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<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="center" style="font-size: 10pt; margin-top: 18pt">As filed with the Securities and Exchange Commission on November&nbsp;18, 2008
</DIV>


<DIV align="right" style="font-size: 10pt; margin-top: 12pt">Registration No.&nbsp;333-_______<BR>
<BR style="font-size: 6pt">
</DIV>


<DIV style="width: 100%; border-bottom: 2pt solid black; font-size: 1pt">&nbsp;</DIV>
<DIV style="width: 100%; border-bottom: 1pt solid black; font-size: 1pt">&nbsp;</DIV>




<DIV align="center" style="font-size: 14pt; margin-top: 10pt"><B>UNITED STATES<BR>
SECURITIES AND EXCHANGE COMMISSION</B>
</DIV>

<DIV align="center" style="font-size: 12pt"><B>WASHINGTON, DC 20549</B>
</DIV>

<DIV align="center" style="font-size: 18pt; margin-top: 12pt"><B>FORM S-8</B>
</DIV>

<DIV align="center" style="font-size: 12pt"><B>REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933</B></DIV>


<DIV align="center" style="font-size: 24pt; margin-top: 12pt"><B>DUSA PHARMACEUTICALS, INC.</B>
</DIV>

<DIV align="center" style="font-size: 10pt">(Exact Name of Registrant as Specified in Its Charter)</DIV>


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    <TD align="center" valign="top"><B>New Jersey</B>
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top"><B>22-3103129</B></TD>
</TR>
<TR valign="bottom">
    <TD align="center" valign="top">(State or Other Jurisdiction
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">(I.R.S. Employer</TD>
</TR>
<TR valign="bottom">
    <TD align="center" valign="top">of Incorporation or Organization)
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">Identification No.)</TD>
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</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 12pt"><B>25 Upton Drive<BR>
Wilmington, Massachusetts 01887</B><BR>
(Address of Principal Executive Offices) (Zip Code)</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 12pt"><B>DUSA Pharmaceuticals, Inc. 2006 Equity Compensation Plan<BR>
DUSA Pharmaceuticals, Inc. Non-Qualified Deferred Compensation Plan<BR>
1991 Incentive Stock Option Plan Of Deprenyl USA, Inc.<BR>
DUSA Pharmaceuticals, Inc. 1994 Restricted Stock Option Plan<BR>
DUSA Pharmaceuticals, Inc. 1996 Omnibus Plan, As Amended<BR>
Stock Option Agreements For D. Geoffrey Shulman<BR>
Stock Option Agreement For Richard C. Lufkin<BR>
Stock Option Agreements For Scott Lundahl<BR>
Class&nbsp;B Warrant Agreement For D. Geoffrey Shulman</B><BR>
(Full Title of the Plan)</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 12pt"><B>Nanette W. Mantell, Esq.<BR>
Reed Smith LLP<BR>
Princeton Forrestal Village<BR>
136 Main Street &#151; Suite&nbsp;250<BR>
Princeton, New Jersey 08543-7839<BR>
(609)&nbsp;514-8541</B><BR>
(Name and Address and Telephone of Agent for Service)</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 12pt"><B>Copies to:<BR>
Robert F. Doman, President and Chief Executive Officer<BR>
DUSA Pharmaceuticals, Inc.<BR>
25 Upton Drive<BR>
Wilmington, Massachusetts 01887<BR>
(978)&nbsp;657-7500</B></DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">
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 Rule 12b-2 of the Exchange Act. (Check one):</DIV>



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    <TD width="10%">&nbsp;</TD>
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    <TD nowrap align="center" valign="top">Large accelerated filer <FONT face="Wingdings">&#111;</FONT>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" valign="top">Accelerated filer <FONT face="Wingdings">&#254;</FONT>&nbsp;</TD>
    <TD align="center">&nbsp;</TD>
    <TD nowrap align="center">Non-accelerated filer <FONT face="Wingdings">&#111;</FONT><BR>
(Do not check if a smaller reporting company)</TD>
    <TD align="center">&nbsp;</TD>
    <TD nowrap align="center" valign="top">Smaller reporting company <FONT face="Wingdings">&#111;</FONT>&nbsp;</TD>
</TR>
</TABLE>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt">CALCULATION OF REGISTRATION FEE
</DIV>

<DIV align="center">
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    <TD width="6%">&nbsp;</TD>

    <TD width="1%">&nbsp;</TD>
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    <TD nowrap align="left" colspan="15" style="border-bottom: 3px double #000000">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">    <TD width="1%">&nbsp;</TD>

    <TD>&nbsp;</TD>
    <TD style="border-right: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="border-right: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="border-right: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center"><B>Proposed</B></TD>
    <TD style="border-right: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">    <TD width="1%">&nbsp;</TD>

    <TD>&nbsp;</TD>
    <TD style="border-right: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="border-right: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center"><B>Proposed</B></TD>
    <TD style="border-right: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center"><B>Maximum</B></TD>
    <TD style="border-right: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">    <TD width="1%">&nbsp;</TD>

    <TD>&nbsp;</TD>
    <TD style="border-right: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center"><B>Amount</B></TD>
    <TD style="border-right: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center"><B>Maximum</B></TD>
    <TD style="border-right: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center"><B>Aggregate</B></TD>
    <TD style="border-right: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center"><B>Amount of</B></TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">    <TD width="1%">&nbsp;</TD>

    <TD nowrap align="center"><B>Title of Each Class of Securities</B></TD>
    <TD style="border-right: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center"><B>to be</B></TD>
    <TD style="border-right: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center"><B>Offering Price Per</B></TD>
    <TD style="border-right: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center"><B>Offering</B></TD>
    <TD style="border-right: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center"><B>Registration</B></TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">    <TD width="1%">&nbsp;</TD>

    <TD nowrap align="center" style="border-bottom: 1px solid #ffffff"><B>to be Registered</B></TD>
    <TD style="border-right: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" style="border-bottom: 1px solid #ffffff"><B>Registered</B></TD>
    <TD style="border-right: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" style="border-bottom: 1px solid #ffffff"><B>Share</B></TD>
    <TD style="border-right: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center"><B>Price</B></TD>
    <TD style="border-right: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" style="border-bottom: 1px solid #ffffff"><B>Fee</B></TD>
    <TD width="1%">&nbsp;</TD>
</TR>

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    <TD width="1%" style="border-top: 1px solid #000000">&nbsp;</TD>
                    <TD style="border-top: 1px solid #000000"><DIV style="margin-left:15px; text-indent:-15px">2006 Equity Compensation Plan &#150;
Shares of Common Stock, no par
value (options reserved for
future grants)
</DIV></TD>
    <TD style="border-right: 1px solid #000000; border-top: 1px solid #000000">&nbsp;</TD>
    <TD style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD align="center" valign="bottom" style="border-top: 1px solid #000000">927,202<SUP style="font-size: 85%; vertical-align: text-top"> (1)</SUP></TD>
    <TD style="border-right: 1px solid #000000; border-top: 1px solid #000000">&nbsp;</TD>
    <TD style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD align="center" valign="bottom" style="border-top: 1px solid #000000">$1.38<SUP style="font-size: 85%; vertical-align: text-top"> (2)</SUP></TD>
    <TD style="border-right: 1px solid #000000; border-top: 1px solid #000000">&nbsp;</TD>
    <TD style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD align="center" valign="bottom" style="border-top: 1px solid #000000">$1,279,538.76</TD>
    <TD style="border-right: 1px solid #000000; border-top: 1px solid #000000">&nbsp;</TD>
    <TD style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD align="center" valign="bottom" style="border-top: 1px solid #000000">$50.29</TD>
    <TD width="1%" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD width="1%" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD style="border-top: 1px solid #000000"><DIV style="margin-left:15px; text-indent:-15px">Deferred Compensation Obligations</DIV></TD>
    <TD style="border-right: 1px solid #000000; border-top: 1px solid #000000">&nbsp;</TD>
    <TD style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD align="center" valign="bottom" style="border-top: 1px solid #000000">$150,000</TD>
    <TD style="border-right: 1px solid #000000; border-top: 1px solid #000000">&nbsp;</TD>
    <TD style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD align="center" valign="bottom" style="border-top: 1px solid #000000">100%<SUP style="font-size: 85%; vertical-align: text-top">(3)</SUP></TD>
    <TD style="border-right: 1px solid #000000; border-top: 1px solid #000000">&nbsp;</TD>
    <TD style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD align="center" valign="bottom" style="border-top: 1px solid #000000">$150,000</TD>
    <TD style="border-right: 1px solid #000000; border-top: 1px solid #000000">&nbsp;</TD>
    <TD style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD align="center" valign="bottom" style="border-top: 1px solid #000000">$5.90</TD>
    <TD width="1%" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD width="1%" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD style="border-top: 1px solid #000000"><DIV style="margin-left:15px; text-indent:-15px">TOTAL REGISTRATION FEE</DIV></TD>
    <TD style="border-right: 1px solid #000000; border-top: 1px solid #000000">&nbsp;</TD>
    <TD style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD align="center" valign="bottom" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD style="border-right: 1px solid #000000; border-top: 1px solid #000000">&nbsp;</TD>
    <TD style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD align="center" valign="bottom" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD style="border-right: 1px solid #000000; border-top: 1px solid #000000">&nbsp;</TD>
    <TD style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD align="center" valign="bottom" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD style="border-right: 1px solid #000000; border-top: 1px solid #000000">&nbsp;</TD>
    <TD style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD align="center" valign="bottom" style="border-top: 1px solid #000000">$56.19</TD>
    <TD width="1%" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR style="font-size: 1px" valign="bottom">
    <TD nowrap align="left" colspan="15" style="border-top: 3px double #000000">&nbsp;</TD>
</TR>

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<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="96">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD nowrap align="left">(1)</TD>
    <TD>&nbsp;</TD>
    <TD>Together with an indeterminate number of additional shares which may be
issued pursuant to the DUSA Pharmaceuticals, Inc. 2006 Equity Compensation Plan,
as amended, as a result of stock splits, stock dividends or similar transactions
in accordance with Rule&nbsp;416 of the Securities Act of 1933, as amended.</TD>
</TR>

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

<TR valign="top">
    <TD nowrap align="left">(2)</TD>
    <TD>&nbsp;</TD>
    <TD>Estimated solely for the purpose of calculating the registration fee
pursuant to Rule&nbsp;457(h)(1) of the Securities Act of 1933, as amended, based upon
the average of the high and low price as reported on The Nasdaq Global Market on
November&nbsp;17, 2008.</TD>
</TR>

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

<TR valign="top">
    <TD nowrap align="left">(3)</TD>
    <TD>&nbsp;</TD>
    <TD>The Deferred Compensation Obligations are unsecured obligations of the
Registrant to pay deferred compensation in the future in accordance with the
terms of the DUSA Pharmaceuticals, Inc. Non-Qualified Deferred Compensation Plan.</TD>
</TR>

</TABLE>



<DIV style="width: 100%; border-bottom: 1pt solid black; margin-top: 10pt; font-size: 1pt">&nbsp;</DIV>
<DIV style="width: 100%; border-bottom: 2pt solid black; font-size: 1pt">&nbsp;</DIV>



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<DIV style="font-family: 'Times New Roman',Times,serif">






<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>INTRODUCTORY STATEMENT</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This registration statement on Form S-8 relates to shares of DUSA Pharmaceuticals, Inc.
(&#147;DUSA&#148;) common stock, no par value, now eligible for issuance under the DUSA Pharmaceuticals, Inc.
2006 Equity Compensation Plan, as amended (the &#147;Equity Plan&#148;) and approved by the shareholders of
DUSA at its 2008 Annual Meeting of Shareholders, and obligations of DUSA to participants in the
DUSA Pharmaceuticals, Inc. Non-Qualified Deferred Compensation Plan (the &#147;Deferred Comp Plan&#148; and
together with the Equity Plan, the &#147;Plans&#148;). The Deferred Comp Plan allows participants to defer a
portion of their salary and bonus until such time as the participant elects to receive the deferred
compensation. The Deferred Compensation Obligations registered on this registration statement
consist of unsecured obligations of DUSA to pay to participants their contributions into the
Deferred Compensation Plan, upon their election, the balance of their deferred compensation
accounts. The Plans were previously reported in a registration statement on Form S-8 (File No.
333-141615) filed with the Securities and Exchange Commission on March&nbsp;28, 2007.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This registration statement also includes a revised reoffer prospectus. The inclusion of the
individuals listed under the &#147;Selling Securityholders&#148; section of the prospectus does not
constitute a commitment to sell any or all of the stated number of shares of common stock. The
number of shares offered shall be determined from time to time by each selling securityholder at
their sole discretion and such individuals are listed as selling securityholders solely to register
the shares that each has received or will receive under DUSA&#146;s various equity compensation plans.
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>PART I<BR>
INFORMATION REQUIRED IN THE SECTION 10(A) PROSPECTUS</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The documents containing the information required by Part&nbsp;I of Form S-8 have been or will be
sent or given to the participants in the Plans being registered hereby as specified by Rule
428(b)(1) of Regulation&nbsp;C under the Securities Act of 1933, as amended (the &#147;Securities Act&#148;), and
such documents taken together with the documents incorporated by reference in this registration
statement shall constitute a prospectus that meets the requirements of Section 10(a) of the
Securities Act. Pursuant to Rule&nbsp;428 of the Securities Act, such documents are not required to be
filed with the Securities and Exchange Commission as part of this registration statement or as an
Exhibit hereto.
</DIV>


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<DIV style="font-family: 'Times New Roman',Times,serif">




<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>PROSPECTUS</B>
</DIV>


<DIV align="Center" style="font-size: 12pt; margin-top: 6pt"><B>2,352,225 Shares of Common Stock by Selling Securityholders</B>

</DIV>
<DIV align="left">
<A name="101"></A>
</DIV>

<DIV align="Center" style="font-size: 18pt; margin-top: 6pt"><B>DUSA Pharmaceuticals, Inc.</B>

</DIV>
<DIV align="center" style="font-size: 10pt; margin-top: 12pt"><DIV align="center"><DIV style="font-size: 3pt; margin-top: 16pt; width: 26%; border-top: 1px solid #000000">&nbsp;</DIV></DIV></DIV>


<DIV align="left" style="font-size: 9pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The shares of common stock of DUSA Pharmaceuticals, Inc. covered by this prospectus may be
offered and sold to the public by certain selling securityholders of DUSA. The selling
securityholders have acquired or will acquire the shares under DUSA&#146;s 1991 Incentive Stock Option
Plan of Deprenyl USA, Inc. (Deprenyl USA, Inc. is the former name of DUSA Pharmaceuticals, Inc.),
1994 Restricted Stock Option Plan, 1996 Omnibus Plan, as amended, 2006 Equity Compensation Plan, as
amended, together with stock option agreements with D.&nbsp;Geoffrey Shulman, Richard C. Lufkin and
Scott Lundahl, individually, and/or a Class&nbsp;B Warrant Agreement with D.&nbsp;Geoffrey Shulman.
</DIV>

<DIV align="left" style="font-size: 9pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our common stock is quoted on the Nasdaq Global Market under the symbol &#147;DUSA.&#148; On November
17, 2008, the closing price of a share of our common stock on the Nasdaq Global Market was $1.30
per share.
</DIV>
<DIV align="center" style="font-size: 10pt; margin-top: 12pt"><DIV align="center"><DIV style="font-size: 3pt; margin-top: 16pt; width: 26%; border-top: 1px solid #000000">&nbsp;</DIV></DIV></DIV>


<DIV align="left" style="font-size: 9pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Investing in our common stock involves risks. See &#147;Risk Factors&#148; beginning on page 3.</B>
</DIV>
<DIV align="center" style="font-size: 10pt; margin-top: 12pt"><DIV align="center"><DIV style="font-size: 3pt; margin-top: 16pt; width: 26%; border-top: 1px solid #000000">&nbsp;</DIV></DIV></DIV>


<DIV align="left" style="font-size: 9pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Neither the Securities and Exchange Commission nor any state securities commission has
approved or disapproved these securities or passed upon the adequacy or accuracy of this
prospectus. Any representation to the contrary is a criminal offense.</B>
</DIV>
<DIV align="center" style="font-size: 10pt; margin-top: 12pt"><DIV align="center"><DIV style="font-size: 3pt; margin-top: 16pt; width: 26%; border-top: 1px solid #000000">&nbsp;</DIV></DIV></DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 12pt">The date of this prospectus is November&nbsp;18, 2008.</DIV>


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<!-- TOC -->
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<DIV align="left">
<A name="tocpage"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>TABLE OF CONTENTS</B>
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="88%">&nbsp;</TD>
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    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
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    <TD>&nbsp;</TD>
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    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000">Page</TD>
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<TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#101">DUSA Pharmaceuticals, Inc.</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#102">Risk Factors</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#103">Special Note Regarding Forward-Looking Statements</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">17</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#104">Use of Proceeds</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">19</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#105">Selling Securityholders</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">20</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#106">Plan of Distribution</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">23</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#107">Legal Matters</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">23</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#108">Experts</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">23</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#109">Where You Can Find More Information</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">24</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#110">Incorporation of Certain Documents by Reference</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">24</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
<TR><TD colspan="9"><FONT size="2">&nbsp;<A HREF="y72711exv5w1.htm">EX-5.1: OPINION OF REED SMITH LLP</A></FONT></TD></TR>
<TR><TD colspan="9"><FONT size="2">&nbsp;<A HREF="y72711exv10w1.htm">EX-10.1: 2006 EQUITY COMPENSATION PLAN</A></FONT></TD></TR>
<TR><TD colspan="9"><FONT size="2">&nbsp;<A HREF="y72711exv23w1.htm">EX-23.1: CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM</A></FONT></TD></TR>
</TABLE>
</DIV>

<DIV align="left">
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</DIV>
<DIV align="center" style="font-size: 10pt; margin-top: 12pt"><DIV align="center"><DIV style="font-size: 3pt; margin-top: 16pt; width: 26%; border-top: 1px solid #000000">&nbsp;</DIV></DIV></DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;You should rely only on the information contained in this prospectus or any supplement,
including the documents that we incorporate by reference. We have not authorized anyone to provide
you with information different from that which is contained in or incorporated by reference to this
prospectus. We are offering to sell shares of common stock and seeking offers to buy shares of
common stock only in jurisdictions where offers and sales are permitted. The information contained
in this prospectus is accurate only as of the date of the prospectus, regardless of the time of
delivery of this prospectus or of any sale of the common stock.
</DIV>


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<DIV style="font-family: 'Times New Roman',Times,serif">





<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>DUSA PHARMACEUTICALS, INC.</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We are a vertically integrated dermatology company that is developing and marketing Levulan
PDT and other products for common skin conditions. Our currently marketed products include among
others Levulan<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP> Kerastick<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP> 20% Topical Solution with photodynamic therapy,
the BLU-U<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP> brand light source, and certain products acquired in the March&nbsp;10, 2006
merger with Sirius Laboratories, Inc., including ClindaReach<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP>.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Historically, we devoted most of our resources to advancing the development and marketing of
our Levulan<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP> PDT/PD technology platform. In addition to our marketed products, our drug,
Levulan<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP> brand of aminolevulinic acid HCl, or ALA, in combination with light, has been
studied in a broad range of medical conditions. When Levulan<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP> is used and followed with
exposure to light to treat a medical condition, it is known as Levulan<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP> photodynamic
therapy, or PDT. When Levulan<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP> is used and followed with exposure to light to detect
medical conditions, it is known as Levulan<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP> photodetection, or Levulan<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP> PD.
Our Kerastick<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP> is the proprietary applicator that delivers Levulan<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP>. Our
BLU-U<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP> is our patented light device.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Levulan<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP> Kerastick<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP> 20% Topical Solution with PDT and the
BLU-U<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP> were launched in the United States, or U.S., in September&nbsp;2000 for the treatment
of non-hyperkeratotic actinic keratoses, or AKs, of the face or scalp under a former dermatology
collaboration. AKs are precancerous skin lesions caused by chronic sun exposure that can develop
over time into a form of skin cancer called squamous cell carcinoma. In addition, in September&nbsp;2003
we received clearance from the United States Food and Drug Administration, or FDA, to market the
BLU-U<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP> without Levulan<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP> PDT for the treatment of moderate inflammatory acne
vulgaris and general dermatological conditions.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Sirius Laboratories, Inc., or Sirius, a dermatology specialty pharmaceuticals company, was
founded in 2000 with a primary focus on the treatment of acne vulgaris and acne rosacea.
Nicomide<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP>, its key product, is a vitamin-mineral product currently prescribed by
dermatologists. In April&nbsp;2008, we were notified by Actavis Totowa, LLC, the manufacturer of
Nicomide<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP>, that Actavis would cease manufacturing several prescription vitamins,
including Nicomide<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP>, due to continuing discussions with the FDA. As we previously
disclosed, Actavis Totowa had received notice that the FDA considers prescription dietary
supplements to be unapproved new drugs. In response to this notification and subsequent discussions
with the FDA, we stopped the sale and distribution of Nicomide<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP> as a prescription
product in June&nbsp;2008. We are relabeling our remaining supply of product as a non-prescription
dietary supplement in compliance with the Dietary Supplement Health and Education Act, or DSHEA.
We are in discussions with the FDA regarding new labeling, including use of the trademark. We are
actively searching for a source of supply for the DSHEA product. We expect both the price and
volume of the Nicomide<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP> DSHEA labeled product to be considerably less than historic
Nicomide<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP> levels.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On
August&nbsp;12, 2008, we entered into a worldwide non-exclusive
patent License Agreement to our patent covering Nicomide<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP> with River&#146;s Edge Pharmaceuticals, LLC, or River&#146;s Edge, and
an amendment to our Settlement Agreement with River&#146;s Edge which we entered into in October&nbsp;2007 to
settle certain patent litigation. The amendment to the Settlement Agreement allows River&#146;s Edge to
manufacture and market a prescription product that could be substitutable for Nicomide<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP>
pursuant to the terms of the License Agreement and changes certain payment obligations of River&#146;s
Edge for sales of its substitutable product. In consideration for granting the license, we will be
paid a share of the net revenues, as defined in the License Agreement, of River&#146;s Edge&#146;s licensed
product sales under the License Agreement. At the same time, we are also considering the possible
sale of the product and related patent.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We are responsible for manufacturing our Levulan<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP> Kerastick<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP> and for the
regulatory, sales, marketing, and customer service of our Levulan<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP>
Kerastick<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP>, and other related activities for all of our products. Our current objectives
include increasing the sales of our products in the United States, Canada, Latin America, and
Korea, launching Levulan<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP> with our partners in additional Latin American countries and
Asia, and continuing our efforts of exploring partnership opportunities for Levulan<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP> PDT
for dermatology in Europe.
</DIV>



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<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;To further these objectives, we entered into a marketing and distribution agreement with
Stiefel Laboratories, Inc. in January&nbsp;2006 granting Stiefel an exclusive right to distribute the
Levulan<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP> Kerastick<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP> in Mexico, Central and South America. On March&nbsp;5, 2008,
Stiefel notified us that the Brazilian authorities had published the final pricing for the product
which is acceptable to Stiefel and to us. Stiefel launched the product in Brazil in April&nbsp;2008. In
light of the unexpected delay in receiving acceptable final pricing in Brazil, in 2007 we amended
certain terms of the original Stiefel agreement to reflect our plans to launch in other Latin
American countries prior to Brazil. The product was launched in Argentina, Chile, Colombia and
Mexico during the fourth quarter of 2007. Similarly, in January&nbsp;2007, we entered into a marketing
and distribution agreement with Daewoong Pharmaceutical Co., Ltd. and Daewoong&#146;s wholly owned
subsidiary, DNC Daewoong Derma &#038; Plastic Surgery Network Company, together referred to as Daewoong,
granting Daewoong exclusive rights to distribute the Levulan<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP> Kerastick<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP> in
certain Asian countries. In the fourth quarter of 2007, the Korean Food and Drug Administration, or
KFDA, approved Levulan<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP> Kerastick<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP> for PDT for the treatment of actinic
keratosis, and Daewoong launched our product in Korea. Recently, we granted Daewoong the right to
distribute our product in Japan on a named-patient basis to test this market.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We believe that issues related to reimbursement negatively impacted the economic
competitiveness of our therapy with other AK therapies and hindered its adoption in the past.
Though we believe that current Centers for Medicare and Medicaid Services, or CMS, reimbursement
levels allow us to be competitive, we continue to support efforts to improve reimbursement levels
to physicians. Most major private insurers have approved coverage for our AK therapy; however some
private insurers still do not provide adequate coverage. When we learn of these issues, we educate
the insurers and are often able to facilitate a change in their coverage policy. We believe that
with potential future improvements, along with our education and marketing programs, a more
widespread adoption of our therapy should occur over time. We intend to seek reimbursement
coverage for use of our BLU-U to treat acne following the analysis of the results of our Phase IIB
clinical trial.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We are developing Levulan<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP> PDT and PD under an exclusive worldwide license of
patents and technology from PARTEQ Research and Development Innovations, the licensing arm of
Queen&#146;s University, Kingston, Ontario, Canada. We also own or license certain other patents
relating to methods for using pharmaceutical formulations which contain our drug and related
processes and improvements. In the United States, DUSA<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP>, DUSA Pharmaceuticals,
Inc.<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP>, Levulan<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP>, Kerastick<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP>, BLU-U<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP>,
Nicomide<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP>, Nicomide-T<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP>, ClindaReach<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP>, Meted<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP>, and
Psoriacap<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP> are registered trademarks. Several of these trademarks are also registered in
Europe, Australia, Canada, and in other parts of the world. Numerous other trademark applications
are pending.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As of September&nbsp;30, 2008, we had an accumulated deficit of approximately $140,000,000. We
cannot predict whether any of our products will achieve significant enough market acceptance or
generate sufficient revenues to enable us to become profitable on a sustainable basis. We expect to
continue to incur operating losses until sales of our products increase substantially. Achieving
our goal of becoming a profitable operating company is dependent upon greater acceptance of our PDT
therapy by the medical and consumer constituencies.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As of September&nbsp;30, 2008, we had a staff of 88 employees, including 4 part-time employees who
worked across all operating functions at DUSA.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Unless the context otherwise requires, the terms &#147;we,&#148; &#147;our,&#148; &#147;us,&#148; &#147;the Company&#148; and &#147;DUSA&#148;
refer to DUSA Pharmaceuticals, Inc., a New Jersey corporation.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We were incorporated on February&nbsp;21, 1991, under the laws of the State of New Jersey. Our
principal executive offices are located at 25 Upton Drive, Wilmington, Massachusetts 01887
(telephone: (978)&nbsp;657-7500).
</DIV>





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<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left">
<A name="102"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>RISK FACTORS</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Investing in our common stock is very speculative and involves a high degree of risk. You should
carefully consider and evaluate all of the information in, or incorporated by reference in, this
prospectus. The following are among the risks we face related to our business, assets and operations.
They are not the only ones we face. Any of these risks could materially and adversely affect our
business, results of operations and financial condition, which in turn could materially and
adversely affect the trading price of our common stock and you might lose all or part of your
investment.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">This section contains forward-looking statements of our plans,
objectives, expectations and intentions. We use words such as &#147;anticipate&#148;, &#147;believe&#148;, &#147;expect&#148;,&#148;
future&#148;, and &#147;intend&#148; and similar expressions to identify forward-looking statements. Our actual
results could differ materially from those anticipated in these forward-looking statements for many
reasons, including the risk factors described below. You should not
place undue reliance on these forward-looking statements, which apply only as of the date of this
prospectus.
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>Risks Related To DUSA</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>We Are Not Currently Profitable And May Not Be Profitable In The Future Unless We Can
Successfully Market And Sell Significantly Higher Quantities Of Our Products.</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>If Product Sales Do Not Increase Significantly, We May Not Be Able To Advance Development Of
Our Other Potential Products As Quickly As We Would Like To, Which Would Delay The Approval Process
And Marketing Of New Potential Products.</I></B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">If we do not generate sufficient revenues from our approved products, we may be forced to delay or
abandon some or all of our product development programs. The pharmaceutical development and
commercialization process is time consuming and costly, and any delays might result in higher costs
which could adversely affect our financial condition. Without sufficient product sales, we would
need alternative sources of funding. There is no guarantee that adequate funding sources could be
found to continue the development of our potential products. We might be required to commit
substantially greater capital than we have available to research and development of such products
and we may not have sufficient funds to complete all or any of our development programs.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>Our Ability To Become Profitable Will Be Delayed Since We Will No Longer Promote
Nicomide</I></B><SUP style="font-size: 85%; vertical-align: text-top"><B><I><SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP></I></B></SUP><B><I> As A Prescription Product And Since Other Generic Products Entered the Market.</I></B>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">In March&nbsp;2006, we acquired Nicomide<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP> in connection with our merger with Sirius
Laboratories, Inc. Our revenues from sales of Nicomide<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP> will decrease significantly with
our decision to cease marketing Nicomide<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP> as a prescription product in response to
discussions with the FDA. Assuming we launch Nicomide<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP> as a dietary supplement which is
compliant with current FDA regulations, our ability to become profitable will be more difficult.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">In April&nbsp;2008, we were notified by Actavis Totowa, LLC, the manufacturer of Nicomide<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP>,
that Actavis would cease manufacturing several prescription vitamins, including
Nicomide<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP>, due to continuing discussions with the U.S. Food and Drug Administration. As
we previously disclosed, Actavis Totowa had received notice that the FDA considers prescription
dietary supplements to be unapproved new drugs. In response to this notification and subsequent
discussions with the FDA, we stopped the sale and
distribution of Nicomide<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP> as a prescription product in June&nbsp;2008. We are relabeling our
remaining supply of product as a non-prescription dietary supplement in compliance with DSHEA. We
are in discussions
</DIV>


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<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">with the FDA regarding new labeling, including use of the trademark. We are
actively searching for a source of supply for the DSHEA product. We expect both the price and
volume of the Nicomide<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP> DSHEA labeled product to be considerably less than historic
Nicomide<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP> levels.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">On August&nbsp;12, 2008, we entered into a worldwide non-exclusive patent License Agreement to our
patent covering Nicomide<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP> with River&#146;s Edge Pharmaceuticals, LLC and an amendment to our
Settlement Agreement with River&#146;s Edge which we entered into in October&nbsp;2007 to settle certain
patent litigation. The amendment to the Settlement Agreement allows River&#146;s Edge to manufacture
and market a prescription product that could be substitutable for Nicomide<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP> pursuant to
the terms of the License Agreement and changes certain payment obligations of River&#146;s Edge for
sales of its substitutable product. In consideration for granting the license, we will be paid a
share of the net revenues, as defined in the License Agreement, of River&#146;s Edge&#146;s licensed product
sales under the License Agreement. At the same time, we are also considering the possible sale of
the product and related patent.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>We Have Not Yet Secured A Manufacturer for a DSHEA Nicomide</I></B><SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP> <B><I>Product, And, As A
Result, Our Revenues From Nicomide</I></B><SUP style="font-size: 85%; vertical-align: text-top"><B><I><SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP></I></B></SUP><B><I> Sales May Suffer.</I></B>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">In April&nbsp;2008, we were notified by the manufacturer of Nicomide that it was ceasing the
manufacturing of several prescription vitamins, including Nicomide<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP>. We are actively
searching for a source of supply to manufacture a DSHEA-labeled version of Nicomide<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP>.
Since Actavis, the former manufacturer, owns certain proprietary assays and manufacturing processes
relating to Nicomide<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP>, it could take several months to develop the DSHEA version of
Nicomide<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP>. Although we believe we will have sufficient quantities of re-labeled
Nicomide<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP> product to meet the DSHEA market demand in the short-term, it is possible that
we could go into a back-order situation and could lose market share while we redevelop the DSHEA
product. We may not be able to locate a manufacturer on terms that are acceptable to us.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>Any Failure To Comply With Ongoing Governmental Regulations In The United States And Elsewhere
Will Limit Our Ability To Market Our Products And Become Profitable.</I></B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The manufacture and marketing of our products are subject to continuing FDA review as well as
comprehensive regulation by the FDA and by state and local regulatory authorities. These laws
require, among other things:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>approval of manufacturing facilities, including adherence to good manufacturing
and laboratory practices during production and storage,</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>controlled research and testing of some of these products even after approval, and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>control of marketing activities, including advertising and labeling.</TD>
</TR>

</TABLE>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">If we, or any of our contract manufacturers, fail to comply with these requirements, we may be
limited in the jurisdictions in which we are permitted to sell our products. Additionally, if we or
our manufacturers fail to comply with applicable regulatory approval requirements, a regulatory
agency may also:
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>send warning letters, as received by the manufacturer of our BLU-U<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP>,</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>impose fines and other civil penalties on us,</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>seize our products,</TD>
</TR>

</TABLE>
</DIV>
<P align="center" style="font-size: 10pt"><!-- Folio -->4<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV style="margin-top: 6pt"><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">


<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>suspend our regulatory approvals,</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>cease the manufacture of our products, as Actavis Totowa is doing with Nicomide<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP>,</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>refuse to approve pending applications or supplements to approved applications filed by us,</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>refuse to permit exports of our products from the United States,</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>require us to recall products,</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>require us to notify physicians of labeling changes and/or product related problems,</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>impose restrictions on our operations, and/or</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>criminally prosecute us.</TD>
</TR>

</TABLE>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">We and our manufacturers must continue to comply with cGMP and Quality System Regulation, or QSR,
and equivalent foreign regulatory requirements. The cGMP requirements govern quality control and
documentation policies and procedures. In complying with cGMP and foreign regulatory requirements,
we and our third-party manufacturers will be obligated to expend time, money and effort in
production, record keeping and quality control to assure that our products meet applicable
specifications and other requirements.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Certain of the products acquired or licensed in connection with the Sirius merger including
Nicomide<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP>, are regulated by FDA under its marketed unapproved drugs compliance policy
guide entitled, &#147;Marketed New Drugs without Approved NDAs or ANDAs.&#148; Under this policy, the FDA
recognizes that certain unapproved products, based on the introduction date of their active
ingredients and the lack of safety concerns, have been marketed for many years and, at this time,
will not be the subject of any enforcement action. The FDA has recently taken a more proactive role
and is strongly encouraging manufacturers of such products to submit applications to obtain
marketing approval and/or bring these products into compliance with current FDA regulations. As
result of discussions with the FDA, we stopped the sale and distribution of Nicomide<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP>
and Psoriatec<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP> as prescription products in June&nbsp;2008. We are relabeling a supply of
Nicomide<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP> product as a non-prescription dietary supplement in compliance with DSHEA for
re-launch and are in discussions with FDA about appropriate DSHEA labeling, including use of the
trademark. We are actively searching for a source of supply for the DSHEA product. Label changes
eliminating references to medicinal benefits will limit the marketing claims we can make for
Nicomide<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP> and a change of product name, if required, could negatively affect our
revenues and profits. We could experience a back-order situation if a manufacturer is not available
in time to meet our supply needs which could also affect our revenues and profits. Our license
agreement for Psoriatec<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP> expired on September&nbsp;30, 2008.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Manufacturing facilities are subject to ongoing periodic inspection by the FDA, including
unannounced inspections. We cannot guarantee that our third-party supply sources, or our own
Kerastick<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP> facility, will continue to meet all applicable FDA regulations. If we, or any
of our manufacturers, including without limitation, the manufacturer of the BLU-U<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP>, who
has received warning letters from the FDA, fail to
maintain compliance with FDA regulatory requirements, it would be time consuming and costly to
remedy the problem(s) or to qualify other sources. These consequences could have a significant
adverse effect on our financial condition and operations. As part of our FDA approval for the
Levulan<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP> Kerastick<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP> for AK, we were required to conduct two Phase IV
follow-up studies. We successfully completed the first
</DIV>


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</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">study; and submitted our final report on the
second study to the FDA in January&nbsp;2004. The FDA has requested additional information, which was
provided to them in June&nbsp;2008. We are awaiting their response. Additionally, if previously unknown
problems with the product, a manufacturer or its facility are discovered in the future, changes in
product labeling restrictions or withdrawal of the product from the market may occur. Any such
problems could affect our ability to become profitable.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Litigation Is Expensive And We May Not Be Able To Afford The Costs.</B>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The costs of litigation or any proceeding relating to our intellectual property rights could be
substantial even if resolved in our favor. Some of our competitors have far greater resources than
we do and may be better able to afford the costs of complex patent litigation. For example,
third-parties such as companies that have launched niacinamide products, may infringe one or more
of our patents, and cause us to spend significant resources to enforce our patent rights. Also, in
a lawsuit against a third-party for infringement of our patents in the United States, that
third-party may challenge the validity of our patent(s). We cannot guarantee that a third-party
will not claim, with or without merit, that our patents are not valid or that we have infringed
their patent(s) or misappropriated their proprietary material. Defending these types of legal
actions involve considerable expense and could negatively affect our financial results.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Additionally, if a third-party were to file a United States patent application, or be issued a
patent claiming technology also claimed by us in a pending United States application(s), we may be
required to participate in interference proceedings in the United States Patent and Trademark
Office, or USPTO, to determine the priority of the invention. A third-party could also request the
declaration of a patent interference between one of our issued United States patents and one of its
patent applications. Any interference proceedings likely would require participation by us and/or
PARTEQ, could involve substantial legal fees and result in a loss or lessening of our patent
protection.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">In October&nbsp;2008, Winston Laboratories, Inc. filed a notice of demand for arbitration with us
alleging that we breached the agreements relating to Psoriatec<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP>. We intend to
vigorously defend ourselves, and this proceeding will likely involve considerable legal expenses
which could negatively affect our financial results.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>If We Are Unable To Obtain The Necessary Capital To Fund Our Operations, We Will Have To Delay
Our Development Programs And May Not Be Able To Complete Our Clinical Trials.</B>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">While we completed a private placement raising net proceeds of approximately $10.3&nbsp;million in
October&nbsp;2007, we may need substantial additional funds to fully develop, manufacture, market and
sell our potential products. We may obtain funds through other public or private financings,
including equity financing, and/or through collaborative arrangements. We cannot predict whether
any additional financing will be available at all or on acceptable terms. Depending on the extent
of available funding, we may delay, reduce in scope or eliminate some of our research and
development programs. We may also choose to license rights to third parties to commercialize
products or technologies that we would otherwise have attempted to develop and commercialize on our
own which could reduce our potential revenues.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The availability of additional capital to us is uncertain. There can be no assurance that
additional funding
will be available to us on favorable terms, if at all. Any equity financing, if needed, would
likely result in dilution to our existing shareholders and debt financing, if available, would
likely involve significant cash payment obligations and include restrictive covenants that restrict
our ability to operate our business. Failure to raise capital if needed could materially adversely
impact our business, our financial condition, results of operations and cash flows.
</DIV>


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</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">




<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Since We Now Operate The Only FDA Approved Manufacturing Facility For The
Kerastick</B><SUP style="font-size: 85%; vertical-align: text-top"><B><SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP></B></SUP><B> And Continue To Rely Heavily On Sole Suppliers For The Manufacture Of
Levulan</B><SUP style="font-size: 85%; vertical-align: text-top"><B><SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP></B></SUP><B>, The BLU-U</B><SUP style="font-size: 85%; vertical-align: text-top"><B><SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP></B></SUP><B>, And Meted</B><SUP style="font-size: 85%; vertical-align: text-top"><B><SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP></B></SUP><B>, Any Supply Or Manufacturing
Problems Could Negatively Impact Our Sales As With Nicomide</B><SUP style="font-size: 85%; vertical-align: text-top"><B><SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP></B></SUP><B>.</B>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">If we experience problems producing Levulan<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP> Kerastick<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP> units in our
facility, or if any of our contract suppliers fail to supply our requirements for products, our
business, financial condition and results of operations would suffer. Although we have received
approval by the FDA to manufacture the BLU-U<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP> and the Levulan<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP>
Kerastick<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP> in our Wilmington, Massachusetts facility, at this time, with respect to the
BLU-U<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP>, we expect to utilize our own facility only as a back-up to our current third
party manufacturer or for repairs unless we decide to manufacture in light of FDA&#146;s warning letter
to our BLU-U<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP> manufacturer.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">In April&nbsp;2008, we were notified by Actavis Totowa, LLC, the manufacturer of Nicomide<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP>,
that Actavis would cease manufacturing several prescription vitamins, including
Nicomide<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP>, due to continuing discussions with the FDA. As we previously disclosed,
Actavis Totowa had received notice that the FDA considers prescription dietary supplements to be
unapproved new drugs. In response to this notification and subsequent discussions with the FDA, we
stopped the sale and distribution of Nicomide<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP> as a prescription product in June&nbsp;2008.
We are relabeling our remaining supply of product as a non-prescription dietary supplement in
compliance with DSHEA. We are in discussions with the FDA regarding new labeling, including use of
the trademark. We are actively searching for a source of supply for the DSHEA product. We expect
both the price and volume of the Nicomide<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP> DSHEA labeled product to be considerably less
than historic Nicomide<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP> levels.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">On August&nbsp;12, 2008, we entered into a worldwide non-exclusive patent License Agreement to our
patent covering Nicomide<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP> with River&#146;s Edge Pharmaceuticals, LLC and an amendment to our
Settlement Agreement with River&#146;s Edge which we entered into in October&nbsp;2007 to settle certain
patent litigation. The amendment to the Settlement Agreement allows River&#146;s Edge to manufacture
and market a prescription product that could be substitutable for Nicomide<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP> pursuant to
the terms of the License Agreement and changes certain payment obligations of River&#146;s Edge for
sales of its substitutable product. In consideration for granting the license, we will be paid a
share of the net revenues, as defined in the License Agreement, of River&#146;s Edge&#146;s licensed product
sales under the License Agreement. At the same time, we are also considering the possible sale of
the product and related patent.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Manufacturers and their subcontractors often encounter difficulties when commercial quantities of
products are manufactured for the first time, or large quantities of products are manufactured,
including problems involving:
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>product yields,</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>quality control,</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>component and service availability,</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>compliance with FDA regulations, and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the need for further FDA approval if manufacturers make material changes to
manufacturing processes and/or facilities.</TD>
</TR>

</TABLE>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">We cannot guarantee that problems will not arise with production yields, costs or quality as we and
our suppliers manufacture our products. Any manufacturing problems could delay or limit our
supplies which would hinder our marketing and sales efforts. If our facility, any facility of our
contract manufacturers, or any equipment in those facilities is damaged or destroyed, we may not be
able to quickly or inexpensively
</DIV>


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<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">replace it. Likewise, if there are quality or supply problems with
any components or materials needed to manufacturer our products, we may not be able to quickly
remedy the problem(s). Any of these problems could cause our sales to suffer.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>We Have Only Limited Experience Marketing And Selling Pharmaceutical Products And No
Experience Marketing Dietary Supplements, As A Result, Our Revenues From Product Sales May Suffer.</B>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">If we are unable to successfully market and sell sufficient quantities of our products, revenues
from product sales will be lower than anticipated and our financial condition may be adversely
affected. We are responsible for marketing our products in the United States and the rest of the
world, except Canada, Latin America and parts of Asia, where we have distributors. We are doing so
without the experience of having marketed pharmaceutical products prior to 2000. In October&nbsp;2003,
DUSA began hiring a small direct sales force and we increased the size of our sales force to market
our products in the United States. We do not have experience marketing dietary supplement products
like Nicomide<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP>. If our sales and marketing efforts fail, then sales of the
Levulan<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP> Kerastick<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP>, the BLU-U<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP>, Nicomide<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP> and other
products will be adversely affected.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>The Commercial Success Of Any Products That We May Develop Will Depend Upon The Degree Of
Market Acceptance Of Our Products Among Physicians, Patients, Health Care Payors, Private Health
Insurers And The Medical Community.</B>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Our ability to commercialize any products that we may develop will be highly dependent upon the
extent to which these products gain market acceptance among physicians, patients, health care
payors, such as Medicare and Medicaid, private health insurers, including managed care
organizations and group purchasing organizations, and the medical community. If these products do
not achieve an adequate level of acceptance, we may not generate material product revenues, and we
may not become profitable. The degree of market acceptance of our product candidates, if approved
for commercial sale, will depend on a number of factors, including:
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the effectiveness, or perceived effectiveness, of our products in comparison to
competing products;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the existence of any significant side effects, as well as their severity in comparison to
any competing products;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>potential advantages over alternative treatments;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the ability to offer our products for sale at competitive prices;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>relative convenience and ease of administration;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the strength of marketing and distribution support; and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>sufficient third-party coverage or reimbursement.</TD>
</TR>

</TABLE>
</DIV>
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</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>If We Cannot Improve Physician Reimbursement And/Or Convince More Private Insurance Carriers
To Adequately Reimburse Physicians For Our Product, Sales May Suffer.</B>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Without adequate levels of reimbursement by government health care programs and private health
insurers, the market for our Levulan<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP> Kerastick<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP> for AK therapy will be
limited. While we continue to support efforts to improve reimbursement levels to physicians and are
working with the major private insurance carriers to improve coverage for our therapy, if our
efforts are not successful, a broader adoption of our therapy and sales of our products could be
negatively impacted. Although positive reimbursement changes related to AK were made in 2005, 2007
and again in 2008, some physicians still believe that reimbursement levels do not fully reflect the
required efforts to routinely execute our therapy in their practices.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">If insurance companies do not cover, or stop covering products which are covered, including
Nicomide<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP>, our sales could be dramatically reduced.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>We Have Significant Losses And Anticipate Continued Losses</B>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">We have a history of operating losses. We expect to have continued losses until sales of our
products increase substantially. We incurred net losses of $2,837,000 and $4,260,000 for the three
and nine-month periods ended September&nbsp;30, 2008, respectively, and $14,714,000 and $31,350,000 for
the years ended December&nbsp;31, 2007 and 2006, respectively. As of September&nbsp;30, 2008, our accumulated
deficit was approximately $140,000,000. We cannot predict whether any of our products will achieve
significant enough market acceptance or generate sufficient revenues to enable us to become
profitable on a sustainable basis.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>We Have Limited Patent Protection, And If We Are Unable To Protect Our Proprietary Rights,
Competitors Might Be Able To Develop Similar Products To Compete With Our Products And Technology.</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Our ability to compete successfully depends, in part, on our ability to defend patents that have
issued, obtain new patents, protect trade secrets and operate without infringing the proprietary
rights of others. We have no compound patent protection for our Levulan<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP> brand of the
compound ALA. Our basic ALA patents are for methods of detecting and treating various diseased
tissues using ALA (or related compounds called precursors), in combination with light. We own or
exclusively license ALA patents and patent applications related to the following:
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>methods of using ALA and its unique physical forms in combination with light,</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>compositions and apparatus for those methods, and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>unique physical forms of ALA.</TD>
</TR>

</TABLE>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">We have limited ALA patent protection outside the United States, which may make it easier for
third-parties to compete there. Our basic method of treatment patents and applications have
counterparts in only six foreign countries, and certain countries under the European Patent
Convention. Even where we have patent protection, there is no guarantee that we will be able to
enforce our patents. Additionally,
</DIV>


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<DIV align="left" style="font-size: 10pt; margin-top: 6pt">enforcement of a given patent may not be practicable or an
economically viable alternative.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Some of the indications for which we may develop PDT therapies may not be covered by the claims in
any of our existing patents. Even with the issuance of additional patents to DUSA, other parties
are free to develop other uses of ALA, including medical uses, and to market ALA for such uses,
assuming that they have obtained appropriate regulatory marketing approvals. ALA in the chemical
form has been commercially supplied for decades, and is not itself subject to patent protection.
There are reports of third-parties conducting clinical studies with ALA in countries outside the
United States where PARTEQ, the licensor of our ALA patents, does not have patent protection. In
addition, a number of third-parties are seeking patents for uses of ALA not covered by our patents.
These other uses, whether patented or not, and the commercial availability of ALA, could limit the
scope of our future operations because ALA products could come on the market which would not
infringe our patents but would compete with our Levulan <SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP> products even though they are
marketed for different uses.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Nicomide<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP> is covered by a United States patent which issued in December&nbsp;2005. River&#146;s
Edge Pharmaceuticals, LLC filed an application with the USPTO for the reexamination of the patent
which was vacated by the USPTO on March&nbsp;6, 2008. On October&nbsp;28, 2007, we entered into a settlement
agreement and mutual release, or Settlement Agreement, to dismiss the lawsuit brought by DUSA
against River&#146;s Edge, asserting a number of claims arising out of River&#146;s Edge&#146;s alleged
infringement of U.S. Patent No.&nbsp;6,979,468 under which DUSA has marketed, distributed and sold
Nicomide<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP>. Under the terms of the Settlement Agreement, River&#146;s Edge unconditionally
acknowledged the validity and enforceability of the Nicomide<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP> patent.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">On
August&nbsp;12, 2008, we entered into a worldwide non-exclusive
patent License Agreement to our patent covering Nicomide<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP> with River&#146;s Edge Pharmaceuticals, LLC and an amendment to our
Settlement Agreement with River&#146;s Edge. The amendment to the Settlement Agreement allows River&#146;s
Edge to manufacture and market a prescription product that could be substitutable for
Nicomide<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP> pursuant to the terms of the License Agreement and changes certain payment
obligations of River&#146;s Edge for sales of its substitutable product. In consideration for granting
the license, we will be paid a share of the net revenues, as defined in the License Agreement, of
River&#146;s Edge&#146;s licensed product sales under the License Agreement.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Another company has launched a substitutable niacinamide product, which may cause us to again
consider litigation and the validity of the Nicomide<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP> patent could be tested again.
Also, new products have been launched that are competing with Nicomide<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP>. These events,
together with our decision regarding the marketing of Nicomide will delay our ability to be
profitable.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Furthermore, PhotoCure received FDA approval to market Metvixia<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP> for treatment of AKs in
July&nbsp;2004, and this product, which would be directly competitive with our Levulan<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP>
Kerastick<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP> product, could be launched at any time. While we are entitled to royalties
from PhotoCure on its net sales of Metvixia<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP>, this
product which will be marketed in the U.S. by a large dermatology company, may adversely affect our
ability to maintain or increase our Levulan<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP> market.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">While we attempt to protect our proprietary information as trade secrets through agreements with
each employee, licensing partner, consultant, university, pharmaceutical company and agent, we
cannot guarantee that these agreements will provide effective protection for our proprietary
information. It is possible that:
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>these persons or entities might breach the agreements,</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>we might not have adequate remedies for a breach, and/or</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>our competitors will independently develop or otherwise discover our trade secrets;</TD>
</TR>

</TABLE>
</DIV>
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</TABLE>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">All of which could negatively impact our ability to be profitable.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>We Have Only Three Therapies That Have Received Regulatory Approval Or Clearance, And We
Cannot Predict Whether We Will Ever Develop Or Commercialize Any Other Levulan</B><SUP style="font-size: 85%; vertical-align: text-top"><B><SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP></B></SUP><B>
Products.</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>Our Potential Products Are In Early Stages Of Development And May Never Result In Any
Commercially Successful Products.</I></B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">To be profitable, we must successfully research, develop, obtain regulatory approval for,
manufacture, introduce, market and distribute our products. Except for Levulan<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP> PDT for
AKs, the BLU-U<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP> for acne, the ClindaReach<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP> pledget and the currently marketed
products we acquired in our merger with Sirius, all of our other potential Levulan<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP> and
other potential product candidates are at an early stage of development and subject to the risks of
failure inherent in the development of new pharmaceutical products and products based on new
technologies. These risks include:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>delays in product development, clinical testing or manufacturing,</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>unplanned expenditures in product development, clinical testing or manufacturing,</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>failure in clinical trials or failure to receive regulatory approvals,</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>emergence of superior or equivalent products,</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>inability to market products due to third-party proprietary rights, and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>failure to achieve market acceptance.</TD>
</TR>

</TABLE>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">We cannot predict how long the development of our investigational stage products will take or
whether they will be medically effective. We cannot be sure that a successful market will continue
to develop for our Levulan<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP> drug technology.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>We Must Receive Separate Approval For Each Of Our Potential Products Before We Can Sell Them
Commercially In The United States Or Abroad.</I></B>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">All of our potential Levulan<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP> products will require the approval of the FDA before they
can be marketed in the United States. If we fail to obtain the required approvals (as we did for
the product we were developing with Altana) for these products our revenues will be limited. Before
an application to the FDA seeking approval to market a new drug, called an NDA, can be filed, a
product must undergo, among other things, extensive animal testing and human clinical trials. The
process of obtaining FDA approvals can be lengthy, costly, and time-consuming. Following the
acceptance of an NDA, the time required for regulatory approval can vary and is usually one to
three years or more. The FDA may require additional animal studies and/or human clinical trials
before granting approval. Our Levulan<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP> PDT products are based on relatively new
technology. To the best of our knowledge, the FDA has approved only three drugs for use in
photodynamic therapy, including Levulan<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP>. This factor may lengthen the approval process.
We face much trial and error and we may fail at numerous stages along the way.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">We cannot predict whether we will obtain approval for any of our potential products. Data obtained
from preclinical testing and clinical trials can be susceptible to varying interpretations which
could delay, limit
</DIV>


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<DIV align="left" style="font-size: 10pt; margin-top: 6pt">or prevent regulatory approvals. Future clinical trials may not show that
Levulan<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP> PDT or photodetection, known as PD, is safe and effective for any new use we
are studying as we experienced with our recent acne study. In addition, delays or disapprovals may
be encountered based upon additional governmental regulation resulting from future legislation or
administrative action or changes in FDA policy.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">In April&nbsp;2008, we were notified by Actavis Totowa, LLC, the manufacturer of Nicomide<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP>,
that Actavis would cease manufacturing several prescription vitamins, including
Nicomide<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP>, due to continuing discussions with the FDA. As we previously disclosed,
Actavis Totowa had received notice that the FDA considers prescription dietary supplements to be
unapproved new drugs. In response to this notification and subsequent discussions with the FDA, we
stopped the sale and distribution of Nicomide<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP> as a prescription product in June&nbsp;2008.
We are relabeling our remaining supply of product as a non-prescription dietary supplement in
compliance with DSHEA. We are in discussions with the FDA regarding new labeling, including use of
the trademark. We are actively searching for a source of supply for the DSHEA product. We expect
both the price and volume of the Nicomide<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP> DSHEA labeled product to be considerably less
than historic Nicomide<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP> levels.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">On August&nbsp;12, 2008, we entered into a worldwide non-exclusive patent License Agreement to our
patent covering Nicomide<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP> with River&#146;s Edge Pharmaceuticals, LLC and an amendment to our
Settlement Agreement with River&#146;s Edge. The amendment to the Settlement Agreement allows River&#146;s
Edge to manufacture and market a prescription product that could be substitutable for
Nicomide<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP> pursuant to the terms of the License Agreement and changes certain payment
obligations of River&#146;s Edge for sales of its substitutable product. In consideration for granting
the license, we will be paid a share of the net revenues, as defined in the License Agreement, of
River&#146;s Edge&#146;s licensed product sales under the License Agreement. At the same time, we are also
considering the possible sale of the product and related patent.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>Because Of The Nature Of Our Business, The Loss Of Key Members Of Our Management Team Could
Delay Achievement Of Our Goals.</I></B>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">We are a small company with only 88 employees, including 4 part-time employees, as of September&nbsp;30,
2008. We are highly dependent on several key officer/employees with specialized scientific and
technical skills without whom our business, financial condition and results of operations would
suffer, especially in the photodynamic therapy portion of our business. The photodynamic therapy
industry is still quite small and the number of experts is limited. The loss of these key employees
could cause significant delays in achievement of our business and research goals since very few
people with their expertise could be hired. Our growth and future success will depend, in large
part, on the continued contributions of these key
individuals as well as our ability to motivate and retain other qualified personnel in our
specialty drug and light device areas.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>Collaborations With Outside Scientists May Be Subject To Restriction And Change.</I></B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We work with scientific and clinical advisors and collaborators at academic and other institutions
that assist us in our research and development efforts. These scientists and advisors are not our
employees and may have other commitments that limit their availability to us. Although our advisors
and collaborators generally agree not to do competing work, if a conflict of interest between their
work for us and their work for another entity arises, we may lose their services. In addition,
although our advisors and collaborators sign agreements not to disclose our confidential
information, it is possible that valuable proprietary knowledge may become publicly known through
them.
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>Risks Related To Our Industry</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Product Liability And Other Claims Against Us May Reduce Demand For Our Products Or Result In
Damages.</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>We Are Subject To Risk From Potential Product Liability Lawsuits Which Could Negatively Affect
Our Business.</I></B>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The development, manufacture and sale of medical products expose us to product liability claims
related to the use or misuse of our products. Product liability claims can be expensive to defend
and may result in significant judgments against us. A successful claim in excess of our insurance
coverage could materially harm our business, financial condition and results of operations.
Additionally, we cannot guarantee that continued product liability insurance coverage will be
available in the future at acceptable costs. If the cost is too high, we may have to self-insure.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>Our Business Involves Environmental Risks And We May Incur Significant Costs Complying With
Environmental Laws And Regulations.</I></B>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">We have used various hazardous materials, such as mercury in fluorescent tubes in our research and
development activities. We are subject to federal, state and local laws and regulations which
govern the use, manufacture, storage, handling and disposal of hazardous materials and specific
waste products. Now that we have established our own production line for the manufacture of the
Kerastick<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP>, we are subject to additional environmental laws and regulations. We believe
that we are in compliance in all material respects with currently applicable environmental laws and
regulations. However, we cannot guarantee that we will not incur significant costs to comply with
environmental laws and regulations in the future. We also cannot guarantee that current or future
environmental laws or regulations will not materially adversely affect our operations, business or
assets. In addition, although we believe our safety procedures for handling and disposing of these
materials comply with federal, state and local laws and regulations, we cannot completely eliminate
the risk of accidental contamination or injury from these materials. In the event of such an
accident, we could be held liable for any resulting damages, and this liability could exceed our
resources.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>We May Not Be Able To Compete Against Traditional Treatment Methods Or Keep Up With Rapid
Changes In The Biotechnology And Pharmaceutical Industries That Could Make Some Or All Of Our
Products Non-Competitive Or Obsolete.</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>Competing Products And Technologies Based On Traditional Treatment Methods May Make Some Or
All Of Our Programs Or Potential Products Noncompetitive Or Obsolete.</I></B>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Well-known pharmaceutical, biotechnology and medical device companies are marketing
well-established therapies for the treatment of many of the same conditions that we are seeking to
treat, including AKs, acne and rosacea. Doctors may prefer to use familiar methods, rather than
trying our products. Reimbursement issues affect the economic competitiveness of our products as
compared to other more traditional therapies.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Many companies are also seeking to develop new products and technologies, and receiving approval
for medical conditions for which we are developing treatments. Our industry is subject to rapid,
unpredictable and significant technological change. Competition is intense. Our competitors may
succeed in developing products that are safer or more effective than ours. Many of our competitors
have substantially greater financial, technical and marketing resources than we have. In addition,
several of these companies have
</DIV>


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<DIV align="left" style="font-size: 10pt; margin-top: 6pt">significantly greater experience than we do in developing products,
conducting preclinical and clinical testing and obtaining regulatory approvals to market products
for health care.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">We cannot guarantee that new drugs or future developments in drug technologies will not have a
material adverse effect on our business. Increased competition could result in:
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>price reductions,</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>lower levels of third-party reimbursements,</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>failure to achieve market acceptance, and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>loss of market share, any of which could adversely affect our business. Further, we cannot
give any assurance that developments by our competitors or future competitors will
not render our technology obsolete.</TD>
</TR>

</TABLE>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">On May&nbsp;30, 2006, we entered into a patent license agreement with PhotoCure ASA whereby DUSA granted
a non-exclusive license to PhotoCure under the patents DUSA licenses from PARTEQ, for esters of
ALA. Furthermore, DUSA granted a non-exclusive license to PhotoCure for its existing formulations
of its Hexvix<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP> and Metvix<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP> (known in the United States as
Metvixia<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP>) products for any DUSA patents that may issue or be licensed by DUSA in the
future. PhotoCure received FDA approval to market Metvixia for treatment of AKs in July&nbsp;2004 and it
would be directly competitive with our Levulan<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP> Kerastick<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP> product should
PhotoCure decide to begin marketing this product. While we are entitled to royalties from PhotoCure
on its net sales of Metvixia, this product, which will be marketed in the U.S. by a large
dermatology company which may start to market Metvixia at any time, would adversely affect our
ability to maintain or increase our market.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>We Have Learned That Some Compounding Pharmacies Are Producing A Form&nbsp;Of Aminolevulinic Acid
HCl And Are Marketing It To The Medical Community.</I></B>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">We are aware that there are compounding pharmacies that market compounded versions of
aminolevulinic acid HCl as an alternative to our Levulan<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP> product. Since December&nbsp;2004,
we have filed
lawsuits against compounding pharmacies, chemical suppliers and a light device company and several
physicians alleging violations of the Lanham Act for false advertising and trademark infringement,
and of United States patent law. All of the lawsuits have been settled or ended favorably to us.
While we believe that certain actions of compounding pharmacies and others go beyond the activities
which are permitted under the Food, Drug and Cosmetic Act and have advised the FDA and local health
authorities of our concerns, we cannot be certain that our legal strategy will be successful in
curbing the practices of these companies or that regulatory authorities will intervene to stop
their activities. In addition, there may be other compounding pharmacies which are following FDA
guidelines, or others conducting illegal activities of which we are not aware, which may be
negatively impacting our sales revenues.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>Our Competitors In The Biotechnology And Pharmaceutical Industries May Have Better Products,
Manufacturing Capabilities Or Marketing Expertise.</I></B>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">We are aware of several companies commercializing and/or conducting research with ALA or
ALA-related compounds, including: medac GmbH and photonamic GmbH &#038; Co. KG (Germany); Biofrontera,
PhotoTherapeutics, Inc. (U.K.) and PhotoCure ASA (Norway) which entered into a marketing agreement
with Galderma S.A. for countries outside of Nordic countries for certain dermatology indications.
We also anticipate that we will face increased competition as the scientific development of PDT and
PD advances and new companies enter our markets. Several companies are developing PDT agents other
than
</DIV>


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<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Levulan<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP>. These include: QLT Inc. (Canada); Axcan Pharma Inc. (U.S.); Miravant,
Inc. (U.S.); and Pharmacyclics, Inc. (U.S.). There are many pharmaceutical companies that compete
with us in the field of dermatology, particularly in the acne and rosacea markets.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">PhotoCure has received marketing approval of its ALA precursor (ALA methyl-ester) compound for PDT
treatment of AKs and basal cell carcinoma in the European Union, New Zealand, Australia and
countries in Scandinavia. PhotoCure&#146;s marketing partner, a large dermatology company, could begin
to market its product in direct competition with Levulan<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP> in the U.S., at any time,
under the terms of our patent license agreement and we may lose market share.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Axcan Pharma Inc. has received FDA approval for the use of its product, PHOTOFRIN<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP>, for
PDT in the treatment of high grade dysplasia associated with Barrett&#146;s Esophagus. Axcan is the
first company to market a PDT therapy for this indication for which we designed our proprietary
sheath device and have conducted pilot clinical trials.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">We expect that our principal methods of competition with other PDT products will be based upon such
factors as:
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the ease of administration of our method of PDT,</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the degree of generalized skin sensitivity to light,</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the number of required doses,</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the selectivity of our drug for the target lesion or tissue of interest, and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the type and cost of our light systems.</TD>
</TR>

</TABLE>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Our primary competition in the acne and rosacea markets includes oral and topical antibiotics,
other topical prescription and over-the-counter products, as well as various laser and non-laser
light treatments. The market is highly competitive and other large and small companies have more
experience than we do which could make it difficult for us to penetrate the market. We are also
aware of new products that were
launched recently which will compete with Nicomide<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP> which could negatively impact our
market share. The entry of new products from time to time would likely cause us to lose market
share.
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>Risks Related To Our Stock</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>If Outstanding Options, Warrants And Rights Are Converted, The Value Of Those Shares Of Common
Stock Outstanding Just Prior To The Conversion Will Be Diluted.</I></B>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">As of October&nbsp;31, 2008, there were outstanding options and warrants to purchase 4,419,000 shares of
common stock, with exercise prices ranging from $1.60 to $31.00 per share, and from $2.85 to $6.00
per share, respectively. In addition, there are 102,000 shares of restricted stock that have not
yet vested. The holders of the options and warrants have the opportunity to profit if the market
price for the common stock exceeds the exercise price of their respective securities, without
assuming the risk of ownership. The holders are likely to exercise their securities when we would
probably be able to raise capital from the public on terms more favorable than those provided in
these securities.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>Our Results Of Operations And General Market Conditions For Specialty Pharmaceutical And
Biotechnology Stocks Could Result In Sudden Changes In The Market Value Of Our Stock.</I></B>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The price of our common stock has been highly volatile. These fluctuations create a greater risk of
capital
</DIV>


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<DIV align="left" style="font-size: 10pt; margin-top: 6pt">losses for our shareholders as compared to less volatile stocks. From January&nbsp;1, 2007 to
October&nbsp;31, 2008, the price of our stock has ranged from a low of $0.87 to a high of $5.00. Factors
that contributed to the volatility of our stock during this period included:
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>quarterly levels of product sales;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>clinical trial results;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>general market conditions;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>patent litigation;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>increased marketing activities or press releases; and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>changes in third-party payor reimbursement for our therapy.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The significant general market volatility in similar stage pharmaceutical and biotechnology
companies made the market price of our common stock even more volatile.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>Significant Fluctuations In Orders For Our Products, On A Monthly And Quarterly Basis, Are
Common Based On External Factors And Sales Promotion Activities. These Fluctuations Could Increase
The Volatility Of Our Stock Price.</I></B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The price of our common stock may be affected by the amount of quarterly shipments of our
products to end-users. Since our PDT products are still in the early stages of adoption, and sales
volumes are still low, a number of factors could affect product sales levels and growth rates in
any period. These could include the level of penetration of new markets outside of the United
States, the timing of medical conferences, sales promotion activities, and large volume purchases
by our higher usage customers. In
addition, seasonal fluctuations in the number of patients seeking treatment at various times
during the year could impact sales volumes. These factors could, in turn, affect the volatility of
our stock price.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>Our Common Stock May Not Continue To Trade On The Nasdaq Global Market, Which Could Reduce The
Value Of Your Investment And Make Your Shares More Difficult To Sell.</I></B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In order for our common stock to trade on the Nasdaq Global Market, we must continue to meet
the listing standards of that market. Among other things, those standards require that our common
stock maintain a minimum closing bid price of at least $1.00&nbsp;per share. Recently, our common stock
has traded at prices near and below $1.00. On October&nbsp;16, 2008, Nasdaq suspended the enforcement
of rules requiring a minimum $1.00 closing bid price. The suspension will remain in effect through
January&nbsp;16, 2009. If we do not continue to meet Nasdaq&#146;s applicable minimum listing standards,
Nasdaq could delist us from the Nasdaq Global Market. If our common stock is delisted from the
Nasdaq Global Market, we could seek to have our common stock listed on the Nasdaq Capital Market or
other Nasdaq markets. However, delisting of our common stock from the Nasdaq Global Market could
hinder your ability to sell, or obtain an accurate quotation for the price of, your shares of our
common stock. Delisting could also adversely affect the perception among investors of DUSA and its
prospects, which could lead to further declines in the market price of our common stock. Delisting
would also make it more difficult and expensive for us to raise capital. In addition, delisting
might subject us to an Securities and Exchange Commission rule that could adversely affect the
ability of broker-dealers to sell or make a market in our common stock, thus hindering your ability
to sell your shares.
</DIV>

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<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>Effecting A Change Of Control Of DUSA Would Be Difficult, Which May Discourage Offers For
Shares Of Our Common Stock.</I></B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our certificate of incorporation authorizes the board of directors to issue up to 100,000,000
shares of stock, 40,000,000 of which are common stock. The board of directors has the authority to
determine the price, rights, preferences and privileges, including voting rights, of the remaining
60,000,000 shares without any further vote or action by the shareholders. The rights of the holders
of our common stock will be subject to, and may be adversely affected by, the rights of the holders
of any preferred stock that may be issued in the future.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On September&nbsp;27, 2002, we adopted a shareholder rights plan at a special meeting of DUSA&#146;s
board of directors. The rights plan could discourage, delay or prevent a person or group from
acquiring 15% or more of our common stock, thereby limiting, perhaps, the ability of our
shareholders to benefit from such a transaction.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The rights plan provides for the distribution of one right as a dividend for each outstanding
share of our common stock to holders of record as of October&nbsp;10, 2002. Each right entitles the
registered holder to purchase one one-thousandths of a share of preferred stock at an exercise
price of $37.00 per right. The rights will be exercisable subsequent to the date that a person or
group either has acquired, obtained the right to acquire, or commences or discloses an intention to
commence a tender offer to acquire, 15% or more of our outstanding common stock or if a person or
group is declared an &#147;Adverse Person&#148;, as such term is defined in the rights plan. The rights may
be redeemed by DUSA at a redemption price of one one-hundredth of a cent per right until ten days
following the date the person or group acquires, or discloses an intention to acquire, 15% or more,
as the case may be, of DUSA, or until such later date as may be determined by the our board of
directors.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Under the rights plan, if a person or group acquires the threshold amount of common stock, all
holders of rights (other than the acquiring person or group) may, upon payment of the purchase
price then in effect, purchase shares of common stock of DUSA having a value of twice the purchase
price. In the event that we are involved in a merger or other similar transaction where DUSA is not
the surviving corporation, all holders of rights (other than the acquiring person or group) shall
be entitled, upon payment of the purchase price then in effect, to purchase common stock of the
surviving corporation having a value of twice the purchase price. The rights will expire on October
10, 2012, unless previously redeemed. Our board of directors has also adopted certain amendments to
DUSA&#146;s certificate of incorporation consistent with the terms of the rights plan.
</DIV>
<DIV align="left">
<A name="103"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This prospectus contains various &#147;forward-looking statements&#148; within the meaning of
Section&nbsp;27A of the Securities Act of 1933 and 21E of the Securities Exchange Act of 1934 which
represent our expectations or beliefs concerning future events, including, but not limited to
management&#146;s statements regarding our strategies and core objectives for 2008, the results of our
integration of Sirius Laboratories, Inc. with our business and matters relating thereto, our
expectations concerning the introduction of generic substitutes for Nicomide<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP> and such
products&#146; impact on sales of Nicomide<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP> , our use of estimates and assumptions in the
preparation of our financial statements and policies and impact on us of the adoption of certain
accounting standards, the impact of compounding pharmacies, beliefs regarding estimates,
management&#146;s beliefs regarding the unique nature of Levulan<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP> and its use and potential
use, expectations regarding the timing of results of clinical trials, future development of
Levulan<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP> and our other products and other potential indications, statements regarding
the manufacture of Nicomide<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP> in the future, beliefs concerning manufacture of the
BLU-U<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP> , intention to pursue licensing,
</DIV>

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</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">marketing, co-promotion, collaboration or
acquisition opportunities, status of clinical programs for all other indications and beliefs
regarding potential efficacy and marketing, our beliefs regarding the safety, simplicity,
reliability and cost-effectiveness of certain light sources, our expectations regarding other
product launches in other countries, expectations regarding additional market expansion,
expectations for commercialization of Levulan<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP> Kerastick<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP> in Asian countries
and a distribution agreement for Japan, expectations regarding the marketing and distribution of
Levulan<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP> Kerastick<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP> by Daewoong Pharmaceutical Co., Ltd. and Stiefel
Laboratories, Inc., beliefs regarding the clinical benefit of Levulan<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP> PDT for acne and
other indications, beliefs regarding the suitability of clinical data, expectations regarding the
confidentiality of our proprietary information, statements of our intentions to seek additional
U.S. and foreign regulatory approvals, and to market and increase sales outside the U.S., beliefs
regarding regulatory classifications, filings, timelines, off-label use and environmental
compliance, beliefs concerning patent disputes and litigation, intentions to defend our patent
estate, the impact of a third-party&#146;s regulatory compliance and fulfillment of contractual
obligations, and our anticipation that third parties will launch products upon receipt of
regulatory approval, expectations of increases or decreases in the prices we charge for our
products, our beliefs regarding the size of the market for our products and our product candidates,
expectations of increases or decreases in cost of product sales, expected use of cash resources,
requirements of cash resources for our future liquidity, beliefs regarding investments and economic
conditions, expectations regarding outstanding options and warrants and our dividend policy,
anticipation of increases or decreases in personnel, beliefs regarding the effect of reimbursement
policies on revenues and acceptance of our therapies, expectations for future strategic
opportunities and research and development programs and expenses, expectations for continuing
operating losses and competition, including from Metvixia, expectations regarding the adequacy and
availability of insurance, expectations regarding general and administrative costs, expectations
regarding increased sales and marketing costs and research and development costs, levels of
interest income and our capital resource needs, intention to raise additional funds to meet capital
requirements and the potential
dilution and impact on our business, potential for additional inspection and testing of our
manufacturing facilities or additional FDA actions, beliefs regarding the adequacy of our inventory
of Kerastick<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP> and BLU-U<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP> units and of Nicomide<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP> , our
manufacturing capabilities and the impact of inventories on revenues, beliefs regarding interest
rate risks to our investments and effects of inflation, beliefs regarding the impact of any current
or future legal proceedings, dependence on key personnel, and beliefs concerning product liability
insurance, the enforceability of our patents, the impact of generic products, our beliefs regarding
our sales and marketing efforts, competition with other companies, the adoption of our products,
and the outcome of such efforts, our beliefs regarding our sales and marketing efforts, our beliefs
regarding the use of our products and technologies by third parties, our beliefs regarding our
compliance with applicable laws, rules and regulations, our beliefs regarding available
reimbursement for our products, our beliefs regarding the current and future clinical development
and testing of our potential products and technologies and the costs thereof, the volatility of our
stock price, the impact of our rights plan, the possibility that the holders of options and
warrants will purchase our common stock by exercising these securities, timing and future
development plans with respect to the NCI clinical trials, beliefs regarding legal strategies or
regulatory authorities&#146; actions to stop compounding pharmacies, expectations of price and volume of
Nicomide<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP> as a DSHEA-labeled product, expectations related to the change in revenues of
our PDT and Non-PDT products, expectations regarding the payment of milestones to former Sirius
shareholders, intention to sublease the Toronto offices, plans to re-launch Nicomide<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP>
under DSHEA compliant labeling, beliefs regarding market share, beliefs regarding profitability,
beliefs regarding the change in growth in our PDT Drug and Device Products segment, expectations
regarding the BLU-U<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP> evaluation program and purchases of our products resulting
therefrom, expectations regarding the development time-table for a DSHEA version of
Nicomide<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP> and beliefs regarding the quantities of re-labeled Nicomide<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP>. These
forward-looking statements are further qualified by important factors that could cause actual
results to differ materially from those in the forward-looking statements. These factors include,
without limitation, changing market and regulatory conditions, actual clinical results of our
trials, the impact of competitive products and pricing, the timely development, FDA and
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->18<!-- /Folio -->
</DIV>

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

<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">foreign
regulatory approval, and market acceptance of our products, environmental risks relating to our
products, reliance on third-parties for the production, manufacture, sales and marketing of our
products, the availability of products for acquisition and/or license on terms agreeable to us,
sufficient sources of funds, the securities regulatory process, the maintenance of our patent
portfolio and ability to obtain competitive levels of reimbursement by third-party payors, none of
which can be assured. Results actually achieved may differ materially from expected results
included in these statements as a result of these or other factors.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;You should read and interpret any forward-looking statements together with the following
documents:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>our most recent Annual Report on Form 10-K;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>our most recent Quarterly Report on Form 10-Q;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>our most recent Current Reports on Form 8-K;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the risk factors contained in this prospectus under the caption &#147;Risk Factors&#148;; and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>our other filings with the SEC.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Any forward-looking statement speaks only as of the date on which that statement is made. We
will not update any forward-looking statement to reflect events or circumstances that occur
after the date on which such statement is made.
</DIV>
<DIV align="left">
<A name="104"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>USE OF PROCEEDS</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;DUSA will not receive any proceeds from the sale of shares of common stock which may be sold
pursuant to this prospectus for the respective accounts of the selling securityholders. All such
proceeds, net of brokerage commissions, if any, will be received by the selling securityholders.
See the sections titled &#147;Selling Securityholders&#148; and &#147;Plan of Distribution.&#148;
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->19<!-- /Folio -->
</DIV>


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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="font-family: 'Times New Roman',Times,serif">

<DIV align="left">
<A name="105"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>SELLING SECURITYHOLDERS</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This prospectus relates to shares of common stock to be offered by the selling
securityholders. The table below, including the footnotes, presents information regarding the
selling securityholders and the shares of our common stock that the selling securityholders may
offer and sell from time to time under this prospectus. The inclusion in the table of the
individuals named therein shall not be deemed to be an admission that any such individuals are
&#147;affiliates&#148; of DUSA.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following is a list, as of November&nbsp;7, 2008, of the selling securityholders and the number
of shares beneficially owned by each selling securityholder. The number of shares in the column
&#147;Number of Shares to be Offered&#148; represents all of the shares that a selling securityholder may
offer under this prospectus. The table and footnotes assume that the selling securityholders will
sell all of such shares. However, because the selling securityholders may sell all or some of
their shares under this prospectus from time to time, or in another permitted manner, we cannot
assure you as to the actual number of shares that will be sold by the selling securityholders or
that will be held by the selling securityholders after completion of any sales. We do not know how
long the selling securityholders will hold the shares before selling them. Information concerning
the selling securityholders may change from time to time and changed information will be presented
in a supplement to this prospectus if and when necessary and required. Beneficial ownership is
determined in accordance with Rule&nbsp;13d-3(d) promulgated by the SEC under the Securities Exchange
Act of 1934, as amended.
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="52%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Number of</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Number of</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Number of</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Percentage of</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Shares</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Shares to be</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Shares Owned</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Shares Owned</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left" style="border-bottom: 1px solid #000000"><B>Name</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>Owned</B><SUP style="font-size: 85%; vertical-align: text-top"><B>(1)</B></SUP></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>Offered</B><SUP style="font-size: 85%; vertical-align: text-top"><B>(1) (2)</B></SUP></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>After Offering</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>After Offering</B></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">John H. Abeles (3)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">124,500</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">124,500</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">*</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">David M. Bartash (4)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">100,500</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">100,500</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">*</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Mark Carota (5)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">111,875</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">111,875</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">*</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Jay M. Haft (6)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">139,500</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">139,500</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">*</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Richard C. Lufkin (7)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">117,100</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">117,100</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">*</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Richard C. Christopher (8)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">83,250</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">83,250</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">*</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Robert F. Doman (9)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">130,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">130,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">*</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Scott L. Lundahl (10)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">127,707</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">127,707</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">*</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Stuart L. Marcus (11)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">178,125</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">178,125</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">*</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Magnus Moliteus (12)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">65,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">65,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">*</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">William F. O&#146;Dell (13)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">31,250</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">31,250</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">*</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">D. Geoffrey Shulman (14)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,113,918</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,113,918</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">*</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Michael J. Todisco (15)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">29,500</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">29,500</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">*</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>



<DIV align="left">
<DIV style="font-size: 3pt; margin-top: 16pt; width: 18%; border-top: 1px solid #000000">&nbsp;</DIV>
</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96"></TD>
</TR>

<TR valign="top">
    <TD nowrap align="left">*</TD>
    <TD>&nbsp;</TD>
    <TD>Less than one percent.</TD>
</TR>

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

<TR valign="top">
    <TD nowrap align="left">(1)</TD>
    <TD>&nbsp;</TD>
    <TD>Represents shares beneficially owned by the named individual which have been granted under
the 1991 Incentive Stock Option Plan of Deprenyl USA, Inc. (Deprenyl USA, Inc. is the former
name of DUSA Pharmaceuticals, Inc.), the DUSA Pharmaceuticals, Inc. 1994 Restricted Stock
Option Plan, the DUSA Pharmaceuticals, Inc. 1996 Omnibus Plan, as amended, the DUSA
Pharmaceuticals, Inc. 2006 Equity Compensation Plan, as amended, individual stock option
agreements with D.&nbsp;Geoffrey Shulman, Richard C. Lufkin and Scott Lundahl and a Class&nbsp;B Warrant
Agreement with D.&nbsp;Geoffrey Shulman, including shares that such individual has the right to
acquire upon exercise of options or warrants vesting within sixty (60)&nbsp;days of November&nbsp;7,
2008, but does not include shares underlying options and warrants which vest more than sixty
(60)&nbsp;days from such date. Also includes all shares previously issued to such individuals
after the</TD>
</TR>

</TABLE>


<P align="center" style="font-size: 10pt"><!-- Folio -->20<!-- /Folio -->
</DIV>

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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="font-family: 'Times New Roman',Times,serif">



<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96"></TD>
</TR>

<TR valign="top">
    <TD nowrap align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>exercise of options or warrants granted under the listed plans and shares of common stock
otherwise acquired, or beneficially owned, by such named individual. Unless otherwise
noted, all persons referred to above have sole voting and sole investment power.</TD>
</TR>

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

<TR valign="top">
    <TD nowrap align="left">(2)</TD>
    <TD>&nbsp;</TD>
    <TD>Does not constitute a commitment to sell any or all of the stated number of shares of common
stock. The number of shares offered shall be determined from time to time by each selling
securityholder at their sole discretion.</TD>
</TR>

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

<TR valign="top">
    <TD nowrap align="left">(3)</TD>
    <TD>&nbsp;</TD>
    <TD>Dr.&nbsp;Abeles has served as a director since August&nbsp;1994. Beneficial ownership includes 34,500
shares of common stock and 85,000 shares of common stock underlying stock options granted to
Dr.&nbsp;Abeles which will have vested within sixty (60)&nbsp;days after November&nbsp;7, 2008. Dr.&nbsp;Abeles
shares investment and voting power with regard to the 34,500 shares of common stock.</TD>
</TR>

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

<TR valign="top">
    <TD nowrap align="left">(4)</TD>
    <TD>&nbsp;</TD>
    <TD>Mr.&nbsp;Bartash has served as a director since November&nbsp;2001. Beneficial ownership includes
15,500 shares of common stock and 85,000 shares of common stock underlying stock options
granted to Mr.&nbsp;Bartash which will have vested within sixty (60)&nbsp;days after November&nbsp;7, 2008.</TD>
</TR>

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

<TR valign="top">
    <TD nowrap align="left">(5)</TD>
    <TD>&nbsp;</TD>
    <TD>Mr.&nbsp;Carota joined us in October&nbsp;1999 and was elected as our Vice President, Operations in
February&nbsp;2000. Beneficial ownership includes 111,875 shares of common stock underlying stock
options granted to Mr.&nbsp;Carota which will have vested within sixty (60)&nbsp;days after November&nbsp;7,
2008. The number of shares owned does not include 44,000 shares of common stock underlying
stock options and 11,000 shares of common stock granted to Mr.&nbsp;Carota which will vest more
than sixty (60)&nbsp;days after November&nbsp;7, 2008.</TD>
</TR>

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

<TR valign="top">
    <TD nowrap align="left">(6)</TD>
    <TD>&nbsp;</TD>
    <TD>Mr.&nbsp;Haft has served as a director since September&nbsp;1996. He served as Chairman of the Board
and Lead Director from June&nbsp;2003 to January&nbsp;3, 2005. Since January&nbsp;3, 2005, he has served as
Vice Chairman of the Board and Lead Director. Beneficial ownership includes 34,500 shares of
common stock and 105,000 shares of common stock underlying stock options granted to Mr.&nbsp;Haft
which will have vested within sixty (60)&nbsp;days after November&nbsp;7, 2008. Under Rule&nbsp;13d-3 of the
Securities and Exchange Act of 1934, as amended, Mr.&nbsp;Haft disclaims, but may be deemed to be
the beneficial owner of, the 34,500 shares of common stock held indirectly by Mr.&nbsp;Haft&#146;s
spouse.</TD>
</TR>

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

<TR valign="top">
    <TD nowrap align="left">(7)</TD>
    <TD>&nbsp;</TD>
    <TD>Mr.&nbsp;Lufkin has served as a director since January&nbsp;1992. Beneficial ownership includes 12,100
shares of common stock and 105,000 shares of common stock underlying stock options granted to
Mr.&nbsp;Lufkin which will have vested within sixty (60)&nbsp;days after November&nbsp;7, 2008.</TD>
</TR>

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

<TR valign="top">
    <TD nowrap align="left">(8)</TD>
    <TD>&nbsp;</TD>
    <TD>Mr.&nbsp;Christopher joined us in December&nbsp;2000 and was appointed to the position of Vice
President, Finance and Chief Financial Officer effective February&nbsp;16, 2005. Before that, Mr.
Christopher served as our Vice President, Financial Planning and Business Analysis and had
also served as our Director, Financial Analysis. Beneficial ownership includes 5,000 shares
of common stock and 78,250 shares of common stock underlying stock options granted to Mr.
Christopher which will have vested within sixty (60)&nbsp;days after November&nbsp;7, 2008. The number
of shares owned does not include 50,750 shares of common stock underlying stock options and
13,000 shares of common stock granted to Mr.&nbsp;Christopher which will vest more than sixty (60)
days after November&nbsp;7, 2008.</TD>
</TR>

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

<TR valign="top">
    <TD nowrap align="left">(9)</TD>
    <TD>&nbsp;</TD>
    <TD>Mr.&nbsp;Doman joined us as our President and Chief Operating Officer on January&nbsp;3, 2005 and was
promoted to President and Chief Executive Officer in June&nbsp;2007. Beneficial ownership includes
15,000 shares of common stock and 115,000 shares of common stock underlying options granted to
Mr.&nbsp;Doman which will have vested within sixty (60)&nbsp;days after November&nbsp;7, 2008. The</TD>
</TR>

</TABLE>


<P align="center" style="font-size: 10pt"><!-- Folio -->21<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">



<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96"></TD>
</TR>

<TR valign="top">
    <TD nowrap align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>number of shares owned does not include 123,500 shares of common stock underlying stock
options and 19,000 shares of common stock which will vest more than sixty (60)&nbsp;days after
November&nbsp;7, 2008.</TD>
</TR>

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

<TR valign="top">
    <TD nowrap align="left">(10)</TD>
    <TD>&nbsp;</TD>
    <TD>Mr.&nbsp;Lundahl joined us in May&nbsp;1998 and was elected as our Vice President, Regulatory Affairs
and Intellectual Property in June&nbsp;2003. Before that, Mr.&nbsp;Lundahl was our Vice President,
Technology and Device Development from June&nbsp;1999 until June&nbsp;2003. Beneficial ownership
includes 5,207 shares of common stock and 122,500 shares of common stock underlying stock
options granted to Mr.&nbsp;Lundahl which will have vested within sixty (60)&nbsp;days after November&nbsp;7,
2008. The number of shares owned does not include 44,000 shares of common stock underlying
stock options and 11,000 shares of common stock granted to Mr.&nbsp;Lundahl which will vest more
than sixty (60)&nbsp;days after November&nbsp;7, 2008.</TD>
</TR>

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

<TR valign="top">
    <TD nowrap align="left">(11)</TD>
    <TD>&nbsp;</TD>
    <TD>Dr.&nbsp;Marcus was elected as our Vice President, Scientific Affairs and Chief Medical Officer in
October&nbsp;1993. Beneficial ownership includes 178,125 shares of common stock underlying stock
options granted to Dr.&nbsp;Marcus which will have vested within sixty (60)&nbsp;days after November&nbsp;7,
2008. The number of shares owned does not include 48,250 shares of common stock underlying
stock options and 13,000 shares of common stock granted to Dr.&nbsp;Marcus which will vest more
than sixty (60)&nbsp;days after November&nbsp;7, 2008.</TD>
</TR>

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

<TR valign="top">
    <TD nowrap align="left">(12)</TD>
    <TD>&nbsp;</TD>
    <TD>Mr.&nbsp;Moliteus has served as a director since August&nbsp;2003. Beneficial ownership includes
50,000 shares of common stock underlying stock options granted to Mr.&nbsp;Moliteus which will have
vested within sixty (60)&nbsp;days after November&nbsp;7, 2008.</TD>
</TR>

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

<TR valign="top">
    <TD nowrap align="left">(13)</TD>
    <TD>&nbsp;</TD>
    <TD>Mr.&nbsp;O&#146;Dell joined us as our Executive Vice President Sales and Marketing on April&nbsp;4, 2006.
Beneficial ownership includes 31,250 shares of common stock underlying stock options granted
to Mr.&nbsp;O&#146;Dell which will have vested within sixty (60)&nbsp;days after November&nbsp;7, 2008. This
number does not include 63,250 shares of common stock underlying stock options and 13,000
shares of common stock which will vest more than sixty (60)&nbsp;days after November&nbsp;7, 2008.</TD>
</TR>

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

<TR valign="top">
    <TD nowrap align="left">(14)</TD>
    <TD>&nbsp;</TD>
    <TD>Dr.&nbsp;Shulman currently serves as the Chairman of the Board and Chief Strategic Officer of
DUSA. Dr.&nbsp;Shulman served as our Chief Executive Officer from our inception in 1991 until June
2007 and as our President from 1991 to 2004. Dr.&nbsp;Shulman served as our Chairman from 1991
through 2003 and from January&nbsp;2005 to June&nbsp;2008. Beneficial ownership includes 87,668 shares
of common stock, 776,250 shares of common stock underlying stock options and 250,000 shares of
common stock underlying a warrant granted to Dr.&nbsp;Shulman which will have vested within sixty
(60)&nbsp;days after November&nbsp;7, 2008. The number of shares owned does not include 120,250 shares
of common stock underlying stock options and 11,000 shares of common stock granted to Dr.
Shulman which will vest more than sixty (60)&nbsp;days after November&nbsp;7, 2008.</TD>
</TR>

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

<TR valign="top">
    <TD nowrap align="left">(15)</TD>
    <TD>&nbsp;</TD>
    <TD>Mr.&nbsp;Todisco has served as Vice President, Controller since September&nbsp;2006. Beneficial
ownership includes 29,500 shares of common stock underlying stock options granted to Mr.
Todisco which will have vested within sixty (60)&nbsp;days after November&nbsp;7, 2008. The number of
shares owned does not include 46,000 shares of common stock underlying stock options and
11,000 shares of common stock granted to Mr.&nbsp;Todisco which will vest more than sixty (60)&nbsp;days
after November&nbsp;7, 2008.</TD>
</TR>

</TABLE>


<P align="center" style="font-size: 10pt"><!-- Folio -->22<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">





<DIV align="left">
<A name="106"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>PLAN OF DISTRIBUTION</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Shares offered hereby may be sold from time to time directly by or on behalf of the selling
securityholders in one or more transactions on the Nasdaq Global Market or on any stock exchange on
which the common stock may be listed at the time of sale, in privately negotiated transactions, or
through a combination of such methods, at market prices prevailing at the time of sale, at prices
related to such prevailing market prices, at fixed prices (which may be changed) or at negotiated
prices. The selling securityholders may sell shares through one or more agents, brokers or dealers
or directly to purchasers. Such brokers or dealers may receive compensation in the form of
commissions, discounts or concessions from the selling securityholders and/or purchasers of the
shares or both (which compensation as to a particular broker or dealer may be in excess of
customary commissions).
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In connection with such sales, the selling securityholders and any participating broker or
dealer may be deemed to be &#147;underwriters&#148; within the meaning of the Securities Act, and any
commissions they receive and the proceeds of any sale of shares may be deemed to be underwriting
discounts and commissions under the Securities Act.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In order to comply with certain state securities laws, if applicable, the shares may be sold
in such jurisdictions only through registered or licensed brokers or dealers. In certain states,
the shares may not be sold unless the shares have been registered or qualified for sale in such
state or an exemption from regulation or qualification is available and is complied with. Sales of
shares must also be made by the selling securityholders in compliance with all other applicable
state securities laws and regulations.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In addition to any shares sold hereunder, selling securityholders may, at the same time, sell
any shares of common stock owned by them in compliance with all of the requirements of Rule&nbsp;144,
regardless of whether such shares are covered by this reoffer prospectus. There can be no
assurance that any of the selling securityholders will sell any or all of the shares offered by
them hereby.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;DUSA will pay all expenses of the registration of the shares. DUSA has notified certain
selling securityholders of the need to deliver a copy of this reoffer prospectus in connection with
any sale of the shares.
</DIV>
<DIV align="left">
<A name="107"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>LEGAL MATTERS</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The validity of the shares being offered hereby has been passed upon for DUSA by Reed Smith
LLP. Nanette W. Mantell, Esq., a partner of Reed Smith LLP, serves as DUSA&#146;s Secretary, which is
an officer position.
</DIV>
<DIV align="left">
<A name="108"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>EXPERTS</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The consolidated financial statements, incorporated in this prospectus by reference from DUSA
Pharmaceuticals, Inc.&#146;s Annual Report on Form 10-K and the effectiveness of DUSA Pharmaceuticals,
Inc.&#146;s internal control over financial reporting have been audited by Deloitte &#038; Touche LLP, an
independent registered public accounting firm, as stated in their reports, which are incorporated
herein by reference. Such financial statements have been so incorporated in reliance upon the
reports of such firm given upon their authority as experts in accounting and auditing.
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->23<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left">
<A name="109"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>WHERE YOU CAN FIND MORE INFORMATION</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We have filed with the SEC a registration statement on Form S-8 under the Securities Act with
respect to the shares of common stock offered hereby. This prospectus does not contain all of the
information set forth in the registration statement and the exhibits thereto. You can find
additional information regarding us and the common stock in the registration statement and the
exhibits. Statements contained in this prospectus regarding the contents of any contract or any
other document to which reference is made are not necessarily complete, and, in each instance where
a copy of such contract or other document has been filed as an exhibit to the registration
statement, reference is made to the copy so filed, each such statement being qualified in all
respects by such reference.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We are subject to the informational requirements of the Securities Exchange Act of 1934, as
amended (the &#147;Exchange Act&#148;), and, in accordance therewith, file reports and other information with
the SEC. The registration statement, including exhibits, and the reports and other information
filed by us can be inspected without charge at the public reference facilities maintained by the
SEC at the SEC&#146;s public reference room at 100 F Street, N.E., Washington, D.C. 20549. Copies of
such material can be obtained from such offices at fees prescribed by the SEC. The public may
obtain information on the operation of the Public Reference room by calling the SEC at
1-800-SEC-0330. The SEC maintains a World Wide Web site that contains reports, proxy and
information statements and other information regarding registrants that file electronically with
the SEC. The address of this site is http://www.sec.gov. In addition, you can also access
documents we file with the SEC at our website, http://www.dusapharma.com, which is not a part of
this prospectus and is not incorporated herein by reference.
</DIV>
<DIV align="left">
<A name="110"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following documents, which have been filed by us with the SEC pursuant to the Exchange
Act, are incorporated by reference in this prospectus as of their respective dates:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(a)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Our Annual Report on Form 10-K for the year ended December&nbsp;31, 2007;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(b)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Our Quarterly Report on Form 10-Q for the quarter ended March&nbsp;31, 2008;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(c)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Our Quarterly Report on Form 10-Q for the quarter ended June&nbsp;30, 2008;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(d)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Our Quarterly Report on Form 10-Q for the quarter ended September&nbsp;30, 2008;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(e)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>All other reports filed pursuant to Section&nbsp;13 or 15(d) of the Exchange Act
since December&nbsp;31, 2007; and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(f)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The description of DUSA&#146;s common stock contained in its registration statement
on Form 8-A which was filed on January&nbsp;3, 1992 and amended on Form 8-A12G filed on
October&nbsp;24, 1997, and in DUSA&#146;s Quarterly Report on Form 10-Q which was filed on
November&nbsp;12, 1997.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;All documents filed by us pursuant to Section&nbsp;13(a), 13(c), 14 and 15(d) of the Exchange Act
after the date hereof and prior to the termination of the offering, other than information
furnished pursuant to Item&nbsp;2.02 or Item&nbsp;7.01 of Form 8-K or as otherwise permitted by SEC rules and
regulations, shall be deemed to be incorporated by reference into this prospectus and to be a part
hereof from the date of filing of such documents. Any statement contained in a document
incorporated or deemed to be incorporated
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->24<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">herein by reference shall be deemed to be modified or superseded for purposes of this
prospectus to the extent that a statement contained herein or in any other subsequently filed
document which also is or is deemed to be incorporated by reference herein modifies or supersedes
such statement.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We will provide without charge to any person, including any beneficial owner, to whom this
prospectus is delivered, upon written or oral request of such person, a copy of each document
incorporated by reference in the prospectus (other than exhibits to such documents unless such
exhibits are specifically incorporated by reference into this prospectus). We will provide such
copies at no cost, upon written or oral request, by writing or telephoning us at:
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 50%"><B>DUSA Pharmaceuticals, Inc.<BR>
25 Upton Drive<BR>
Wilmington, Massachusetts 01887<BR>
Attention: Mr.&nbsp;Richard Christopher<BR>
Telephone: (978)&nbsp;657-7500<BR>
Attention: Mr.&nbsp;Richard Christopher<BR>
E-mail to: ChristopherR@DusaPharma.com</B>

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our World Wide Web site is located at www.dusapharma.com. Information on the Web site is not
incorporated by reference into this prospectus.
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->25<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><DIV style="width: 100%; border-bottom: 3px solid #000000; font-size: 1px">&nbsp;</DIV>
</DIV>


<DIV align="Center" style="font-size: 10pt; margin-top: 12pt"><B>2,352,225 Shares</B>

</DIV>

<DIV align="Center" style="font-size: 10pt; margin-top: 6pt"><B>DUSA<BR>
PHARMACEUTICALS, INC.</B><SUP style="font-size: 85%; vertical-align: text-top"> </SUP>

</DIV>

<DIV align="Center" style="font-size: 10pt; margin-top: 6pt">Common Stock

</DIV>

<DIV align="Center" style="font-size: 10pt; margin-top: 6pt"><DIV align="center"><DIV style="font-size: 3pt; margin-top: 16pt; width: 26%; border-top: 1px solid #000000">&nbsp;</DIV></DIV>

</DIV>

<DIV align="Center" style="font-size: 10pt; margin-top: 6pt"><B>PROSPECTUS</B>

</DIV>

<DIV align="Center" style="font-size: 10pt; margin-top: 6pt"><DIV align="center"><DIV style="font-size: 3pt; margin-top: 16pt; width: 26%; border-top: 1px solid #000000">&nbsp;</DIV></DIV>

</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt">November&nbsp;18, 2008
</DIV>


<DIV align="Center" style="font-size: 10pt; margin-top: 12pt"><DIV style="width: 100%; border-bottom: 3px solid #000000; font-size: 1px">&nbsp;</DIV>

</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>PART II<BR>
INFORMATION REQUIRED TO BE IN THE REGISTRATION STATEMENT</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt">ITEM 3. Incorporation of Documents by Reference
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following documents, which have been filed by us with the SEC pursuant to the Exchange
Act, are incorporated by reference in this registration statement as of their respective dates:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(a)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Our Annual Report on Form 10-K for the year ended December&nbsp;31, 2007;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(b)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Our Quarterly Report on Form 10-Q for the quarter ended March&nbsp;31, 2008;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(c)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Our Quarterly Report on Form 10-Q for the quarter ended June&nbsp;30, 2008;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(d)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Our Quarterly Report on Form 10-Q for the quarter ended September&nbsp;30, 2008;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(e)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>All other reports filed pursuant to Section&nbsp;13 or 15(d) of the Exchange Act
since December&nbsp;31, 2007; and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(f)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The description of DUSA&#146;s common stock contained in its registration statement
on Form 8-A which was filed on January&nbsp;3, 1992 and amended on Form 8-A12G filed on
October&nbsp;24, 1997, and in DUSA&#146;s Quarterly Report on Form 10-Q which was filed on
November&nbsp;12, 1997.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;All documents filed by us pursuant to Section&nbsp;13(a), 13(c), 14 and 15(d) of the Exchange Act
after the date hereof and prior to the termination of the offering, other than information
furnished pursuant to Item&nbsp;2.02 or Item&nbsp;7.01 of Form 8-K or as otherwise permitted by SEC rules and
regulations, shall be deemed to be incorporated by reference into this prospectus and to be a part
hereof from the date of filing of such documents. Any statement contained in a document
incorporated or deemed to be incorporated herein by reference shall be deemed to be modified or
superseded for purposes of this prospectus to the extent that a statement contained herein or in
any other subsequently filed document which also is or is deemed to be incorporated by reference
herein modifies or supersedes such statement.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt">ITEM 4. Description of Securities
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Not applicable.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt">ITEM 5. Interests of Named Experts and Counsel
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Not applicable.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt">ITEM 6. Indemnification of Directors and Officers
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Article&nbsp;5 of the Company&#146;s Certificate of Incorporation, as amended, and New Jersey Business
Corporation Act, N.J.S.A. 14A:2-7 provide as follows:
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Any director and officer of the Corporation shall not be personally liable to the Corporation or
its shareholders for damages for breach of any duty owed to the Corporation or its shareholders,
except that this provision shall not relieve a director or officer from liability for any breach of
duty based upon an act or omission (a)&nbsp;in breach of such person&#146;s duty of loyalty to the
Corporation or its shareholders; (b)&nbsp;not in good faith or involving a knowing violation of law; or
(c)&nbsp;resulting in receipt by such person of an
</DIV>
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</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">improper personal benefit.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The Company&#146;s By-laws, as amended, pursuant to the New Jersey Business Corporation Act, N.J.S.A.
14A:3-5, provide as follows:
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><U>ARTICLE IV</U><BR>
<U>INDEMNIFICATION</U>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Section&nbsp;1.</U> <U>Actions by Others</U>. The Corporation (1)&nbsp;shall 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) by reason of the fact that he is or was a director,
officer or trustee of the Corporation or of any constituent corporation absorbed by the Corporation
in a consolidation or merger and (2)&nbsp;except as otherwise required by Section&nbsp;3 of this Article, 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) by reason of the fact
that he (a)&nbsp;is or was an employee or agent or the legal representative of a director, officer,
trustee, employee or agent of the Corporation or of any absorbed constituent corporation, or (b)&nbsp;is
or was serving at the request of the Corporation or of any absorbed constituent corporation as a
director, officer, employee, agent of or participant in another corporation, partnership, joint
venture, trust or other enterprise, or the legal representative of such a person against expenses,
costs, disbursements (including attorneys&#146; fees), judgments, fines and amounts actually and
reasonably incurred by him in good faith and in connection with such action, suit or proceeding if
he acted in a manner he reasonably believed to be in or not opposed to the best interests of the
Corporation, and with respect to any criminal action or proceeding, he had no reasonable cause to
believe that his conduct was unlawful. The termination of any action, suit or proceeding by
judgment, order, settlement, conviction, or upon a plea of <U>nolo contendere</U> or its
equivalent, shall not, of itself, create a presumption that the person did not meet the applicable
standard of conduct.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Section&nbsp;2.</U> <U>Actions by or in the Right of the Corporation</U>. The Corporation
shall 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 suit by or in the right of the Corporation to procure a
judgment in its favor by reason of the fact that he is or was a director, officer, trustee,
employee or agent of the Corporation or of any constituent corporation absorbed by the Corporation
by consolidation or merger, or the legal representative of any such person, or is or was serving at
the request of the Corporation or of any absorbed constituent corporation, as a director, officer,
trustee, employee, agent of or participant, or the legal representative of any such person in
another corporation, partnership, joint venture, trust or other enterprise against expenses
(including attorneys&#146; fees) actually and reasonably incurred by him in connection with the defense
or settlement of such action or suit if he acted in good faith and in a manner he reasonably
believed to be in or not opposed to the best interests of the Corporation and except that no
indemnification shall be made in respect of any claim, issue or matter as to which such person
shall have been adjudged to be liable to the Corporation unless and only to the extent that the New
Jersey Superior Court or the court in which such action or suit was brought shall determine upon
application that, despite the adjudication of liability but in view of all the circumstances of the
case, such person is fairly and reasonably entitled to indemnity for such expenses which the New
Jersey Superior Court or such other court shall deem proper.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Section&nbsp;3.</U> <U> </U> <U>Successful Defense</U>. To the extent that a person who is
or was a director, officer, trustee, employee or agent of the Corporation or of any constituent
corporation absorbed by the Corporation by consolidation or merger, or the legal representative of
any such person, has been successful on the merits or otherwise in defense of any action, suit or
proceeding referred to in Section&nbsp;1 or Section&nbsp;2 of this Article, or in defense of any claim,
issue, or matter therein, he shall be indemnified
</DIV>

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</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">against expenses (including attorneys&#146; fees) actually and reasonably incurred by him in
connection therewith.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Section&nbsp;4.</U> <U>Specific Authorization</U>. Any indemnification under Section&nbsp;1 or
Section&nbsp;2 of this Article (unless ordered by a court) shall be made by the Corporation only as
authorized in the specific case upon a determination that indemnification of the director, officer,
trustee, employee, agent, or the legal representative thereof, is proper in the circumstances
because he has met the applicable standard of conduct set forth in said Sections&nbsp;1 and 2. Such
determination shall be made (1)&nbsp;by the Board of Directors by a majority vote of quorum consisting
of directors who were not parties to such action, suit or proceeding, or (2)&nbsp;if such a quorum is
not obtainable, a quorum of disinterested directors so directs, by independent legal counsel for a
written opinion, (3)&nbsp;by the shareholders.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Section&nbsp;5.</U> <U>Advance of Expenses</U>. Expenses incurred by any person who may have
a right of indemnification under this Article in defending civil or criminal action, suit or
proceeding may be paid by the Corporation in advance of the final distribution of such action, suit
or proceeding as authorized by the board of directors upon receipt of an undertaking by or on
behalf of the director, officer, trustee, employee, or the legal representative thereof, to repay
such amount unless it shall ultimately be determined that he is entitled to be indemnified by the
Corporation pursuant to this Article.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Section&nbsp;6.</U> <U>Right of Indemnity not Exclusive</U>. The indemnification and
advancement of expenses provided by this Article shall not exclude any other rights to which those
seeking indemnification may be entitled under the certificate of incorporation of the Corporation
or any by-law, agreement, vote of shareholders or otherwise; provided that no indemnification shall
be made to or on behalf of a Director, officer, trustee, employee, agent, or legal representative
if a judgment or other final adjudication adverse to such persons establishes that his acts or
omissions (a)&nbsp;were in breach of his duty of loyalty to the corporation or its shareholders, (b)
were not in good faith or involved a knowing violation of law or (c)&nbsp;resulted in receipt by such
person of an improper personal benefit.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Section&nbsp;7.</U> <U>Insurance</U>. The Corporation may purchase and maintain insurance on
behalf of any person who is or was a director, officer, trustee, employee or agent of the
Corporation or of any constituent corporation absorbed by the Corporation by consolidation or
merger of the legal representative of such person or is or was serving at the request of the
Corporation or of any absorbed constituent corporation as a director, officer, trustee, employee or
agent of or participant in another corporation, partnership, joint venture, trust or other
enterprise, or the legal representative of any such person against any liability asserted against
him and incurred by him in any such capacity, arising out of his status as such or by reason of his
being or having been such, whether or not the Corporation would have the power to indemnify him
against such liability under the provisions of this Article, the New Jersey Business Corporation
Act, or otherwise.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Section&nbsp;8.</U> <U>Invalidity of any Provision of this Article</U>. The invalidity or
unenforceability of any provision of this Article shall not affect the validity or enforceability
of the remaining provisions of this Article.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">We also maintain directors and officers liability insurance which may, in some instances, reimburse
us for judgments against us or our directors or officers.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt">ITEM 7. Exemption from Registration Claimed.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Not applicable.
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->II-3 <!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">




<DIV align="left" style="font-size: 10pt; margin-top: 12pt">ITEM 8. Exhibits
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="7%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="90%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left" style="border-bottom: 1px solid #000000"><B>Exhibit&nbsp;No.</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" style="border-bottom: 1px solid #000000"><B>Description of Exhibit</B></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:26px; text-indent:-0px">4.1
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Common Stock specimen, filed as Exhibit&nbsp;4(a) to the
Registrant&#146;s Form&nbsp;10-K for the fiscal year ended December&nbsp;31,
2002, and is incorporated herein by reference</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:20px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:26px; text-indent:-0px">4.2
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Rights Agreement, dated as of September&nbsp;27, 2002, between the
Registrant and American Stock Transfer and Trust Company filed
as Exhibit&nbsp;4.0 to Registrant&#146;s Current Report on Form&nbsp;8-K
filed October&nbsp;11, 2002, and is incorporated herein by
reference</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:20px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:26px; text-indent:-0px">4.3
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Rights Certificate relating to the rights granted to holders
of common stock under the Rights Agreement filed as
Exhibit&nbsp;4.0 to Registrant&#146;s Current Report on Form&nbsp;8-K, filed
on October&nbsp;11, 2002, and is incorporated herein by reference</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:20px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:26px; text-indent:-0px">4.4
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Form of D. Geoffrey Shulman&#146;s Class&nbsp;B Warrant filed as
Exhibit&nbsp;4(b) to the Registrant&#146;s Form&nbsp;10-K for the fiscal year
ended December&nbsp;31, 2007, and is incorporated herein by
reference</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:26px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:26px; text-indent:-0px">5.1
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Opinion of Reed Smith LLP</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:20px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:20px; text-indent:-0px">10.1
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">DUSA Pharmaceuticals, Inc. 2006 Equity Compensation Plan, as
amended July&nbsp;31, 2008</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:20px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:20px; text-indent:-0px">10.2
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">DUSA Pharmaceuticals, Inc. 2006 Deferred Compensation Plan, as
amended October&nbsp;18, 2006 filed as Exhibit&nbsp;10(qq) to the
Registrant&#146;s Form&nbsp;10-K for the fiscal year ended December&nbsp;31,
2006, and is incorporated herein by reference</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:20px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:20px; text-indent:-0px">23.1
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Consent of independent registered public accounting firm</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:20px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:20px; text-indent:-0px">23.2
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Consent of Reed Smith LLP (included in Exhibit&nbsp;5.1)</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:20px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:20px; text-indent:-0px">24.1
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Power of Attorney (contained on Signature Page)</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:20px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:20px; text-indent:-0px">99.1
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Form of Nonqualified Stock Option Grant Agreement filed as
Exhibit&nbsp;99.1 to the Registrant&#146;s registration statement on
Form&nbsp;S-8 (file no. 333-141615) filed on March&nbsp;28, 2007, and is
incorporated herein by reference</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:20px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:20px; text-indent:-0px">99.2
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Form of Incentive Stock Option Grant Agreement filed as
Exhibit&nbsp;99.2 to the Registrant&#146;s registration statement on
Form&nbsp;S-8 (file no. 333-141615) filed on March&nbsp;28, 2007, and is
incorporated herein by reference</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:20px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:20px; text-indent:-0px">99.3
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Form of Stock Award Grant Agreement filed as Exhibit&nbsp;99.3 to
the Registrant&#146;s registration statement on Form&nbsp;S-8 (file no.
333-141615) filed on March&nbsp;28, 2007, and is incorporated
herein by reference</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt">ITEM 9. Undertakings
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;The undersigned registrant hereby undertakes:
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)&nbsp;to file, during any period in which offers or sales are being made, a post-effective
amendment to this registration statement:
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;to include in any prospectus required by Section&nbsp;10(a)(3) of the Securities Act of 1933;
</DIV>

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</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)&nbsp;to reflect in the prospectus any facts or events arising after the effective date of this
registration statement (or the most recent post-effective amendment thereof) which, individually or
in the aggregate, represent a fundamental change in the information set forth in this registration
statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered
(if the total dollar value of securities offered would not exceed that which was registered) and
any deviation from the low or high end of the estimated maximum offering range may be reflected in
the form of prospectus filed with the SEC pursuant to Rule 424(b) if, in the aggregate, the changes
in volume and price represent no more than a 20% change in the maximum aggregate offering price set
forth in the &#147;Calculation of Registration Fee&#148; table in the effective registration statement;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii)&nbsp;to include any material information with respect to the plan of distribution not
previously disclosed in this registration statement or any material change to such information in
this registration statement;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">provided, however, that paragraphs (a)(1)(i), and (a)(1)(ii) above do not apply if the registration
statement is on Form S-8 and the information required to be included in a post-effective amendment
by those paragraphs is contained in periodic reports filed with or furnished to the SEC by the
registrant pursuant to Section&nbsp;13 or 15(d) of the Exchange Act that are incorporated by reference
in the registration statement.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2)&nbsp;that, for the purpose of determining any liability under the Securities Act of 1933, each
such post-effective amendment 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>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3)&nbsp;to remove from registration by means of a post-effective amendment any of the securities
being registered which remain unsold at the termination of the offering.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;The undersigned registrant hereby undertakes that, for purposes of determining any
liability under the Securities Act, each filing of the registrant&#146;s annual report pursuant to
Section&nbsp;13 (a)&nbsp;or Section 15(d) of the Exchange Act (and, where applicable, each filing of an
employee benefit plan&#146;s annual report pursuant to Section 15(d) of the Exchange Act) that is
incorporated by reference in the registration statement 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>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;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 Securities 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>

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</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>SIGNATURES</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>The Registrant: </I></B>Pursuant to the requirements of the Securities Act of 1933, as amended, the
registrant certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-8 and has duly caused this registration statement on Form S-8 to
be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Wilmington,
Commonwealth of Massachusetts, on this 18th day of November, 2008.
</DIV>

<TABLE width="100%" border="0" cellspacing="0" cellpadding="0" style="font-size: 10pt">
<TR>
    <TD width="48%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="35%">&nbsp;</TD>
    <TD width="15%">&nbsp;</TD>
</TR>
<TR>
    <TD valign="top" align="left">&nbsp;</TD>
    <TD colspan="3" align="left">DUSA PHARMACEUTICALS, INC.<BR>
&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD valign="top">By:&nbsp;&nbsp;</TD>
    <TD colspan="2" style="border-bottom: 1px solid #000000" align="left">/s/ Robert F. Doman
&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left">Robert F. Doman&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left">President and Chief Executive
Officer&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
</TABLE>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><U>POWER OF ATTORNEY</U>
</DIV>



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Know All Men By These Presents, that each person whose signature appears below constitutes and
appoints Robert F. Doman and Richard C. Christopher, and each of them singly, as his/her true and
lawful attorney-in-fact and agent with full power of substitution and resubstitution, for him/her
and in his/her name, place and stead, in any and all capacities, to sign any or all amendments
(including post-effective amendments) to this registration statement or any related registration
statement, including any amendment to this registration statement for the purpose of registering
additional shares in accordance with General Instruction E to Form S-8, and to file the same, with
all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorney-in-fact and agent full power and authority to do and
perform each and every act and thing requisite and necessary to be done in connection with the
above premises, as fully to all intents and purposes as he/she might or could do in person, hereby
ratifying and confirming all that said attorney-in-fact and agent or his/her substitute or
substitutes, may lawfully do or cause to be done by virtue thereof.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Pursuant to the requirements of the Securities Act of 1933, as amended, this Registration
Statement on Form S-8 has been signed by the following persons in the capacities and on the dates
indicated:
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="27%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="40%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="23%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">/s/ John H. Abeles, MD
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Director
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">November&nbsp;18, 2008</TD>
</TR>
<TR style="font-size: 1px">
    <TD valign="top" style="border-top: 1px solid #000000"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">John H. Abeles, MD
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Date</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">/s/ David M. Bartash
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Director
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">November&nbsp;18, 2008</TD>
</TR>
<TR style="font-size: 1px">
    <TD valign="top" style="border-top: 1px solid #000000"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">David M. Bartash
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Date</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">/s/ Richard C. Christopher
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Vice President, Finance and Chief Financial Officer
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">November&nbsp;18, 2008</TD>
</TR>
<TR style="font-size: 1px">
    <TD valign="top" style="border-top: 1px solid #000000"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Richard C. Christopher
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" nowrap>
(principal
financial officer and
principal accounting
officer)
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Date</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">/s/ Robert F. Doman
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Director, President and Chief Executive Officer
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">November&nbsp;18, 2008</TD>
</TR>
<TR style="font-size: 1px">
    <TD valign="top" style="border-top: 1px solid #000000"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Robert F. Doman
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
(principal executive
officer)
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Date</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->II-6 <!-- /Folio -->
</DIV>

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

<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="27%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="40%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="23%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">/s/ Jay M. Haft, Esq.
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Lead Director
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">November&nbsp;18, 2008</TD>
</TR>
<TR style="font-size: 1px">
    <TD valign="top" style="border-top: 1px solid #000000"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Jay M. Haft, Esq.
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Date</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">/s/ Richard C. Lufkin
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Director
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">November&nbsp;18, 2008</TD>
</TR>
<TR style="font-size: 1px">
    <TD valign="top" style="border-top: 1px solid #000000"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Richard C. Lufkin
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Date</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">/s/ Magnus Moliteus
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Director
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">November&nbsp;18, 2008</TD>
</TR>
<TR style="font-size: 1px">
    <TD valign="top" style="border-top: 1px solid #000000"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Magnus Moliteus
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Date</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->II-7 <!-- /Folio -->
</DIV>

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

<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>The DUSA Pharmaceuticals, Inc. Non-Qualified Deferred Compensation Plan: </I></B>Pursuant to the
requirements of the Securities Act of 1933, the trustees (or other persons who administer the
employee benefit plan) have duly caused this registration statement to be signed on its behalf by
the undersigned, thereunto duly authorized, in the City of New York, State of New York on November
18, 2008.
</DIV>

<TABLE width="100%" border="0" cellspacing="0" cellpadding="0" style="font-size: 10pt">
<TR>
    <TD width="48%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="35%">&nbsp;</TD>
    <TD width="15%">&nbsp;</TD>
</TR>
<TR>
    <TD valign="top" align="left">&nbsp;</TD>
    <TD colspan="3" align="left" nowrap>DUSA PHARMACEUTICALS, INC.<BR>
NON-QUALIFIED DEFERRED COMPENSATION PLAN<BR>
&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD valign="top">By:&nbsp;&nbsp;</TD>
    <TD colspan="2" style="border-bottom: 1px solid #000000" align="left">/s/ Jay M. Haft, Esq.
&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left">Jay M. Haft, Esq.&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10pt"><!-- Folio -->II-8 <!-- /Folio -->
</DIV>

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

<DIV style="font-family: 'Times New Roman',Times,serif">


<TABLE width="100%" border="0" cellspacing="0" cellpadding="0" style="font-size: 10pt">
<TR>
    <TD width="48%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="35%">&nbsp;</TD>
    <TD width="15%">&nbsp;</TD>
</TR>

</TABLE>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>EXHIBIT INDEX</B>
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="7%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="90%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left" style="border-bottom: 1px solid #000000"><B>Exhibit&nbsp;No.</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" style="border-bottom: 1px solid #000000"><B>Description of Exhibit</B></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:20px; text-indent:-0px">4.1
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Common Stock specimen, filed as Exhibit&nbsp;4(a) to the
Registrant&#146;s Form&nbsp;10-K for the fiscal year ended December&nbsp;31,
2002, and is incorporated herein by reference</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:20px; text-indent:-0px">4.2
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Rights Agreement, dated as of September&nbsp;27, 2002, between the
Registrant and American Stock Transfer and Trust Company filed
as Exhibit&nbsp;4.0 to Registrant&#146;s Current Report on Form&nbsp;8-K
filed October&nbsp;11, 2002, and is incorporated herein by
reference</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:15px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:20px; text-indent:-0px">4.3
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Rights Certificate relating to the rights granted to holders
of common stock under the Rights Agreement filed as
Exhibit&nbsp;4.0 to Registrant&#146;s Current Report on Form&nbsp;8-K, filed
on October&nbsp;11, 2002, and is incorporated herein by reference</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:15px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:20px; text-indent:-0px">4.4
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Form of D. Geoffrey Shulman&#146;s Class&nbsp;B Warrant filed as
Exhibit&nbsp;4(b) to the Registrant&#146;s Form&nbsp;10-K for the fiscal year
ended December&nbsp;31, 2007, and is incorporated herein by
reference</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:15px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:20px; text-indent:-0px">5.1
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Opinion of Reed Smith LLP</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:15px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:15px; text-indent:-0px">10.1
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">DUSA Pharmaceuticals, Inc. 2006 Equity Compensation Plan, as
amended July&nbsp;31, 2008</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:15px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:15px; text-indent:-0px">10.2
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">DUSA Pharmaceuticals, Inc. 2006 Deferred Compensation Plan, as
amended October&nbsp;18, 2006 filed as Exhibit&nbsp;10(qq) to the
Registrant&#146;s Form&nbsp;10-K for the fiscal year ended December&nbsp;31,
2006, and is incorporated herein by reference</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:15px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:15px; text-indent:-0px">23.1
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Consent of independent registered public accounting firm</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:15px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:15px; text-indent:-0px">23.2
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Consent of Reed Smith LLP (included in Exhibit&nbsp;5.1)</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:15px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:15px; text-indent:-0px">24.1
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Power of Attorney (contained on Signature Page)</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:15px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:15px; text-indent:-0px">99.1
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Form of Nonqualified Stock Option Grant Agreement filed as
Exhibit&nbsp;99.1 to the Registrant&#146;s registration statement on
Form&nbsp;S-8 (file no. 333-141615) filed on March&nbsp;28, 2007, and is
incorporated herein by reference</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:15px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:15px; text-indent:-0px">99.2
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Form of Incentive Stock Option Grant Agreement filed as
Exhibit&nbsp;99.2 to the Registrant&#146;s registration statement on
Form&nbsp;S-8 (file no. 333-141615) filed on March&nbsp;28, 2007, and is
incorporated herein by reference</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:15px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:15px; text-indent:-0px">99.3
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Form of Stock Award Grant Agreement filed as Exhibit&nbsp;99.3 to
the Registrant&#146;s registration statement on Form&nbsp;S-8 (file no.
333-141615) filed on March&nbsp;28, 2007, and is incorporated
herein by reference</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>



<P align="center" style="font-size: 10pt"><!-- Folio -->II-9 <!-- /Folio -->
</DIV>



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S-8
Table of Contents
As filed with the Securities and Exchange Commission on November 18, 2008
Registration No. 333-_______
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM S-8
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
DUSA PHARMACEUTICALS, INC.
(Exact Name of Registrant as Specified in Its Charter)
New Jersey
22-3103129
(State or Other Jurisdiction
(I.R.S. Employer
of Incorporation or Organization)
Identification No.)
25 Upton Drive
Wilmington, Massachusetts 01887
(Address of Principal Executive Offices) (Zip Code)
DUSA Pharmaceuticals, Inc. 2006 Equity Compensation Plan
DUSA Pharmaceuticals, Inc. Non-Qualified Deferred Compensation Plan
1991 Incentive Stock Option Plan Of Deprenyl USA, Inc.
DUSA Pharmaceuticals, Inc. 1994 Restricted Stock Option Plan
DUSA Pharmaceuticals, Inc. 1996 Omnibus Plan, As Amended
Stock Option Agreements For D. Geoffrey Shulman
Stock Option Agreement For Richard C. Lufkin
Stock Option Agreements For Scott Lundahl
Class B Warrant Agreement For D. Geoffrey Shulman
(Full Title of the Plan)
Nanette W. Mantell, Esq.
Reed Smith LLP
Princeton Forrestal Village
136 Main Street — Suite 250
Princeton, New Jersey 08543-7839
(609) 514-8541
(Name and Address and Telephone of Agent for Service)
Copies to:
Robert F. Doman, President and Chief Executive Officer
DUSA Pharmaceuticals, Inc.
25 Upton Drive
Wilmington, Massachusetts 01887
(978) 657-7500
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
þ
Non-accelerated filer
o
(Do not check if a smaller reporting company)
Smaller reporting company
o
CALCULATION OF REGISTRATION FEE
Proposed
Proposed
Maximum
Amount
Maximum
Aggregate
Amount of
Title of Each Class of Securities
to be
Offering Price Per
Offering
Registration
to be Registered
Registered
Share
Price
Fee
2006 Equity Compensation Plan –
Shares of Common Stock, no par
value (options reserved for
future grants)
927,202
(1)
$1.38
(2)
$1,279,538.76
$50.29
Deferred Compensation Obligations
$150,000
100%
(3)
$150,000
$5.90
TOTAL REGISTRATION FEE
$56.19
(1)
Together with an indeterminate number of additional shares which may be
issued pursuant to the DUSA Pharmaceuticals, Inc. 2006 Equity Compensation Plan,
as amended, as a result of stock splits, stock dividends or similar transactions
in accordance with Rule 416 of the Securities Act of 1933, as amended.
(2)
Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(h)(1) of the Securities Act of 1933, as amended, based upon
the average of the high and low price as reported on The Nasdaq Global Market on
November 17, 2008.
(3)
The Deferred Compensation Obligations are unsecured obligations of the
Registrant to pay deferred compensation in the future in accordance with the
terms of the DUSA Pharmaceuticals, Inc. Non-Qualified Deferred Compensation Plan.
Table of Contents
INTRODUCTORY STATEMENT
This registration statement on Form S-8 relates to shares of DUSA Pharmaceuticals, Inc.
("DUSA") common stock, no par value, now eligible for issuance under the DUSA Pharmaceuticals, Inc.
2006 Equity Compensation Plan, as amended (the "Equity Plan") and approved by the shareholders of
DUSA at its 2008 Annual Meeting of Shareholders, and obligations of DUSA to participants in the
DUSA Pharmaceuticals, Inc. Non-Qualified Deferred Compensation Plan (the "Deferred Comp Plan" and
together with the Equity Plan, the "Plans"). The Deferred Comp Plan allows participants to defer a
portion of their salary and bonus until such time as the participant elects to receive the deferred
compensation. The Deferred Compensation Obligations registered on this registration statement
consist of unsecured obligations of DUSA to pay to participants their contributions into the
Deferred Compensation Plan, upon their election, the balance of their deferred compensation
accounts. The Plans were previously reported in a registration statement on Form S-8 (File No.
333-141615) filed with the Securities and Exchange Commission on March 28, 2007.
This registration statement also includes a revised reoffer prospectus. The inclusion of the
individuals listed under the "Selling Securityholders" section of the prospectus does not
constitute a commitment to sell any or all of the stated number of shares of common stock. The
number of shares offered shall be determined from time to time by each selling securityholder at
their sole discretion and such individuals are listed as selling securityholders solely to register
the shares that each has received or will receive under DUSA's various equity compensation plans.
PART I
INFORMATION REQUIRED IN THE SECTION 10(A) PROSPECTUS
The documents containing the information required by Part I of Form S-8 have been or will be
sent or given to the participants in the Plans being registered hereby as specified by Rule
428(b)(1) of Regulation C under the Securities Act of 1933, as amended (the "Securities Act"), and
such documents taken together with the documents incorporated by reference in this registration
statement shall constitute a prospectus that meets the requirements of Section 10(a) of the
Securities Act. Pursuant to Rule 428 of the Securities Act, such documents are not required to be
filed with the Securities and Exchange Commission as part of this registration statement or as an
Exhibit hereto.
Table of Contents
PROSPECTUS
2,352,225 Shares of Common Stock by Selling Securityholders
DUSA Pharmaceuticals, Inc.
The shares of common stock of DUSA Pharmaceuticals, Inc. covered by this prospectus may be
offered and sold to the public by certain selling securityholders of DUSA. The selling
securityholders have acquired or will acquire the shares under DUSA's 1991 Incentive Stock Option
Plan of Deprenyl USA, Inc. (Deprenyl USA, Inc. is the former name of DUSA Pharmaceuticals, Inc.),
1994 Restricted Stock Option Plan, 1996 Omnibus Plan, as amended, 2006 Equity Compensation Plan, as
amended, together with stock option agreements with D. Geoffrey Shulman, Richard C. Lufkin and
Scott Lundahl, individually, and/or a Class B Warrant Agreement with D. Geoffrey Shulman.
Our common stock is quoted on the Nasdaq Global Market under the symbol "DUSA." On November
17, 2008, the closing price of a share of our common stock on the Nasdaq Global Market was $1.30
per share.
Investing in our common stock involves risks. See "Risk Factors" beginning on page 3.
Neither the Securities and Exchange Commission nor any state securities commission has
approved or disapproved these securities or passed upon the adequacy or accuracy of this
prospectus. Any representation to the contrary is a criminal offense.
The date of this prospectus is November 18, 2008.
TABLE OF CONTENTS
Page
DUSA Pharmaceuticals, Inc.
1
Risk Factors
3
Special Note Regarding Forward-Looking Statements
17
Use of Proceeds
19
Selling Securityholders
20
Plan of Distribution
23
Legal Matters
23
Experts
23
Where You Can Find More Information
24
Incorporation of Certain Documents by Reference
24
EX-5.1: OPINION OF REED SMITH LLP
EX-10.1: 2006 EQUITY COMPENSATION PLAN
EX-23.1: CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
You should rely only on the information contained in this prospectus or any supplement,
including the documents that we incorporate by reference. We have not authorized anyone to provide
you with information different from that which is contained in or incorporated by reference to this
prospectus. We are offering to sell shares of common stock and seeking offers to buy shares of
common stock only in jurisdictions where offers and sales are permitted. The information contained
in this prospectus is accurate only as of the date of the prospectus, regardless of the time of
delivery of this prospectus or of any sale of the common stock.
Table of Contents
DUSA PHARMACEUTICALS, INC.
We are a vertically integrated dermatology company that is developing and marketing Levulan
PDT and other products for common skin conditions. Our currently marketed products include among
others Levulan
®
Kerastick
®
20% Topical Solution with photodynamic therapy,
the BLU-U
®
brand light source, and certain products acquired in the March 10, 2006
merger with Sirius Laboratories, Inc., including ClindaReach
®
.
Historically, we devoted most of our resources to advancing the development and marketing of
our Levulan
®
PDT/PD technology platform. In addition to our marketed products, our drug,
Levulan
®
brand of aminolevulinic acid HCl, or ALA, in combination with light, has been
studied in a broad range of medical conditions. When Levulan
®
is used and followed with
exposure to light to treat a medical condition, it is known as Levulan
®
photodynamic
therapy, or PDT. When Levulan
®
is used and followed with exposure to light to detect
medical conditions, it is known as Levulan
®
photodetection, or Levulan
®
PD.
Our Kerastick
®
is the proprietary applicator that delivers Levulan
®
. Our
BLU-U
®
is our patented light device.
The Levulan
®
Kerastick
®
20% Topical Solution with PDT and the
BLU-U
®
were launched in the United States, or U.S., in September 2000 for the treatment
of non-hyperkeratotic actinic keratoses, or AKs, of the face or scalp under a former dermatology
collaboration. AKs are precancerous skin lesions caused by chronic sun exposure that can develop
over time into a form of skin cancer called squamous cell carcinoma. In addition, in September 2003
we received clearance from the United States Food and Drug Administration, or FDA, to market the
BLU-U
®
without Levulan
®
PDT for the treatment of moderate inflammatory acne
vulgaris and general dermatological conditions.
Sirius Laboratories, Inc., or Sirius, a dermatology specialty pharmaceuticals company, was
founded in 2000 with a primary focus on the treatment of acne vulgaris and acne rosacea.
Nicomide
®
, its key product, is a vitamin-mineral product currently prescribed by
dermatologists. In April 2008, we were notified by Actavis Totowa, LLC, the manufacturer of
Nicomide
®
, that Actavis would cease manufacturing several prescription vitamins,
including Nicomide
®
, due to continuing discussions with the FDA. As we previously
disclosed, Actavis Totowa had received notice that the FDA considers prescription dietary
supplements to be unapproved new drugs. In response to this notification and subsequent discussions
with the FDA, we stopped the sale and distribution of Nicomide
®
as a prescription
product in June 2008. We are relabeling our remaining supply of product as a non-prescription
dietary supplement in compliance with the Dietary Supplement Health and Education Act, or DSHEA.
We are in discussions with the FDA regarding new labeling, including use of the trademark. We are
actively searching for a source of supply for the DSHEA product. We expect both the price and
volume of the Nicomide
®
DSHEA labeled product to be considerably less than historic
Nicomide
®
levels.
On
August 12, 2008, we entered into a worldwide non-exclusive
patent License Agreement to our patent covering Nicomide
®
with River's Edge Pharmaceuticals, LLC, or River's Edge, and
an amendment to our Settlement Agreement with River's Edge which we entered into in October 2007 to
settle certain patent litigation. The amendment to the Settlement Agreement allows River's Edge to
manufacture and market a prescription product that could be substitutable for Nicomide
®
pursuant to the terms of the License Agreement and changes certain payment obligations of River's
Edge for sales of its substitutable product. In consideration for granting the license, we will be
paid a share of the net revenues, as defined in the License Agreement, of River's Edge's licensed
product sales under the License Agreement. At the same time, we are also considering the possible
sale of the product and related patent.
We are responsible for manufacturing our Levulan
®
Kerastick
®
and for the
regulatory, sales, marketing, and customer service of our Levulan
®
Kerastick
®
, and other related activities for all of our products. Our current objectives
include increasing the sales of our products in the United States, Canada, Latin America, and
Korea, launching Levulan
®
with our partners in additional Latin American countries and
Asia, and continuing our efforts of exploring partnership opportunities for Levulan
®
PDT
for dermatology in Europe.
1
Table of Contents
To further these objectives, we entered into a marketing and distribution agreement with
Stiefel Laboratories, Inc. in January 2006 granting Stiefel an exclusive right to distribute the
Levulan
®
Kerastick
®
in Mexico, Central and South America. On March 5, 2008,
Stiefel notified us that the Brazilian authorities had published the final pricing for the product
which is acceptable to Stiefel and to us. Stiefel launched the product in Brazil in April 2008. In
light of the unexpected delay in receiving acceptable final pricing in Brazil, in 2007 we amended
certain terms of the original Stiefel agreement to reflect our plans to launch in other Latin
American countries prior to Brazil. The product was launched in Argentina, Chile, Colombia and
Mexico during the fourth quarter of 2007. Similarly, in January 2007, we entered into a marketing
and distribution agreement with Daewoong Pharmaceutical Co., Ltd. and Daewoong's wholly owned
subsidiary, DNC Daewoong Derma & Plastic Surgery Network Company, together referred to as Daewoong,
granting Daewoong exclusive rights to distribute the Levulan
®
Kerastick
®
in
certain Asian countries. In the fourth quarter of 2007, the Korean Food and Drug Administration, or
KFDA, approved Levulan
®
Kerastick
®
for PDT for the treatment of actinic
keratosis, and Daewoong launched our product in Korea. Recently, we granted Daewoong the right to
distribute our product in Japan on a named-patient basis to test this market.
We believe that issues related to reimbursement negatively impacted the economic
competitiveness of our therapy with other AK therapies and hindered its adoption in the past.
Though we believe that current Centers for Medicare and Medicaid Services, or CMS, reimbursement
levels allow us to be competitive, we continue to support efforts to improve reimbursement levels
to physicians. Most major private insurers have approved coverage for our AK therapy; however some
private insurers still do not provide adequate coverage. When we learn of these issues, we educate
the insurers and are often able to facilitate a change in their coverage policy. We believe that
with potential future improvements, along with our education and marketing programs, a more
widespread adoption of our therapy should occur over time. We intend to seek reimbursement
coverage for use of our BLU-U to treat acne following the analysis of the results of our Phase IIB
clinical trial.
We are developing Levulan
®
PDT and PD under an exclusive worldwide license of
patents and technology from PARTEQ Research and Development Innovations, the licensing arm of
Queen's University, Kingston, Ontario, Canada. We also own or license certain other patents
relating to methods for using pharmaceutical formulations which contain our drug and related
processes and improvements. In the United States, DUSA
®
, DUSA Pharmaceuticals,
Inc.
®
, Levulan
®
, Kerastick
®
, BLU-U
®
,
Nicomide
®
, Nicomide-T
®
, ClindaReach
®
, Meted
®
, and
Psoriacap
®
are registered trademarks. Several of these trademarks are also registered in
Europe, Australia, Canada, and in other parts of the world. Numerous other trademark applications
are pending.
As of September 30, 2008, we had an accumulated deficit of approximately $140,000,000. We
cannot predict whether any of our products will achieve significant enough market acceptance or
generate sufficient revenues to enable us to become profitable on a sustainable basis. We expect to
continue to incur operating losses until sales of our products increase substantially. Achieving
our goal of becoming a profitable operating company is dependent upon greater acceptance of our PDT
therapy by the medical and consumer constituencies.
As of September 30, 2008, we had a staff of 88 employees, including 4 part-time employees who
worked across all operating functions at DUSA.
Unless the context otherwise requires, the terms "we," "our," "us," "the Company" and "DUSA"
refer to DUSA Pharmaceuticals, Inc., a New Jersey corporation.
We were incorporated on February 21, 1991, under the laws of the State of New Jersey. Our
principal executive offices are located at 25 Upton Drive, Wilmington, Massachusetts 01887
(telephone: (978) 657-7500).
2
Table of Contents
RISK FACTORS
Investing in our common stock is very speculative and involves a high degree of risk. You should
carefully consider and evaluate all of the information in, or incorporated by reference in, this
prospectus. The following are among the risks we face related to our business, assets and operations.
They are not the only ones we face. Any of these risks could materially and adversely affect our
business, results of operations and financial condition, which in turn could materially and
adversely affect the trading price of our common stock and you might lose all or part of your
investment.
This section contains forward-looking statements of our plans,
objectives, expectations and intentions. We use words such as "anticipate", "believe", "expect","
future", and "intend" and similar expressions to identify forward-looking statements. Our actual
results could differ materially from those anticipated in these forward-looking statements for many
reasons, including the risk factors described below. You should not
place undue reliance on these forward-looking statements, which apply only as of the date of this
prospectus.
Risks Related To DUSA
We Are Not Currently Profitable And May Not Be Profitable In The Future Unless We Can
Successfully Market And Sell Significantly Higher Quantities Of Our Products.
If Product Sales Do Not Increase Significantly, We May Not Be Able To Advance Development Of
Our Other Potential Products As Quickly As We Would Like To, Which Would Delay The Approval Process
And Marketing Of New Potential Products.
If we do not generate sufficient revenues from our approved products, we may be forced to delay or
abandon some or all of our product development programs. The pharmaceutical development and
commercialization process is time consuming and costly, and any delays might result in higher costs
which could adversely affect our financial condition. Without sufficient product sales, we would
need alternative sources of funding. There is no guarantee that adequate funding sources could be
found to continue the development of our potential products. We might be required to commit
substantially greater capital than we have available to research and development of such products
and we may not have sufficient funds to complete all or any of our development programs.
Our Ability To Become Profitable Will Be Delayed Since We Will No Longer Promote
Nicomide
®
As A Prescription Product And Since Other Generic Products Entered the Market.
In March 2006, we acquired Nicomide
®
in connection with our merger with Sirius
Laboratories, Inc. Our revenues from sales of Nicomide
®
will decrease significantly with
our decision to cease marketing Nicomide
®
as a prescription product in response to
discussions with the FDA. Assuming we launch Nicomide
®
as a dietary supplement which is
compliant with current FDA regulations, our ability to become profitable will be more difficult.
In April 2008, we were notified by Actavis Totowa, LLC, the manufacturer of Nicomide
®
,
that Actavis would cease manufacturing several prescription vitamins, including
Nicomide
®
, due to continuing discussions with the U.S. Food and Drug Administration. As
we previously disclosed, Actavis Totowa had received notice that the FDA considers prescription
dietary supplements to be unapproved new drugs. In response to this notification and subsequent
discussions with the FDA, we stopped the sale and
distribution of Nicomide
®
as a prescription product in June 2008. We are relabeling our
remaining supply of product as a non-prescription dietary supplement in compliance with DSHEA. We
are in discussions
3
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with the FDA regarding new labeling, including use of the trademark. We are
actively searching for a source of supply for the DSHEA product. We expect both the price and
volume of the Nicomide
®
DSHEA labeled product to be considerably less than historic
Nicomide
®
levels.
On August 12, 2008, we entered into a worldwide non-exclusive patent License Agreement to our
patent covering Nicomide
®
with River's Edge Pharmaceuticals, LLC and an amendment to our
Settlement Agreement with River's Edge which we entered into in October 2007 to settle certain
patent litigation. The amendment to the Settlement Agreement allows River's Edge to manufacture
and market a prescription product that could be substitutable for Nicomide
®
pursuant to
the terms of the License Agreement and changes certain payment obligations of River's Edge for
sales of its substitutable product. In consideration for granting the license, we will be paid a
share of the net revenues, as defined in the License Agreement, of River's Edge's licensed product
sales under the License Agreement. At the same time, we are also considering the possible sale of
the product and related patent.
We Have Not Yet Secured A Manufacturer for a DSHEA Nicomide
®
Product, And, As A
Result, Our Revenues From Nicomide
®
Sales May Suffer.
In April 2008, we were notified by the manufacturer of Nicomide that it was ceasing the
manufacturing of several prescription vitamins, including Nicomide
®
. We are actively
searching for a source of supply to manufacture a DSHEA-labeled version of Nicomide
®
.
Since Actavis, the former manufacturer, owns certain proprietary assays and manufacturing processes
relating to Nicomide
®
, it could take several months to develop the DSHEA version of
Nicomide
®
. Although we believe we will have sufficient quantities of re-labeled
Nicomide
®
product to meet the DSHEA market demand in the short-term, it is possible that
we could go into a back-order situation and could lose market share while we redevelop the DSHEA
product. We may not be able to locate a manufacturer on terms that are acceptable to us.
Any Failure To Comply With Ongoing Governmental Regulations In The United States And Elsewhere
Will Limit Our Ability To Market Our Products And Become Profitable.
The manufacture and marketing of our products are subject to continuing FDA review as well as
comprehensive regulation by the FDA and by state and local regulatory authorities. These laws
require, among other things:
•
approval of manufacturing facilities, including adherence to good manufacturing
and laboratory practices during production and storage,
•
controlled research and testing of some of these products even after approval, and
•
control of marketing activities, including advertising and labeling.
If we, or any of our contract manufacturers, fail to comply with these requirements, we may be
limited in the jurisdictions in which we are permitted to sell our products. Additionally, if we or
our manufacturers fail to comply with applicable regulatory approval requirements, a regulatory
agency may also:
•
send warning letters, as received by the manufacturer of our BLU-U
®
,
•
impose fines and other civil penalties on us,
•
seize our products,
4
Table of Contents
•
suspend our regulatory approvals,
•
cease the manufacture of our products, as Actavis Totowa is doing with Nicomide
®
,
•
refuse to approve pending applications or supplements to approved applications filed by us,
•
refuse to permit exports of our products from the United States,
•
require us to recall products,
•
require us to notify physicians of labeling changes and/or product related problems,
•
impose restrictions on our operations, and/or
•
criminally prosecute us.
We and our manufacturers must continue to comply with cGMP and Quality System Regulation, or QSR,
and equivalent foreign regulatory requirements. The cGMP requirements govern quality control and
documentation policies and procedures. In complying with cGMP and foreign regulatory requirements,
we and our third-party manufacturers will be obligated to expend time, money and effort in
production, record keeping and quality control to assure that our products meet applicable
specifications and other requirements.
Certain of the products acquired or licensed in connection with the Sirius merger including
Nicomide
®
, are regulated by FDA under its marketed unapproved drugs compliance policy
guide entitled, "Marketed New Drugs without Approved NDAs or ANDAs." Under this policy, the FDA
recognizes that certain unapproved products, based on the introduction date of their active
ingredients and the lack of safety concerns, have been marketed for many years and, at this time,
will not be the subject of any enforcement action. The FDA has recently taken a more proactive role
and is strongly encouraging manufacturers of such products to submit applications to obtain
marketing approval and/or bring these products into compliance with current FDA regulations. As
result of discussions with the FDA, we stopped the sale and distribution of Nicomide
®
and Psoriatec
®
as prescription products in June 2008. We are relabeling a supply of
Nicomide
®
product as a non-prescription dietary supplement in compliance with DSHEA for
re-launch and are in discussions with FDA about appropriate DSHEA labeling, including use of the
trademark. We are actively searching for a source of supply for the DSHEA product. Label changes
eliminating references to medicinal benefits will limit the marketing claims we can make for
Nicomide
®
and a change of product name, if required, could negatively affect our
revenues and profits. We could experience a back-order situation if a manufacturer is not available
in time to meet our supply needs which could also affect our revenues and profits. Our license
agreement for Psoriatec
®
expired on September 30, 2008.
Manufacturing facilities are subject to ongoing periodic inspection by the FDA, including
unannounced inspections. We cannot guarantee that our third-party supply sources, or our own
Kerastick
®
facility, will continue to meet all applicable FDA regulations. If we, or any
of our manufacturers, including without limitation, the manufacturer of the BLU-U
®
, who
has received warning letters from the FDA, fail to
maintain compliance with FDA regulatory requirements, it would be time consuming and costly to
remedy the problem(s) or to qualify other sources. These consequences could have a significant
adverse effect on our financial condition and operations. As part of our FDA approval for the
Levulan
®
Kerastick
®
for AK, we were required to conduct two Phase IV
follow-up studies. We successfully completed the first
5
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study; and submitted our final report on the
second study to the FDA in January 2004. The FDA has requested additional information, which was
provided to them in June 2008. We are awaiting their response. Additionally, if previously unknown
problems with the product, a manufacturer or its facility are discovered in the future, changes in
product labeling restrictions or withdrawal of the product from the market may occur. Any such
problems could affect our ability to become profitable.
Litigation Is Expensive And We May Not Be Able To Afford The Costs.
The costs of litigation or any proceeding relating to our intellectual property rights could be
substantial even if resolved in our favor. Some of our competitors have far greater resources than
we do and may be better able to afford the costs of complex patent litigation. For example,
third-parties such as companies that have launched niacinamide products, may infringe one or more
of our patents, and cause us to spend significant resources to enforce our patent rights. Also, in
a lawsuit against a third-party for infringement of our patents in the United States, that
third-party may challenge the validity of our patent(s). We cannot guarantee that a third-party
will not claim, with or without merit, that our patents are not valid or that we have infringed
their patent(s) or misappropriated their proprietary material. Defending these types of legal
actions involve considerable expense and could negatively affect our financial results.
Additionally, if a third-party were to file a United States patent application, or be issued a
patent claiming technology also claimed by us in a pending United States application(s), we may be
required to participate in interference proceedings in the United States Patent and Trademark
Office, or USPTO, to determine the priority of the invention. A third-party could also request the
declaration of a patent interference between one of our issued United States patents and one of its
patent applications. Any interference proceedings likely would require participation by us and/or
PARTEQ, could involve substantial legal fees and result in a loss or lessening of our patent
protection.
In October 2008, Winston Laboratories, Inc. filed a notice of demand for arbitration with us
alleging that we breached the agreements relating to Psoriatec
®
. We intend to
vigorously defend ourselves, and this proceeding will likely involve considerable legal expenses
which could negatively affect our financial results.
If We Are Unable To Obtain The Necessary Capital To Fund Our Operations, We Will Have To Delay
Our Development Programs And May Not Be Able To Complete Our Clinical Trials.
While we completed a private placement raising net proceeds of approximately $10.3 million in
October 2007, we may need substantial additional funds to fully develop, manufacture, market and
sell our potential products. We may obtain funds through other public or private financings,
including equity financing, and/or through collaborative arrangements. We cannot predict whether
any additional financing will be available at all or on acceptable terms. Depending on the extent
of available funding, we may delay, reduce in scope or eliminate some of our research and
development programs. We may also choose to license rights to third parties to commercialize
products or technologies that we would otherwise have attempted to develop and commercialize on our
own which could reduce our potential revenues.
The availability of additional capital to us is uncertain. There can be no assurance that
additional funding
will be available to us on favorable terms, if at all. Any equity financing, if needed, would
likely result in dilution to our existing shareholders and debt financing, if available, would
likely involve significant cash payment obligations and include restrictive covenants that restrict
our ability to operate our business. Failure to raise capital if needed could materially adversely
impact our business, our financial condition, results of operations and cash flows.
6
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Since We Now Operate The Only FDA Approved Manufacturing Facility For The
Kerastick
®
And Continue To Rely Heavily On Sole Suppliers For The Manufacture Of
Levulan
®
, The BLU-U
®
, And Meted
®
, Any Supply Or Manufacturing
Problems Could Negatively Impact Our Sales As With Nicomide
®
.
If we experience problems producing Levulan
®
Kerastick
®
units in our
facility, or if any of our contract suppliers fail to supply our requirements for products, our
business, financial condition and results of operations would suffer. Although we have received
approval by the FDA to manufacture the BLU-U
®
and the Levulan
®
Kerastick
®
in our Wilmington, Massachusetts facility, at this time, with respect to the
BLU-U
®
, we expect to utilize our own facility only as a back-up to our current third
party manufacturer or for repairs unless we decide to manufacture in light of FDA's warning letter
to our BLU-U
®
manufacturer.
In April 2008, we were notified by Actavis Totowa, LLC, the manufacturer of Nicomide
®
,
that Actavis would cease manufacturing several prescription vitamins, including
Nicomide
®
, due to continuing discussions with the FDA. As we previously disclosed,
Actavis Totowa had received notice that the FDA considers prescription dietary supplements to be
unapproved new drugs. In response to this notification and subsequent discussions with the FDA, we
stopped the sale and distribution of Nicomide
®
as a prescription product in June 2008.
We are relabeling our remaining supply of product as a non-prescription dietary supplement in
compliance with DSHEA. We are in discussions with the FDA regarding new labeling, including use of
the trademark. We are actively searching for a source of supply for the DSHEA product. We expect
both the price and volume of the Nicomide
®
DSHEA labeled product to be considerably less
than historic Nicomide
®
levels.
On August 12, 2008, we entered into a worldwide non-exclusive patent License Agreement to our
patent covering Nicomide
®
with River's Edge Pharmaceuticals, LLC and an amendment to our
Settlement Agreement with River's Edge which we entered into in October 2007 to settle certain
patent litigation. The amendment to the Settlement Agreement allows River's Edge to manufacture
and market a prescription product that could be substitutable for Nicomide
®
pursuant to
the terms of the License Agreement and changes certain payment obligations of River's Edge for
sales of its substitutable product. In consideration for granting the license, we will be paid a
share of the net revenues, as defined in the License Agreement, of River's Edge's licensed product
sales under the License Agreement. At the same time, we are also considering the possible sale of
the product and related patent.
Manufacturers and their subcontractors often encounter difficulties when commercial quantities of
products are manufactured for the first time, or large quantities of products are manufactured,
including problems involving:
•
product yields,
•
quality control,
•
component and service availability,
•
compliance with FDA regulations, and
•
the need for further FDA approval if manufacturers make material changes to
manufacturing processes and/or facilities.
We cannot guarantee that problems will not arise with production yields, costs or quality as we and
our suppliers manufacture our products. Any manufacturing problems could delay or limit our
supplies which would hinder our marketing and sales efforts. If our facility, any facility of our
contract manufacturers, or any equipment in those facilities is damaged or destroyed, we may not be
able to quickly or inexpensively
7
Table of Contents
replace it. Likewise, if there are quality or supply problems with
any components or materials needed to manufacturer our products, we may not be able to quickly
remedy the problem(s). Any of these problems could cause our sales to suffer.
We Have Only Limited Experience Marketing And Selling Pharmaceutical Products And No
Experience Marketing Dietary Supplements, As A Result, Our Revenues From Product Sales May Suffer.
If we are unable to successfully market and sell sufficient quantities of our products, revenues
from product sales will be lower than anticipated and our financial condition may be adversely
affected. We are responsible for marketing our products in the United States and the rest of the
world, except Canada, Latin America and parts of Asia, where we have distributors. We are doing so
without the experience of having marketed pharmaceutical products prior to 2000. In October 2003,
DUSA began hiring a small direct sales force and we increased the size of our sales force to market
our products in the United States. We do not have experience marketing dietary supplement products
like Nicomide
®
. If our sales and marketing efforts fail, then sales of the
Levulan
®
Kerastick
®
, the BLU-U
®
, Nicomide
®
and other
products will be adversely affected.
The Commercial Success Of Any Products That We May Develop Will Depend Upon The Degree Of
Market Acceptance Of Our Products Among Physicians, Patients, Health Care Payors, Private Health
Insurers And The Medical Community.
Our ability to commercialize any products that we may develop will be highly dependent upon the
extent to which these products gain market acceptance among physicians, patients, health care
payors, such as Medicare and Medicaid, private health insurers, including managed care
organizations and group purchasing organizations, and the medical community. If these products do
not achieve an adequate level of acceptance, we may not generate material product revenues, and we
may not become profitable. The degree of market acceptance of our product candidates, if approved
for commercial sale, will depend on a number of factors, including:
•
the effectiveness, or perceived effectiveness, of our products in comparison to
competing products;
•
the existence of any significant side effects, as well as their severity in comparison to
any competing products;
•
potential advantages over alternative treatments;
•
the ability to offer our products for sale at competitive prices;
•
relative convenience and ease of administration;
•
the strength of marketing and distribution support; and
•
sufficient third-party coverage or reimbursement.
8
Table of Contents
If We Cannot Improve Physician Reimbursement And/Or Convince More Private Insurance Carriers
To Adequately Reimburse Physicians For Our Product, Sales May Suffer.
Without adequate levels of reimbursement by government health care programs and private health
insurers, the market for our Levulan
®
Kerastick
®
for AK therapy will be
limited. While we continue to support efforts to improve reimbursement levels to physicians and are
working with the major private insurance carriers to improve coverage for our therapy, if our
efforts are not successful, a broader adoption of our therapy and sales of our products could be
negatively impacted. Although positive reimbursement changes related to AK were made in 2005, 2007
and again in 2008, some physicians still believe that reimbursement levels do not fully reflect the
required efforts to routinely execute our therapy in their practices.
If insurance companies do not cover, or stop covering products which are covered, including
Nicomide
®
, our sales could be dramatically reduced.
We Have Significant Losses And Anticipate Continued Losses
We have a history of operating losses. We expect to have continued losses until sales of our
products increase substantially. We incurred net losses of $2,837,000 and $4,260,000 for the three
and nine-month periods ended September 30, 2008, respectively, and $14,714,000 and $31,350,000 for
the years ended December 31, 2007 and 2006, respectively. As of September 30, 2008, our accumulated
deficit was approximately $140,000,000. We cannot predict whether any of our products will achieve
significant enough market acceptance or generate sufficient revenues to enable us to become
profitable on a sustainable basis.
We Have Limited Patent Protection, And If We Are Unable To Protect Our Proprietary Rights,
Competitors Might Be Able To Develop Similar Products To Compete With Our Products And Technology.
Our ability to compete successfully depends, in part, on our ability to defend patents that have
issued, obtain new patents, protect trade secrets and operate without infringing the proprietary
rights of others. We have no compound patent protection for our Levulan
®
brand of the
compound ALA. Our basic ALA patents are for methods of detecting and treating various diseased
tissues using ALA (or related compounds called precursors), in combination with light. We own or
exclusively license ALA patents and patent applications related to the following:
•
methods of using ALA and its unique physical forms in combination with light,
•
compositions and apparatus for those methods, and
•
unique physical forms of ALA.
We have limited ALA patent protection outside the United States, which may make it easier for
third-parties to compete there. Our basic method of treatment patents and applications have
counterparts in only six foreign countries, and certain countries under the European Patent
Convention. Even where we have patent protection, there is no guarantee that we will be able to
enforce our patents. Additionally,
9
Table of Contents
enforcement of a given patent may not be practicable or an
economically viable alternative.
Some of the indications for which we may develop PDT therapies may not be covered by the claims in
any of our existing patents. Even with the issuance of additional patents to DUSA, other parties
are free to develop other uses of ALA, including medical uses, and to market ALA for such uses,
assuming that they have obtained appropriate regulatory marketing approvals. ALA in the chemical
form has been commercially supplied for decades, and is not itself subject to patent protection.
There are reports of third-parties conducting clinical studies with ALA in countries outside the
United States where PARTEQ, the licensor of our ALA patents, does not have patent protection. In
addition, a number of third-parties are seeking patents for uses of ALA not covered by our patents.
These other uses, whether patented or not, and the commercial availability of ALA, could limit the
scope of our future operations because ALA products could come on the market which would not
infringe our patents but would compete with our Levulan
®
products even though they are
marketed for different uses.
Nicomide
®
is covered by a United States patent which issued in December 2005. River's
Edge Pharmaceuticals, LLC filed an application with the USPTO for the reexamination of the patent
which was vacated by the USPTO on March 6, 2008. On October 28, 2007, we entered into a settlement
agreement and mutual release, or Settlement Agreement, to dismiss the lawsuit brought by DUSA
against River's Edge, asserting a number of claims arising out of River's Edge's alleged
infringement of U.S. Patent No. 6,979,468 under which DUSA has marketed, distributed and sold
Nicomide
®
. Under the terms of the Settlement Agreement, River's Edge unconditionally
acknowledged the validity and enforceability of the Nicomide
®
patent.
On
August 12, 2008, we entered into a worldwide non-exclusive
patent License Agreement to our patent covering Nicomide
®
with River's Edge Pharmaceuticals, LLC and an amendment to our
Settlement Agreement with River's Edge. The amendment to the Settlement Agreement allows River's
Edge to manufacture and market a prescription product that could be substitutable for
Nicomide
®
pursuant to the terms of the License Agreement and changes certain payment
obligations of River's Edge for sales of its substitutable product. In consideration for granting
the license, we will be paid a share of the net revenues, as defined in the License Agreement, of
River's Edge's licensed product sales under the License Agreement.
Another company has launched a substitutable niacinamide product, which may cause us to again
consider litigation and the validity of the Nicomide
®
patent could be tested again.
Also, new products have been launched that are competing with Nicomide
®
. These events,
together with our decision regarding the marketing of Nicomide will delay our ability to be
profitable.
Furthermore, PhotoCure received FDA approval to market Metvixia
®
for treatment of AKs in
July 2004, and this product, which would be directly competitive with our Levulan
®
Kerastick
®
product, could be launched at any time. While we are entitled to royalties
from PhotoCure on its net sales of Metvixia
®
, this
product which will be marketed in the U.S. by a large dermatology company, may adversely affect our
ability to maintain or increase our Levulan
®
market.
While we attempt to protect our proprietary information as trade secrets through agreements with
each employee, licensing partner, consultant, university, pharmaceutical company and agent, we
cannot guarantee that these agreements will provide effective protection for our proprietary
information. It is possible that:
•
these persons or entities might breach the agreements,
•
we might not have adequate remedies for a breach, and/or
•
our competitors will independently develop or otherwise discover our trade secrets;
10
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All of which could negatively impact our ability to be profitable.
We Have Only Three Therapies That Have Received Regulatory Approval Or Clearance, And We
Cannot Predict Whether We Will Ever Develop Or Commercialize Any Other Levulan
®
Products.
Our Potential Products Are In Early Stages Of Development And May Never Result In Any
Commercially Successful Products.
To be profitable, we must successfully research, develop, obtain regulatory approval for,
manufacture, introduce, market and distribute our products. Except for Levulan
®
PDT for
AKs, the BLU-U
®
for acne, the ClindaReach
®
pledget and the currently marketed
products we acquired in our merger with Sirius, all of our other potential Levulan
®
and
other potential product candidates are at an early stage of development and subject to the risks of
failure inherent in the development of new pharmaceutical products and products based on new
technologies. These risks include:
•
delays in product development, clinical testing or manufacturing,
•
unplanned expenditures in product development, clinical testing or manufacturing,
•
failure in clinical trials or failure to receive regulatory approvals,
•
emergence of superior or equivalent products,
•
inability to market products due to third-party proprietary rights, and
•
failure to achieve market acceptance.
We cannot predict how long the development of our investigational stage products will take or
whether they will be medically effective. We cannot be sure that a successful market will continue
to develop for our Levulan
®
drug technology.
We Must Receive Separate Approval For Each Of Our Potential Products Before We Can Sell Them
Commercially In The United States Or Abroad.
All of our potential Levulan
®
products will require the approval of the FDA before they
can be marketed in the United States. If we fail to obtain the required approvals (as we did for
the product we were developing with Altana) for these products our revenues will be limited. Before
an application to the FDA seeking approval to market a new drug, called an NDA, can be filed, a
product must undergo, among other things, extensive animal testing and human clinical trials. The
process of obtaining FDA approvals can be lengthy, costly, and time-consuming. Following the
acceptance of an NDA, the time required for regulatory approval can vary and is usually one to
three years or more. The FDA may require additional animal studies and/or human clinical trials
before granting approval. Our Levulan
®
PDT products are based on relatively new
technology. To the best of our knowledge, the FDA has approved only three drugs for use in
photodynamic therapy, including Levulan
®
. This factor may lengthen the approval process.
We face much trial and error and we may fail at numerous stages along the way.
We cannot predict whether we will obtain approval for any of our potential products. Data obtained
from preclinical testing and clinical trials can be susceptible to varying interpretations which
could delay, limit
11
Table of Contents
or prevent regulatory approvals. Future clinical trials may not show that
Levulan
®
PDT or photodetection, known as PD, is safe and effective for any new use we
are studying as we experienced with our recent acne study. In addition, delays or disapprovals may
be encountered based upon additional governmental regulation resulting from future legislation or
administrative action or changes in FDA policy.
In April 2008, we were notified by Actavis Totowa, LLC, the manufacturer of Nicomide
®
,
that Actavis would cease manufacturing several prescription vitamins, including
Nicomide
®
, due to continuing discussions with the FDA. As we previously disclosed,
Actavis Totowa had received notice that the FDA considers prescription dietary supplements to be
unapproved new drugs. In response to this notification and subsequent discussions with the FDA, we
stopped the sale and distribution of Nicomide
®
as a prescription product in June 2008.
We are relabeling our remaining supply of product as a non-prescription dietary supplement in
compliance with DSHEA. We are in discussions with the FDA regarding new labeling, including use of
the trademark. We are actively searching for a source of supply for the DSHEA product. We expect
both the price and volume of the Nicomide
®
DSHEA labeled product to be considerably less
than historic Nicomide
®
levels.
On August 12, 2008, we entered into a worldwide non-exclusive patent License Agreement to our
patent covering Nicomide
®
with River's Edge Pharmaceuticals, LLC and an amendment to our
Settlement Agreement with River's Edge. The amendment to the Settlement Agreement allows River's
Edge to manufacture and market a prescription product that could be substitutable for
Nicomide
®
pursuant to the terms of the License Agreement and changes certain payment
obligations of River's Edge for sales of its substitutable product. In consideration for granting
the license, we will be paid a share of the net revenues, as defined in the License Agreement, of
River's Edge's licensed product sales under the License Agreement. At the same time, we are also
considering the possible sale of the product and related patent.
Because Of The Nature Of Our Business, The Loss Of Key Members Of Our Management Team Could
Delay Achievement Of Our Goals.
We are a small company with only 88 employees, including 4 part-time employees, as of September 30,
2008. We are highly dependent on several key officer/employees with specialized scientific and
technical skills without whom our business, financial condition and results of operations would
suffer, especially in the photodynamic therapy portion of our business. The photodynamic therapy
industry is still quite small and the number of experts is limited. The loss of these key employees
could cause significant delays in achievement of our business and research goals since very few
people with their expertise could be hired. Our growth and future success will depend, in large
part, on the continued contributions of these key
individuals as well as our ability to motivate and retain other qualified personnel in our
specialty drug and light device areas.
Collaborations With Outside Scientists May Be Subject To Restriction And Change.
We work with scientific and clinical advisors and collaborators at academic and other institutions
that assist us in our research and development efforts. These scientists and advisors are not our
employees and may have other commitments that limit their availability to us. Although our advisors
and collaborators generally agree not to do competing work, if a conflict of interest between their
work for us and their work for another entity arises, we may lose their services. In addition,
although our advisors and collaborators sign agreements not to disclose our confidential
information, it is possible that valuable proprietary knowledge may become publicly known through
them.
12
Table of Contents
Risks Related To Our Industry
Product Liability And Other Claims Against Us May Reduce Demand For Our Products Or Result In
Damages.
We Are Subject To Risk From Potential Product Liability Lawsuits Which Could Negatively Affect
Our Business.
The development, manufacture and sale of medical products expose us to product liability claims
related to the use or misuse of our products. Product liability claims can be expensive to defend
and may result in significant judgments against us. A successful claim in excess of our insurance
coverage could materially harm our business, financial condition and results of operations.
Additionally, we cannot guarantee that continued product liability insurance coverage will be
available in the future at acceptable costs. If the cost is too high, we may have to self-insure.
Our Business Involves Environmental Risks And We May Incur Significant Costs Complying With
Environmental Laws And Regulations.
We have used various hazardous materials, such as mercury in fluorescent tubes in our research and
development activities. We are subject to federal, state and local laws and regulations which
govern the use, manufacture, storage, handling and disposal of hazardous materials and specific
waste products. Now that we have established our own production line for the manufacture of the
Kerastick
®
, we are subject to additional environmental laws and regulations. We believe
that we are in compliance in all material respects with currently applicable environmental laws and
regulations. However, we cannot guarantee that we will not incur significant costs to comply with
environmental laws and regulations in the future. We also cannot guarantee that current or future
environmental laws or regulations will not materially adversely affect our operations, business or
assets. In addition, although we believe our safety procedures for handling and disposing of these
materials comply with federal, state and local laws and regulations, we cannot completely eliminate
the risk of accidental contamination or injury from these materials. In the event of such an
accident, we could be held liable for any resulting damages, and this liability could exceed our
resources.
We May Not Be Able To Compete Against Traditional Treatment Methods Or Keep Up With Rapid
Changes In The Biotechnology And Pharmaceutical Industries That Could Make Some Or All Of Our
Products Non-Competitive Or Obsolete.
Competing Products And Technologies Based On Traditional Treatment Methods May Make Some Or
All Of Our Programs Or Potential Products Noncompetitive Or Obsolete.
Well-known pharmaceutical, biotechnology and medical device companies are marketing
well-established therapies for the treatment of many of the same conditions that we are seeking to
treat, including AKs, acne and rosacea. Doctors may prefer to use familiar methods, rather than
trying our products. Reimbursement issues affect the economic competitiveness of our products as
compared to other more traditional therapies.
Many companies are also seeking to develop new products and technologies, and receiving approval
for medical conditions for which we are developing treatments. Our industry is subject to rapid,
unpredictable and significant technological change. Competition is intense. Our competitors may
succeed in developing products that are safer or more effective than ours. Many of our competitors
have substantially greater financial, technical and marketing resources than we have. In addition,
several of these companies have
13
Table of Contents
significantly greater experience than we do in developing products,
conducting preclinical and clinical testing and obtaining regulatory approvals to market products
for health care.
We cannot guarantee that new drugs or future developments in drug technologies will not have a
material adverse effect on our business. Increased competition could result in:
•
price reductions,
•
lower levels of third-party reimbursements,
•
failure to achieve market acceptance, and
•
loss of market share, any of which could adversely affect our business. Further, we cannot
give any assurance that developments by our competitors or future competitors will
not render our technology obsolete.
On May 30, 2006, we entered into a patent license agreement with PhotoCure ASA whereby DUSA granted
a non-exclusive license to PhotoCure under the patents DUSA licenses from PARTEQ, for esters of
ALA. Furthermore, DUSA granted a non-exclusive license to PhotoCure for its existing formulations
of its Hexvix
®
and Metvix
®
(known in the United States as
Metvixia
®
) products for any DUSA patents that may issue or be licensed by DUSA in the
future. PhotoCure received FDA approval to market Metvixia for treatment of AKs in July 2004 and it
would be directly competitive with our Levulan
®
Kerastick
®
product should
PhotoCure decide to begin marketing this product. While we are entitled to royalties from PhotoCure
on its net sales of Metvixia, this product, which will be marketed in the U.S. by a large
dermatology company which may start to market Metvixia at any time, would adversely affect our
ability to maintain or increase our market.
We Have Learned That Some Compounding Pharmacies Are Producing A Form Of Aminolevulinic Acid
HCl And Are Marketing It To The Medical Community.
We are aware that there are compounding pharmacies that market compounded versions of
aminolevulinic acid HCl as an alternative to our Levulan
®
product. Since December 2004,
we have filed
lawsuits against compounding pharmacies, chemical suppliers and a light device company and several
physicians alleging violations of the Lanham Act for false advertising and trademark infringement,
and of United States patent law. All of the lawsuits have been settled or ended favorably to us.
While we believe that certain actions of compounding pharmacies and others go beyond the activities
which are permitted under the Food, Drug and Cosmetic Act and have advised the FDA and local health
authorities of our concerns, we cannot be certain that our legal strategy will be successful in
curbing the practices of these companies or that regulatory authorities will intervene to stop
their activities. In addition, there may be other compounding pharmacies which are following FDA
guidelines, or others conducting illegal activities of which we are not aware, which may be
negatively impacting our sales revenues.
Our Competitors In The Biotechnology And Pharmaceutical Industries May Have Better Products,
Manufacturing Capabilities Or Marketing Expertise.
We are aware of several companies commercializing and/or conducting research with ALA or
ALA-related compounds, including: medac GmbH and photonamic GmbH & Co. KG (Germany); Biofrontera,
PhotoTherapeutics, Inc. (U.K.) and PhotoCure ASA (Norway) which entered into a marketing agreement
with Galderma S.A. for countries outside of Nordic countries for certain dermatology indications.
We also anticipate that we will face increased competition as the scientific development of PDT and
PD advances and new companies enter our markets. Several companies are developing PDT agents other
than
14
Table of Contents
Levulan
®
. These include: QLT Inc. (Canada); Axcan Pharma Inc. (U.S.); Miravant,
Inc. (U.S.); and Pharmacyclics, Inc. (U.S.). There are many pharmaceutical companies that compete
with us in the field of dermatology, particularly in the acne and rosacea markets.
PhotoCure has received marketing approval of its ALA precursor (ALA methyl-ester) compound for PDT
treatment of AKs and basal cell carcinoma in the European Union, New Zealand, Australia and
countries in Scandinavia. PhotoCure's marketing partner, a large dermatology company, could begin
to market its product in direct competition with Levulan
®
in the U.S., at any time,
under the terms of our patent license agreement and we may lose market share.
Axcan Pharma Inc. has received FDA approval for the use of its product, PHOTOFRIN
®
, for
PDT in the treatment of high grade dysplasia associated with Barrett's Esophagus. Axcan is the
first company to market a PDT therapy for this indication for which we designed our proprietary
sheath device and have conducted pilot clinical trials.
We expect that our principal methods of competition with other PDT products will be based upon such
factors as:
•
the ease of administration of our method of PDT,
•
the degree of generalized skin sensitivity to light,
•
the number of required doses,
•
the selectivity of our drug for the target lesion or tissue of interest, and
•
the type and cost of our light systems.
Our primary competition in the acne and rosacea markets includes oral and topical antibiotics,
other topical prescription and over-the-counter products, as well as various laser and non-laser
light treatments. The market is highly competitive and other large and small companies have more
experience than we do which could make it difficult for us to penetrate the market. We are also
aware of new products that were
launched recently which will compete with Nicomide
®
which could negatively impact our
market share. The entry of new products from time to time would likely cause us to lose market
share.
Risks Related To Our Stock
If Outstanding Options, Warrants And Rights Are Converted, The Value Of Those Shares Of Common
Stock Outstanding Just Prior To The Conversion Will Be Diluted.
As of October 31, 2008, there were outstanding options and warrants to purchase 4,419,000 shares of
common stock, with exercise prices ranging from $1.60 to $31.00 per share, and from $2.85 to $6.00
per share, respectively. In addition, there are 102,000 shares of restricted stock that have not
yet vested. The holders of the options and warrants have the opportunity to profit if the market
price for the common stock exceeds the exercise price of their respective securities, without
assuming the risk of ownership. The holders are likely to exercise their securities when we would
probably be able to raise capital from the public on terms more favorable than those provided in
these securities.
Our Results Of Operations And General Market Conditions For Specialty Pharmaceutical And
Biotechnology Stocks Could Result In Sudden Changes In The Market Value Of Our Stock.
The price of our common stock has been highly volatile. These fluctuations create a greater risk of
capital
15
Table of Contents
losses for our shareholders as compared to less volatile stocks. From January 1, 2007 to
October 31, 2008, the price of our stock has ranged from a low of $0.87 to a high of $5.00. Factors
that contributed to the volatility of our stock during this period included:
•
quarterly levels of product sales;
•
clinical trial results;
•
general market conditions;
•
patent litigation;
•
increased marketing activities or press releases; and
•
changes in third-party payor reimbursement for our therapy.
The significant general market volatility in similar stage pharmaceutical and biotechnology
companies made the market price of our common stock even more volatile.
Significant Fluctuations In Orders For Our Products, On A Monthly And Quarterly Basis, Are
Common Based On External Factors And Sales Promotion Activities. These Fluctuations Could Increase
The Volatility Of Our Stock Price.
The price of our common stock may be affected by the amount of quarterly shipments of our
products to end-users. Since our PDT products are still in the early stages of adoption, and sales
volumes are still low, a number of factors could affect product sales levels and growth rates in
any period. These could include the level of penetration of new markets outside of the United
States, the timing of medical conferences, sales promotion activities, and large volume purchases
by our higher usage customers. In
addition, seasonal fluctuations in the number of patients seeking treatment at various times
during the year could impact sales volumes. These factors could, in turn, affect the volatility of
our stock price.
Our Common Stock May Not Continue To Trade On The Nasdaq Global Market, Which Could Reduce The
Value Of Your Investment And Make Your Shares More Difficult To Sell.
In order for our common stock to trade on the Nasdaq Global Market, we must continue to meet
the listing standards of that market. Among other things, those standards require that our common
stock maintain a minimum closing bid price of at least $1.00 per share. Recently, our common stock
has traded at prices near and below $1.00. On October 16, 2008, Nasdaq suspended the enforcement
of rules requiring a minimum $1.00 closing bid price. The suspension will remain in effect through
January 16, 2009. If we do not continue to meet Nasdaq's applicable minimum listing standards,
Nasdaq could delist us from the Nasdaq Global Market. If our common stock is delisted from the
Nasdaq Global Market, we could seek to have our common stock listed on the Nasdaq Capital Market or
other Nasdaq markets. However, delisting of our common stock from the Nasdaq Global Market could
hinder your ability to sell, or obtain an accurate quotation for the price of, your shares of our
common stock. Delisting could also adversely affect the perception among investors of DUSA and its
prospects, which could lead to further declines in the market price of our common stock. Delisting
would also make it more difficult and expensive for us to raise capital. In addition, delisting
might subject us to an Securities and Exchange Commission rule that could adversely affect the
ability of broker-dealers to sell or make a market in our common stock, thus hindering your ability
to sell your shares.
16
Table of Contents
Effecting A Change Of Control Of DUSA Would Be Difficult, Which May Discourage Offers For
Shares Of Our Common Stock.
Our certificate of incorporation authorizes the board of directors to issue up to 100,000,000
shares of stock, 40,000,000 of which are common stock. The board of directors has the authority to
determine the price, rights, preferences and privileges, including voting rights, of the remaining
60,000,000 shares without any further vote or action by the shareholders. The rights of the holders
of our common stock will be subject to, and may be adversely affected by, the rights of the holders
of any preferred stock that may be issued in the future.
On September 27, 2002, we adopted a shareholder rights plan at a special meeting of DUSA's
board of directors. The rights plan could discourage, delay or prevent a person or group from
acquiring 15% or more of our common stock, thereby limiting, perhaps, the ability of our
shareholders to benefit from such a transaction.
The rights plan provides for the distribution of one right as a dividend for each outstanding
share of our common stock to holders of record as of October 10, 2002. Each right entitles the
registered holder to purchase one one-thousandths of a share of preferred stock at an exercise
price of $37.00 per right. The rights will be exercisable subsequent to the date that a person or
group either has acquired, obtained the right to acquire, or commences or discloses an intention to
commence a tender offer to acquire, 15% or more of our outstanding common stock or if a person or
group is declared an "Adverse Person", as such term is defined in the rights plan. The rights may
be redeemed by DUSA at a redemption price of one one-hundredth of a cent per right until ten days
following the date the person or group acquires, or discloses an intention to acquire, 15% or more,
as the case may be, of DUSA, or until such later date as may be determined by the our board of
directors.
Under the rights plan, if a person or group acquires the threshold amount of common stock, all
holders of rights (other than the acquiring person or group) may, upon payment of the purchase
price then in effect, purchase shares of common stock of DUSA having a value of twice the purchase
price. In the event that we are involved in a merger or other similar transaction where DUSA is not
the surviving corporation, all holders of rights (other than the acquiring person or group) shall
be entitled, upon payment of the purchase price then in effect, to purchase common stock of the
surviving corporation having a value of twice the purchase price. The rights will expire on October
10, 2012, unless previously redeemed. Our board of directors has also adopted certain amendments to
DUSA's certificate of incorporation consistent with the terms of the rights plan.
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
This prospectus contains various "forward-looking statements" within the meaning of
Section 27A of the Securities Act of 1933 and 21E of the Securities Exchange Act of 1934 which
represent our expectations or beliefs concerning future events, including, but not limited to
management's statements regarding our strategies and core objectives for 2008, the results of our
integration of Sirius Laboratories, Inc. with our business and matters relating thereto, our
expectations concerning the introduction of generic substitutes for Nicomide
®
and such
products' impact on sales of Nicomide
®
, our use of estimates and assumptions in the
preparation of our financial statements and policies and impact on us of the adoption of certain
accounting standards, the impact of compounding pharmacies, beliefs regarding estimates,
management's beliefs regarding the unique nature of Levulan
®
and its use and potential
use, expectations regarding the timing of results of clinical trials, future development of
Levulan
®
and our other products and other potential indications, statements regarding
the manufacture of Nicomide
®
in the future, beliefs concerning manufacture of the
BLU-U
®
, intention to pursue licensing,
17
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marketing, co-promotion, collaboration or
acquisition opportunities, status of clinical programs for all other indications and beliefs
regarding potential efficacy and marketing, our beliefs regarding the safety, simplicity,
reliability and cost-effectiveness of certain light sources, our expectations regarding other
product launches in other countries, expectations regarding additional market expansion,
expectations for commercialization of Levulan
®
Kerastick
®
in Asian countries
and a distribution agreement for Japan, expectations regarding the marketing and distribution of
Levulan
®
Kerastick
®
by Daewoong Pharmaceutical Co., Ltd. and Stiefel
Laboratories, Inc., beliefs regarding the clinical benefit of Levulan
®
PDT for acne and
other indications, beliefs regarding the suitability of clinical data, expectations regarding the
confidentiality of our proprietary information, statements of our intentions to seek additional
U.S. and foreign regulatory approvals, and to market and increase sales outside the U.S., beliefs
regarding regulatory classifications, filings, timelines, off-label use and environmental
compliance, beliefs concerning patent disputes and litigation, intentions to defend our patent
estate, the impact of a third-party's regulatory compliance and fulfillment of contractual
obligations, and our anticipation that third parties will launch products upon receipt of
regulatory approval, expectations of increases or decreases in the prices we charge for our
products, our beliefs regarding the size of the market for our products and our product candidates,
expectations of increases or decreases in cost of product sales, expected use of cash resources,
requirements of cash resources for our future liquidity, beliefs regarding investments and economic
conditions, expectations regarding outstanding options and warrants and our dividend policy,
anticipation of increases or decreases in personnel, beliefs regarding the effect of reimbursement
policies on revenues and acceptance of our therapies, expectations for future strategic
opportunities and research and development programs and expenses, expectations for continuing
operating losses and competition, including from Metvixia, expectations regarding the adequacy and
availability of insurance, expectations regarding general and administrative costs, expectations
regarding increased sales and marketing costs and research and development costs, levels of
interest income and our capital resource needs, intention to raise additional funds to meet capital
requirements and the potential
dilution and impact on our business, potential for additional inspection and testing of our
manufacturing facilities or additional FDA actions, beliefs regarding the adequacy of our inventory
of Kerastick
®
and BLU-U
®
units and of Nicomide
®
, our
manufacturing capabilities and the impact of inventories on revenues, beliefs regarding interest
rate risks to our investments and effects of inflation, beliefs regarding the impact of any current
or future legal proceedings, dependence on key personnel, and beliefs concerning product liability
insurance, the enforceability of our patents, the impact of generic products, our beliefs regarding
our sales and marketing efforts, competition with other companies, the adoption of our products,
and the outcome of such efforts, our beliefs regarding our sales and marketing efforts, our beliefs
regarding the use of our products and technologies by third parties, our beliefs regarding our
compliance with applicable laws, rules and regulations, our beliefs regarding available
reimbursement for our products, our beliefs regarding the current and future clinical development
and testing of our potential products and technologies and the costs thereof, the volatility of our
stock price, the impact of our rights plan, the possibility that the holders of options and
warrants will purchase our common stock by exercising these securities, timing and future
development plans with respect to the NCI clinical trials, beliefs regarding legal strategies or
regulatory authorities' actions to stop compounding pharmacies, expectations of price and volume of
Nicomide
®
as a DSHEA-labeled product, expectations related to the change in revenues of
our PDT and Non-PDT products, expectations regarding the payment of milestones to former Sirius
shareholders, intention to sublease the Toronto offices, plans to re-launch Nicomide
®
under DSHEA compliant labeling, beliefs regarding market share, beliefs regarding profitability,
beliefs regarding the change in growth in our PDT Drug and Device Products segment, expectations
regarding the BLU-U
®
evaluation program and purchases of our products resulting
therefrom, expectations regarding the development time-table for a DSHEA version of
Nicomide
®
and beliefs regarding the quantities of re-labeled Nicomide
®
. These
forward-looking statements are further qualified by important factors that could cause actual
results to differ materially from those in the forward-looking statements. These factors include,
without limitation, changing market and regulatory conditions, actual clinical results of our
trials, the impact of competitive products and pricing, the timely development, FDA and
18
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foreign
regulatory approval, and market acceptance of our products, environmental risks relating to our
products, reliance on third-parties for the production, manufacture, sales and marketing of our
products, the availability of products for acquisition and/or license on terms agreeable to us,
sufficient sources of funds, the securities regulatory process, the maintenance of our patent
portfolio and ability to obtain competitive levels of reimbursement by third-party payors, none of
which can be assured. Results actually achieved may differ materially from expected results
included in these statements as a result of these or other factors.
You should read and interpret any forward-looking statements together with the following
documents:
•
our most recent Annual Report on Form 10-K;
•
our most recent Quarterly Report on Form 10-Q;
•
our most recent Current Reports on Form 8-K;
•
the risk factors contained in this prospectus under the caption "Risk Factors"; and
•
our other filings with the SEC.
Any forward-looking statement speaks only as of the date on which that statement is made. We
will not update any forward-looking statement to reflect events or circumstances that occur
after the date on which such statement is made.
USE OF PROCEEDS
DUSA will not receive any proceeds from the sale of shares of common stock which may be sold
pursuant to this prospectus for the respective accounts of the selling securityholders. All such
proceeds, net of brokerage commissions, if any, will be received by the selling securityholders.
See the sections titled "Selling Securityholders" and "Plan of Distribution."
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SELLING SECURITYHOLDERS
This prospectus relates to shares of common stock to be offered by the selling
securityholders. The table below, including the footnotes, presents information regarding the
selling securityholders and the shares of our common stock that the selling securityholders may
offer and sell from time to time under this prospectus. The inclusion in the table of the
individuals named therein shall not be deemed to be an admission that any such individuals are
"affiliates" of DUSA.
The following is a list, as of November 7, 2008, of the selling securityholders and the number
of shares beneficially owned by each selling securityholder. The number of shares in the column
"Number of Shares to be Offered" represents all of the shares that a selling securityholder may
offer under this prospectus. The table and footnotes assume that the selling securityholders will
sell all of such shares. However, because the selling securityholders may sell all or some of
their shares under this prospectus from time to time, or in another permitted manner, we cannot
assure you as to the actual number of shares that will be sold by the selling securityholders or
that will be held by the selling securityholders after completion of any sales. We do not know how
long the selling securityholders will hold the shares before selling them. Information concerning
the selling securityholders may change from time to time and changed information will be presented
in a supplement to this prospectus if and when necessary and required. Beneficial ownership is
determined in accordance with Rule 13d-3(d) promulgated by the SEC under the Securities Exchange
Act of 1934, as amended.
Number of
Number of
Number of
Percentage of
Shares
Shares to be
Shares Owned
Shares Owned
Name
Owned
(1)
Offered
(1) (2)
After Offering
After Offering
John H. Abeles (3)
124,500
124,500
0
*
David M. Bartash (4)
100,500
100,500
0
*
Mark Carota (5)
111,875
111,875
0
*
Jay M. Haft (6)
139,500
139,500
0
*
Richard C. Lufkin (7)
117,100
117,100
0
*
Richard C. Christopher (8)
83,250
83,250
0
*
Robert F. Doman (9)
130,000
130,000
0
*
Scott L. Lundahl (10)
127,707
127,707
0
*
Stuart L. Marcus (11)
178,125
178,125
0
*
Magnus Moliteus (12)
65,000
65,000
0
*
William F. O'Dell (13)
31,250
31,250
0
*
D. Geoffrey Shulman (14)
1,113,918
1,113,918
0
*
Michael J. Todisco (15)
29,500
29,500
0
*
*
Less than one percent.
(1)
Represents shares beneficially owned by the named individual which have been granted under
the 1991 Incentive Stock Option Plan of Deprenyl USA, Inc. (Deprenyl USA, Inc. is the former
name of DUSA Pharmaceuticals, Inc.), the DUSA Pharmaceuticals, Inc. 1994 Restricted Stock
Option Plan, the DUSA Pharmaceuticals, Inc. 1996 Omnibus Plan, as amended, the DUSA
Pharmaceuticals, Inc. 2006 Equity Compensation Plan, as amended, individual stock option
agreements with D. Geoffrey Shulman, Richard C. Lufkin and Scott Lundahl and a Class B Warrant
Agreement with D. Geoffrey Shulman, including shares that such individual has the right to
acquire upon exercise of options or warrants vesting within sixty (60) days of November 7,
2008, but does not include shares underlying options and warrants which vest more than sixty
(60) days from such date. Also includes all shares previously issued to such individuals
after the
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exercise of options or warrants granted under the listed plans and shares of common stock
otherwise acquired, or beneficially owned, by such named individual. Unless otherwise
noted, all persons referred to above have sole voting and sole investment power.
(2)
Does not constitute a commitment to sell any or all of the stated number of shares of common
stock. The number of shares offered shall be determined from time to time by each selling
securityholder at their sole discretion.
(3)
Dr. Abeles has served as a director since August 1994. Beneficial ownership includes 34,500
shares of common stock and 85,000 shares of common stock underlying stock options granted to
Dr. Abeles which will have vested within sixty (60) days after November 7, 2008. Dr. Abeles
shares investment and voting power with regard to the 34,500 shares of common stock.
(4)
Mr. Bartash has served as a director since November 2001. Beneficial ownership includes
15,500 shares of common stock and 85,000 shares of common stock underlying stock options
granted to Mr. Bartash which will have vested within sixty (60) days after November 7, 2008.
(5)
Mr. Carota joined us in October 1999 and was elected as our Vice President, Operations in
February 2000. Beneficial ownership includes 111,875 shares of common stock underlying stock
options granted to Mr. Carota which will have vested within sixty (60) days after November 7,
2008. The number of shares owned does not include 44,000 shares of common stock underlying
stock options and 11,000 shares of common stock granted to Mr. Carota which will vest more
than sixty (60) days after November 7, 2008.
(6)
Mr. Haft has served as a director since September 1996. He served as Chairman of the Board
and Lead Director from June 2003 to January 3, 2005. Since January 3, 2005, he has served as
Vice Chairman of the Board and Lead Director. Beneficial ownership includes 34,500 shares of
common stock and 105,000 shares of common stock underlying stock options granted to Mr. Haft
which will have vested within sixty (60) days after November 7, 2008. Under Rule 13d-3 of the
Securities and Exchange Act of 1934, as amended, Mr. Haft disclaims, but may be deemed to be
the beneficial owner of, the 34,500 shares of common stock held indirectly by Mr. Haft's
spouse.
(7)
Mr. Lufkin has served as a director since January 1992. Beneficial ownership includes 12,100
shares of common stock and 105,000 shares of common stock underlying stock options granted to
Mr. Lufkin which will have vested within sixty (60) days after November 7, 2008.
(8)
Mr. Christopher joined us in December 2000 and was appointed to the position of Vice
President, Finance and Chief Financial Officer effective February 16, 2005. Before that, Mr.
Christopher served as our Vice President, Financial Planning and Business Analysis and had
also served as our Director, Financial Analysis. Beneficial ownership includes 5,000 shares
of common stock and 78,250 shares of common stock underlying stock options granted to Mr.
Christopher which will have vested within sixty (60) days after November 7, 2008. The number
of shares owned does not include 50,750 shares of common stock underlying stock options and
13,000 shares of common stock granted to Mr. Christopher which will vest more than sixty (60)
days after November 7, 2008.
(9)
Mr. Doman joined us as our President and Chief Operating Officer on January 3, 2005 and was
promoted to President and Chief Executive Officer in June 2007. Beneficial ownership includes
15,000 shares of common stock and 115,000 shares of common stock underlying options granted to
Mr. Doman which will have vested within sixty (60) days after November 7, 2008. The
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number of shares owned does not include 123,500 shares of common stock underlying stock
options and 19,000 shares of common stock which will vest more than sixty (60) days after
November 7, 2008.
(10)
Mr. Lundahl joined us in May 1998 and was elected as our Vice President, Regulatory Affairs
and Intellectual Property in June 2003. Before that, Mr. Lundahl was our Vice President,
Technology and Device Development from June 1999 until June 2003. Beneficial ownership
includes 5,207 shares of common stock and 122,500 shares of common stock underlying stock
options granted to Mr. Lundahl which will have vested within sixty (60) days after November 7,
2008. The number of shares owned does not include 44,000 shares of common stock underlying
stock options and 11,000 shares of common stock granted to Mr. Lundahl which will vest more
than sixty (60) days after November 7, 2008.
(11)
Dr. Marcus was elected as our Vice President, Scientific Affairs and Chief Medical Officer in
October 1993. Beneficial ownership includes 178,125 shares of common stock underlying stock
options granted to Dr. Marcus which will have vested within sixty (60) days after November 7,
2008. The number of shares owned does not include 48,250 shares of common stock underlying
stock options and 13,000 shares of common stock granted to Dr. Marcus which will vest more
than sixty (60) days after November 7, 2008.
(12)
Mr. Moliteus has served as a director since August 2003. Beneficial ownership includes
50,000 shares of common stock underlying stock options granted to Mr. Moliteus which will have
vested within sixty (60) days after November 7, 2008.
(13)
Mr. O'Dell joined us as our Executive Vice President Sales and Marketing on April 4, 2006.
Beneficial ownership includes 31,250 shares of common stock underlying stock options granted
to Mr. O'Dell which will have vested within sixty (60) days after November 7, 2008. This
number does not include 63,250 shares of common stock underlying stock options and 13,000
shares of common stock which will vest more than sixty (60) days after November 7, 2008.
(14)
Dr. Shulman currently serves as the Chairman of the Board and Chief Strategic Officer of
DUSA. Dr. Shulman served as our Chief Executive Officer from our inception in 1991 until June
2007 and as our President from 1991 to 2004. Dr. Shulman served as our Chairman from 1991
through 2003 and from January 2005 to June 2008. Beneficial ownership includes 87,668 shares
of common stock, 776,250 shares of common stock underlying stock options and 250,000 shares of
common stock underlying a warrant granted to Dr. Shulman which will have vested within sixty
(60) days after November 7, 2008. The number of shares owned does not include 120,250 shares
of common stock underlying stock options and 11,000 shares of common stock granted to Dr.
Shulman which will vest more than sixty (60) days after November 7, 2008.
(15)
Mr. Todisco has served as Vice President, Controller since September 2006. Beneficial
ownership includes 29,500 shares of common stock underlying stock options granted to Mr.
Todisco which will have vested within sixty (60) days after November 7, 2008. The number of
shares owned does not include 46,000 shares of common stock underlying stock options and
11,000 shares of common stock granted to Mr. Todisco which will vest more than sixty (60) days
after November 7, 2008.
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PLAN OF DISTRIBUTION
Shares offered hereby may be sold from time to time directly by or on behalf of the selling
securityholders in one or more transactions on the Nasdaq Global Market or on any stock exchange on
which the common stock may be listed at the time of sale, in privately negotiated transactions, or
through a combination of such methods, at market prices prevailing at the time of sale, at prices
related to such prevailing market prices, at fixed prices (which may be changed) or at negotiated
prices. The selling securityholders may sell shares through one or more agents, brokers or dealers
or directly to purchasers. Such brokers or dealers may receive compensation in the form of
commissions, discounts or concessions from the selling securityholders and/or purchasers of the
shares or both (which compensation as to a particular broker or dealer may be in excess of
customary commissions).
In connection with such sales, the selling securityholders and any participating broker or
dealer may be deemed to be "underwriters" within the meaning of the Securities Act, and any
commissions they receive and the proceeds of any sale of shares may be deemed to be underwriting
discounts and commissions under the Securities Act.
In order to comply with certain state securities laws, if applicable, the shares may be sold
in such jurisdictions only through registered or licensed brokers or dealers. In certain states,
the shares may not be sold unless the shares have been registered or qualified for sale in such
state or an exemption from regulation or qualification is available and is complied with. Sales of
shares must also be made by the selling securityholders in compliance with all other applicable
state securities laws and regulations.
In addition to any shares sold hereunder, selling securityholders may, at the same time, sell
any shares of common stock owned by them in compliance with all of the requirements of Rule 144,
regardless of whether such shares are covered by this reoffer prospectus. There can be no
assurance that any of the selling securityholders will sell any or all of the shares offered by
them hereby.
DUSA will pay all expenses of the registration of the shares. DUSA has notified certain
selling securityholders of the need to deliver a copy of this reoffer prospectus in connection with
any sale of the shares.
LEGAL MATTERS
The validity of the shares being offered hereby has been passed upon for DUSA by Reed Smith
LLP. Nanette W. Mantell, Esq., a partner of Reed Smith LLP, serves as DUSA's Secretary, which is
an officer position.
EXPERTS
The consolidated financial statements, incorporated in this prospectus by reference from DUSA
Pharmaceuticals, Inc.'s Annual Report on Form 10-K and the effectiveness of DUSA Pharmaceuticals,
Inc.'s internal control over financial reporting have been audited by Deloitte & Touche LLP, an
independent registered public accounting firm, as stated in their reports, which are incorporated
herein by reference. Such financial statements have been so incorporated in reliance upon the
reports of such firm given upon their authority as experts in accounting and auditing.
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WHERE YOU CAN FIND MORE INFORMATION
We have filed with the SEC a registration statement on Form S-8 under the Securities Act with
respect to the shares of common stock offered hereby. This prospectus does not contain all of the
information set forth in the registration statement and the exhibits thereto. You can find
additional information regarding us and the common stock in the registration statement and the
exhibits. Statements contained in this prospectus regarding the contents of any contract or any
other document to which reference is made are not necessarily complete, and, in each instance where
a copy of such contract or other document has been filed as an exhibit to the registration
statement, reference is made to the copy so filed, each such statement being qualified in all
respects by such reference.
We are subject to the informational requirements of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), and, in accordance therewith, file reports and other information with
the SEC. The registration statement, including exhibits, and the reports and other information
filed by us can be inspected without charge at the public reference facilities maintained by the
SEC at the SEC's public reference room at 100 F Street, N.E., Washington, D.C. 20549. Copies of
such material can be obtained from such offices at fees prescribed by the SEC. The public may
obtain information on the operation of the Public Reference room by calling the SEC at
1-800-SEC-0330. The SEC maintains a World Wide Web site that contains reports, proxy and
information statements and other information regarding registrants that file electronically with
the SEC. The address of this site is http://www.sec.gov. In addition, you can also access
documents we file with the SEC at our website, http://www.dusapharma.com, which is not a part of
this prospectus and is not incorporated herein by reference.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents, which have been filed by us with the SEC pursuant to the Exchange
Act, are incorporated by reference in this prospectus as of their respective dates:
(a)
Our Annual Report on Form 10-K for the year ended December 31, 2007;
(b)
Our Quarterly Report on Form 10-Q for the quarter ended March 31, 2008;
(c)
Our Quarterly Report on Form 10-Q for the quarter ended June 30, 2008;
(d)
Our Quarterly Report on Form 10-Q for the quarter ended September 30, 2008;
(e)
All other reports filed pursuant to Section 13 or 15(d) of the Exchange Act
since December 31, 2007; and
(f)
The description of DUSA's common stock contained in its registration statement
on Form 8-A which was filed on January 3, 1992 and amended on Form 8-A12G filed on
October 24, 1997, and in DUSA's Quarterly Report on Form 10-Q which was filed on
November 12, 1997.
All documents filed by us pursuant to Section 13(a), 13(c), 14 and 15(d) of the Exchange Act
after the date hereof and prior to the termination of the offering, other than information
furnished pursuant to Item 2.02 or Item 7.01 of Form 8-K or as otherwise permitted by SEC rules and
regulations, shall be deemed to be incorporated by reference into this prospectus and to be a part
hereof from the date of filing of such documents. Any statement contained in a document
incorporated or deemed to be incorporated
24
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herein by reference shall be deemed to be modified or superseded for purposes of this
prospectus to the extent that a statement contained herein or in any other subsequently filed
document which also is or is deemed to be incorporated by reference herein modifies or supersedes
such statement.
We will provide without charge to any person, including any beneficial owner, to whom this
prospectus is delivered, upon written or oral request of such person, a copy of each document
incorporated by reference in the prospectus (other than exhibits to such documents unless such
exhibits are specifically incorporated by reference into this prospectus). We will provide such
copies at no cost, upon written or oral request, by writing or telephoning us at:
DUSA Pharmaceuticals, Inc.
25 Upton Drive
Wilmington, Massachusetts 01887
Attention: Mr. Richard Christopher
Telephone: (978) 657-7500
Attention: Mr. Richard Christopher
E-mail to: ChristopherR@DusaPharma.com
Our World Wide Web site is located at www.dusapharma.com. Information on the Web site is not
incorporated by reference into this prospectus.
25
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2,352,225 Shares
DUSA
PHARMACEUTICALS, INC.
Common Stock
PROSPECTUS
November 18, 2008
Table of Contents
PART II
INFORMATION REQUIRED TO BE IN THE REGISTRATION STATEMENT
ITEM 3. Incorporation of Documents by Reference
The following documents, which have been filed by us with the SEC pursuant to the Exchange
Act, are incorporated by reference in this registration statement as of their respective dates:
(a)
Our Annual Report on Form 10-K for the year ended December 31, 2007;
(b)
Our Quarterly Report on Form 10-Q for the quarter ended March 31, 2008;
(c)
Our Quarterly Report on Form 10-Q for the quarter ended June 30, 2008;
(d)
Our Quarterly Report on Form 10-Q for the quarter ended September 30, 2008;
(e)
All other reports filed pursuant to Section 13 or 15(d) of the Exchange Act
since December 31, 2007; and
(f)
The description of DUSA's common stock contained in its registration statement
on Form 8-A which was filed on January 3, 1992 and amended on Form 8-A12G filed on
October 24, 1997, and in DUSA's Quarterly Report on Form 10-Q which was filed on
November 12, 1997.
All documents filed by us pursuant to Section 13(a), 13(c), 14 and 15(d) of the Exchange Act
after the date hereof and prior to the termination of the offering, other than information
furnished pursuant to Item 2.02 or Item 7.01 of Form 8-K or as otherwise permitted by SEC rules and
regulations, shall be deemed to be incorporated by reference into this prospectus and to be a part
hereof from the date of filing of such documents. Any statement contained in a document
incorporated or deemed to be incorporated herein by reference shall be deemed to be modified or
superseded for purposes of this prospectus to the extent that a statement contained herein or in
any other subsequently filed document which also is or is deemed to be incorporated by reference
herein modifies or supersedes such statement.
ITEM 4. Description of Securities
Not applicable.
ITEM 5. Interests of Named Experts and Counsel
Not applicable.
ITEM 6. Indemnification of Directors and Officers
Article 5 of the Company's Certificate of Incorporation, as amended, and New Jersey Business
Corporation Act, N.J.S.A. 14A:2-7 provide as follows:
Any director and officer of the Corporation shall not be personally liable to the Corporation or
its shareholders for damages for breach of any duty owed to the Corporation or its shareholders,
except that this provision shall not relieve a director or officer from liability for any breach of
duty based upon an act or omission (a) in breach of such person's duty of loyalty to the
Corporation or its shareholders; (b) not in good faith or involving a knowing violation of law; or
(c) resulting in receipt by such person of an
II-1
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improper personal benefit.
The Company's By-laws, as amended, pursuant to the New Jersey Business Corporation Act, N.J.S.A.
14A:3-5, provide as follows:
ARTICLE IV
INDEMNIFICATION
Section 1.
Actions by Others
. The Corporation (1) shall 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) by reason of the fact that he is or was a director,
officer or trustee of the Corporation or of any constituent corporation absorbed by the Corporation
in a consolidation or merger and (2) except as otherwise required by Section 3 of this Article, 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) by reason of the fact
that he (a) is or was an employee or agent or the legal representative of a director, officer,
trustee, employee or agent of the Corporation or of any absorbed constituent corporation, or (b) is
or was serving at the request of the Corporation or of any absorbed constituent corporation as a
director, officer, employee, agent of or participant in another corporation, partnership, joint
venture, trust or other enterprise, or the legal representative of such a person against expenses,
costs, disbursements (including attorneys' fees), judgments, fines and amounts actually and
reasonably incurred by him in good faith and in connection with such action, suit or proceeding if
he acted in a manner he reasonably believed to be in or not opposed to the best interests of the
Corporation, and with respect to any criminal action or proceeding, he had no reasonable cause to
believe that his conduct was unlawful. The termination of any action, suit or proceeding by
judgment, order, settlement, conviction, or upon a plea of
nolo contendere
or its
equivalent, shall not, of itself, create a presumption that the person did not meet the applicable
standard of conduct.
Section 2.
Actions by or in the Right of the Corporation
. The Corporation
shall 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 suit by or in the right of the Corporation to procure a
judgment in its favor by reason of the fact that he is or was a director, officer, trustee,
employee or agent of the Corporation or of any constituent corporation absorbed by the Corporation
by consolidation or merger, or the legal representative of any such person, or is or was serving at
the request of the Corporation or of any absorbed constituent corporation, as a director, officer,
trustee, employee, agent of or participant, or the legal representative of any such person in
another corporation, partnership, joint venture, trust or other enterprise against expenses
(including attorneys' fees) actually and reasonably incurred by him in connection with the defense
or settlement of such action or suit if he acted in good faith and in a manner he reasonably
believed to be in or not opposed to the best interests of the Corporation and except that no
indemnification shall be made in respect of any claim, issue or matter as to which such person
shall have been adjudged to be liable to the Corporation unless and only to the extent that the New
Jersey Superior Court or the court in which such action or suit was brought shall determine upon
application that, despite the adjudication of liability but in view of all the circumstances of the
case, such person is fairly and reasonably entitled to indemnity for such expenses which the New
Jersey Superior Court or such other court shall deem proper.
Section 3.
Successful Defense
. To the extent that a person who is
or was a director, officer, trustee, employee or agent of the Corporation or of any constituent
corporation absorbed by the Corporation by consolidation or merger, or the legal representative of
any such person, has been successful on the merits or otherwise in defense of any action, suit or
proceeding referred to in Section 1 or Section 2 of this Article, or in defense of any claim,
issue, or matter therein, he shall be indemnified
II-2
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against expenses (including attorneys' fees) actually and reasonably incurred by him in
connection therewith.
Section 4.
Specific Authorization
. Any indemnification under Section 1 or
Section 2 of this Article (unless ordered by a court) shall be made by the Corporation only as
authorized in the specific case upon a determination that indemnification of the director, officer,
trustee, employee, agent, or the legal representative thereof, is proper in the circumstances
because he has met the applicable standard of conduct set forth in said Sections 1 and 2. Such
determination shall be made (1) by the Board of Directors by a majority vote of quorum consisting
of directors who were not parties to such action, suit or proceeding, or (2) if such a quorum is
not obtainable, a quorum of disinterested directors so directs, by independent legal counsel for a
written opinion, (3) by the shareholders.
Section 5.
Advance of Expenses
. Expenses incurred by any person who may have
a right of indemnification under this Article in defending civil or criminal action, suit or
proceeding may be paid by the Corporation in advance of the final distribution of such action, suit
or proceeding as authorized by the board of directors upon receipt of an undertaking by or on
behalf of the director, officer, trustee, employee, or the legal representative thereof, to repay
such amount unless it shall ultimately be determined that he is entitled to be indemnified by the
Corporation pursuant to this Article.
Section 6.
Right of Indemnity not Exclusive
. The indemnification and
advancement of expenses provided by this Article shall not exclude any other rights to which those
seeking indemnification may be entitled under the certificate of incorporation of the Corporation
or any by-law, agreement, vote of shareholders or otherwise; provided that no indemnification shall
be made to or on behalf of a Director, officer, trustee, employee, agent, or legal representative
if a judgment or other final adjudication adverse to such persons establishes that his acts or
omissions (a) were in breach of his duty of loyalty to the corporation or its shareholders, (b)
were not in good faith or involved a knowing violation of law or (c) resulted in receipt by such
person of an improper personal benefit.
Section 7.
Insurance
. The Corporation may purchase and maintain insurance on
behalf of any person who is or was a director, officer, trustee, employee or agent of the
Corporation or of any constituent corporation absorbed by the Corporation by consolidation or
merger of the legal representative of such person or is or was serving at the request of the
Corporation or of any absorbed constituent corporation as a director, officer, trustee, employee or
agent of or participant in another corporation, partnership, joint venture, trust or other
enterprise, or the legal representative of any such person against any liability asserted against
him and incurred by him in any such capacity, arising out of his status as such or by reason of his
being or having been such, whether or not the Corporation would have the power to indemnify him
against such liability under the provisions of this Article, the New Jersey Business Corporation
Act, or otherwise.
Section 8.
Invalidity of any Provision of this Article
. The invalidity or
unenforceability of any provision of this Article shall not affect the validity or enforceability
of the remaining provisions of this Article.
We also maintain directors and officers liability insurance which may, in some instances, reimburse
us for judgments against us or our directors or officers.
ITEM 7. Exemption from Registration Claimed.
Not applicable.
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ITEM 8. Exhibits
Exhibit No.
Description of Exhibit
4.1
Common Stock specimen, filed as Exhibit 4(a) to the
Registrant's Form 10-K for the fiscal year ended December 31,
2002, and is incorporated herein by reference
4.2
Rights Agreement, dated as of September 27, 2002, between the
Registrant and American Stock Transfer and Trust Company filed
as Exhibit 4.0 to Registrant's Current Report on Form 8-K
filed October 11, 2002, and is incorporated herein by
reference
4.3
Rights Certificate relating to the rights granted to holders
of common stock under the Rights Agreement filed as
Exhibit 4.0 to Registrant's Current Report on Form 8-K, filed
on October 11, 2002, and is incorporated herein by reference
4.4
Form of D. Geoffrey Shulman's Class B Warrant filed as
Exhibit 4(b) to the Registrant's Form 10-K for the fiscal year
ended December 31, 2007, and is incorporated herein by
reference
5.1
Opinion of Reed Smith LLP
10.1
DUSA Pharmaceuticals, Inc. 2006 Equity Compensation Plan, as
amended July 31, 2008
10.2
DUSA Pharmaceuticals, Inc. 2006 Deferred Compensation Plan, as
amended October 18, 2006 filed as Exhibit 10(qq) to the
Registrant's Form 10-K for the fiscal year ended December 31,
2006, and is incorporated herein by reference
23.1
Consent of independent registered public accounting firm
23.2
Consent of Reed Smith LLP (included in Exhibit 5.1)
24.1
Power of Attorney (contained on Signature Page)
99.1
Form of Nonqualified Stock Option Grant Agreement filed as
Exhibit 99.1 to the Registrant's registration statement on
Form S-8 (file no. 333-141615) filed on March 28, 2007, and is
incorporated herein by reference
99.2
Form of Incentive Stock Option Grant Agreement filed as
Exhibit 99.2 to the Registrant's registration statement on
Form S-8 (file no. 333-141615) filed on March 28, 2007, and is
incorporated herein by reference
99.3
Form of Stock Award Grant Agreement filed as Exhibit 99.3 to
the Registrant's registration statement on Form S-8 (file no.
333-141615) filed on March 28, 2007, and is incorporated
herein by reference
ITEM 9. Undertakings
(a) The undersigned registrant hereby undertakes:
(1) to file, during any period in which offers or sales are being made, a post-effective
amendment to this registration statement:
(i) to include in any prospectus required by Section 10(a)(3) of the Securities Act of 1933;
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(ii) to reflect in the prospectus any facts or events arising after the effective date of this
registration statement (or the most recent post-effective amendment thereof) which, individually or
in the aggregate, represent a fundamental change in the information set forth in this registration
statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered
(if the total dollar value of securities offered would not exceed that which was registered) and
any deviation from the low or high end of the estimated maximum offering range may be reflected in
the form of prospectus filed with the SEC pursuant to Rule 424(b) if, in the aggregate, the changes
in volume and price represent no more than a 20% change in the maximum aggregate offering price set
forth in the "Calculation of Registration Fee" table in the effective registration statement;
(iii) to include any material information with respect to the plan of distribution not
previously disclosed in this registration statement or any material change to such information in
this registration statement;
provided, however, that paragraphs (a)(1)(i), and (a)(1)(ii) above do not apply if the registration
statement is on Form S-8 and the information required to be included in a post-effective amendment
by those paragraphs is contained in periodic reports filed with or furnished to the SEC by the
registrant pursuant to Section 13 or 15(d) of the Exchange Act that are incorporated by reference
in the registration statement.
(2) that, for the purpose of determining any liability under the Securities Act of 1933, each
such post-effective amendment 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.
(3) to remove from registration by means of a post-effective amendment any of the securities
being registered which remain unsold at the termination of the offering.
(b) The undersigned registrant hereby undertakes that, for purposes of determining any
liability under the Securities Act, each filing of the registrant's annual report pursuant to
Section 13 (a) or Section 15(d) of the Exchange Act (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the Exchange Act) that is
incorporated by reference in the registration statement 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.
(c) 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 Securities 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.
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SIGNATURES
The Registrant:
Pursuant to the requirements of the Securities Act of 1933, as amended, the
registrant certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-8 and has duly caused this registration statement on Form S-8 to
be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Wilmington,
Commonwealth of Massachusetts, on this 18th day of November, 2008.
DUSA PHARMACEUTICALS, INC.
By:
/s/ Robert F. Doman
Robert F. Doman
President and Chief Executive
Officer
POWER OF ATTORNEY
Know All Men By These Presents, that each person whose signature appears below constitutes and
appoints Robert F. Doman and Richard C. Christopher, and each of them singly, as his/her true and
lawful attorney-in-fact and agent with full power of substitution and resubstitution, for him/her
and in his/her name, place and stead, in any and all capacities, to sign any or all amendments
(including post-effective amendments) to this registration statement or any related registration
statement, including any amendment to this registration statement for the purpose of registering
additional shares in accordance with General Instruction E to Form S-8, and to file the same, with
all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorney-in-fact and agent full power and authority to do and
perform each and every act and thing requisite and necessary to be done in connection with the
above premises, as fully to all intents and purposes as he/she might or could do in person, hereby
ratifying and confirming all that said attorney-in-fact and agent or his/her 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 on Form S-8 has been signed by the following persons in the capacities and on the dates
indicated:
/s/ John H. Abeles, MD
Director
November 18, 2008
John H. Abeles, MD
Date
/s/ David M. Bartash
Director
November 18, 2008
David M. Bartash
Date
/s/ Richard C. Christopher
Vice President, Finance and Chief Financial Officer
November 18, 2008
Richard C. Christopher
(principal
financial officer and
principal accounting
officer)
Date
/s/ Robert F. Doman
Director, President and Chief Executive Officer
November 18, 2008
Robert F. Doman
(principal executive
officer)
Date
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/s/ Jay M. Haft, Esq.
Lead Director
November 18, 2008
Jay M. Haft, Esq.
Date
/s/ Richard C. Lufkin
Director
November 18, 2008
Richard C. Lufkin
Date
/s/ Magnus Moliteus
Director
November 18, 2008
Magnus Moliteus
Date
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The DUSA Pharmaceuticals, Inc. Non-Qualified Deferred Compensation Plan:
Pursuant to the
requirements of the Securities Act of 1933, the trustees (or other persons who administer the
employee benefit plan) have duly caused this registration statement to be signed on its behalf by
the undersigned, thereunto duly authorized, in the City of New York, State of New York on November
18, 2008.
DUSA PHARMACEUTICALS, INC.
NON-QUALIFIED DEFERRED COMPENSATION PLAN
By:
/s/ Jay M. Haft, Esq.
Jay M. Haft, Esq.
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EXHIBIT INDEX
Exhibit No.
Description of Exhibit
4.1
Common Stock specimen, filed as Exhibit 4(a) to the
Registrant's Form 10-K for the fiscal year ended December 31,
2002, and is incorporated herein by reference
4.2
Rights Agreement, dated as of September 27, 2002, between the
Registrant and American Stock Transfer and Trust Company filed
as Exhibit 4.0 to Registrant's Current Report on Form 8-K
filed October 11, 2002, and is incorporated herein by
reference
4.3
Rights Certificate relating to the rights granted to holders
of common stock under the Rights Agreement filed as
Exhibit 4.0 to Registrant's Current Report on Form 8-K, filed
on October 11, 2002, and is incorporated herein by reference
4.4
Form of D. Geoffrey Shulman's Class B Warrant filed as
Exhibit 4(b) to the Registrant's Form 10-K for the fiscal year
ended December 31, 2007, and is incorporated herein by
reference
5.1
Opinion of Reed Smith LLP
10.1
DUSA Pharmaceuticals, Inc. 2006 Equity Compensation Plan, as
amended July 31, 2008
10.2
DUSA Pharmaceuticals, Inc. 2006 Deferred Compensation Plan, as
amended October 18, 2006 filed as Exhibit 10(qq) to the
Registrant's Form 10-K for the fiscal year ended December 31,
2006, and is incorporated herein by reference
23.1
Consent of independent registered public accounting firm
23.2
Consent of Reed Smith LLP (included in Exhibit 5.1)
24.1
Power of Attorney (contained on Signature Page)
99.1
Form of Nonqualified Stock Option Grant Agreement filed as
Exhibit 99.1 to the Registrant's registration statement on
Form S-8 (file no. 333-141615) filed on March 28, 2007, and is
incorporated herein by reference
99.2
Form of Incentive Stock Option Grant Agreement filed as
Exhibit 99.2 to the Registrant's registration statement on
Form S-8 (file no. 333-141615) filed on March 28, 2007, and is
incorporated herein by reference
99.3
Form of Stock Award Grant Agreement filed as Exhibit 99.3 to
the Registrant's registration statement on Form S-8 (file no.
333-141615) filed on March 28, 2007, and is incorporated
herein by reference
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