INTANGIBLE ASSETS

9 Months Ended

Sep. 30, 2011

(3) INTANGIBLE ASSETS

The Company's intangible assets are related to the acquisition of assets from Durham Pharmaceuticals Ltd. in 2007 and are summarized as follows:

	September 30, 2011							December 31, 2010
	Estimated			Accumulated
	Life	Cost		Amortization		Net		Net
Contract related intangible asset:
Cato Research discounted contract	3 years	$	355,000	$	355,000	$	-	$	-
Technology related intangible assets:
Patent for the AzoneTS-based product candidates and formulation	6 years		1,305,000		-		1,305,000		1,305,000
Drug Master Files containing formulation, clinical and safety documentation used by the FDA	6 years		1,500,000		-		1,500,000		1,500,000
Two in-process Durhalieve-related pharmaceutical products	6 years		6,820,000		-		6,820,000		6,820,000
Total technology related intangible assets			9,625,000		-		9,625,000		9,625,000
Intangible assets, net		$	9,980,000	$	355,000	$	9,625,000	$	9,625,000

Intangible assets related to technology are expected to be amortized on a straight-line basis over the period ending 2018, when the underlying patents expire, and will commence upon revenue generation which the Company estimates to occur in 2013. The contract related intangible asset was amortized over a 3 year period that ended in 2010. Amortization expense relating to the contract was $25,000 and $84,000 for the three and nine months ended September 30, 2010, respectively, and is included in research and development expense in the Consolidated Statement of Operations.