    April 30, 2010; and
•
Warrants to purchase an aggregate of 870,922 shares of
    preferred stock at a weighted average exercise price of $0.93
    per share, which will become, in accordance with their terms,
    warrants to purchase 870,922 shares of common stock at an
    exercise price of $0.93 per share of common stock upon the
    closing of this offering, held by a total of 13 persons.
Common
    Stock
Voting Rights.
Each holder of common stock is
    entitled to one vote per share on all matters submitted to a
    vote of the stockholders, including the election of directors.
    Our restated certificate of incorporation and our bylaws will
    not provide for cumulative voting rights. Because of this, the
    holders of a majority of the shares of common stock entitled to
    vote in any election of directors can elect all of the directors
    standing for election, if they should so choose. An election of
    directors by our stockholders is determined by a plurality of
    the votes cast by stockholders entitled to vote on the election.
Dividends.
Subject to preferences that may be
    applicable to any then outstanding preferred stock, the holders
    of our outstanding shares of common stock are entitled to
    receive dividends, if any, as may be declared from time to time
    by our board of directors out of legally available funds.
Liquidation.
In the event of our liquidation,
    dissolution or winding up, holders of common stock will be
    entitled to share ratably in the net assets legally available
    for distribution to stockholders after the payment of all of our
    debts and other liabilities, subject to the satisfaction of any
    liquidation preference granted to the holders of any outstanding
    shares of preferred stock.
Rights and Preferences.
Holders of our common
    stock have no preemptive, conversion or subscription rights, and
    there are no redemption or sinking fund provisions applicable to
    our common stock. The rights, preferences and privileges of the
    holders of common stock are subject to, and may be adversely
    affected by,
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the rights of the holders of shares of any series of our
    preferred stock that we may designate and issue in the future.
Preferred
    Stock
Our restated certificate of incorporation will not reference any
    existing series of preferred stock and will authorize our board
    of directors to issue up to
shares
    of undesignated preferred stock. Under the restated certificate
    of incorporation, our board will be authorized, without
    stockholder approval, to issue preferred stock in one or more
    series, to establish the number of shares to be included in each
    such series and to fix the designation, powers, preferences and
    rights of such shares and any qualifications, limitations or
    restrictions thereof. The issuance of preferred stock, while
    providing flexibility in connection with possible acquisitions
    and other corporate purposes, could, among other things, have
    the effect of delaying, deferring or preventing a change in our
    control that may otherwise benefit holders of common stock. The
    issuance of preferred stock with voting and conversion rights
    may adversely affect the voting power of the holders of common
    stock, including the loss of voting control to others. We have
    no current plans to issue any shares of preferred stock.
Warrants
Assuming no warrants have been exercised as of May 14,
    2010, upon the closing of this offering there will be
    outstanding 12 warrants to purchase an aggregate of
    736,514 shares of common stock, each at an exercise price
    of $0.93 per share and each of which expire on August 20,
    2016, one warrant to purchase 134,408 shares of common
    stock at an exercise price of $0.93 per share, which will expire
    on the date five years following the closing of this offering,
    but in any event no later than March 29, 2017 and two
    warrants to purchase 255,376 shares of common stock, each
    at an exercise price of $0.93 per share and each of which expire
    ten years from the date of issuance.
Each of these warrants has a net exercise provision under which
    its holder may, in lieu of payment of the exercise price in
    cash, surrender the warrant and receive a net amount of shares
    based on the fair market value of our common stock at the time
    of exercise of the warrant after deduction of the aggregate
    exercise price. Each of these warrants also contains provisions
    for the adjustment of the exercise price and the aggregate
    number of shares issuable upon the exercise of the warrant in
    the event of stock dividends,
split-ups,
reclassifications, mergers, consolidations, combinations or
    exchanges of shares, separations, reorganizations or
    liquidations.
The holders of certain of these warrants are entitled to
    registration rights under our Investor Rights Agreement, as
    described in more detail under "— Registration
    Rights."
Registration
    Rights
Upon the closing of this offering, holders of a total
    of           shares
    of our common stock as of April 30, 2010, including shares
    of our common stock issuable upon exercise of outstanding
    warrants, will have the right to require us to register these
    shares under the Securities Act, under specified circumstances,
    pursuant to the terms of the Investor Rights Agreement. After
    registration pursuant to these rights, these shares will become
    freely tradable without restriction under the Securities Act.
    These registration rights will terminate upon the earlier of the
    date that is three years following the closing of this offering
    and the date that all registrable shares may immediately be sold
    pursuant to Rule 144 without regard to volume limitations.
Demand and
Form S-3
Registration Rights.
Subject to specified
    limitations, the holders of at least
    66
2
/
3
%
    of our preferred stock having registration rights may demand
    that we register all or a portion of their registrable shares
    under the Securities Act. We are not obligated to file a
    registration statement pursuant to this provision:
•
Until 180 days after the closing of this offering; and
•
On more than two occasions.
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In addition, the holders of our registrable shares may demand
    that we register on
Form S-3
all or a portion of the registrable shares held by them. We are
    not obligated to file a
Form S-3
pursuant to this provision on more than two occasions in any
12-month
period.
Incidental Registration Rights.
If at any time
    after the closing of this offering we propose to file a
    registration statement to register any of our securities under
    the Securities Act, either for our own account or for the
    account of any of our stockholders, the holders of our
    registrable shares are entitled to notice of registration and
    are entitled to include their shares of common stock in the
    registration.
Limitations and Expenses.
In the event that
    any registration in which the holders of registrable shares
    participate pursuant to the Investor Rights Agreement is an
    underwritten public offering, the number of registrable shares
    to be included may, in specified circumstances, be limited due
    to market conditions. Pursuant to the Investor Rights Agreement,
    we are required to pay all registration expenses, including the
    fees and expenses of one counsel to represent the selling
    holders, other than any underwriting discounts, selling
    commissions and similar discounts relating to underwriters or
    commissions related to sales, related to any demand or
    incidental registration. We are also required to indemnify each
    participating holder with respect to each registration of
    registrable shares that is effected.
Delaware Anti-Takeover Law and Provisions of Our Restated
    Certificate of Incorporation and Our Bylaws
Delaware Anti-Takeover Law.
We are subject to
    Section 203 of the DGCL. Section 203 generally
    prohibits a public Delaware corporation from engaging in a
    "business combination" with an "interested
    stockholder" for a period of three years after the date of
    the transaction in which the person became an interested
    stockholder, unless the interested stockholder attained such
    status with the approval of our board of directors, the business
    combination is approved in a prescribed manner or the interested
    stockholder acquired at least 85% of our outstanding voting
    stock in the transaction in which it became an interested
    stockholder. A "business combination" includes, among
    other things, a merger or consolidation involving us and the
    "interested stockholder" and the sale of more than 10%
    of our assets. In general, an "interested stockholder"
    is any entity or person beneficially owning 15% or more of our
    outstanding voting stock and any entity or person affiliated
    with or controlling or controlled by such entity or person.
Restated Certificate of Incorporation and
    Bylaws
.  Provisions of our restated certificate of
    incorporation and our bylaws, which will become effective upon
    the closing of this offering, may delay or discourage
    transactions involving an actual or potential change of control
    or change in our management, including transactions in which
    stockholders might otherwise receive a premium for their shares,
    or transactions that our stockholders might otherwise deem to be
    in their best interests. Therefore, these provisions could
    adversely affect the price of our common stock. Among other
    things, our restated certificate of incorporation and our bylaws:
•
Authorize the issuance of "blank check" preferred
    stock, the terms of which may be established and shares of which
    may be issued without stockholder approval;
•
Prohibit stockholder action by written consent, thereby
    requiring all stockholder actions to be taken at a meeting of
    our stockholders;
•
Eliminate the ability of stockholders to call a special meeting
    of stockholders; and
•
Establish advance notice requirements for nominations for
    election to the board of directors or for proposing matters that
    can be acted upon at stockholder meetings.
The amendment of any of these provisions would require approval
    by the holders of at least
    66
2
/
3
%
    of our then outstanding common stock.
Listing
    on The NASDAQ Global Market
We are applying to have our common stock listed on The NASDAQ
    Global Market under the symbol "PATH."
Transfer
    Agent and Registrar
The transfer agent and registrar for our common stock will be
.
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SHARES ELIGIBLE
    FOR FUTURE SALE
Prior to this offering, there has been no public market for our
    common stock, and a liquid trading market for our common stock
    may not develop or be sustained after this offering. Future
    sales of substantial amounts of our common stock in the public
    market, including shares issued upon exercise of outstanding
    options and warrants or in the public market after this
    offering, or the anticipation of these sales, could adversely
    affect market prices prevailing from time to time and could
    impair our ability to raise equity capital in the future.
Upon the closing of this offering, we will have outstanding an
    aggregate
    of           shares
    of common stock, assuming the underwriters do not exercise their
    over-allotment option and no options or warrants outstanding as
    of April 30, 2010 are exercised.
Of the shares to be outstanding immediately after the closing of
    this offering, we expect
    that           shares
    will be freely tradable without restriction under the Securities
    Act unless purchased by our "affiliates," as that term
    is defined in Rule 144 under the Securities Act. The
    remaining           shares
    of our common stock outstanding after this offering will be
    "restricted securities" under Rule 144 of the
    Securities Act, and we expect that substantially all of these
    shares will be subject to a
180-day
lock-up
period under the
lock-up
agreements as described below. "Restricted securities"
    as defined under Rule 144 were issued and sold by us in
    reliance on exemptions from the registration requirements of the
    Securities Act. These shares may be sold in the public market
    only if registered or pursuant to an exemption from
    registration, such as Rule 144 or Rule 701 under the
    Securities Act. Resale of
    the           restricted
    shares that will become available for sale in the public market
    starting 180 days after the date of this prospectus will be
    limited by volume and other resale restrictions under
    Rule 144 because certain holders are our affiliates.
Lock-Up
Agreements
We, our officers and directors and holders of substantially all
    of our outstanding stock, options and warrants have agreed,
    subject to specified exceptions, not to sell or transfer any
    common stock or securities convertible into, or exchangeable or
    exercisable for, common stock, during a period ending
    180 days after the date of this prospectus, subject to
    extension, without first obtaining the written consent of
    Leerink Swann LLC and Lazard Capital Markets LLC. Specifically,
    we and these other individuals and entities have agreed not to:
•
Offer, pledge, sell or contract to sell, sell any option or
    contract to purchase, purchase any option or contract to sell,
    grant any option, right or warrant to purchase, lend, or
    otherwise transfer or dispose of, directly or indirectly, any
    shares of common stock or any securities convertible into or
    exercisable or exchangeable for common stock; or
•
Enter into any swap or other arrangement that transfers to
    another, in whole or in part, any of the economic consequences
    of ownership of the common stock.
The
lock-up
restrictions and specified exceptions are described in more
    detail under "Underwriting —
Lock-Up
Agreements."
Rule 144
In general, under Rule 144, beginning 90 days after
    the date of this prospectus, any person who is not our affiliate
    and has held their shares for at least six months, including the
    holding period of any prior owner other than one of our
    affiliates, may sell shares without restriction. In addition,
    under Rule 144, any person who is not an affiliate of ours
    and has held their shares for at least one year, including the
    holding period of any prior owner other than one of our
    affiliates, would be entitled to sell an unlimited number of
    shares immediately upon the closing of this offering without
    regard to whether current public information about us is
    available.
Beginning 90 days after the date of this prospectus, a
    person who is our affiliate or who was our affiliate at any time
    during the preceding three months and who has beneficially owned
    restricted securities for at least
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six months, including the holding period of any prior owner
    other than one of our affiliates, is entitled to sell a number
    of shares within any three-month period that does not exceed the
    greater of:
•
1% of the number of shares of our common stock then outstanding,
    which will equal
    approximately          
    shares immediately after this offering; and
•
The average weekly trading volume of our common stock on The
    NASDAQ Global Market during the four calendar weeks preceding
    the filing of a Notice of Proposed Sale of Securities Pursuant
    to Rule 144 with respect to the sale.
Sales under Rule 144 by our affiliates are also subject to
    manner of sale provisions and notice requirements and to the
    availability of current public information about us.
Upon expiration of the
180-day
lock-up
period described above,
    approximately           shares
    of our common stock will be eligible for sale under
    Rule 144, including shares eligible for resale immediately
    upon the closing of this offering as described above. We cannot
    estimate the number of shares of our common stock that our
    existing stockholders will elect to sell under Rule 144.
Rule 701
In general, under Rule 701 of the Securities Act, any of
    our employees, consultants or advisors, other than our
    affiliates, who purchased shares from us in connection with a
    qualified compensatory stock plan or other written agreement is
    eligible to resell these shares 90 days after the date of
    this prospectus in reliance on Rule 144, but without
    compliance with the holding period requirements of Rule 144
    and without regard to the volume of such sales or the
    availability of public information about us. Subject to the
180-day
lock-up
period described above,
    approximately           shares
    of our common stock will be eligible for sale in accordance with
    Rule 701.
Registration
    Rights
Subject to the
lock-up
agreements described above, upon closing of this offering, the
    holders
    of           shares
    of our common stock and warrants to purchase up
    to           shares
    of our common stock will be entitled to require us to register
    these shares under the Securities Act under specified
    circumstances. After registration pursuant to these rights,
    these shares will become freely tradable without restriction
    under the Securities Act. These registration rights are
    described in more detail under "Description of Capital
    Stock — Registration Rights."
Equity
    Incentive Plans
We intend to file one or more registration statements on
Form S-8
under the Securities Act to register all shares of common stock
    subject to outstanding stock options and common stock issuable
    under our 2005 Plan, 2010 Plan and ESPP. We expect to file the
    registration statement covering shares offered pursuant to our
    stock plans shortly after the date of this prospectus,
    permitting the resale of such shares by non-affiliates in the
    public market without restriction under the Securities Act and
    the sale by affiliates in the public market, subject to
    compliance with the resale provisions of Rule 144. Our
    equity incentive plans are described in more detail under
    "Executive Compensation — Employee Benefit
    Plans."
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UNDERWRITING
Subject to the terms and conditions set forth in an underwriting
    agreement dated the date of this prospectus among us and the
    underwriters named below, we have agreed to sell to the
    underwriters, and each underwriter has severally agreed to
    purchase from us, the number of shares of common stock listed
    next to its name in the following table. Leerink Swann LLC and
    Lazard Capital Markets LLC are acting as joint book-running
    managers for the offering and as representatives of the
    underwriters.
Number of
Name
Shares
Leerink Swann LLC
Lazard Capital Markets LLC
Thomas Weisel Partners LLC
Needham & Company, LLC
Total
The underwriters are committed to purchase all the shares of
    common stock offered by us if they purchase any shares. The
    underwriting agreement also provides that if an underwriter
    defaults, the purchase commitments of non-defaulting
    underwriters may be increased or the offering may be terminated.
    The underwriters are not obligated to purchase the shares of
    common stock covered by the underwriters' over-allotment
    option described below.
The underwriters are offering the shares, subject to prior sale,
    when, as and if issued to and accepted by them, subject to
    approval of legal matters by their counsel, and other conditions
    contained in the underwriting agreement, such as the receipt by
    the underwriters of officer's certificates and legal
    opinions. The underwriters reserve the right to withdraw, cancel
    or modify offers to the public and to reject orders in whole or
    in part.
Discounts
    and Commissions
The underwriters propose initially to offer the shares to the
    public at the public offering price set forth on the cover page
    of this prospectus and to dealers at that price less a
    concession not in excess of $      per
    share. After the initial offering of the shares, the public
    offering price and other selling terms may be changed by the
    representatives.
The following table shows the public offering price,
    underwriting discounts and commissions and proceeds before
    expenses to us. The information assumes either no exercise or
    full exercise by the underwriters of their over-allotment option.
Per Share
Without Option
With Option
Public offering price
$
$
$
Underwriting discounts and commissions
$
$
$
Proceeds, before expenses, to us
$
$
$
The total estimated expenses of the offering, including
    registration, filing and listing fees, printing fees and legal
    and accounting expenses, but excluding underwriting discounts
    and commissions, are approximately
    $      and are payable by us.
Lazard Frères & Co. LLC referred this transaction to
    Lazard Capital Markets LLC and will receive a referral fee from
    Lazard Capital Markets LLC in connection therewith.
Over-Allotment
    Option
We have granted the underwriters an option to purchase up
    to          
    additional shares of common stock at the public offering price,
    less underwriting discounts and commissions. The underwriters
    may exercise this option for 30 days from the date of this
    prospectus solely to cover sales of shares of common stock by
    the underwriters in excess of the total number of shares set
    forth in the table above. If any shares are purchased pursuant
    to this over-allotment option, the underwriters will purchase
    the additional shares in approximately the same proportion as
    shown in the table above. If any of these additional shares are
    purchased, the
116
Table of Contents
underwriters will offer the additional shares on the same terms
    as those on which the shares are being offered. We will pay the
    expenses associated with the exercise of the over-allotment
    option.
Initial
    Public Offering Pricing
Prior to this offering, there has been no public market for our
    common stock. The initial public offering price will be
    negotiated between us and the representatives. Among the factors
    considered in these negotiations are:
•
The prospects for our company and the industry in which we
    operate;
•
Our past and present financial and operating performance;
•
Financial and operating information and market valuations of
    publicly traded companies engaged in activities similar to ours;
•
The prevailing conditions of U.S. securities markets at the
    time of this offering; and
•
Other factors deemed relevant.
The estimated initial public offering price range set forth on
    the cover of this preliminary prospectus is subject to change as
    a result of market conditions and other factors.
Lock-Up
Agreements
We, our officers and directors and holders of substantially all
    of our outstanding stock, options and warrants have entered into
lock-up
agreements with the underwriters. Under these agreements, we and
    these other individuals have agreed, subject to specified
    exceptions, not to sell or transfer any common stock or
    securities convertible into, or exchangeable or exercisable for,
    common stock, during a period ending 180 days after the
    date of this prospectus, without first obtaining the written
    consent of Leerink Swann LLC and Lazard Capital Markets LLC.
    Specifically, we and these other individuals have agreed not to:
•
Offer, pledge, sell or contract to sell, sell any option or
    contract to purchase, purchase any option or contract to sell,
    grant any option, right or warrant to purchase, lend, or
    otherwise transfer or dispose of, directly or indirectly, any
    shares of common stock or any securities convertible into or
    exercisable or exchangeable for common stock; or
•
Enter into any swap or other arrangement that transfers to
    another, in whole or in part, any of the economic consequences
    of ownership of the common stock,
whether any such transaction described above is to be settled by
    delivery of common stock or other securities, in cash or
    otherwise.
The restrictions described above do not apply to:
•
The sale of shares of common stock to the underwriters pursuant
    to the underwriting agreement;
•
The issuance by us of shares of common stock upon the exercise
    of an option or warrant or the conversion of a security
    outstanding on the date of this prospectus of which the
    underwriters have been advised in writing or that is described
    in this prospectus;
•
The grant by us of stock options or other stock-based awards, or
    the issuance of shares of common stock upon exercise thereof, to
    eligible participants pursuant to employee benefit or equity
    incentive plans described in this prospectus, provided that,
    prior to the grant of any such stock options or other
    stock-based awards that vest within the restricted period, each
    recipient of such grant shall sign and deliver a
lock-up
agreement agreeing to be subject to the restrictions on transfer
    described above;
•
Transactions by security holders relating to shares of common
    stock or other securities acquired in open market transactions
    after the completion of this offering, provided that no filing
    under Section 16(a) of the Exchange Act is required or is
    voluntarily made in connection with subsequent sales of common
    stock or other securities acquired in such open market
    transactions;
117
Table of Contents
•
Sales or transfers by security holders of shares of common stock
    to us pursuant to the exercise on a net-issuance basis of any
    warrant outstanding on the date of the underwriting agreement of
    which the representatives have been advised in writing or that
    is described in this prospectus;
•
The exercise of any option or warrant to purchase shares of
    common stock outstanding on the date of the underwriting
    agreement of which the representatives have been advised in
    writing or that is described in this prospectus, provided that
    the underlying shares of common stock issued upon exercise
    remain subject to the restrictions imposed by the
lock-up
agreement;
•
Transfers or contributions by security holders of shares of
    common stock or any security convertible into common stock as a
    bona fide gift, in connection with estate planning or upon death
    by will or intestate succession;
•
Transfers or distributions by security holders of shares of
    common stock or any security convertible into common stock to
    limited partners, members, stockholders or affiliates of the
    security holder; or
•
Transfers or contributions by security holders of shares of
    common stock or any security convertible into common stock to
    any trust for the direct or indirect benefit of the security
    holder or the immediate family of the security holder;
provided that in the case of each of the preceding three types
    of transactions, each transferee or distributee signs and
    delivers a
lock-up
agreement agreeing to be subject to the restrictions on transfer
    described above and no filing under Section 16(a) of the
    Exchange Act, reporting a reduction in beneficial ownership of
    shares of common stock, is required or is voluntarily made
    during the restricted period.
The
180-day
restricted period is subject to extension if (1) during the
    last 17 days of the restricted period we issue an earnings
    release or material news or a material event relating to us
    occurs or (ii) prior to the expiration of the restricted
    period, we announce that we will release earnings results during
    the
16-day
period beginning on the last day of the restricted period, in
    which case the restrictions imposed in the
lock-up
agreements will continue to apply until the expiration of the
18-day
period beginning on the issuance of the earnings release or the
    occurrence of the material news or material event.
Indemnification
We have agreed to indemnify the underwriters against certain
    liabilities, including liabilities under the Securities Act, and
    to contribute to payments that the underwriters may be required
    to make for these liabilities.
The
    NASDAQ Global Market Listing
We are applying to have our common stock listed on The NASDAQ
    Global Market under the symbol "PATH."
Price
    Stabilization, Short Positions and Penalty Bids
In order to facilitate the offering of our common stock, the
    underwriters may engage in transactions that stabilize, maintain
    or otherwise affect the price of our common stock. In connection
    with the offering, the underwriters may purchase and sell our
    common stock in the open market. These transactions may include
    short sales, purchases on the open market to cover positions
    created by short sales and stabilizing transactions. Short sales
    involve the sale by the underwriters of a greater number of
    shares of common stock than they are required to purchase in the
    offering. "Covered" short sales are sales made in an
    amount not greater than the underwriters' option to
    purchase additional shares of common stock in the offering. The
    underwriters may close out any covered short position by either
    exercising their over-allotment option or purchasing shares of
    common stock in the open market. In determining the source of
    shares of common stock to close out the covered short position,
    the underwriters will consider, among other things, the price of
    shares available for purchase in the open market as compared to
    the price at which they may purchase shares through the
over-allotment
option. "Naked" short sales are sales in excess of the
    over-allotment option. The underwriters
118
Table of Contents
must close out any naked short position by purchasing shares of
    common stock in the open market. A naked short position is more
    likely to be created if the underwriters are concerned that
    there may be downward pressure on the price of our common stock
    in the open market after pricing that could adversely affect
    investors who purchase in the offering. Stabilizing transactions
    consist of various bids for or purchases of shares of common
    stock made by the underwriters in the open market prior to the
    completion of the offering.
Similar to other purchase transactions, the underwriters'
    purchases to cover the syndicate short sales may have the effect
    of raising or maintaining the market price of our common stock
    or preventing or retarding a decline in the market price of our
    common stock. As a result, the price of our common stock may be
    higher than the price that might otherwise exist in the open
    market.
The underwriters have advised us that, pursuant to
    Regulation M of the Securities Act, they may also engage in
    other activities that stabilize, maintain or otherwise affect
    the price of our common stock, including the imposition of
    penalty bids. This means that if the representatives of the
    underwriters purchase common stock in the open market in
    stabilizing transactions or to cover short sales, the
    representatives can require the underwriters that sold those
    shares as part of this offering to repay the underwriting
    discount received by them.
The underwriters make no representation or prediction as to the
    direction or magnitude of any effect that the transactions
    described above may have on the price of our common stock. In
    addition, neither we nor the underwriters make any
    representation that the underwriters will engage in these
    transactions or that these transactions, once commenced, will
    not be discontinued without notice.
Electronic
    Offer, Sale and Distribution of Shares
A prospectus in electronic format may be made available on the
    websites maintained by one or more underwriters or selling group
    members, if any, participating in the offering. The underwriters
    may agree to allocate a number of shares of common stock to
    underwriters and selling group members for sale to their online
    brokerage account holders. Internet distributions will be
    allocated by the representatives to underwriters and selling
    group members that may make Internet distributions on the same
    basis as other allocations. Other than the prospectus in
    electronic format, the information on the underwriters'
    websites and any information contained in any other website
    maintained by the underwriters is not part of this prospectus or
    the registration statement of which this prospectus forms a part.
Notice to
Non-U.S.
Investors
In relation to each member state of the European Economic Area
    that has implemented the Prospectus Directive, each of which we
    refer to as a relevant member state, with effect from and
    including the date on which the Prospectus Directive is
    implemented in that relevant member state, or the relevant
    implementation date, an offer of securities described in this
    prospectus may not be made to the public in that relevant member
    state other than:
•
To legal entities that are authorized or regulated to operate in
    the financial markets or, if not so authorized or regulated,
    whose corporate purpose is solely to invest in securities;
•
To any legal entity that has two or more of (1) an average
    of at least 250 employees during the last financial year;
    (2) a total balance sheet of more than €43,000,000 and
    (3) an annual net turnover of more than €50,000,000,
    as shown in its last annual or consolidated accounts;
•
To fewer than 100 natural or legal persons (other than qualified
    investors as defined in the Prospectus Directive) subject to
    obtaining the prior consent of representatives for any such
    offer; or
•
In any other circumstances that do not require the publication
    of a prospectus pursuant to Article 3 of the Prospectus
    Directive;
provided that no such offer of securities shall require us or
    any underwriter to publish a prospectus pursuant to
    Article 3 of the Prospectus Directive.
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Table of Contents
For the purposes of this provision, the expression an
    "offer of shares to the public" in relation to any
    shares of common stock in any relevant member state means the
    communication in any form and by any means of sufficient
    information on the terms of the offer and the shares to be
    offered so as to enable an investor to decide to purchase or
    subscribe for the shares, as the same may be varied in that
    member state by any measure implementing the Prospectus
    Directive in that member state and the expression
    "Prospectus Directive" means Directive 2003/71/EC and
    includes any relevant implementing measure in each relevant
    member state.
Other
    Relationships
From time to time, certain of the underwriters and their
    affiliates have provided, and may provide in the future, various
    advisory, investment and commercial banking and other services
    to us in the ordinary course of business, for which they have
    received and may continue to receive customary fees and
    commissions.
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Table of Contents
LEGAL
    MATTERS
The validity of the shares of common stock being offered by this
    prospectus will be passed upon for us by Morgan,
    Lewis & Bockius LLP, Philadelphia, Pennsylvania.
    Wilmer Cutler Pickering Hale and Dorr LLP, New York, New York,
    is acting as counsel for the underwriters in connection with
    this offering.
EXPERTS
The financial statements of NuPathe Inc. as of December 31,
    2008 and 2009, and for each of the years in the three-year
    period ended December 31, 2009 and the period from
    January 7, 2005 (inception) through December 31, 2009,
    have been included herein and in this prospectus in reliance
    upon the report of KPMG LLP, independent registered public
    accounting firm, appearing elsewhere herein, and upon the
    authority of said firm as experts in accounting and auditing.
    The audit report covering the December 31, 2009 financial
    statements contains an explanatory paragraph that states that
    NuPathe has incurred recurring losses and negative cash flows
    from operations since its inception that raise substantial doubt
    about its ability to continue as a going concern. The financial
    statements do not include any adjustments that might result from
    the outcome of that uncertainty.
WHERE YOU
    CAN FIND MORE INFORMATION
We have filed with the SEC a registration statement on
Form S-1
(File Number 333-
) under the Securities Act
    with respect to the shares of common stock we are offering by
    this prospectus. This prospectus, which constitutes a part of
    the registration statement, does not contain all of the
    information in the registration statement and its exhibits. For
    further information with respect to us and the common stock
    offered by this prospectus, you should refer to the registration
    statement and the exhibits to the registration statement.
    Statements contained in this prospectus as to the contents of
    any contract, agreement or any other document are not
    necessarily complete, and in each instance, we refer you to the
    copy of the contract, agreement or other document filed as an
    exhibit to the registration statement. Each of these statements
    is qualified in all respects by this reference.
You may read and copy the registration statement for this
    offering at the SEC's Public Reference Room, which is
    located at 100 F Street, N.E., Room 1580,
    Washington, DC 20549. You may obtain information on the
    operation of the Public Reference Room by calling the SEC at
1-800-SEC-0330.
In addition, the SEC maintains an Internet website, which is
    located at
http://www.sec.gov
that contains reports, proxy and information statements and
    other information regarding issuers that file electronically
    with the SEC. You may access the registration statement for this
    offering at the SEC's Internet website.
Upon closing of this offering, we will be subject to the
    information and periodic reporting requirements of the Exchange
    Act, and we will file reports, proxy and information statements
    and other information with the SEC. These reports, proxy and
    information statements and other information will be available
    for inspection and copying at the Public Reference Room and
    website of the SEC, as described above.
121
INDEX TO
    FINANCIAL STATEMENTS
NUPATHE
    INC.
(A Development-Stage Company)
Page
Report of Independent Registered Public
    Accounting Firm
F-2
Balance Sheets
F-3
Statements of Operations
F-4
Statements of Redeemable Convertible Preferred
    Stock and Stockholders' Deficit
F-5
Statements of Cash Flows
F-6
Notes to Financial Statements
F-7
F-1
Table of Contents
Report of
    Independent Registered Public Accounting Firm
The Board of Directors and Stockholders
NuPathe Inc.:
We have audited the accompanying balance sheets of NuPathe Inc.
    (a development-stage company) (the Company) as of
    December 31, 2008 and 2009, and the related statements of
    operations, redeemable convertible preferred stock and
    stockholders' deficit, and cash flows for each of the years
    in the three-year period ended December 31, 2009 and the
    period from January 7, 2005 (inception) through
    December 31, 2009. These financial statements are the
    responsibility of the Company's management. Our
    responsibility is to express an opinion on these financial
    statements based on our audits.
We conducted our audits in accordance with the standards of the
    Public Company Accounting Oversight Board (United States). Those
    standards require that we plan and perform the audit to obtain
    reasonable assurance about whether the financial statements are
    free of material misstatement. An audit includes examining, on a
    test basis, evidence supporting the amounts and disclosures in
    the financial statements. An audit also includes assessing the
    accounting principles used and significant estimates made by
    management, as well as evaluating the overall financial
    statement presentation. We believe that our audits provide a
    reasonable basis for our opinion.
In our opinion, the financial statements referred to above
    present fairly, in all material respects, the financial position
    of NuPathe Inc. as of December 31, 2008 and 2009, and the
    results of its operations and its cash flows for each of the
    years in the three-year period ended December 31, 2009 and
    for the period from January 7, 2005 (inception) through
    December 31, 2009, in conformity with U.S. generally
    accepted accounting principles.
The accompanying financial statements have been prepared
    assuming that the Company will continue as a going concern. As
    discussed in note 2 to the financial statements, the
    Company has incurred recurring losses and negative cash flows
    from operations since its inception that raise substantial doubt
    about its ability to continue as a going concern.
    Management's plans in regard to these matters are also
    described in note 2. The financial statements do not
    include any adjustments that might result from the outcome of
    this uncertainty.
/s/ KPMG LLP
Philadelphia, Pennsylvania
May 14, 2010
F-2
Table of Contents
NUPATHE
    INC.
(A Development-Stage Company)
Balance Sheets
December 31,
Pro Forma
2008
2009
December 31, 2009
Unaudited
(See note 3)
ASSETS
Current assets:
Cash and cash equivalents
$
8,368,461
$
3,926,574
$
18,206,978
Prepaid expenses and other
1,139,878
918,878
918,878
Total current assets
9,508,339
4,845,452
19,125,856
Property and equipment, net
122,726
70,628
70,628
Other assets
144,521
93,053
296,308
Total assets
$
9,775,586
$
5,009,133
$
19,492,792
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current liabilities:
Current portion of long-term debt
$
890,929
$
818,139
$
36,043
Accounts payable
920,422
1,464,106
1,464,106
Accrued expenses
1,412,350
1,035,826
1,035,826
Total current liabilities
3,223,701
3,318,071
2,535,975
Long-term debt
782,096
—
5,000,000
Warrant liability
102,354
626,492
—
Total liabilities
4,108,151
3,944,563
7,535,975
Commitments (note 9)
Redeemable convertible preferred stock, $0.001 par value;
    authorized 71,745,055 shares at December 31, 2009;
    issued and outstanding 42,205,062, and 53,096,340 shares at
    December 31, 2008 and 2009, respectively (liquidation value
    of $56,179,639 at December 31, 2009)
41,808,630
55,538,191
—
Stockholders' equity (deficit):
Common stock, $0.001 par value; authorized
    90,830,376 shares, issued and outstanding 3,626,250,
    3,131,250
    and          shares
    at December 31, 2008 and 2009 and December 31, 2009
    pro forma, respectively
3,626
3,131
63,539
Additional paid-in capital
—
—
66,370,030
Deficit accumulated during the development stage
(36,144,821
)
(54,476,752
)
(54,476,752
)
Total stockholders' equity (deficit)
(36,141,195
)
(54,473,621
)
11,956,817
Total liabilities and stockholders' equity (deficit)
$
9,775,586
$
5,009,133
$
19,492,792
See accompanying notes to financial statements.
F-3
Table of Contents
NUPATHE
    INC.
(A Development-Stage Company)
Statements of Operations
Period from
January 7, 2005
Year Ended December 31,
(inception) through
2007
2008
2009
December 31, 2009
Operating expenses:
Research and development
$
7,761,442
$
8,815,354
$
11,309,503
$
31,787,569
Acquired in-process research and development
—
5,500,000
—
5,500,000
General and administrative
1,883,822
3,075,084
3,142,253
9,827,382
Total operating expenses
(9,645,264
)
(17,390,438
)
(14,451,756
)
(47,114,951
)
Interest income
222,866
157,622
30,437
526,473
Interest expense
(252,675
)
(278,387
)
(1,320,005
)
(2,622,537
)
Loss before tax benefit
(9,675,073
)
(17,511,203
)
(15,741,324
)
(49,211,015
)
Income tax benefit
—
—
151,012
151,012
Net loss
(9,675,073
)
(17,511,203
)
(15,590,312
)
$
(49,060,003
)
Accretion of redeemable convertible preferred stock
(1,126,265
)
(2,330,344
)
(3,617,211
)
Net loss applicable to common stockholders
$
(10,801,338
)
$
(19,841,547
)
$
(19,207,523
)
Basic and diluted net loss per common share
$
(3.67
)
$
(6.49
)
$
(6.28
)
Weighted average basic and diluted common shares outstanding
2,947,005
3,059,137
3,060,000
Unaudited pro forma net loss
$
(15,590,312
)
Unaudited pro forma basic and diluted net loss per common share
$
Unaudited pro forma weighted average basic and diluted common
    shares outstanding
See accompanying notes to financial statements.
F-4
Table of Contents
NUPATHE
    INC.
(A Development-Stage Company)
Statements of Redeemable
    Convertible Preferred Stock and Stockholders' Deficit
Period from January 7, 2005 (inception) through
    December 31, 2009
Stockholders' Deficit
Deficit
Accumulated
Redeemable Convertible
During the
Preferred Stock
Common Stock
Additional
Development
Shares
Amount
Shares
Amount
Paid-in Capital
Stage
Total
Balance, January 7, 2005 (inception)
—
$
—
—
$
—
$
—
$
—
$
—
Issuance of common stock to initial stockholders at $0.08 per
    share
—
—
2,710,000
2,710
214,090
—
216,800
Net loss
—
—
—
—
—
(1,067,659
)
(1,067,659
)
Balance, December 31, 2005
—
—
2,710,000
2,710
214,090
(1,067,659
)
(850,859
)
Stock-based compensation
—
—
915,000
915
43,195
—
44,110
Conversion of convertible notes and accrued interest into
    Series A redeemable convertible preferred stock
3,481,645
2,590,343
—
—
647,587
—
647,587
Sale of Series A redeemable convertible preferred stock at
    $0.93 per share, net of expenses of $267,458
8,064,516
7,232,542
—
—
—
—
—
Accretion of Series A redeemable convertible preferred
    stock to redemption value
—
340,998
—
—
(340,998
)
—
(340,998
)
Net loss
—
—
—
—
—
(5,215,756
)
(5,215,756
)
Balance, December 31, 2006
11,546,161
10,163,883
3,625,000
3,625
563,874
(6,283,415
)
(5,715,916
)
Stock-based compensation
—
—
—
—
59,205
—
59,205
Sale of Series A redeemable convertible preferred stock at
    $0.93 per share, net of expenses of $20,272
5,376,345
4,979,729
—
—
—
—
—
Accretion of Series A redeemable convertible preferred
    stock to redemption value
—
1,126,265
—
—
(623,079
)
(503,186
)
(1,126,265
)
Net loss
—
—
—
—
—
(9,675,073
)
(9,675,073
)
Balance, December 31, 2007
16,922,506
16,269,877
3,625,000
3,625
—
(16,461,674
)
(16,458,049
)
Stock-based compensation
—
—
—
—
158,176
—
158,176
Exercise of stock options
—
—
1,250
1
224
—
225
Sale of Series A redeemable convertible preferred stock at
    $0.93 per share
2,688,171
2,499,999
—
—
—
—
—
Sale of Series B redeemable convertible preferred stock at
    $0.93 per share, net of expenses of $304,368
22,594,385
20,708,410
—
—
—
—
—
Accretion of Series A and Series B redeemable
    convertible preferred stock to redemption value
—
2,330,344
—
—
(158,400
)
(2,171,944
)
(2,330,344
)
Net loss
—
—
—
—
—
(17,511,203
)
(17,511,203
)
Balance, December 31, 2008
42,205,062
41,808,630
3,626,250
3,626
—
(36,144,821
)
(36,141,195
)
Stock-based compensation
—
—
—
—
319,055
—
319,055
Forfeiture of restricted stock
—
—
(495,000
)
(495
)
495
—
—
Sale of Series B redeemable convertible preferred stock at
    $0.93 per share, net of expenses of $16,538
8,786,952
8,155,327
—
—
—
—
—
Conversion of convertible notes and accrued interest into
    Series B redeemable convertible preferred stock
2,104,326
1,957,023
—
—
—
—
—
Beneficial conversion feature related to the convertible note
    and warrant agreement
—
—
—
—
556,042
—
556,042
Accretion of Series A and Series B redeemable
    convertible preferred stock to redemption value
—
3,617,211
—
—
(875,592
)
(2,741,619
)
(3,617,211
)
Net loss
—
—
—
—
—
(15,590,312
)
(15,590,312
)
Balance, December 31, 2009
53,096,340
$
55,538,191
3,131,250
$
3,131
$
—
$
(54,476,752
)
$
(54,473,621
)
See accompanying notes to financial statements.
F-5
Table of Contents
NUPATHE
    INC.
(A Development-Stage Company)
Statements of Cash Flows
Period from
January 7, 2005
Year Ended December 31,
(inception) through
2007
2008
2009
December 31, 2009
Cash flows from operating activities:
Net loss
$
(9,675,073
)
$
(17,511,203
)
$
(15,590,312
)
$
(49,060,003
)
Adjustments to reconcile net loss to net cash used in operating
    activities:
Depreciation expense
17,140
48,197
57,383
130,825
Loss on asset disposal
—
—
23,508
23,508
Acquired in-process research and development
—
5,500,000
—
5,500,000
Stock-based compensation
59,205
158,176
319,055
589,346
Noncash interest expense
36,816
49,503
1,154,486
1,888,392
Changes in operating assets and liabilities:
Prepaid expenses and other assets
(267,662
)
(702,692
)
301,090
(832,456
)
Accounts payable
663,389
(11,149
)
543,684
1,464,106
Accrued expenses
537,134
195,537
(376,524
)
1,160,196
Net cash used in operating activities
(8,629,051
)
(12,273,631
)
(13,567,630
)
(39,136,086
)
Cash flows from investing activities:
Purchase of in-process research and development
—
(5,500,000
)
—
(5,500,000
)
Purchases of property and equipment
(35,721
)
(126,677
)
(28,792
)
(224,960
)
Net cash used in investing activities
(35,721
)
(5,626,677
)
(28,792
)
(5,724,960
)
Cash flows from financing activities:
Proceeds from issuance of debt
2,507,992
100,749
—
2,608,741
Proceeds from convertible notes
—
—
1,934,183
4,404,183
Payment of debt issuance costs
(74,034
)
—
—
(74,034
)
Repayment of debt
(129,648
)
(870,879
)
(934,975
)
(1,935,502
)
Proceeds from sale of preferred stock, net
4,979,729
23,208,409
8,155,327
43,576,007
Proceeds from sale of common stock
—
225
—
208,225
Net cash provided by financing activities
7,284,039
22,438,504
9,154,535
48,787,620
Net increase (decrease) in cash and cash equivalents
(1,380,733
)
4,538,196
(4,441,887
)
3,926,574
Cash and cash equivalents, beginning of period
5,210,998
3,830,265
8,368,461
—
Cash and cash equivalents, end of period
$
3,830,265
$
8,368,461
$
3,926,574
$
3,926,574
Supplemental cash flow disclosures:
Noncash investing and financing activities:
Conversion of note principal and accrued interest to redeemable
    convertible preferred stock
$
—
$
—
$
1,957,023
$
4,547,366
Accretion of redeemable convertible preferred stock
1,126,265
2,330,344
3,617,211
7,414,818
Cash paid for interest
193,147
236,078
173,580
602,805
See accompanying notes to financial statements.
F-6
Table of Contents
NUPATHE
    INC.
Notes
    to Financial Statements
(1)
Background
NuPathe Inc. (the Company) is a development-stage company
    incorporated in Delaware on January 7, 2005 (inception).
    The Company is a specialty pharmaceutical company focused on the
    development and commercialization of branded therapeutics for
    diseases of the central nervous system. The Company operates in
    one segment and has its principal offices in Conshohocken,
    Pennsylvania.
(2)
Development-Stage
    Risks and Liquidity
The Company has incurred losses and negative cash flows from
    operations since inception and has a deficit accumulated during
    the development stage of $54,476,752 as of December 31,
    2009. The Company anticipates incurring additional losses until
    such time, if ever, that it can generate significant sales of
    its products currently in development. Management estimates that
    current cash and cash equivalents and the proceeds of
    $10,062,500 from convertible notes issued in April 2010 (the
    April 2010 Convertible Notes) (note 6) and the
    $5,000,000 of proceeds from a term loan facility entered into in
    May 2010 (the May 2010 Loan Facility)
    (note 6) are sufficient to sustain planned operations
    through the third quarter of 2010. Substantial additional
    financing will be needed by the Company to fund its operations
    and to commercially develop its products. There is no assurance
    that such financing will be available when needed or on
    acceptable terms. These factors raise substantial doubt about
    the Company's ability to continue as a going concern.
The accompanying financial statements have been prepared on a
    going concern basis, which contemplates the realization of
    assets and satisfaction of liabilities in the normal course of
    business. The financial statements do not include any
    adjustments relating to the recoverability and classification of
    recorded asset amounts or the amounts and classification of
    liabilities that might result from the outcome of this
    uncertainty.
Management is currently evaluating different strategies to
    obtain the required funding of future operations. These
    strategies may include, but are not limited to: an initial
    public offering of the Company's common stock, additional
    venture capital funding, collaborative arrangements with third
    parties
and/or
borrowings of debt. There can be no assurance that these future
    funding efforts will be successful.
The Company is subject to those risks associated with any
    specialty pharmaceutical company that has substantial
    expenditures for research and development. There can be no
    assurance that the Company's research and development
    projects will be successful, that products developed will obtain
    necessary regulatory approval, or that any approved product will
    be commercially viable. In addition, the Company operates in an
    environment of rapid technological change, and is largely
    dependent on the services of its employees and consultants.
(3)
Summary
    of Significant Accounting Policies
(a)  Use
    of Estimates
The preparation of financial statements in conformity with
    U.S. generally accepted accounting principles requires
    management to make estimates and assumptions that affect the
    reported amounts of assets and liabilities and disclosure of
    contingent assets and liabilities at the date of the financial
    statements and the reported amounts of expenses during the
    reporting period. Actual results could differ from such
    estimates.
(b)  Fair
    Value of Financial Instruments
Management believes that the carrying amounts of the
    Company's financial instruments, including cash
    equivalents, prepaid expenses and other current assets, accounts
    payable and accrued expenses, approximate fair value due to the
    short-term nature of those instruments. The carrying amount of
    the Company's debt obligations approximate fair value based
    on interest rates available on similar borrowings.
F-7
Table of Contents
NUPATHE
    INC.
Notes to
    Financial Statements — (Continued)
The Company follows Financial Accounting Standards Board (FASB)
    accounting guidance on fair value measurements for financial
    assets and liabilities measured on a recurring basis. The
    guidance requires fair value measurements be classified and
    disclosed in one of the following three categories:
•
Level 1:
Unadjusted quoted prices in
    active markets that are accessible at the measurement date for
    identical, unrestricted assets or liabilities;
•
Level 2:
Quoted prices in markets that
    are not active, or input which are observable, either directly
    or indirectly, for substantially the full term of the asset or
    liabilities; or
•
Level 3:
Prices or valuation techniques
    that require inputs that are both significant to the fair value
    measurement and unobservable (i.e., supported by little or no
    market activity).
The following fair value hierarchy table presents information
    about each major category of the Company's financial assets
    and liability measured at fair value on a recurring basis as of
    December 31, 2008 and 2009:
Fair Value Measurement at Reporting Date Using
Quoted Prices
in Active
Significant
Markets for
Other
Significant
Identical
Observable
Unobservable
Assets
Inputs
Inputs
(Level 1)
(Level 2)
(Level 3)
Total
At December 31, 2008
Assets
Cash equivalents
$
8,109,821
$
—
$  —
$
8,109,821
Liabilities
Warrant liability
$
—
$
—
$102,354
$
102,354
At December 31, 2009
Assets
Cash equivalents
$
3,654,831
$
—
$  —
$
3,654,831
Liabilities
—
Warrant liability
$
—
$
—
$626,492
$
626,492
The reconciliation of warrant liability measured at fair value
    on a recurring basis using unobservable inputs
    (Level 3) is as follows:
Warrant
Liability
Balance at January 1, 2008
$
104,319
Change in fair value of warrant liability
(1,965
)
Balance at December 31, 2008
102,354
Issuance of additional warrants
556,042
Change in fair value of warrant liability
(31,904
)
Balance at December 31, 2009
$
626,492
The fair value of the warrant liability is based on Level 3
    inputs. For this liability, the Company developed its own
    assumptions that do not have observable inputs or available
    market data to support the fair value. See note 6 for
    further discussion of the warrant liability.
F-8
Table of Contents
NUPATHE
    INC.
Notes to
    Financial Statements — (Continued)
(c)  Unaudited
    Pro forma Balance Sheet Presentation
The unaudited pro forma balance sheet as of December 31,
    2009 reflects:
•
The automatic conversion of all outstanding shares of redeemable
    convertible preferred stock, including accrued dividends, as of
    December 31, 2009, into 60,408,215 shares of common
    stock upon the closing of the initial public offering (IPO)
    contemplated by the Company's prospectus as of
    December 31, 2009. The shares of common stock issued in the
    IPO and any related estimated net proceeds are excluded from
    such pro forma information. In addition, the Company has
    outstanding warrants to purchase 134,408 shares of
    Series A redeemable convertible preferred stock
    (Series A) and 736,514 shares of Series B
    redeemable convertible preferred stock
    (Series B), which will become warrants to purchase
    870,922 shares of common stock upon the closing of the IPO.
    The liability of $626,492 related to these warrants has been
    reclassified to additional paid-in capital as these warrants
    will no longer be exercisable for redeemable preferred shares.
•
The receipt in April 2010 of gross proceeds of $10,062,500 upon
    the issuance of the April 2010 Convertible Notes and the
    automatic conversion of all principal outstanding under the
    April 2010 Convertible Notes into an aggregate
    of      shares of common stock upon the
    closing of the IPO (note 6).
•
The receipt in May 2010 of gross proceeds of $5,000,000 upon
    entering into the May 2010 Loan Facility and the issuance of
    warrants to purchase 255,376 shares of Series B at
    $0.93 per share to the lenders under such facility, which will
    become warrants to purchase 255,376 shares of common stock
    upon the closing of the IPO. The estimated fair value of the
    warrants of $203,255 has been reflected as deferred financing
    costs and additional paid-in capital in the pro forma balance
    sheet. The pro forma balance sheet also reflects the repayment
    in full of the finance company loan balance of $782,096 with the
    proceeds from the term loan facility (note 6).
(d)  Cash
    and Cash Equivalents
The Company considers all highly liquid debt instruments that
    have maturities of three months or less when acquired to be cash
    equivalents. As of December 31, 2008 and 2009, cash
    equivalents of $8,109,021 and $3,654,831, respectively,
    consisted of money market mutual funds invested in commercial
    paper and short-term corporate and government obligations. The
    Company maintains its checking account at one bank. The Company
    utilizes major financial institutions in order to reduce the
    associated risks. Since March 2007, the Company's cash
    accounts have been subject to account control agreements with
    the secured finance company that give the finance company the
    right to assume control of the accounts in the event of a loan
    default (note 6).
(e)  Property
    and Equipment
Property and equipment are recorded at cost and are depreciated
    on a straight-line basis over their estimated useful lives. The
    Company uses a life of three years for laboratory equipment and
    computer equipment, including software, and five years for
    office equipment and furniture. Leasehold improvements are
    amortized over the shorter of the lease term or the estimated
    useful life of the asset. Long-lived assets, such as property
    and equipment, are reviewed for impairment whenever events or
    changes in circumstances indicate that the carrying amount of an
    asset may not be recoverable. Recoverability of assets to be
    held and used is measured by a comparison of the carrying amount
    of an asset to estimated undiscounted future cash flows expected
    to be generated by the asset. If the carrying amount of an asset
    exceeds its estimated future cash flows, then an impairment
    charge is recognized for the amount by which the carrying value
    of the asset exceeds the fair value of the asset. As of
    December 31, 2008 and 2009, management believes that no
    revision of the remaining useful lives or write-down of
    long-lived assets is required.
F-9
Table of Contents
NUPATHE
    INC.
Notes to
    Financial Statements — (Continued)
(f)  Research
    and Development and In-Process Research and
    Development
Research and development costs are charged to expense as
    incurred. Upfront and milestone payments made to third parties
    who perform research and development services on the
    Company's behalf will be expensed as services are rendered.
    Costs incurred in obtaining technology licenses are charged to
    research and development expense if the technology licensed has
    not reached technological feasibility and has no alternative
    future use.
(g)  Income
    Taxes
Income taxes are accounted for under the asset and liability
    method. Deferred tax assets and liabilities are recognized for
    the future tax consequences attributable to differences between
    the financial statement carrying amounts of existing assets and
    liabilities and their respective tax basis and operating loss
    and tax credit carryforwards. Deferred tax assets and
    liabilities are measured using enacted tax rates expected to
    apply to taxable income in the years in which those temporary
    differences are expected to be recovered or settled. The effect
    on deferred tax assets and liabilities of a change in tax rates
    is recognized in income in the period that includes the
    enactment date.
In June 2006, the FASB issued guidance related to accounting for
    uncertainty in income taxes. This authoritative interpretation
    clarified and standardized the manner by which companies are
    required to account for uncertain income tax positions. Under
    this guidance, the Company may recognize, the tax benefit from
    an uncertain tax position only if it is more likely than not to
    be sustained upon examination based on the technical merits of
    the position. The amount of the accrual for which an exposure
    exists is measured as the largest amount of benefit determined
    on a cumulative probability basis that the Company believes is
    more likely than not to be realized upon ultimate settlement of
    the position. This interpretation also provides guidance on
    de-recognition, classification, interest and penalties,
    accounting in interim periods, disclosures, and transition. The
    Company adopted this guidance effective January 1, 2007.
    The adoption of this guidance did not have any impact on the
    Company's financial position, results of operations or cash
    flows.
(h)  Stock-Based
    Compensation
The Company measures employee stock-based awards at grant date
    fair value and records compensation expense on a straight-line
    basis over the vesting period of the award.
Determining the appropriate fair value of stock-based awards
    requires the use of subjective assumptions, including the fair
    value of the Company's common stock, and for stock options,
    the expected life of the option and expected stock price
    volatility. The Company uses the Black-Scholes option-pricing
    model to value its stock option awards. The assumptions used in
    calculating the fair value of stock-based awards represent
    management's best estimates and involve inherent
    uncertainties and the application of management's judgment.
    As a result, if factors change and management uses different
    assumptions, stock-based compensation expense could be
    materially different for future awards.
The expected life of stock options was estimated using the
    "simplified method," as the Company has limited
    historical information to develop reasonable expectations about
    future exercise patterns and post-vesting employment termination
    behavior for its stock option grants. The simplified method is
    the midpoint between the vest date and the contractual term of
    the option. For stock price volatility, the Company uses
    comparable public companies as a basis for the expected
    volatility to calculate the fair value of option grants.
Nonemployee awards are revalued until an award vests and
    compensation expense is recorded on a straight-line basis over
    the vesting period of each separate vesting tranche of the
    award, or the accelerated attribution method. The estimation of
    the number of stock awards that will ultimately vest requires
    judgment, and to the extent actual results or updated estimates
    differ from the Company's current estimates, such amounts
    will be recorded as an adjustment in the period in which
    estimates are revised.
F-10
Table of Contents
NUPATHE
    INC.
Notes to
    Financial Statements — (Continued)
(i)  Net
    Loss Per Common Share
Basic and diluted net loss per common share is determined by
    dividing net loss applicable to common stockholders by the
    weighted average common shares outstanding less the weighted
    average shares subject to repurchase, during the period. For all
    periods presented, the outstanding shares of Series A and
    Series B, common stock options, unvested restricted stock
    and preferred stock warrants have been excluded from the
    calculation because their effect would be anti-dilutive.
    Therefore, the weighted average shares used to calculate both
    basic and diluted loss per share are the same.
The following potentially dilutive securities have been excluded
    from the computations of diluted weighted average shares
    outstanding as of December 31, 2007, 2008 and 2009, as they
    would be anti-dilutive:
December 31,
2007
2008
2009
Redeemable convertible preferred stock
16,922,506
42,205,062
53,096,340
Shares issuable pursuant to redeemable convertible preferred
    stock accretion
1,309,674
3,616,584
7,311,875
Options outstanding
1,328,557
7,203,947
7,620,042
Unvested restricted stock
566,250
566,250
71,250
Preferred stock warrants outstanding
134,408
134,408
870,922
The unaudited pro forma net loss per common share is computed
    using the weighted average number of common shares outstanding
    and assumes the conversion of all outstanding shares of the
    Company's Series A and Series B, including
    accrued dividends,
    into           shares
    of common stock and the conversion of the April 2010 Convertible
    Notes
    into           shares
    of common stock upon the closing of the Company's planned
    IPO, as if they had occurred at the later of the beginning of
    the period or date of issuance. Accordingly, net loss applicable
    to common stockholders is adjusted to remove all preferred stock
    accretion. The Company believes the unaudited pro forma net loss
    per common share provides material information to investors, as
    the conversion of the Company's preferred stock to common
    stock, including accrued dividends, and the conversion of the
    April 2010 Convertible Notes is expected to occur upon the
    closing of an IPO, and the disclosure of pro forma net loss per
    common share provides an indication of net loss per common share
    that is comparable to what will be reported by the Company as a
    public company following the closing of the IPO.
The following table summarizes the calculation of unaudited pro
    forma basic and diluted net loss per common share for the year
    ended December 31, 2009:
Numerator:
Net loss applicable to common stockholders
$
(19,207,523
)
Effect of pro forma conversion of preferred stock:
Accretion of redeemable convertible preferred stock
3,617,211
Pro forma net loss applicable to common stockholders
$
(15,590,312
)
Denominator:
Weighted average common shares outstanding
3,060,000
Effect of pro forma conversion of redeemable convertible
    preferred stock:
Series A redeemable convertible preferred stock
20,262,880
Series B redeemable convertible preferred stock
31,303,945
Effect of pro forma conversion of April 2010 Convertible Notes
Shares used in computing unaudited pro forma weighted average
    basic and diluted common shares outstanding
Unaudited pro forma basic and diluted net loss per common share
$
F-11
Table of Contents
NUPATHE
    INC.
Notes to
    Financial Statements — (Continued)
(j)  Segment
    Information
The Company is managed and operated as one business. The entire
    business is managed by a single management team that reports to
    the chief executive officer. The Company does not operate
    separate lines of business or separate business entities with
    respect to any of its product candidates. Accordingly, the
    Company does not prepare discrete financial information with
    respect to separate product areas and does not have separately
    reportable segments.
(k)  Recently
    Issued Accounting Standards
The Company adopted new accounting guidance on fair value
    measurements effective January 1, 2008, for financial
    assets and liabilities. In addition, effective January 1,
    2009, the Company adopted this guidance as it relates to
    nonfinancial assets and liabilities that are not recognized or
    disclosed at fair value in the financial statements on at least
    an annual basis. This guidance defines fair value as the price
    that would be received to sell an asset or paid to transfer a
    liability, referred to as the exit price, in an orderly
    transaction between market participants at the measurement date.
    The standard outlines a valuation framework and creates a fair
    value hierarchy in order to increase the consistency and
    comparability of fair value measurements and the related
    disclosures. The adoption of this guidance did not have a
    material impact on the Company's financial statements.
In June 2008, the FASB issued new guidance related to assessing
    whether an equity-linked financial instrument (or embedded
    feature) is indexed to an entity's own stock for the
    purposes of determining whether such equity-linked financial
    instrument (or embedded feature) is subject to derivative
    accounting. The Company adopted this new guidance effective
    January 1, 2009. The adoption of this guidance did not have
    a material impact on the Company's financial statements.
In May 2009, the FASB issued new guidance on subsequent events.
    The standard provides guidance on management's assessment
    of subsequent events and incorporates this guidance into
    accounting literature. The standard is effective prospectively
    for interim and annual periods ending after June 15, 2009
    and the Company adopted this guidance beginning with the interim
    period ended June 30, 2009. The adoption of this standard
    did not have a material impact on the Company's financial
    statements.
In April 2009, the FASB issued a staff position requiring fair
    value disclosures in both interim as well as annual financial
    statements in order to provide more timely information about the
    effects of current market conditions on financial instruments.
    The guidance is effective for interim and annual periods ending
    after June 15, 2009, and the Company adopted this guidance
    commencing with the issuance of the September 30, 2009
    financial statements. The adoption of this standard did not have
    a material impact on the Company's financial statements.
In June 2009, the FASB Accounting Standards Codification (ASC)
    was issued, effective for financial statements issued for
    interim and annual periods ending after September 15, 2009.
    The ASC supersedes literature of the FASB, Emerging Issues Task
    Force and other sources. The ASC did not change
    U.S. generally accepted accounting principles. The adoption
    of this standard did not have a material impact on the
    Company's financial statements.
F-12
Table of Contents
NUPATHE
    INC.
Notes to
    Financial Statements — (Continued)
(4)  Property
    and Equipment
Property and equipment consisted of the following:
December 31,
2008
2009
Computer equipment and software
$
153,878
$
109,414
Office equipment and furniture
3,086
3,086
Lab equipment
10,817
19,623
Leasehold improvements
28,387
38,238
196,168
170,361
Less accumulated depreciation and amortization
(73,442
)
(99,733
)
$
122,726
$
70,628
Depreciation and amortization expense was $17,140, $48,197 and
    $57,383 for the years ended December 31, 2007, 2008 and
    2009, respectively.
(5)  Accrued
    Expenses
Accrued expenses consisted of the following:
December 31,
2008
2009
Accrued compensation and benefits
$
182,277
$
504,091
Accrued professional fees
159,802
112,301
Accrued research and development expenses
839,374
238,401
Accrued interest and other
230,897
181,033
$
1,412,350
$
1,035,826
(6)  Debt
(a)  Convertible
    Notes
From October 2005 to June 2006, the Company issued convertible
    promissory notes for cash proceeds of $2,470,000 to five
    institutional and individual investors, including an officer of
    the Company. The notes bore interest of 8% per year and were due
    two years from the issuance dates. The notes were convertible
    into preferred stock upon completion of a Qualified Financing,
    as defined.
In August 2006, the note holders converted their notes,
    including accrued interest of $120,343, into
    3,481,645 shares of Series A at a conversion price of
    $0.74 per share, equal to a 20% discount from the per share
    price paid by the Series A investors (note 7). As a result
    of the discount and in accordance with FASB accounting guidance,
    the Company recorded a beneficial conversion feature (BCF) of
    $647,587 in connection with the conversion of the notes, which
    was recorded as interest expense in 2006.
In July 2009, the Company issued convertible promissory notes
    for cash proceeds of $1,934,183 to existing investors, including
    two officers of the Company (the 2009 Notes). The 2009 Notes
    bore interest of 10% per year and were due on June 30,
    2010, if not converted prior to such date, and were mandatorily
    convertible into preferred stock upon the occurrence of the
    Second Tranche Closing, as defined. The holders of the 2009
    Notes were entitled to receive warrants to purchase shares of
    Series B upon the conversion of the 2009 Notes. The fair
    value of the warrants of $556,042 was recorded as a reduction in
    the carrying value of the 2009 Notes as original issue discount
    and recognized as interest expense. After the allocation of the
F-13
Table of Contents
NUPATHE
    INC.
Notes to
    Financial Statements — (Continued)
original issue discount, the 2009 Notes contained a BCF of
    $556,042, which was also recognized as additional interest
    expense.
In August 2009, the holders of the 2009 Notes converted their
    notes, including accrued interest of $22,840, into
    2,104,326 shares of Series B at a conversion price of
    $0.93 per share. Upon conversion, the investors received
    warrants to purchase 736,514 shares of Series B at
    0.93 per share that are exercisable for a term of up to seven
    years. Because the Series B for which the warrants are
    exercisable is a redeemable security, the warrants are liability
    classified in accordance with FASB accounting guidance. The
    Company records the warrant liability at its fair value using
    the Black-Scholes option-pricing model and revalues the warrant
    at each reporting date. The following table summarizes the fair
    value and the assumptions used for the Black-Scholes
    option-pricing model for these Series B warrants:
Date of
Issuance
(August 20,
December 31,
2009)
2009
Fair value
$
556,042
$
526,828
Expected dividend yield
—
%
—
%
Expected volatility
95.50
%
87.83
%
Risk-free interest rate
2.60
%
3.26
%
Remaining contractual term
7 years
6.6 years
In April 2010, the Company issued convertible promissory notes
    for cash proceeds of $10,062,500 to existing investors,
    including three officers of the Company. The April 2010
    Convertible Notes bear interest of 8% per year and are due on
    December 31, 2010, if not converted prior to that date. The
    April 2010 Convertible Notes and related accrued interest are
    mandatorily convertible into common stock at a conversion price
    equal to 80% of the IPO price per share upon the occurrence of
    an IPO, as defined. Additionally, the April 2010 Convertible
    Notes are mandatorily convertible into preferred stock upon the
    execution of an acquisition agreement, as defined, or the
    issuance of equity securities with total proceeds greater than
    $10.0 million. In the event that an IPO does not occur and
    the April 2010 Convertible Notes convert as a result of the
    events previously noted or the notes are still outstanding at
    the maturity date, the Company will issue warrants to the
    holders of the April 2010 Convertible Notes. The terms of such
    warrants are dependent upon the conversion or repayment event
    and are defined in the notes.
(b)  Credit
    Facilities and Vendor Debt
In March 2007, the Company received a $2,500,000 loan from a
    finance company. The loan was secured by a lien on all of the
    Company's assets, excluding intellectual property, which
    was subject to a negative pledge. The loan contained certain
    additional nonfinancial covenants. In connection with the loan
    agreement, the Company's cash and investment accounts were
    subject to account control agreements with the finance company
    that gave the finance company the right to assume control of the
    accounts in the event of a loan default. Loan defaults were
    defined in the loan agreement and included, among others, the
    finance company's determination that there was a material
    adverse change in the Company's operations. Interest on the
    loan was at a rate of 11.44%. The loan was interest-only for six
    months, and was repayable in equal monthly payments of principal
    and interest of $82,369 over 36 months. Interest expense of
    $215,204, $226,594 and $142,785 was recognized during the years
    ended December 31, 2007, 2008 and 2009, respectively. At
    December 31, 2008 and 2009, the balance outstanding on this
    loan was $1,627,735 and $782,096, respectively. This loan was
    repaid on May 13, 2010.
In connection with the loan from the finance company, the
    Company issued a warrant to purchase 134,408 shares of
    Series A at an exercise price of $0.93 per share that is
    exercisable for a term of up to ten years. Because the
    Series A for which the warrant is exercisable is a
    redeemable security, the warrant is liability classified. The
    Company records the warrant liability at its fair value using
    the Black-Scholes option-
F-14
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NUPATHE
    INC.
Notes to
    Financial Statements — (Continued)
pricing model and revalues the warrant at each reporting date.
    The following table summarizes the fair value and the
    assumptions used for the Black-Scholes
option-pricing
model for this warrant:
Date of
Issuance
(March 29,
December 31,
2007)
2008
2009
Fair value
$
106,457
$
102,354
$
99,664
Expected dividend yield
—
%
—
%
—
%
Expected volatility
83.10
%
89.79
%
89.17
%
Risk-free interest rate
4.64
%
2.03
%
3.43
%
Remaining contractual term
10 years
8.25 years
7.25 years
The initial fair value of the warrant of $106,457 was recorded
    as deferred financing costs and is being amortized to interest
    expense over the life of the loan. Interest expense of $22,812,
    $30,416 and $30,416 related to the warrant was recorded during
    the years ended December 31, 2007, 2008 and 2009,
    respectively.
In May 2010, the Company executed a term loan facility with
    lenders to fund working capital needs. The loan is secured by a
    lien on all of the Company's assets, excluding intellectual
    property, which is subject to a negative pledge. The Company
    received proceeds of $5,000,000 at closing. An additional
    $6,000,000 of proceeds is available to the Company subject to
    the closing of an equity financing as defined, and subject to
    final approval from the lenders. The loan bears interest at an
    annual rate of LIBOR plus 8.75%, subject to a LIBOR floor
    of 3.00%. The loan contains a material adverse change clause, as
    defined, which can trigger an event of default. The loan is
    repayable over 39 months with interest only payments for
    the first twelve months. In connection with the loan, the
    lenders received warrants to purchase 255,376 shares of
    Series B at $0.93 per share, which will become warrants to
    purchase 255,376 shares of common stock upon the closing of
    the IPO. The Company is required to issue additional warrants to
    purchase up to an additional 306,452 shares of
    Series B in the event that additional proceeds are received
    from the lenders.
Additionally, at December 31, 2008 and 2009, there was
    $45,290 and $36,043, respectively, outstanding on a short-term
    loan from a vendor. As of December 31, 2009, all of the
    Company's outstanding debt is due in 2010.
(7)  Capital
    Structure
(a)  Redeemable
    Convertible Preferred Stock
As of December 31, 2009, the authorized and outstanding
    redeemable convertible preferred stock and their principal terms
    are as follows:
Shares
Shares
Carrying
Liquidation
Series
Authorized
Outstanding
Amount
Value
A
17,056,914
16,922,506
$
19,060,782
$
19,473,996
B
54,688,141
36,173,834
36,477,409
36,705,643
In August 2006, the Company entered into an agreement with a
    group of investors to sell 16,129,032 shares of
    Series A at a price of $0.93 per share. Of these,
    6,451,613 shares were sold in August 2006 and
    1,612,903 shares were sold in October 2006, resulting in
    net cash proceeds of $7,232,542 in 2006. An additional
    5,376,345 shares of Series A were sold to the
    investors in October 2007, resulting in net cash proceeds of
    $4,979,729, and 2,688,171 shares of Series A were sold
    to the investors in April 2008, resulting in cash proceeds of
    $2,499,999. The Series A shares sold in April 2008 were
    exchanged into Series B shares in July 2008 on a
one-for-one
basis.
F-15
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NUPATHE
    INC.
Notes to
    Financial Statements — (Continued)
An additional 3,481,645 shares of Series A were issued
    in August 2006 to the convertible note holders in exchange for
    notes with a principal amount of $2,470,000 and accrued interest
    of $120,343 (note 6).
In July 2008, the Company entered into an agreement with a group
    of investors to sell up to 37,634,409 shares of
    Series B at a price of $0.93 per share, of which
    19,632,019 shares were sold in July 2008 and
    2,962,366 shares were sold in November 2008, resulting in
    net cash proceeds of $20,708,410. In August 2009, an additional
    10,891,278 shares of Series B were issued upon the
    achievement by the Company of a defined development milestone
    for net proceeds of $10,112,350 of which 2,104,326 shares
    of Series B were from the conversion of the 2009 notes
    (note 6). The Company does not currently have any purchase
    commitments for the balance of the 4,148,746 shares
    authorized under this agreement.
At the option of the holder, each share of Series A and
    Series B is convertible into the number of shares of common
    stock equal to the product obtained by multiplying the number of
    shares of preferred stock being converted by the quotient
    obtained by (i) dividing the sum of $0.93 per share plus
    all accrued and unpaid dividends per share by (ii) $0.93
    (subject to certain antidilution adjustments). The Series A
    and Series B shares are mandatorily convertible in the
    event of a qualified public offering, as defined. Holders of the
    Series A and Series B have the number of votes equal
    to the number of common shares into which their stock is
    convertible. Holders of the Series A have the right to
    elect two directors. Holders of the Series B have the right
    to elect another two directors. Holders of the Series A and
    Series B, together with the holders of the common stock,
    all voting together as a single class, have the right to elect
    three additional members of the board of directors. Approval of
    holders of 66.67% of the Series A and Series B shares
    is required for certain significant corporate events.
Series A and Series B holders are entitled to receive
    dividends of 8% per year as and when declared by the board of
    directors. Series A and Series B dividends accrue
    cumulatively and no dividends have been declared through
    December 31, 2009. Dividends are accrued and are payable in
    the event of sale or liquidation of the Company or qualified
    public offering, as defined, or upon conversion or redemption of
    the Series A or Series B. As of December 31, 2008
    and 2009, there were $2,477,031 and $3,736,066, respectively, of
    unpaid Series A dividends. As of December 31, 2008 and
    2009, there were $886,392 and $3,063,978, respectively, of
    unpaid Series B dividends.
Series A and Series B holders are entitled to a
    liquidation preference in an amount equal to $0.93 per share,
    plus any accumulated but unpaid dividends, in the event of a
    liquidation, dissolution, or
winding-up
of the Company, or in the event the Company merges with or is
    acquired by another entity. Once the Series A and
    Series B liquidation preference has been paid, any
    remaining assets would be distributed pro rata to the
    Series B, Series A and common stockholders.
The Series B ranks senior to the Series A and common
    stock as to the payment of dividends or distributions of assets
    upon a liquidation or liquidity event.
At any time after July 31, 2013, the holders of 66.67% of
    Series A and Series B may require the Company to
    redeem the Series A and Series B shares for a price
    per share equal to the greater of $0.93, plus any accumulated
    but unpaid dividends, or its then-fair value. The carrying value
    of the Series A and Series B will be accreted to their
    redemption value by a charge to additional paid-in capital, if
    any, then to accumulated deficit.
(b)  Common
    Stock
In 2005, 2,600,000 shares of common stock were issued to
    the Company's founders and officers for $0.08 per share in
    cash. An additional 110,000 shares were issued to an
    employee and a consultant in return for services, for which the
    Company recorded an expense of $8,800.
F-16
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NUPATHE
    INC.
Notes to
    Financial Statements — (Continued)
As mentioned above, holders of the common stock, together with
    holders of Series A and Series B, all voting together
    as a single class, have the right to elect three members of the
    board of directors.
(c)  Warrants
In connection with the finance company loan and the 2009 Notes,
    the Company issued warrants to purchase shares of Series A
    and B, respectively (note 6). As of December 31, 2009,
    the following warrants to purchase Preferred Stock were
    outstanding:
Number of
Series
Shares
Exercise Price
Expiration
A
134,408
$
0.93
2017
B
736,514
0.93
2016
The warrants are classified as warrant liability on the
    accompanying balance sheet in accordance with FASB accounting
    guidance, as the warrants entitle the holder to purchase
    preferred stock, which may be redeemed at the option of the
    holder. See note 6 for further details.
(8)  Stock-Based
    Compensation
In 2005 (and as amended in August 2006 and July 2008), the
    Company adopted the 2005 Equity Compensation Plan (the Plan)
    that authorized the Company to grant up to 3,800,000 shares
    of common stock to eligible employees, directors, and
    consultants to the Company in the form of restricted stock and
    stock options. In 2008, the Company authorized an additional
    5,000,000 shares, for a total of 8,800,000 shares,
    available for grant. The amount, terms of grants, and
    exercisability provisions are determined by the board of
    directors. The term of the options may be up to 10 years,
    and options are exercisable in cash or as otherwise determined
    by the board of directors.
As of December 31, 2009, there were 758,708 shares of
    common stock available for future grants under the Plan.
Stock-based compensation expense for the years ended
    December 31, 2007, 2008 and 2009 includes compensation
    expense for employee and nonemployee stock option grants and
    restricted stock grants. The compensation expense for the years
    ended December 31, 2007, 2008 and 2009 is as follows:
Year Ended December 31,
2007
2008
2009
Stock options:
Employee
$
36,000
$
104,547
$
308,418
Nonemployee
9,621
9,466
18,869
45,621
114,013
327,287
Restricted stock:
Employee
13,584
44,163
(8,232
)
$
59,205
$
158,176
$
319,055
For the years ended December 31, 2007, 2008 and 2009,
    $18,759, $54,622 and $118,504, respectively, of expense is
    included in research and development expenses and $40,446,
    $103,554 and $200,551, respectively, is included in general and
    administrative expenses. The reversal of compensation expense
    for restricted stock in 2009 resulted from the cancellation of
    restricted stock grants for which expense was recorded in prior
    years.
F-17
Table of Contents
NUPATHE
    INC.
Notes to
    Financial Statements — (Continued)
Stock
    Options
The weighted average fair value of the options granted during
    2007, 2008 and 2009 was estimated at $0.13, $0.17 and $0.17,
    respectively, on the date of grant using the Black-Scholes
    option-pricing model with the following weighted average
    assumptions:
Year Ended December 31,
2007
2008
2009
Expected dividend yield
—
%
—
%
—
%
Expected volatility
80.7
%
79.8
%
92.8
%
Risk-free interest rate
4.3
%
2.9
%
2.2
%
Expected life
6 years
6 years
5.25 years
The expected life assumption is based on the use of the
    simplified method. The expected volatility was calculated based
    on a historical volatility analysis of public company peers that
    are similar to the Company. The risk-free interest rate is based
    on the zero-coupon U.S. Treasury yield at the date of grant
    for a term equivalent to the expected term of the option.
The following is a summary of stock option activity under the
    Plan through December 31, 2009:
Weighted
Weighted
Average
Average
Remaining
Aggregate
Number of
Exercise
Contractual
Intrinsic
Shares
Price
Term in Years
Value
Outstanding at January 1, 2007
783,557
$
0.14
Granted
547,500
0.18
Exercised
—
—
Cancelled/forfeited
(2,500
)
0.18
Outstanding at December 31, 2007
1,328,557
0.16
Granted
6,004,569
0.24
Exercised
(1,250
)
0.18
Cancelled/forfeited
(127,929
)
0.19
Outstanding at December 31, 2008
7,203,947
0.22
Granted
548,700
0.24
Exercised
—
—
Cancelled/forfeited
(132,605
)
0.22
Outstanding at December 31, 2009
7,620,042
$
0.23
8.44
$
107,230
Vested and expected to vest at December 31, 2009
7,590,728
$
0.23
8.38
$
107,086
Exercisable at December 31, 2009
3,464,595
$
0.21
8.14
$
92,384
As of December 31, 2009, there was $667,013 of unrecognized
    compensation expense related to unvested stock options, which is
    expected to be recognized over a weighted average period of
    2.5 years.
F-18
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NUPATHE
    INC.
Notes to
    Financial Statements — (Continued)
Restricted
    Stock
The following summarizes the Company's restricted stock
    activity:
Weighted
Average
Number of
Grant Date
Shares
Fair Value
Nonvested shares at January 1, 2007
751,640
$
0.16
Granted
—
—
Vested
(185,390
)
0.12
Forfeited/repurchased
—
—
Nonvested shares at December 31, 2007
566,250
0.17
Granted
—
—
Vested
—
—
Forfeited/repurchased
—
—
Nonvested shares at December 31, 2008
566,250
0.17
Granted
—
—
Vested
—
—
Forfeited/repurchased
(495,000
)
0.18
Nonvested shares at December 31, 2009
71,250
0.12
In 2006, the Company issued 320,000 restricted shares of common
    stock with a grant date fair value of $38,400 to officers and
    employees. These shares vest based upon defined Company and
    individual performance goals. As of December 31, 2009,
    there were 71,250 unvested shares subject to vesting upon the
    achievement of such goals. As of December 31, 2009, there
    was $8,550 of unrecognized compensation expense related to the
    unvested restricted stock awards that will vest upon the
    achievement of a certain defined milestone.
In 2006, the Company issued 495,000 restricted shares of common
    stock to officers that vest based upon a specific milestone
    related to the value of the Company's Series A upon a
    change of control of the Company's stock. In 2009, these
    restricted shares were forfeited based on the terms of the
    restricted stock agreement.
(9)  Commitments
(a)  Leases
The Company leases office space and office equipment under
    operating leases, which expire at various times through March
    2013. Rent expense under these leases was $89,817, $316,350 and
    $299,342 for the years ended December 31, 2007, 2008 and
    2009, respectively. Rent expense under these leases since
    inception has been $845,000.
Future minimum lease payments as of December 31, 2009 are
    as follows:
2010
$
346,063
2011
351,601
2012
356,708
2013
88,341
$
1,142,713
F-19
Table of Contents
NUPATHE
    INC.
Notes to
    Financial Statements — (Continued)
(b)  License
    Agreements
In July 2008, the Company and Travanti Pharma Inc. (Travanti)
    entered into an asset purchase and license agreement and an
    assignment agreement. Pursuant to the terms of the Travanti
    agreement, the Company paid $5,500,000 for the purchase of a
    patent application, including all supporting documentation and
    priority documents, that is directed to transdermal delivery of
    anti-migraine medications using an active delivery patch. The
    Company granted Travanti a nonexclusive, royalty-free, perpetual
    worldwide license to use the purchased patent application, and
    the invention covered by such patent application, outside the
    field of migraine. In addition, Travanti granted to the Company
    a perpetual, worldwide, exclusive, royalty-free license, with
    the right to grant sublicenses, under Travanti's patent
    rights and know-how that relate generally to specified
    iontophoresis technology to develop, make and commercialize
    migraine products. This fee was recognized in the accompanying
    statement of operations for the year ended December 31,
    2008 as acquired in process research and development, as
    additional research and development efforts and regulatory
    approval is required in order to commercialize this product in
    the United States.
The Company entered into a patent license agreement with the
    University of Pennsylvania (Penn), which became effective in
    July 2006 and was amended in May 2007. Under the patent license
    agreement, Penn granted to the Company exclusive, worldwide
    rights under specified patent applications, and patents issuing
    therefrom, to make, use and sell products using Long Acting
    Delivery (LAD) technology. Under the agreement, the Company has
    the right to sublicense, subject to specified conditions,
    including the payment of sublicense fees. The patent license
    agreement requires that the Company use commercially reasonable
    efforts to develop and commercialize licensed products. The
    license agreement requires the Company to commit a minimum of
    $250,000 per year, towards the development and commercialization
    of licensed products, until the first commercial sale of the
    first licensed product. The license agreement requires annual
    license maintenance payments up to $50,000 until the first
    commercial sale of the first licensed product. In addition, the
    Company has agreed to pay Penn aggregate milestone payments of
    up to $950,000 upon the achievement of specified development and
    regulatory milestones related to each licensed product as
    specified and royalty payments equal to a specified percentage
    of future commercial sales of licensed products subject to the
    license through the expiration of the licensed patents. The
    Company paid fees of $25,000, $20,000 and $30,000 in 2007, 2008
    and 2009, respectively, which were recorded as research and
    development expense. The Company reimbursed Penn for $34,534,
    $72,984 and $64,864 in 2007, 2008 and 2009, respectively, for
    patent prosecution costs, which was recorded as expense by the
    Company.
In September 2009, the Company entered into a license agreement
    with SurModics Pharmaceuticals, Inc. (SurModics), pursuant to
    which the Company received an exclusive worldwide license, with
    the right to sublicense, under SurModics' intellectual
    property, including its interest in joint inventions developed
    under a feasibility agreement, to make, have made, use, sell,
    import and export products covered by the license agreement. The
    Company granted SurModics an exclusive, perpetual, worldwide,
    royalty-free license under the Company's interest in joint
    inventions for uses that do not relate to products covered by
    the agreement or include any of the Company's existing
    technology or confidential information. The Company also granted
    SurModics a right of first negotiation to manufacture clinical
    supplies of covered products. If the Company and SurModics enter
    into such clinical manufacturing agreement, SurModics has a
    right of first negotiation to manufacture commercial supplies of
    covered products. The Company is obligated to pay aggregate
    milestones of up to $4,750,000 upon the achievement of specified
    development, regulatory and sales level milestones related to
    the first clinical indication approved by regulatory authority
    for covered products. The Company must also pay an additional
    milestone payment upon regulatory approval of each additional
    clinical indication for covered products and specified royalties
    on sales of commercial product.
F-20
Table of Contents
NUPATHE
    INC.
Notes to
    Financial Statements — (Continued)
(c)  Employment
    Agreements
Certain of the officers of the Company have employment
    agreements providing for severance and continuation of benefits
    in the event of termination without cause, including in the
    event of a Change of Control of the Company, as defined in the
    agreements.
(10)  Related-Party
    Transactions
A former director and current shareholder and consultant of the
    Company is the chairman of a company that provides outsourced
    clinical development services to the pharmaceutical industry.
    During the years ended December 31, 2007, 2008 and 2009,
    the Company purchased $97,514, $166,308 and $454,337,
    respectively, of services from that company. The Company
    considers the fees paid fair value for the services rendered.
(11)  401(k)
    Profit Sharing Plan
The Company maintains a 401(k) Profit Sharing Plan (the 401(k)
    Plan) available to all employees meeting certain eligibility
    criteria. The 401(k) Plan permits participants to contribute up
    to 90% of their salary, not to exceed the limits established by
    the Internal Revenue Code. All contributions made by
    participants into the participants' accounts vest
    immediately. Throughout 2008 and 2009, the Company provided a
    biweekly matching contribution to participant's accounts as
    provided for under the 401(k) Plan. This contribution is
    determined by a formula that is based on the employee's
    contributions, not to exceed 3% of their eligible wages, as
    defined by the 401(k) Plan. The Company sponsored match was
    $48,000, $61,565 and $74,425 for the years ended
    December 31, 2007, 2008 and 2009, respectively. The
    Company's contribution to the 401(k) Plan is 100% vested
    upon contribution date.
(12)  Income
    Taxes
During the year ended December 31, 2009, the Company sold
    $151,012 of Pennsylvania research and development tax credits to
    a third party buyer. Accordingly, the Company recorded an income
    tax benefit of $151,012 for the year ended December 31,
    2009.
A reconciliation of the statutory U.S. federal rate to the
    Company's effective tax rate is as follows:
Year Ended December 31,
2007
2008
2009
Percent of pre-tax income:
U.S. federal statutory income tax rate
34.0
%
34.0
%
34.0
%
State taxes, net of federal benefit
6.5
6.5
6.5
Other
4.3
3.8
1.0
Change in valuation allowance
(44.8
)
(44.3
)
(40.6
)
Effective income tax rate
—
%
—
%
0.9
%
F-21
Table of Contents
NUPATHE
    INC.
Notes to
    Financial Statements — (Continued)
The tax effects of temporary differences that gave rise to
    significant portions of the deferred tax assets were as follows:
December 31,
2008
2009
Net operating loss carryforwards
$
10,746,454
$
17,118,099
Research and development credit
1,012,886
1,272,271
Depreciation and amortization
2,125,418
2,014,476
Capitalized
start-up
costs
169,429
141,190
Other temporary differences
215,083
182,720
Gross deferred tax asset
14,269,270
(20,728,756
)
Deferred tax assets valuation allowance
(14,269,270
)
(20,728,756
)
$
—
$
—
In assessing the realizability of deferred tax assets, the
    Company considers whether it is more likely than not that some
    portion or all of the deferred tax assets will not be realized.
    The ultimate realization of deferred tax assets is dependent
    upon the generation of future taxable income during the periods
    in which the temporary differences representing net future
    deductible amounts become deductible. Due to the Company's
    history of losses, the deferred tax assets are fully offset by a
    valuation allowance at December 31, 2008 and 2009. The
    valuation allowance in 2008 increased by $7,800,000 over 2007
    and the valuation allowance in 2009 increased by $6,500,000 over
    2008, related primarily to additional net operating losses
    incurred by the Company and additional capitalized
start-up
expenses.
As of December 31, 2008 and 2009, $417,000 and $348,000,
    respectively, of the Company's expenses had been
    capitalized for tax purposes as
start-up
costs. For tax purposes, capitalized
start-up
costs will be amortized over fifteen years beginning when the
    Company commences operations, as defined under the Internal
    Revenue Code.
The following table summarizes carryforwards of net operating
    losses and tax credits as of December 31, 2009:
Amount
Expiration
Federal net operating losses
$
42,169,658
2025 — 2029
State net operating losses
1,272,271
2024 — 2029
The Tax Reform Act of 1986 (the Act) provides for a limitation
    of the annual use of net operating loss and research and
    development tax credit carryforwards following certain ownership
    changes (as defined by the Act) that could limit the
    Company's ability to utilize these carryforwards. The
    Company has not completed a study to assess whether an ownership
    change has occurred, or whether there have been multiple
    ownership changes since its formation, due to the significant
    costs and complexities associated with such a study. The Company
    may have experienced various ownership changes, as defined by
    the Act, as a result of past financings. Accordingly, the
    Company's ability to utilize the aforementioned
    carryforwards may be limited. Additionally, U.S. tax laws
    limit the time during which these carryforwards may be applied
    against future taxes; therefore, the Company may not be able to
    take full advantage of these carryforwards for federal or state
    income tax purposes.
The Company did not have unrecognized tax benefits as of
    December 31, 2009 and does not expect this to change
    significantly over the next twelve months. As of
    December 31, 2009, the Company has not accrued interest or
    penalties related to uncertain tax positions. The Company's
    tax returns for the years ended December 31, 2006 through
    December 31, 2009 are still subject to examination by major
    tax jurisdictions.
F-22
Table of Contents
Shares
Common Stock
Leerink Swann
Lazard Capital Markets
Thomas Weisel Partners LLC
Needham & Company, LLC
,
    2010
Table of Contents
PART II
INFORMATION
    NOT REQUIRED IN PROSPECTUS
Item 13.
Other
    expenses of issuance and distribution.
The following table sets forth all costs and expenses, other
    than underwriting discounts and commissions, in connection with
    the sale of the common stock being registered, all of which will
    be paid by us. All amounts shown are estimates except for the
    Securities Exchange Commission, or SEC, registration fee, the
    Financial Industry Regulatory Authority, or FINRA, filing fee
    and the listing fee for The NASDAQ Global Market.
Amount Paid
or to be Paid
SEC registration fee
$
6,150
FINRA filing fee
9,125
The NASDAQ Global Market listing fee
*
Blue sky qualification fees and expenses
*
Printing expenses
*
Legal fees and expenses
*
Accounting fees and expenses
*
Transfer agent and registrar fees and expenses
*
Insurance Policy Premium
*
Miscellaneous expenses
*
Total Expenses
$
*
*
To be filed by amendment
Item 14.
Indemnification
    of directors and officers.
Section 102(b)(7) of the DGCL provides that a Delaware
    corporation, in its certificate of incorporation, may limit the
    personal liability of a director to the corporation or its
    stockholders for monetary damages for breach of fiduciary duties
    as a director, except for liability for any:
•
Transaction from which the director derived an improper personal
    benefit;
•
Act or omission not in good faith or that involved intentional
    misconduct or a knowing violation of law;
•
Unlawful payment of dividends or redemption of shares; or
•
Breach of the director's duty of loyalty to the corporation
    or its stockholders.
Section 145(a) of the DGCL provides, in general, that a
    Delaware corporation may indemnify any person who was or is a
    party, or is threatened to be made a party, to any threatened,
    pending or completed action, suit or proceeding, whether civil,
    criminal, administrative or investigative (other than an action
    by or in the right of the corporation) because that person is or
    was a director, officer, employee or agent of the corporation,
    or is or was serving at the request of the corporation as a
    director, officer, employee or agent of another corporation or
    other enterprise. The indemnity may include against expenses
    (including attorneys' fees), judgments, fines and amounts
    paid in settlement actually and reasonably incurred by the
    person in connection with such action, so long as the person
    acted in good faith and in a manner he or she reasonably
    believed was in or not opposed to the corporation's best
    interests of the corporation, and, with respect to any criminal
    action or proceeding, had no reasonable cause to believe his or
    her conduct was unlawful.
Section 145(b) of the DGCL provides, in general, that a
    Delaware corporation may indemnify any person who was or is a
    party, or is threatened to be made a party, to any threatened,
    pending or completed action or
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suit by or in the right of the corporation to obtain a judgment
    in its favor because the person is or was a director, officer,
    employee or agent of the corporation, or is or was serving at
    the request of the corporation as a director, officer, employee
    or agent of another corporation or other enterprise. The
    indemnity may include expenses (including attorneys' fees)
    actually and reasonably incurred by the person in connection
    with the defense or settlement of such action, so long as the
    person acted in good faith and in a manner the person reasonably
    believed was in or not opposed to the corporation's best
    interests, except that no indemnification shall be permitted
    without judicial approval if a court has determined that the
    person is to be liable to the corporation with respect to such
    claim. If a present or former director or officer has been
    successful in defense of any action referred to above, the
    corporation must indemnify such officer or director against the
    expenses (including attorneys' fees) he or she actually and
    reasonably incurred in connection with such action.
Section 145(g) of the DGCL provides, in general, that a
    corporation may purchase and maintain insurance on behalf of any
    person who is or was a director, officer, employee or agent of
    the corporation, or is or was serving at the request of the
    corporation as a director, officer, employee or agent of another
    corporation or other enterprise against any liability asserted
    against and incurred by such person, in any such capacity, or
    arising out of his or her status as such, whether or not the
    corporation could indemnify the person against such liability
    under Section 145 of the DGCL.
Our restated certificate of incorporation and our bylaws, each
    of which will become effective upon the closing of this
    offering, and our Investor Rights Agreement, each provide for
    the indemnification of our directors and officers to the fullest
    extent permitted under the DGCL.
In addition to the indemnification provisions provided for in
    our charter documents, we are party to indemnification
    agreements with certain of our directors. These indemnification
    agreements generally provide that we will indemnify the director
    to the fullest extent permitted by law for claims arising in his
    or her capacity as a director of our company or in connection
    with their service at our request for another corporation or
    entity. The indemnification agreements also provide for
    procedures that will apply in the event that a director makes a
    claim for indemnification and establish certain presumptions
    that are favorable to the director.
At present, there is no pending litigation or proceeding
    involving any of our directors or officers as to which
    indemnification is required or permitted, and we are not aware
    of any threatened litigation or proceeding that may result in a
    claim for indemnification.
We maintain a general liability insurance policy which covers
    certain liabilities of our directors and officers arising out of
    claims based on acts or omissions in their capacities as
    directors or officers.
We intend to purchase
and maintain an insurance policy
    which covers certain liabilities of our officers and directors
    arising out of claims based on acts or omissions in their
    capacities as officers and directors, including liabilities
    arising under the Securities Act, the Exchange Act or otherwise.
We have entered into an underwriting agreement, which provides
    for indemnification by the underwriters of us, our officers and
    directors, for certain liabilities, including liabilities
    arising under the Securities Act.
Item 15.
Recent
    sales of unregistered securities.
The following list sets forth information regarding all
    securities sold by us in the three years preceding the filing of
    this registration statement:
Preferred
    Stock Financings
(a) In August 2006, we entered into a Series A
    Preferred Stock Purchase Agreement pursuant to which we issued
    and sold an aggregate of 19,610,677 shares of Series A
    preferred stock in four separate closings from August 2006
    through April 2008, at a purchase price of $0.93 per share, for
    aggregate consideration of $15,000,000 in cash and $2,590,343 in
    aggregate principal and interest due under convertible
    promissory notes held by existing investors, which pursuant to
    the terms of such notes was converted into shares of
    Series A preferred stock.
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Table of Contents
(b) In July 2008, we entered into a Series B Preferred
    Stock Purchase Agreement pursuant to which we issued and sold an
    aggregate of 33,485,663 shares of Series B preferred
    stock in three separate closings from July 2008 through August
    2009, at a purchase price of $0.93 per share, for aggregate
    consideration of $29,184,643 in cash and $1,957,023 in aggregate
    principal and interest due under convertible promissory notes
    held by existing investors, which pursuant to the terms of such
    notes was converted into shares of Series B preferred
    stock. In addition, 2,688,171 shares of Series A
    preferred stock that were acquired in a prior financing by
    certain persons participating in the Series B financing were
    exchanged for an equal number of shares of Series B
    preferred stock.
Convertible
    Note Financings and Warrant Issuances
(c) In July 2009, we received gross proceeds of $1,934,183
    from the sale of convertible promissory notes in a private
    placement to certain of our existing investors. In
    August 2009, the convertible promissory notes converted
    into shares of Series B preferred stock pursuant to the
    terms of such notes. Upon such conversion, warrants to purchase
    an aggregate of 736,514 shares of Series B preferred
    stock were issued to the holders of such notes, which, upon the
    closing of this offering, will become warrants to purchase
    736,514 shares of common stock in accordance with their
    terms.
(d) In April 2010, we received gross proceeds of
    $10,062,500 from the sale of the convertible promissory notes in
    a private placement to certain of our existing investors. The
    convertible promissory notes accrue interest at a rate equal to
    8% per year, compounding monthly, and have a maturity date of
    December 31, 2010, unless converted prior thereto. The
    convertible promissory notes are automatically convertible into
    common stock upon the closing of this offering at a conversion
    price equal to 80% of the price to the public in this offering.
(e) In May 2010, we entered into a $5.0 million
    secured term loan facility. In connection with such loan we
    issued the lenders warrants to purchase 255,376 shares of
    Series B preferred stock at an exercise price of $0.93 per
    share. Upon the closing of this offering, in accordance with
    their terms, the warrants will automatically become exercisable
    for 255,376 shares of common stock at an exercise price of
    $0.93 per share of common stock.
Stock
    Option Grants
(f) From May 14, 2007 through May 14, 2010, we
    granted stock options under our 2005 Equity Compensation Plan to
    purchase an aggregate of 6,960,769 shares of common stock
    with a weighted average exercise price of $0.24 per share, to
    certain of our employees, consultants and directors.
We deemed the offers, sales and issuances of the securities
    described in paragraphs (a) through (f) to be exempt
    from registration under the Securities Act in reliance on either
    (i) Rule 701 of the Securities Act as offers and sales
    of securities under compensatory benefit plans and contracts
    relating to compensation in compliance with Rule 701 or
    (ii) Section 4(2) of the Securities Act, including
    Regulation D promulgated thereunder, relative to
    transactions by an issuer not involving a public offering. Each
    of the recipients of securities in any transaction exempt from
    registration either received or had adequate access, through
    employment, business or other relationships, to information
    about us. All purchasers of shares in transactions exempt from
    registration pursuant to Regulation D represented to us
    that they were accredited investors and were acquiring the
    shares for investment purposes only and not with a view to, or
    for sale in connection with, any distribution thereof and that
    they could bear the risks of the investment and could hold the
    securities for an indefinite period of time. The purchasers
    received written disclosures that the securities had not been
    registered under the Securities Act and that any resale must be
    made pursuant to a registration statement or an available
    exemption from such registration.
All certificates representing the securities issued in the
    transactions described in this Item 15 included appropriate
    legends setting forth that the securities had not been offered
    or sold pursuant to a registration statement and describing the
    applicable restrictions on transfer of the securities. There
    were no underwriters employed in connection with any of the
    transactions set forth in this Item 15.
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Table of Contents
Item 16.
Exhibits
    and financial statement schedules.
(a) Exhibits.
The exhibits to the registration statement are listed in the
    Exhibit Index attached hereto and incorporated by reference
    herein.
(b) Financial Statements Schedules.
No financial statement schedules are provided because the
    information called for is not required or is shown either in the
    financial statements or the notes thereto.
Item 17.
Undertakings.
(a) The undersigned registrant hereby undertakes to provide
    to the underwriter at the closing specified in the underwriting
    agreement, certificates in such denominations and registered in
    such names as required by the underwriter to permit prompt
    delivery to each purchaser.
(b) Insofar as indemnification for liabilities arising
    under the Securities Act may be permitted to directors, officers
    and controlling persons of the registrant pursuant to the
    foregoing provisions or otherwise, the registrant has been
    advised that in the opinion of the SEC such indemnification is
    against public policy as expressed in the Act and is, therefore,
    unenforceable. In the event that a claim for indemnification
    against such liabilities (other than the payment by the
    registrant of expenses incurred or paid by a director, officer
    or controlling person of the registrant in the successful
    defense of any action, suit or proceeding) is asserted by such
    director, officer or controlling person in connection with the
    securities being registered, the registrant will, unless in the
    opinion of its counsel the matter has been settled by
    controlling precedent, submit to a court of appropriate
    jurisdiction the question whether such indemnification by it is
    against public policy as expressed in the Securities Act and
    will be governed by the final adjudication of such issue.
(c) The undersigned registrant hereby undertakes that:
1) For purposes of determining any liability under the
    Securities Act, the information omitted from the form of
    prospectus filed as part of this registration statement in
    reliance upon Rule 430A and contained in a form of
    prospectus filed by the registrant pursuant to Rule 424(b)
    (1) or (4) or 497(h) under the Securities Act shall be
    deemed to be part of this registration statement as of the time
    it was declared effective.
2) For the purpose of determining any liability under the
    Securities Act, each post-effective amendment that contains a
    form of prospectus shall be deemed to be a new registration
    statement relating to the securities offered therein, and the
    offering of such securities at that time shall be deemed to be
    the initial bona fide offering thereof.
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Table of Contents
SIGNATURES
Pursuant to the requirements of the Securities Act, the
    Registrant has duly caused this Registration Statement to be
    signed on its behalf by the undersigned, thereunto duly
    authorized, in the city of Conshohocken, Commonwealth of
    Pennsylvania, on the 14th day of May, 2010.
NUPATHE INC.
By:
/s/  Jane
    H. Hollingsworth
Jane H. Hollingsworth
Chief Executive Officer
POWER OF
    ATTORNEY
Each person whose individual signature appears below hereby
    authorizes and appoints Jane H. Hollingsworth and Keith A.
    Goldan, and each of them, with full power of substitution and
    resubstitution and full power to act without the other, as his
    or her true and lawful attorney in fact and agent to act in his
    or her name, place and stead and to execute in the name and on
    behalf of each person, individually and in each capacity stated
    below, and to file any and all amendments to this Registration
    Statement, including any and all post effective amendments and
    amendments thereto, and any registration statement relating to
    the same offering as this Registration Statement that is to be
    effective upon filing pursuant to Rule 462(b) under the
    Securities Act of 1933, as amended, and to file the same, with
    all exhibits thereto, and other documents in connection
    therewith, with the Securities and Exchange Commission, granting
    unto said attorneys in fact and agents, and each of them, full
    power and authority to do and perform each and every act and
    thing, ratifying and confirming all that said attorneys in fact
    and agents or any of them or their or his substitute or
    substitutes may lawfully do or cause to be done by virtue
    thereof.
Pursuant to the requirements of the Securities Act of 1933, as
    amended, this Registration Statement has been signed by the
    following persons in the capacities and on the dates indicated.
Signature
Title
Date
/s/  Jane
    H. Hollingsworth
Jane
    H. Hollingsworth
Chief Executive Officer and Director (
Principal Executive
    Officer
)
May 14, 2010
/s/  Keith
    A. Goldan
Keith
    A. Goldan
Chief Financial Officer
(
Principal Financial and Accounting Officer
)
May 14, 2010
/s/  Michael
    Cola
Michael
    Cola
Chairman of the Board
May 14, 2010
/s/  Jeanne
    Cunicelli
Jeanne
    Cunicelli
Director
May 14, 2010
/s/  Michael
    C. Diem
Michael
    C. Diem, M.D.
Director
May 14, 2010
/s/  John
    H. Dillon, II
John
    H. Dillon, II
Director
May 14, 2010
/s/  Richard
    S. Kollender
Richard
    S. Kollender
Director
May 14, 2010
/s/  Gary
    J. Kurtzman
Gary
    J. Kurtzman, M.D.
Director
May 14, 2010
II-5
Table of Contents
Exhibit
    Index
Exhibit
Number
Description of Document
1
.1*
Form of Underwriting Agreement
3
.1*
Third Amended and Restated Certificate of Incorporation of
    NuPathe Inc., as amended August 20, 2009, April 9,
    2010 and May 13, 2010
3
.2*
Form of Restated Certificate of Incorporation of NuPathe Inc.,
    to be in effect upon the closing of this offering
3
.3*
Bylaws of NuPathe Inc.
3
.4*
Form of Bylaws of NuPathe Inc., to be in effect upon the closing
    of this offering
4
.1*
Amended and Restated Investor Rights Agreement, dated as of
    July 8, 2008
4
.2*
Preferred Stock Warrant, dated as of March 29, 2007, as
    amended, issued to Oxford Finance Corp.
4
.3*
Form Warrant to Purchase Shares of Series B Preferred
    Stock, as amended
4
.4*
Series B Preferred Stock Warrant, dated May 13, 2010,
    issued to MidCap Funding III, LLC
4
.5*
Series B Preferred Stock Warrant, dated May 13, 2010,
    issued to Silicon Valley Bank
5
.1*
Opinion of Morgan, Lewis & Bockius LLP
10
.1*
Patent License Agreement, effective as of July 1, 2006, as
    amended, between NuPathe Inc. and The Trustees of the University
    of Pennsylvania
10
.2*
Development and License Agreement, dated September 14,
    2007, as amended, between NuPathe Inc. and LTS Lohmann
    Therapie-Systeme AG
10
.3*
Asset Purchase and License Agreement, dated July 8, 2008,
    between NuPathe Inc. and Travanti Pharma Inc.
10
.4*
License Agreement, dated September 23, 2009, between
    NuPathe Inc. and SurModics Pharmaceuticals, Inc. (f/k/a
    Brookwood Pharmaceuticals, Inc.)
10
.5*
Secured Subordinated Convertible Note and Warrant Purchase
    Agreement, dated April 9, 2010, between NuPathe Inc. and
    the Purchasers named therein
10
.6*
Loan and Security Agreement, effective as of May 13, 2010,
    by and among MidCap Funding III, LLC, Silicon Valley Bank and
    NuPathe Inc.
10
.7*
Secured Promissory Note, dated May 13, 2010, made by
    NuPathe Inc. in favor of MidCap Funding III, LLC
10
.8*
Secured Promissory Note, dated May 13, 2010, made by
    NuPathe Inc. in favor of Silicon Valley Bank
10
.9*
Office Space Lease, dated January 10, 2008, between NuPathe
    Inc. and Washington Street Associates II, L.P.
10
.10*
Amended and Restated NuPathe Inc. 2005 Equity Incentive Plan, as
    amended
10
.11*
NuPathe Inc. 2010 Omnibus Incentive Compensation Plan, including
    all forms of grant agreements thereunder
10
.12*
NuPathe Inc. 2010 Employee Stock Purchase Plan
23
.1
Consent of KPMG LLP, independent registered public accounting
    firm
23
.2*
Consent of Morgan, Lewis & Bockius LLP (included in
    Exhibit 5.1)
24
.1
Power of Attorney (included in the signature page to this
    registration statement)
*
To be filed by amendment.