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        AND EXCHANGE COMMISSION </strong></font></div>
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        D.C. 20549 </strong></font></div>
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        8-K </strong></font></div>
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        REPORT </strong></font></div>
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        TO SECTION 13 OR 15(d) OF THE </strong></font></div>
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        EXCHANGE ACT OF 1934 </strong></font></div>
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        of report (Date of earliest event reported): December 1,
        2005</strong></font></div>
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        Pharmaceuticals, Inc. </strong></font></div>
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              <td align="left" valign="middle" width="24%">&#160;</td>
              <td align="left" valign="bottom" width="2%">&#160;</td>
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                  File Number)</strong></font></div>
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            <tr>
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                  Marina Boulevard, Suite 300</strong></font></div>
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        satisfy the filing obligation of the registrant under any of the following
        provisions (see General Instruction A.2. below): </font></div>
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                  material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
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      <div id="PGBRK" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
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          <div style="WIDTH: 100%; TEXT-ALIGN: center">&#160;</div>
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        <div>&#160;</div>
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      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Item
        2.04 </strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Triggering
        Events That Accelerate or Increase a Direct Financial
        Obligation</strong></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">On
        December 1, 2005, Cellegy Pharmaceuticals, Inc. (&#8220;Cellegy&#8221; or the &#8220;Company&#8221;)
        received a notice from PDI, Inc. (&#8220;PDI&#8221;) (the &#8220;Notice&#8221;), notifying the Company
        that PDI considers that Cellegy is in default of the Secured Promissory Note
        and
        the Nonnegotiable Convertible Senior Note which were part of a settlement
        entered into between Cellegy and PDI on April 11, 2005 (collectively, the
        &#8220;Settlement Agreements&#8221;). PDI&#8217;s notice states that PDI believes that Cellegy is
        in material breach of the Secured Promissory Note as a result of Cellegy&#8217;s
        failure to notify PDI of the receipt of certain payments and of Cellegy&#8217;s
        failure to pay amounts to which PDI believes it is entitled. PDI also notified
        Cellegy that PDI believes that an outstanding principal amount of $2,900,000,
        plus default interest, of the Secured Promissory Note and outstanding principal
        amount of $3,500,000, plus default interest, of the Nonnegotiable Convertible
        Senior Note are immediately due and payable in cash pursuant to the &#8220;Event of
        Default&#8221; provisions of the Settlement Agreements.</font></div>
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      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">As
        reported on November 15, 2005, Cellegy </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">renegotiated
        its Exclusive License and Distribution Agreement with its licensee, ProStrakan
        Group plc., relating to Cellegy&#8217;s Rectogesic&#174; product. Under the renegotiated
        agreement, ProStrakan assumed all responsibility for manufacturing and product
        support functions and will purchase the product directly from the manufacturer
        rather than purchasing from Cellegy under the terms of the original agreement.
        In return, ProStrakan paid Cellegy $2 million. PDI claims that it is entitled
        to
        $1 million of that payment. Cellegy does not agree that the payment made
        by
        ProStrakan falls within the definition of &#8220;Pledged Collateral&#8221; in the Settlement
        Agreements and related documents and does not believe that any amount is
        owed to
        PDI as a result of such payments.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Under
        the
        settlement between Cellegy and PDI, Cellegy issued a $3 million initial
        principal Secured Promissory Note to PDI, payable in 18 months, with earlier
        payments of amounts owed under the note required to be made to the extent
        of 50%
        of licensing fees, royalties or milestone payments (or, in each case, other
        payments in the nature thereof) received by Cellegy under Cellegy&#8217;s agreements
        or arrangements with respect to Cellegy&#8217;s Tostrex&#174; (testosterone gel) and
        Rectogesic&#174; (nitroglycerin ointment) products in territories outside of North
        America; 50% of licensing fees, royalties or milestone payments (or, in each
        case, other payments in the nature thereof) received by Cellegy under Cellegy&#8217;s
        agreements or arrangements with respect to Fortigel licensees in North American
        markets; and 10% of proceeds received by Cellegy in excess of $5 million
        from
        financing transactions. &#160;These various payments are to be made until
        the
        amount owed under the note is paid in full. &#160;Cellegy has previously
        made
        certain payments pursuant to these provisions and believes that the outstanding
        principal balance is $2.8 million. Cellegy&#8217;s obligations under the note are
        secured by a security interest, in favor of PDI, in Cellegy&#8217;s interests in the
        payments described above and any proceeds therefrom and certain related
        collateral.&#160; Amounts owed under the note may be accelerated upon an
        event
        of default, which includes, but is not limited to, failure to pay any amount
        when due, certain kinds of bankruptcy filings or certain related actions
        or
        proceedings, an uncured material breach of Cellegy&#8217;s obligations under the note,
        the security interest no longer being a valid, perfected, first priority
        security interest, and a default in indebtedness of Cellegy with an aggregate
        principal amount in excess of $2 million that results in the maturity of
        such
        indebtedness being accelerated before its stated maturity. </font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Cellegy
        also issued to PDI a $3.5 million initial principal amount Nonnegotiable
        Convertible Senior Note due April 11, 2008.&#160;&#160; Events of default
        under
        this note are generally similar to events of default under the Secured
        Promissory Note. By virtue of cross-default provisions, default of the Secured
        Promissory Note also constitutes an event of default under the Nonnegotiable
        Convertible Senior Note.</font></div>
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        the
        terms of the Settlement Agreements and related documents, PDI may declare
        the
        outstanding principal amount of the notes, together with interest, if any,
        of
        the unpaid principal balance thereof, immediately due and payable upon any
        event
        of default of the Secured Promissory Note. </font></div>
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      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Item
        8.01 </strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Other
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      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Based
        on
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        District Court for the Southern District of New York requesting that the
        court
        declare that Cellegy has breached its obligations under the Secured Promissory
        Note and the Nonnegotiable Convertible Senior Note, order Cellegy to
        specifically perform its obligations under the settlement agreements, and
        award
        PDI damages in the amount of $6,400,000 plus default interest as well as
        certain
        other amounts. To the extent the information set forth under Item 2.04 hereof
        also applies to Item 8.01 of Form 8-K, such information is incorporated herein
        by reference.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
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        believes that it has not breached any of the provisions of the Settlement
        Agreements and believes that PDI&#8217;s claims are without merit. The Company plans
        to vigorously defend itself against the claims.</font></div><br>
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        </strong></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 27pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Pursuant
        to the requirements of the Securities Exchange Act of 1934, the registrant
        has
        duly caused this report to be signed on its behalf by the undersigned hereunto
        duly authorized. </font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;&#160;</font></div>
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            <tr>
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              <td align="left" valign="middle" width="3%">&#160;</td>
              <td align="left" valign="bottom" width="1%">&#160;</td>
              <td align="left" valign="middle" width="36%">&#160;</td>
            </tr>
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              <td align="left" valign="top" width="36%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
              </td>
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                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
              </td>
              <td align="left" colspan="3" valign="top" width="41%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>CELLEGY
                  PHARMACEUTICALS, INC.</strong></font></div>
              </td>
            </tr>
            <tr>
              <td align="left" valign="middle" width="36%">&#160;</td>
              <td align="left" colspan="2" valign="middle" width="4%">&#160;</td>
              <td align="left" colspan="2" valign="middle" width="38%">&#160;</td>
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                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
                <div style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Date:
                  December 5, 2005</font></div>
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                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
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                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">By:</font></div>
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              <td align="left" valign="bottom" width="1%" style="BORDER-BOTTOM: #ffffff solid">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
              </td>
              <td align="left" valign="bottom" width="36%" style="BORDER-BOTTOM: #000000 thin solid">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">/s/
                  Robert J. Caso</font></div>
              </td>
            </tr>
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              <td align="left" valign="top" width="36%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
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              <td align="left" valign="bottom" width="3%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
              </td>
              <td align="left" valign="bottom" width="1%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
              </td>
              <td align="left" valign="bottom" width="36%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Robert
                  J. Caso</font></div>
              </td>
            </tr>
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              </td>
              <td align="left" valign="bottom" width="3%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
              </td>
              <td align="left" valign="bottom" width="1%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
              </td>
              <td align="left" valign="bottom" width="36%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Vice
                  President, Finance </font></div>
              </td>
            </tr>
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                  Authorized Officer)</font></div>
              </td>
            </tr>

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{"company-data": {"conformed-name": "CELLEGY PHARMACEUTICALS INC", "cik": "0000887247", "assigned-sic": "2834", "irs-number": "820429727", "state-of-incorporation": "CA", "fiscal-year-end": "1231"}, "filing-values": {"form-type": "8-K", "act": "34", "file-number": "000-26372", "film-number": "051249124"}, "business-address": {"street1": "1800 BYBERRY ROAD, BLDG. #13", "city": "HUNTINGDON VALLEY", "state": "PA", "zip": "19006", "phone": "2159140900"}, "mail-address": {"street1": "1800 BYBERRY ROAD, BLDG. #13", "city": "HUNTINGDON VALLEY", "state": "PA", "zip": "19006"}}
UNITED
        STATES
SECURITIES
        AND EXCHANGE COMMISSION
Washington,
        D.C. 20549
FORM
        8-K
CURRENT
        REPORT
PURSUANT
        TO SECTION 13 OR 15(d) OF THE
SECURITIES
        EXCHANGE ACT OF 1934
Date
        of report (Date of earliest event reported): December 1,
        2005
Cellegy
        Pharmaceuticals, Inc.
(Exact
        Name of Registrant as Specified in Charter)
Delaware
0-26372
82-0429727
(State
                  or other jurisdiction
of
                  incorporation)
(Commission
                  File Number)
(IRS
                  Employer
Identification
                  No.)
1800
                  Byberry Road, Bldg. 13
Huntingdon
                  Valley, Pennsylvania
19006
(Address
                  of Principal Executive Offices)
(Zip
                  Code)
Registrant's
        telephone number, including area code: (215) 914-0900
1000
                  Marina Boulevard, Suite 300
Brisbane,
                  California 94005
(Former
        name or Former Address, if Changed Since Last Report.)
Check
        the
        appropriate box below if the Form 8-K filing is intended to simultaneously
        satisfy the filing obligation of the registrant under any of the following
        provisions (see General Instruction A.2. below):
¨
Written
                  communications pursuant to Rule 425 under the Securities Act (17
                  CFR
                  230.425)
¨
Soliciting
                  material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
                  240.14a-12)
¨
Pre-commencement
                  communications pursuant to Rule 14d-2(b) under the Exchange Act
                  (17 CFR
                  240.14d-2(b))
¨
Pre-commencement
                  communications pursuant to Rule 13e-4(c) under the Exchange Act
                  (17 CFR
                  240.13e-4(c))
Item
        2.04
Triggering
        Events That Accelerate or Increase a Direct Financial
        Obligation
On
        December 1, 2005, Cellegy Pharmaceuticals, Inc. ("Cellegy" or the "Company")
        received a notice from PDI, Inc. ("PDI") (the "Notice"), notifying the Company
        that PDI considers that Cellegy is in default of the Secured Promissory Note
        and
        the Nonnegotiable Convertible Senior Note which were part of a settlement
        entered into between Cellegy and PDI on April 11, 2005 (collectively, the
        "Settlement Agreements"). PDI's notice states that PDI believes that Cellegy is
        in material breach of the Secured Promissory Note as a result of Cellegy's
        failure to notify PDI of the receipt of certain payments and of Cellegy's
        failure to pay amounts to which PDI believes it is entitled. PDI also notified
        Cellegy that PDI believes that an outstanding principal amount of $2,900,000,
        plus default interest, of the Secured Promissory Note and outstanding principal
        amount of $3,500,000, plus default interest, of the Nonnegotiable Convertible
        Senior Note are immediately due and payable in cash pursuant to the "Event of
        Default" provisions of the Settlement Agreements.
As
        reported on November 15, 2005, Cellegy
renegotiated
        its Exclusive License and Distribution Agreement with its licensee, ProStrakan
        Group plc., relating to Cellegy's Rectogesic® product. Under the renegotiated
        agreement, ProStrakan assumed all responsibility for manufacturing and product
        support functions and will purchase the product directly from the manufacturer
        rather than purchasing from Cellegy under the terms of the original agreement.
        In return, ProStrakan paid Cellegy $2 million. PDI claims that it is entitled
        to
        $1 million of that payment. Cellegy does not agree that the payment made
        by
        ProStrakan falls within the definition of "Pledged Collateral" in the Settlement
        Agreements and related documents and does not believe that any amount is
        owed to
        PDI as a result of such payments.
Under
        the
        settlement between Cellegy and PDI, Cellegy issued a $3 million initial
        principal Secured Promissory Note to PDI, payable in 18 months, with earlier
        payments of amounts owed under the note required to be made to the extent
        of 50%
        of licensing fees, royalties or milestone payments (or, in each case, other
        payments in the nature thereof) received by Cellegy under Cellegy's agreements
        or arrangements with respect to Cellegy's Tostrex® (testosterone gel) and
        Rectogesic® (nitroglycerin ointment) products in territories outside of North
        America; 50% of licensing fees, royalties or milestone payments (or, in each
        case, other payments in the nature thereof) received by Cellegy under Cellegy's
        agreements or arrangements with respect to Fortigel licensees in North American
        markets; and 10% of proceeds received by Cellegy in excess of $5 million
        from
        financing transactions.  These various payments are to be made until
        the
        amount owed under the note is paid in full.  Cellegy has previously
        made
        certain payments pursuant to these provisions and believes that the outstanding
        principal balance is $2.8 million. Cellegy's obligations under the note are
        secured by a security interest, in favor of PDI, in Cellegy's interests in the
        payments described above and any proceeds therefrom and certain related
        collateral.  Amounts owed under the note may be accelerated upon an
        event
        of default, which includes, but is not limited to, failure to pay any amount
        when due, certain kinds of bankruptcy filings or certain related actions
        or
        proceedings, an uncured material breach of Cellegy's obligations under the note,
        the security interest no longer being a valid, perfected, first priority
        security interest, and a default in indebtedness of Cellegy with an aggregate
        principal amount in excess of $2 million that results in the maturity of
        such
        indebtedness being accelerated before its stated maturity.
Cellegy
        also issued to PDI a $3.5 million initial principal amount Nonnegotiable
        Convertible Senior Note due April 11, 2008.   Events of default
        under
        this note are generally similar to events of default under the Secured
        Promissory Note. By virtue of cross-default provisions, default of the Secured
        Promissory Note also constitutes an event of default under the Nonnegotiable
        Convertible Senior Note.
Under
        the
        terms of the Settlement Agreements and related documents, PDI may declare
        the
        outstanding principal amount of the notes, together with interest, if any,
        of
        the unpaid principal balance thereof, immediately due and payable upon any
        event
        of default of the Secured Promissory Note.
Item
        8.01
Other
        Events
Based
        on
        the events described in Item 2.04 hereof, PDI has filed suit in United States
        District Court for the Southern District of New York requesting that the
        court
        declare that Cellegy has breached its obligations under the Secured Promissory
        Note and the Nonnegotiable Convertible Senior Note, order Cellegy to
        specifically perform its obligations under the settlement agreements, and
        award
        PDI damages in the amount of $6,400,000 plus default interest as well as
        certain
        other amounts. To the extent the information set forth under Item 2.04 hereof
        also applies to Item 8.01 of Form 8-K, such information is incorporated herein
        by reference.
Cellegy
        believes that it has not breached any of the provisions of the Settlement
        Agreements and believes that PDI's claims are without merit. The Company plans
        to vigorously defend itself against the claims.
SIGNATURE
Pursuant
        to the requirements of the Securities Exchange Act of 1934, the registrant
        has
        duly caused this report to be signed on its behalf by the undersigned hereunto
        duly authorized.
CELLEGY
                  PHARMACEUTICALS, INC.
Date:
                  December 5, 2005
By:
/s/
                  Robert J. Caso
Robert
                  J. Caso
Vice
                  President, Finance
(Duly
                  Authorized Officer)