Commitments and Contingencies

6 Months Ended

Jun. 30, 2012

Commitments and Contingencies

9. Commitments and Contingencies

Technology License – Related Party – The Company has negotiated exclusive licenses from the MD Anderson Cancer Center to develop drug delivery technology for antisense and siRNA drug products. These licenses require, among other things, the Company to reimburse MD Anderson for ongoing patent expense. Related party accrued license payments attributable to the Technology License totaling $50,000 are included in Current Liabilities as of June 30, 2012. Related party accrued expense totaling $52,700 as of June 30, 2012 represent hospital costs for the clinical trial and are not related to the Technology License. As of June 30, 2012, the Company estimates reimbursable past patent expenses will total approximately $75,000 for the antisense license. The Company will be required to pay when invoiced the past patent expenses at the rate of $25,000 per quarter. In addition, the Company has decided to discontinue development of its siRNA technology, and consequently, does not anticipate incurring any significant additional exposure for future siRNA patent expense (See Note 1).

Drug Supplier Project Plan - In June of 2008, Bio-Path entered into a project plan agreement with a contract drug manufacturing supplier for delivery of drug product to support commencement of the Company’s Phase I clinical trial of its first cancer drug product. The Company commenced this trial and was enrolling patients by the end of the second quarter 2010. As of June 30, 2011 there were no further obligations under this drug supplier project plan with the contract manufacturer. Subsequently, in October of 2011 the Company entered into a new project plan agreement with this contract manufacturing supplier for a batch of drug product, which was delivered to the Company during January of 2012. The project plan required the Company to pay the supplier $177,440 for this drug product, and in the first quarter of 2012, this entire amount was paid. In addition, during the first quarter of 2012 the Company entered into a supply agreement with a new drug substance supplier, as part of a plan to upgrade manufacturing output of the drug candidate Liposomal Grb-2 (see Note 1.). The supply agreement calls for a payment of approximately $100,000 for a batch of Grb-2 drug substance. An initial payment of $21,000 was made during the first quarter of 2012 and is carried on the Balance Sheet as of June 30, 2012 as Prepaid Drug Product for Testing. In addition, in the second quarter of 2012 the Company entered into a supply agreement with a drug product manufacturer for a new lot of drug product. Additional charges incurred during the second quarter of 2012 with the drug substance manufacturer and the drug product manufacturer totaled $274,477, which is carried on the Balance Sheet as Prepaid Drug Product for Testing. As a result, as of June 30, 2012 a total of $295,477 was carried on the Balance Sheet as Prepaid Drug Product for Testing. This amount substantially represents the entire financial commitments to the drug substance and the drug product manufacturers for the new lot of drug material.