10-Q

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-Q

x Quarterly Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended March 31, 2012

¨ Transition Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period from             to             .

Commission file number 001-15070

REGENERX BIOPHARMACEUTICALS, INC.

(Exact Name of Registrant as Specified in its Charter)

Delaware	52-1253406
(State of Incorporation)	(IRS Employer I.D. Number)

15245 Shady Grove Road

Suite 470

Rockville, Maryland 20850

(Address of Principal Executive Offices)

(301) 208-9191

(Registrant’s Telephone Number, Including Area Code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  x    No  ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  x    No  ¨

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 definitions of “accelerated filer,” “large accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Securities Exchange Act of 1934. (Check one):

Large accelerated filer	¨	Accelerated filer	¨
Non-accelerated filer	¨  (Do not check if a smaller reporting company)	Smaller reporting company	x

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ¨    No  x

81,679,080 shares of common stock, par value $0.001 per share, were outstanding as of May 14, 2012.

RegeneRx Biopharmaceuticals, Inc.

Form 10-Q

Quarterly Period Ended March 31, 2012

INDEX

			Page No.
Part I.	Financial Information
	Item 1.	Financial Statements
		Balance Sheets at March 31, 2012 (unaudited) and December 31, 2011		3
		Statements of Operations for the three months ended March 31, 2012 and 2011 (unaudited)		4
		Statements of Cash Flows for the three months ended March 31, 2012 and 2011 (unaudited)		5
		Notes to Financial Statements (unaudited)		6-11
	Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		12
	Item 3.	Quantitative and Qualitative Disclosures About Market Risk		21
	Item 4	Controls and Procedures		21
Part II.	Other Information
	Item 1.	Legal Proceedings		21
	Item 1A.	Risk Factors		21
	Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds		37
	Item 3.	Defaults Upon Senior Securities		37
	Item 4.	Mine Safety Disclosures		37
	Item 5.	Other Information		37
	Item 6.	Exhibits		38-41
	Signatures			42

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PART I – FINANCIAL INFORMATION

Item 1. Financial Statements

RegeneRx Biopharmaceuticals, Inc.

Balance Sheets

	March 31, 2012			December 31, 2011
	(Unaudited)
ASSETS
Current assets
Cash and cash equivalents	$	135,510		$	116,092
Grant receivable		99,884			214,450
Prepaid expenses and other current assets		24,134			24,603
Total current assets		259,528			355,145
Property and equipment, net of accumulated depreciation of $119,005 and $116,985		14,926			16,946
Other assets		11,503			11,503
Total assets	$	285,957		$	383,594
LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)
Current liabilities
Accounts payable	$	543,969		$	451,881
Accrued expenses		340,899			358,778
Refundable license fee		200,000			—
Total current liabilities		1,084,868			810,659
Commitments		—			—
Stockholders’ equity (deficit)
Preferred stock, $.001 par value per share, 1,000,000 shares authorized; no shares issued		—			—
Common stock, par value $.001 per share, 200,000,000 shares authorized; 81,390,618 issued and outstanding as of March 31, 2012; 81,390,618 issued and outstanding as of December 31, 2011		81,391			81,391
Additional paid-in capital		95,081,021			95,023,912
Accumulated deficit		(95,961,323	)		(95,532,368	)
Total stockholders’ equity (deficit)		(798,911	)		(427,065	)
Total liabilities and stockholders’ equity (deficit)	$	285,957		$	383,594

The accompanying notes are an integral part of these financial statements.

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RegeneRx Biopharmaceuticals, Inc.

Statements of Operations

(unaudited)

	Three Months ended March 31,
	2012			2011
Sponsored research revenue	$	224,837		$	602,457
Operating expenses:
Research and development		257,446			1,514,785
General and administrative		396,354			685,059
Total operating expenses		653,800			2,199,844
Loss from operations		(428,963	)		(1,597,387	)
Interest income		8			1,018
Net loss	$	(428,955	)	$	(1,596,369	)
Basic and diluted net loss per common share	$	(0.01	)	$	(0.02	)
Weighted average number of common shares outstanding		81,390,618			79,438,368

The accompanying notes are an integral part of these financial statements.

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RegeneRx Biopharmaceuticals, Inc.

Statements of Cash Flows

(unaudited)

	For the Three Months ended March 31,
	2012			2011
Operating activities:
Net loss	$	(428,955	)	$	(1,596,369	)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation and amortization		2,020			2,543
Non-cash share-based compensation		57,109			65,617
Changes in operating assets and liabilities:
Grants receivable		114,566			6,858
Prepaid expenses and other current assets		469			166,539
Other assets		—			5,752
Accounts payable		92,088			129,054
Accrued expenses		(17,879	)		(58,073	)
Refundable license fee		200,000			—
Net cash provided by (used in) operating activities		19,418			(1,278,079	)
Investing activities:
Purchase of property and equipment		—			(1,084	)
Net cash used in investing activities		—			(1,084	)
Financing activities:
Net proceeds from the issuance of common stock		—			1,398,615
Net cash provided by financing activities		—			1,398,615
Net increase in cash and cash equivalents		19,418			119,452
Cash and cash equivalents at beginning of period		116,092			3,790,352
Cash and cash equivalents at end of period	$	135,510		$	3,909,804

The accompanying notes are an integral part of these financial statements.

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RegeneRx Biopharmaceuticals, Inc.

Notes to Financial Statements

For the three months ended March 31, 2012 and 2011 (Unaudited)

1. ORGANIZATION, BUSINESS OVERVIEW AND BASIS OF PRESENTATION

Organization and Nature of Operations.

RegeneRx Biopharmaceuticals, Inc. (“RegeneRx”, the “Company”, “We”, “Us”, “Our”), a Delaware corporation, was incorporated in 1982. We are focused on the discovery and development of novel molecules to accelerate tissue and organ repair. Our operations are confined to one business segment: the development and marketing of product candidates based on Thymosin Beta 4 (“Tß4”), an amino acid peptide.

Management Plans to Address Operating Conditions.

On March 27, 2012, we entered into a term sheet with Lee’s Pharmaceutical (HK) Limited (“Lee’s”) for the license of Tß4 in any pharmaceutical formulation, including our RGN-259, RGN-352 and RGN-137 product candidates, in China, Hong Kong and Macau. Lee’s paid us $200,000 upon signing of the term sheet, and Lee’s will pay us an additional $200,000 upon signing of the definitive license agreement, which we expect to occur by May 31, 2012 or soon thereafter. The amount is classified as refundable license fee on the balance sheet. Sigma-Tau Finanziaria S.P.A., an international pharmaceutical company, which together with its subsidiaries and affiliates, collectively beneficially own approximately 39% of our common stock and represent our largest stockholder group, also collectively own approximately 28% of Lee’s. The receipt of the initial $200,000 will support our operations for thirty to sixty days. Receipt of the additional $200,000 from the signing of the definitive license agreement will provide funding of planned operations through the second quarter of 2012. We continue to evaluate potential strategic options, including the licensing of additional territorial rights to our proprietary clinical programs. Additionally, beginning in late 2011, we began implementing significant cost-saving measures to conserve capital resources and maintain a minimal level of operations, while seeking additional funding and/or to complete a strategic transaction. To that end, in December 2011 we reduced the salaries of all of our employees to approximately $2,800 per employee per month, and we granted stock options to them (in lieu of a portion of the cash salary adjustment) that vested at the end of the year. Beginning in January 2012, all employees became part-time hourly employees with reduced work schedules. Additionally, in January 2012, we discontinued providing employee health benefits and company-sponsored 401(k) matching contributions. The majority of our research and development staff’s efforts since this time have been directed to work under a grant that we received from the National Institutes of Health (“NIH”).

We have incurred net losses of $6.0 million for the year ended December 31, 2011 and $429,000 for the three-month period ended March 31, 2012. Since inception, and through March 31, 2012, we have an accumulated deficit of $96 million and we had cash and cash equivalents of $136,000 as of March 31, 2012. Currently, we are not enrolling patients in any of our clinical trials. We had intended to commence patient enrollment in a Phase 2 clinical trial of RGN-352 for AMI patients near the end of the first quarter of 2011, but this trial has been placed on clinical hold by the FDA pending resolution of certain manufacturing compliance issues at our original contract manufacturer, which was responsible for formulating, filling and finishing RGN-352. We have put the AMI trial on hold pending access to sufficient capital resources to enable us to retain a new drug product manufacturer and are focusing our current efforts on the development of RGN-259 for ophthalmic indications.

We have stopped enrolling and have closed a Phase 2 trial to evaluate RGN-137 in patients suffering from epidermolysis bullosa, or EB. We plan to have the data analyzed once we have the financial resources. Given these objectives and as noted above, we project that our existing capital resources, coupled with the expected $200,000 payment from Lee’s upon entry into the definitive license agreement, will fund our planned operating activities through the end of June 2012, without giving effect to any other financing sources, including any purchases under our committed equity facility with Lincoln Park Capital, which is subject to a number of conditions that limit our ability to draw against such facility (See Note 6).

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We anticipate incurring additional losses in the future as we continue to explore the potential clinical benefits of Tß4-based product candidates over multiple indications. We will need substantial additional funds in order to initiate any further preclinical studies or clinical trials, and to fund our operations beyond June 2012. Accordingly, we have an immediate need for financing and are in the process of exploring various alternatives, including, without limitation, a public or private placement of our securities, debt financing, corporate collaboration and licensing arrangements, or the sale of our company or certain of our intellectual property rights.

These factors raise substantial doubt about our ability to continue as a going concern. The accompanying financial statements have been prepared assuming that we will continue as a going concern. This basis of accounting contemplates the recovery of our assets and the satisfaction of our liabilities in the normal course of business.

Although we intend to continue to seek additional financing or a strategic partner, we may not be able to complete a financing or corporate transaction, either on favorable terms or at all. If we are unable to complete a financing or strategic transaction, we may not be able to continue as a going concern after our funds have been exhausted, and we could be required to significantly curtail or cease operations, file for bankruptcy or liquidate and dissolve. There can be no assurance that we will be able to obtain any sources of funding. The financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should we be forced to take any such actions.

To achieve profitability we, and/or a partner, must successfully conduct pre-clinical studies and clinical trials, obtain required regulatory approvals and successfully manufacture and market those pharmaceuticals we wish to commercialize. The time required to reach profitability is highly uncertain, and there can be no assurance that we will be able to achieve sustained profitability, if at all.

Basis of Presentation.

The accompanying unaudited interim financial statements reflect, in the opinion of management, all adjustments (consisting only of normal recurring adjustments) necessary for a fair presentation of our financial position, results of operations and cash flows for each period presented. These statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) and with the rules and regulations of the SEC, for interim financial statements. Accordingly, they do not include all of the information and footnotes required by GAAP. The accounting policies underlying our unaudited interim financial statements are consistent with those underlying our audited annual financial statements. These unaudited interim financial statements should be read in conjunction with the audited annual financial statements as of and for the year ended December 31, 2011, and related notes thereto, included in our Annual Report on Form 10-K for the year ended December 31, 2011 (the “Annual Report”).

The accompanying December 31, 2011 financial information was derived from our audited financial statements included in the Annual Report. Operating results for the three-month period ended March 31, 2012 are not necessarily indicative of the results to be expected for the year ending December 31, 2012 or any other future period.

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References in this Quarterly Report on Form 10-Q to “authoritative guidance” are to the Accounting Standards Codification issued by the Financial Accounting Standards Board (“FASB”).

Subsequent events have been evaluated through the filing date of these unaudited financial statements.

Use of Estimates.

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Critical accounting policies involved in applying our accounting policies are those that require management to make assumptions about matters that are highly uncertain at the time the accounting estimate was made and those for which different estimates reasonably could have been used for the current period. Critical accounting estimates are also those which are reasonably likely to change from period to period, and would have a material impact on the presentation of our financial condition, changes in financial condition or results of operations. Our most critical accounting estimates relate to accounting policies for clinical trial accruals and share-based arrangements. Management bases its estimates on historical experience and on various other assumptions that it believes are reasonable under the circumstances. Actual results could differ from those estimates.

Sponsored Research Revenues.

We account for non-refundable grants as “Sponsored research revenues” in the accompanying statements of operations. Revenues are recognized when persuasive evidence of an arrangement exists, the associated research or other services have been performed, the related underlying costs are incurred, the contract price is fixed or determinable and collectability is reasonably assured. For the three months ended March 31, 2012 and 2011, all of our revenues were from one NIH grant.

Research and Development.

Research and development (“R&D”) costs are expensed as incurred and include all of the wholly-allocable costs associated with our various clinical programs passed through to us by our outsourced vendors. Those costs include: manufacturing Tß4; formulation of Tß4 into the various product candidates; stability for both Tß4 and the various formulations; pre-clinical toxicology; safety and pharmacokinetic studies; clinical trial management; medical oversight; laboratory evaluations; statistical data analysis; regulatory compliance; quality assurance; and other related activities. R&D includes cash and non-cash compensation, employee benefits, travel and other miscellaneous costs of our internal R&D personnel, six persons in total, who are wholly dedicated to R&D efforts. R&D also includes a pro-ration of our common infrastructure costs for office space and communications.

Cost of Preclinical Studies and Clinical Trials.

We accrue estimated costs for preclinical studies based on estimates of work performed. We estimate expenses incurred for clinical trials that are in process based on patient enrollment and based on clinical data collection and management. Costs based on clinical data collection and management are recognized based on estimates of unbilled goods and services received in the reporting period. We monitor the progress of the trials and their related activities and adjust the accruals accordingly. Adjustments to accruals are charged to expense in the period in which the facts that give rise to the adjustment become known. In the event of early termination of a clinical trial, we would accrue an amount based on estimates of the remaining non-cancelable obligations associated with winding down the clinical trial.

Recent Accounting Pronouncements.

For a discussion of recent accounting pronouncements please refer to Note 2, “Summary of Significant Accounting Policies—Recent Accounting Pronouncements,” in the Annual Report. We did not adopt any new accounting pronouncements during the three months ended March 31, 2012 that had or are expected to have a material impact on our financial statements.

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2. NET LOSS PER COMMON SHARE

Net loss per common share for the three-month periods ended March 31, 2012 and 2011, respectively, is based on the weighted-average number of shares of common stock outstanding during the periods. Basic and diluted loss per share are identical for all periods presented as potentially dilutive securities have been excluded from the calculation of the diluted net loss per common share because the inclusion of such securities would be antidilutive. The potentially dilutive securities include 16,856,658 shares and 20,879,931 shares in 2012 and 2011, respectively, reserved for the exercise of outstanding options and warrants.

3. STOCK-BASED COMPENSATION

We measure stock-based compensation expense based on the grant date fair value of the awards, which is then recognized over the period which service is required to be provided. We estimate the value of our stock option awards on the date of grant using the Black-Scholes option pricing model and amortize that cost over the expected term of the grant. We recognized $57,109 and $65,617 in stock-based compensation expense for the three months ended March 31, 2012 and 2011, respectively. We expect to recognize the compensation cost related to non-vested options as of March 31, 2012 of $225,173 over the weighted average remaining recognition period of 1.4 years.

We did not grant any stock options during the three months ended March 31, 2011. We used the following forward-looking range of assumptions to value each stock option granted to employees, consultants and directors during the three months ended March 31, 2012:

	2012
Dividend yield		0.0	%
Risk-free rate of return		0.9	%
Expected life in years		4 - 4.75
Volatility		73 - 77	%
Forfeiture rate		2.6	%

4. INCOME TAXES

As of March 31, 2012, there have been no material changes to our uncertain tax positions disclosures as provided in Note 8 of the Annual Report. We do not anticipate that total unrecognized tax benefits will significantly change prior to March 31, 2013.

5. FAIR VALUE MEASUREMENTS

The authoritative guidance for fair value measurements defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or the most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Market participants are buyers and sellers in the principal market that are (i) independent, (ii) knowledgeable, (iii) able to transact, and (iv) willing to transact. The guidance describes a fair value hierarchy based on the levels of inputs, of which the first two are considered observable and the last unobservable, that may be used to measure fair value which are the following:

• Level 1 — Quoted prices in active markets for identical assets and liabilities.

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• Level 2 — Observable inputs other than quoted prices in active markets for identical assets and liabilities.

• Level 3 — Unobservable inputs.

At March 31, 2012, we held no qualifying liabilities, and our only qualifying assets that required measurement under the foregoing fair value hierarchy were money market funds and U.S. Treasury Bills included in Cash and Cash Equivalents valued at $136,000, using Level 1 inputs.

6. STOCKHOLDERS’ EQUITY

On January 5, 2011, we entered into a securities purchase agreement with Lincoln Park Capital Fund, LLC (“LPC”), pursuant to which we sold in a registered direct offering 1,851,852 shares of our common stock to LPC at a price per share of $0.27, for gross proceeds of $500,000 before offering expenses (the “Registered Offering”). As part of the Registered Offering, we also issued to LPC, for no additional consideration, a warrant to purchase 740,741 shares of common stock at an exercise price of $0.38 per share (the “LPC Warrant”). Subject to certain ownership limitations, the LPC Warrant is exercisable until January 7, 2016. The exercise price of the LPC Warrant is subject to adjustment in the case of stock splits, stock dividends, combinations of shares and similar recapitalization transactions.

The Registered Offering was made pursuant to an S-3 shelf registration statement on (SEC File No. 333-150675), which was declared effective by the SEC on May 16, 2008, pursuant to a prospectus supplement filed with the SEC on January 7, 2011.

The Registered Offering closed on January 7, 2011. No discounts or placement agent fees were payable in connection with the Registered Offering, and the Company used the proceeds from the Registered Offering for preclinical and clinical development of the Company’s drug candidates and for general corporate purposes, including working capital.

On January 5, 2011, we entered into three separate securities purchase agreements (each, a “Sigma-Tau Purchase Agreement” and together, the “Sigma-Tau Purchase Agreements”) with affiliates of Sigma-Tau Group, our largest stockholder (the “Sigma-Tau Purchasers”), with respect to the private placement (the “Private Placement”) of an aggregate of 3,518,519 shares of common stock (the “Sigma-Tau Shares”) at a price per share of $0.27, for gross proceeds of $950,000. No discounts or placement agent fees were payable in connection with the Private Placement, and we used the net proceeds of the Private Placement for working capital and other general corporate purposes.

In connection with the Private Placement, we also issued to the Sigma-Tau Purchasers warrants (the “Sigma-Tau Warrants”) to purchase an aggregate of 1,407,407 additional shares of common stock at an exercise price of $0.38 per share. The Sigma-Tau Warrants are exercisable until January 7, 2016. The exercise price of the Sigma-Tau Warrants is subject to adjustment in the case of stock splits, stock dividends, combinations of shares and similar recapitalization transactions. The Private Placement closed on January 7, 2011.

In connection with the Private Placement, on January 5, 2011, we and the Sigma-Tau Purchasers entered into an agreement (the “Warrant Amendment”) to amend the terms of certain outstanding warrants held by the holders of such warrants (the “Holders”). Under the Warrant Amendment, all outstanding warrants held by the Holders that were issued between March 2006 and December 2008, exercisable for an aggregate of 3,046,453 shares of Common Stock and with exercise prices between $1.60 per share and $4.06 per share, were amended to reduce their exercise prices to $0.38 per share and to extend their expiration dates to December 31, 2011. The incremental fair value transferred to the holders pursuant to the Warrant Amendment was not material. All of the amended warrants expired unexercised on December 31, 2011.

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On January 4, 2011, we and LPC also entered into a committed equity facility (the “LPC Equity Facility”), together with a Registration Rights Agreement (the “Registration Rights Agreement”), whereby we have the right to sell to LPC up to $11,000,000 of our common stock through October 2013 (any such shares sold being referred to as the “Purchase Shares”). Under the Registration Rights Agreement, we filed a registration statement related to the transaction with the SEC covering the Purchase Shares and the Additional Commitment Shares (as defined below), which was declared effective by the SEC on February 11, 2011. We will generally have the right, but not the obligation, over a 30-month period that began in April 2011, to direct LPC to periodically purchase the Purchase Shares in specific amounts under certain conditions. The purchase price for the Purchase Shares will be the lower of (i) the lowest trading price on the date of sale or (ii) the arithmetic average of the three lowest closing sale prices for the common stock during the 12 consecutive business days ending on the business day immediately preceding the purchase date. In no event, however, will the Purchase Shares be sold to LPC at a price of less than $0.15 per share.

In consideration for entering into the LPC Equity Facility, we issued to LPC 958,333 shares of common stock as an initial commitment fee (the “Initial Commitment Shares”) and are required to issue up to 958,333 shares of common stock as additional commitment shares on a pro rata basis (the “Additional Commitment Shares”) as we direct LPC to purchase our shares under the Equity Facility over the term of the agreement. The LPC Equity Facility may be terminated by us at any time at our discretion without any cost to us. The proceeds that may be received by us under the LPC Equity Facility are expected to be used for preclinical and clinical development of our drug candidates and for general corporate purposes, including working capital.

Under the LPC Equity Facility, we have agreed that, subject to certain exceptions, we will not, during the term of the LPC Equity Facility, effect or enter into an agreement to effect any issuance of common stock or securities convertible into, exercisable for or exchangeable for common stock in a “Variable Rate Transaction,” which means a transaction in which we:

• issue or sell any debt or equity securities that are convertible into, exchangeable or exercisable for, or include the right to receive additional shares of common stock either (A) at a conversion price, exercise price or exchange rate or other price that is based upon and/or varies with the trading prices of or quotations for the shares of common stock at any time after the initial issuance of such debt or equity securities, or (B) with a conversion, exercise or exchange price that is subject to being reset at some future date after the initial issuance of such debt or equity security or upon the occurrence of specified or contingent events directly or indirectly related to our business or the market for the common stock; or

• enter into any agreement, including, but not limited to, an equity line of credit, whereby we may sell securities at a future determined price.

We have also agreed to indemnify LPC against certain losses resulting from our breach of any of our representations, warranties or covenants under the agreements with LPC.

During 2011, we sold 1,500,000 shares of common stock to LPC as Purchase Shares for $348,200 in net proceeds. We also issued 30,336 Additional Commitment Shares in connection with this purchase. At December 31, 2011 additional sales to LPC were not available as our share price was less than $0.15 per share. During the three months ended March 31, 2012 we did not sell any shares to LPC, and we may not sell additional shares to LPC until such time as we have filed a post-effective amendment to the original registration statement and such amendment has been declared effective by the SEC.

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ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

This Quarterly Report on Form 10-Q, including this Part I., Item 2., “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” contains forward-looking statements regarding us and our business, financial condition, results of operations and prospects within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements may be identified by the words “project,” “believe,” “anticipate,” “plan,” “expect,” “estimate,” “intend,” “should,” “would,” “could,” “will,” “may” or other similar expressions. In addition, any statements that refer to projections of our future financial performance, our clinical development programs and schedules, our future capital resources and funding requirements, our anticipated growth and trends in our business and other characterizations of future events or circumstances are forward-looking statements. We cannot guarantee that we will achieve the plans, intentions or expectations expressed or implied in our forward-looking statements. There are a number of important factors that could cause actual results, levels of activity, performance or events to differ materially from those expressed or implied in the forward-looking statements we make, including those described under “Risk Factors” set forth below in Part II., Item 1A. In addition, any forward-looking statements we make in this document speak only as of the date of this report, and we do not intend to update any such forward-looking statements to reflect events or circumstances that occur after that date.

Business Overview

We are a biopharmaceutical company focused on the development of a novel therapeutic peptide, Thymosin beta 4, or Tß4, for tissue and organ protection, repair, and regeneration. We have formulated Tß4 into three distinct product candidates in clinical development:

• RGN-259, a topical eye drop for regeneration of corneal tissues damaged by injury, disease or other pathology;

• RGN-352, an injectable formulation to treat cardiovascular diseases, central and peripheral nervous system diseases, and other medical indications that may be treated by systemic administration; and

• RGN-137, a topical gel for dermal wounds and reduction of scar tissue.

We have a fourth formulation, RGN-457, in preclinical development. RGN-457 is a liquid aerosol formulation of Tß4 targeting cystic fibrosis and other pulmonary diseases by inhalation.

We are continuing strategic partnership discussions with biotechnology and pharmaceutical companies regarding the further clinical development of all of our product candidates.

In addition to our four pharmaceutical product candidates, we are also pursuing the commercial development of peptide fragments and derivatives of Tß4 for potential cosmeceutical use. These fragments are amino acid sequences, and variations thereof, within the Tß4 molecule that have demonstrated activity in several in vitro preclinical research studies that we have sponsored. We believe the biological activities of these fragments may be useful, for example, in developing novel cosmeceutical products for the anti-aging market. Our strategy is to collaborate with another company to develop cosmeceutical formulations based on these peptides.

Development of Product Candidates

RGN-259

RGN-259 is our proprietary preservative-free eye drop formulation of Thymosin beta 4. In September 2011, we completed a Phase 2a exploratory clinical trial evaluating the safety and efficacy of RGN-259 in 72 patients with dry eye syndrome. Patients were randomly assigned to receive either RGN-259 or placebo in this double-masked, placebo-controlled trial. All patients received either RGN-259 (0.1% concentration) or placebo, twice daily for 30 days. Various signs and symptoms of dry eye, such as the degree of ocular surface damage, ocular itching, burning and grittiness, among others, were graded periodically during and following the treatment period. The trial was conducted by Ora Inc., an ophthalmic contract research organization that specializes in dry eye research and clinical trials, and utilized Ora’s Controlled Adverse Environment (CAEsm) chamber, which is a generally accepted model that exacerbates dry eye signs and symptoms in the dry eye patient.

In November 2011, we reported preliminary safety and efficacy results from the trial. RGN-259 was deemed safe and well-tolerated, with no observed drug-related adverse events.

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The co-primary outcome measures evaluated in the trial were inferior corneal fluorescein staining and decreased ocular discomfort on day 29. Various secondary outcome measures were also evaluated in the trial. While the study did not meet the co-primary outcome measures, during and after challenge in the CAE chamber, RGN-259 showed statistically significant efficacy results in other measured endpoints, meaning a p-value equal to or less than 0.05, which indicates a 5% or less likelihood that the results were due to chance, as follows:

• Patients receiving RGN-259 experienced a 325% greater reduction from baseline in central corneal fluorescein staining compared to placebo at the 24 hour recovery period (p = 0.0075). Reduction of fluorescein staining is indicative of a reduction in ocular surface damage of the central cornea;

• Patients receiving RGN-259 experienced a 257% greater reduction from baseline in exacerbation of superior corneal fluorescein staining in the chamber as compared to the placebo (p = 0.0210); and

• Patients receiving RGN-259 experienced a 27.3% greater reduction in exacerbation of ocular discomfort at day 28 during a 75-minute challenge in a controlled adverse environment compared to the placebo group (p = 0.0244). Reduction indicates that RGN-259 can slow exacerbation of ocular symptoms in patients with dry eye syndrome.

Other CAE-related findings, such as superior corneal staining reduction and peripheral (combination of the average of superior and inferior) corneal staining reduction, were observed having statistical significance, while others had positive trends after treatment with RGN-259. These observations are in line with the known biological properties and mechanisms of action of RGN-259 reported in various nonclinical studies.

With respect to inferior corneal fluorescein staining, we did see a trend toward improvement, meaning that we observed reduced staining, at day 28 during exposure to adverse conditions in the CAE chamber in patients receiving RGN-259 compared to placebo, although this improvement was not deemed to be statistically significant (p=0.0968).

The co-primary outcome measures, selected at the outset of this initial exploratory trial, were based on the best available animal data at the time but without the benefit of any actual human clinical experience in dry eye. Therefore, we believe that our not having met the co-primary outcome measures at this stage is not as important as identifying statistically significant outcomes that could potentially serve as approvable endpoints in later stage or in pivotal Phase 3 clinical trials. We believe that the statistically significant observation of reduction in central corneal staining, as well as symptom improvements observed in the trial and described above, reflect actual patient benefits and represent acceptable outcome measures to the FDA for use in follow-up Phase 2 or confirmatory pivotal Phase 3 trials. We are currently preparing a clinical study report for submission to the FDA, which will confirm these results of the exploratory Phase 2 clinical trial.

Separately, we are continuing to support a small physician-sponsored clinical trial in patients with dry eye, in order to evaluate RGN-259’s ability to repair and regenerate damaged ophthalmic tissues in a heterogeneous group of patients, some of whom have severe dry eye as a sequel to graft vs. host disease. Our support includes supplying RGN-259 and placebo for the trial and providing regulatory and clinical guidance.

Lee’s Pharmaceuticals. On March 27, 2012, we announced that we had signed a term sheet with Lee’s Pharmaceutical (HK) Limited, headquartered in Hong Kong, for the license of Thymosin Beta 4 in any pharmaceutical form, including our RGN-259, RGN-352 and RGN-137 product candidates, in China, Hong Kong and Macau. Lee’s paid us $200,000 upon signing of the term sheet, and Lee’s will pay us an additional $200,000 upon signing of the definitive license agreement, which we expect to occur by May 31, 2012 or soon thereafter. Lee’s is an affiliate of Sigma Tau, which collectively with its affiliates is our largest stockholder.

Future Plans. We are in the process of seeking a financial sponsor to allow for the continued clinical development of RGN-259. Based on the results of our Phase 2a clinical trial in patients with dry eye syndrome conducted in 2011 and, subject to the availability of sufficient financial resources, we are designing a Phase 2b clinical trial utilizing Ora’s CAE model that we believe could generate important registration data. We are also engaged in discussions with ophthalmic specialty companies regarding product licensing to advance clinical development of this product candidate.

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RGN-352

During 2009, we completed a Phase 1 clinical trial evaluating the safety, tolerability and pharmacokinetics of the intravenous administration of RGN-352 in 60 healthy subjects. Based on the results of this Phase 1 trial and extensive preclinical efficacy data published in peer-reviewed journals, in the second half of 2010, we began start-up activities for a Phase 2 study to evaluate RGN-352 in patients who had suffered an AMI. We had planned to begin enrolling patients in this clinical trial near the end of the first quarter of 2011. However, in March 2011, we were notified by the FDA that the trial was placed on clinical hold as a result of our contract manufacturer’s alleged failure to comply with current Good Manufacturing Practices, or cGMPs. We have since learned that the manufacturer has closed its manufacturing facility and filed for bankruptcy protection. The FDA has prohibited us from using any of the active drug or placebo formulated by this manufacturer in human trials; consequently, we must have RGN-352 manufactured by a new cGMP-compliant manufacturer in the event we seek to resume this trial.

Significant preparatory time and procedures will be required and expenses would need to be incurred before any new cGMP-compliant manufacturer would be able to manufacture RGN-352 for the AMI trial and for us to resume study start-up activities. Due to these factors, including the time required for revalidation of processes and assays related to production that were already in place with the original manufacturer, we have elected to postpone activities on this trial until the requisite funding is secured.

In addition to the potential application of RGN-352 for the treatment of cardiovascular disease, preclinical research published in the scientific journals Neuroscience and the Journal of Neurosurgery indicates that RGN-352 may also prove useful for patients with multiple sclerosis, or MS, as well as stroke and traumatic brain injury. In these studies, the administration of Tß4 resulted in regeneration of neuronal tissue by promoting remyelination of axons and stimulating oligodendrogenesis, resulting in improvement of neurological functional activity. Based on this preclinical research, depending on our capital resources, and if we are able to separately procure cGMP-compliant clinical trial material, we may also support a proposed physician-sponsored Phase 1/2 clinical trial to be conducted at a major U.S. medical center to evaluate the therapeutic potential of RGN-352 in patients with MS and traumatic brain injury.

RGN-137

Clinical Development — Epidermolysis Bullosa. In 2005, we began enrolling patients in a Phase 2 clinical trial designed to assess the safety and effectiveness of RGN-137 for the treatment of patients with EB. EB is a genetic disease of about 10 gene mutations that results in fragile skin and other epithelial structures (e.g., cornea and GI tract) that can blister spontaneously or separate at the slightest trauma or friction, creating a wound that at times does not heal or heals poorly. In severe cases, recurrent blistering and tissue loss may be life threatening. In this randomized, double-blind, placebo-controlled, dose-response trial, nine U.S. clinical sites have been enrolling patients to evaluate the safety, tolerability, and wound healing effectiveness of three different concentrations of RGN-137 compared to placebo. RGN-137 is being applied topically to the skin, once daily for up to 56 consecutive days. EB has been designated as an “orphan” indication by the FDA’s Office of Orphan Drugs. A portion of this trial was funded by a grant of $681,000 received from the FDA. We have completed enrollment of 30 out of the original target of 36 patients and closed the Phase 2 trial in late 2011 as the availability of eligible patients has been exhausted.

Clinical Development — Pressure Ulcers. In late 2005, we began enrolling patients in a Phase 2 clinical trial designed to assess the safety and effectiveness of RGN-137 for the treatment of patients with chronic pressure ulcers, commonly known as bedsores. In this randomized, double-blind, placebo-controlled, dose-response trial, 15 clinical sites in the United States enrolled a total of 72 patients to evaluate the safety, tolerability, and wound healing effectiveness of three different concentrations of RGN-137 compared to placebo. RGN-137 was applied topically to patients’ ulcers, once daily for up to 84 consecutive days. Patients in the trial were between 19 and 85 years old and had at least one stable Stage III or IV pressure ulcer with a surface area between 5 and 70 cm². Stage III and IV pressure ulcers are full thickness wounds that penetrate through the skin and muscle, sometimes completely to the bone.

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In January 2009, we reported final data from this trial. RGN-137 was well-tolerated at all three dose levels studied, with no dose-limiting adverse events, which achieved the primary objective of the study. As for efficacy, all Tß4 doses performed similarly compared to placebo, with no statistically significant efficacy results. However, patients treated with the middle dose showed a 17% rate of wound healing, which was the highest rate among the three active doses evaluated. The improvement in ulcer healing in this middle dose group following nine weeks of treatment was equal to the improvement in patients treated with placebo after 12 weeks of treatment. A follow-on evaluation, reported at the 3rd International Symposium on the Thymosins in Health and Disease in March 2012, showed that for those pressure ulcer patients’ wounds that healed, RGN-137 mid dose (0.02% Tß4 gel product) accelerated wound closure with a median time to healing of 22 days as compared to 57 days for the placebo. Although those results are clinically significant, they were not statistically significant.

Clinical Development- Venous Stasis Ulcers. In mid-2006 we began enrolling patients in a Phase 2 clinical trial designed to assess the safety and effectiveness of RGN-137 for the treatment of patients with venous stasis ulcers. Venous stasis ulcers are a common type of chronic wound that develops on the ankle or lower leg in patients with chronic vascular disease. In these patients blood flow in the lower extremities is impaired leading to venous hypertension, edema (swelling) and mild redness and scaling of the skin that gradually progresses to ulceration. In this double-blind, placebo-controlled, dose-response study, 8 European sites in Italy (N=5) and Poland (N=3) make up the 72 patients randomized to receive three different concentrations of RGN-137 or placebo. RGN-137 or placebo was applied topically to patients’ ulcers once daily for consecutive days. A patient’s ulcer size and ulcer stability for enrollment were between 3 and 30 cm² and at least 6 weeks in duration, respectively.

In 2009, we reported final data from that trial. All doses of RGN-137 were well tolerated. More patients achieved healing in the RGN-137 mid dose (0.03% Tß4 gel product) than in any other dose group. The mid dose showed both an increased incidence of wound healing and a faster healing time compared to placebo. The mid dose decreased the median time to healing by 45% among those wounds that completely healed. A follow-on evaluation, reported at the 3rd International Symposium on the Thymosins in Health and Disease in March 2012, showed that for those venous stasis ulcer patients’ wounds greater than 3 cm² that healed, the RGN-137 mid dose (0.03% Tß4 gel product) accelerated wound closure with a median time to healing of 49 days as compared to 78 days for the placebo. Those results were both clinically and statistically significant.

Current Financial Circumstances

Due to our current financial condition, beginning in late 2011, we began implementing significant cost-saving measures to conserve capital resources and maintain a minimal level of operations, while seeking to receive additional funding and/or complete a strategic transaction. To that end, we have greatly reduced salaries and work schedules of our employees and have increasingly relied on reimbursements under a grant that we received from the NIH to fund employee salaries. We have also engaged investment bankers to help us explore financing alternatives, including a possible equity financing or licensing transaction, in order to continue the development of our product candidates, as well as the exploration of other strategic alternatives, including a possible asset out-licensing, asset sale or sale of our company.

In March 2012, we entered into a term sheet with Lee’s Pharmaceutical (HK) for the development of Tß4 in any pharmaceutical formulation in China, Hong Kong and Macau. At the time of the signing of the term sheet, we received a $200,000 payment from Lee’s, and we project that our existing capital resources will fund our planned, minimal operating activities through May 2012. Upon execution of the definitive license agreement, we expect to receive an additional $200,000 payment from Lee’s. While we expect that these funds will allow us to continue our minimal level of operations through June 2012, we will continue to have insufficient resources to initiate any additional trials that we have planned. As a result, we will still need to complete a financing or strategic transaction by the end of the second quarter of 2012 to continue as a going concern or we may be forced to cease operations, seek protection under the provisions of the U.S. Bankruptcy Code or liquidate and dissolve our company.

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Financial Operations Overview

We have never generated product revenues, and we do not expect to generate product revenues until the FDA approves one of our product candidates, if ever, and we begin marketing and selling it. Subject to the availability of financing, we expect to invest increasingly significant amounts in the furtherance of our current clinical programs and may add additional nonclinical studies and new clinical trials as we explore the potential of our current product candidates in other indications and explore new formulations of Tß4-based product candidates. As we expand our clinical development initiatives, we expect to incur substantial and increasing losses. Accordingly, we will need to generate significant product revenues in order to ultimately achieve and then maintain profitability. Also, we expect that we will need to raise substantial additional capital in order to meet product development requirements. We cannot assure investors that such capital will be available when needed, on acceptable terms, or at all.

Most of our expenditures to date have been for research and development, or R&D, activities and general and administrative, or G&A, activities. R&D costs include all of the wholly-allocable costs associated with our various clinical programs passed through to us by our outsourced vendors. Those costs include manufacturing Tß4 and peptide fragments, formulation of Tß4 into our product candidates, stability studies for both Tß4, and the various formulations, preclinical toxicology, safety and pharmacokinetic studies, clinical trial management, medical oversight, laboratory evaluations, statistical data analysis, regulatory compliance, quality assurance and other related activities. R&D includes cash and non-cash compensation, employee benefits, travel and other miscellaneous costs of our internal R&D personnel, five persons in total, who are wholly dedicated either on a full or part-time basis to R&D efforts. R&D also includes a proration of our common infrastructure costs for office space and communications. We expense our R&D costs as they are incurred.

R&D expenditures are subject to the risks and uncertainties associated with clinical trials and the FDA review and approval process. As a result, these expenses could exceed our expectations, possibly materially. We are uncertain as to what we will incur in future research and development costs for our clinical studies, as these amounts are subject to the outcome of current studies, management’s continuing assessment of the economics of each individual research and development project and the internal competition for project funding. As described below under “Sources of Liquidity,” in May 2010 we were awarded a grant from the NIH to support the development of RGN-352. Subject to our compliance with the terms and conditions of the grant, we are eligible to receive up to $3.0 million over a three-year period in cost reimbursements related to the purposes set forth in the grant. We intend to use proceeds from the grant for the payment of research and development staff in connection with our grant related research and development activities and, as described above, we have increasingly relied on this grant for purposes of funding our R&D employees’ reduced salaries. Proceeds from the grant have been used for animal studies supporting our clinical work to develop RGN-352 for myocardial infarction, as well as to manufacture additional quantities of Tß4.

G&A costs include outside professional fees for legal, business development, audit and accounting services. G&A also includes cash and non-cash compensation, employee benefits, travel and other miscellaneous costs of our internal G&A personnel, three in total, who are wholly dedicated to G&A efforts. G&A also includes a proration of our common infrastructure costs for office space, and communications. Our G&A expenses also include costs to maintain our intellectual property portfolio. We have expanded our patent prosecution activities and have been reviewing our pending patent applications in the United States, Europe and other countries with the advice of outside legal counsel. In some cases, we have filed patent applications for non-critical strategic purposes intended to prevent others from filing similar patent claims. We continue to closely monitor our patent applications to determine if they will continue to provide strategic benefits. In cases where we believe the benefit has been realized or it becomes unnecessary due to the issuance of other patents, or for other reasons that will not affect the strength of our intellectual property portfolio, we will abandon these patent applications in order to reduce our costs of prosecution.

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Critical Accounting Policies

In Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” of our Annual Report on Form 10-K for the year ended December 31, 2011, which was filed with the SEC on April 4, 2012, which we refer to as the Annual Report, we included a discussion of the most significant accounting policies and estimates used in the preparation of our financial statements. There has been no material change in the policies and estimates used in the preparation of our financial statements since the filing of our Annual Report.

Results of Operations

Comparison of the three months ended March 31, 2012 and 2011

Revenues. For the three months ended March 31, 2012, grant revenue was $225,000 compared to $602,000 for the same period in 2011. In May 2010, we were awarded a grant from NIH’s National Heart Lung & Blood Institute (“NHLBI”). This grant was for $1 million per year for three years. During the three months ended March 31, 2012 and 2011, we recognized revenue based on costs incurred related to this grant.

R&D Expenses. For the three months ended March 31, 2012, our R&D expenses decreased by approximately $1.25 million, or 83%, to $257,000 from $1.5 million for the same period in 2011. The decrease was primarily the result of cost cutting actions implemented in late 2011 and the absence direct clinical activity while we try to secure additional operating capital. During the three months ended March 31, 2011, we were actively working towards the initiation of our Phase 2 clinical trials evaluating RGN-352 in AMI patients, and we commissioned the manufacturing of additional Tß4 for clinical trials. In total, these two activities resulted in R&D expenses of $1.0 million. The balance of the decrease reflects lower personnel and related costs.

G&A Expenses. For the three months ended March 31, 2012, our G&A expenses decreased by approximately $289,000, or 42%, to $396,000, from $685,000 for the same period in 2011. The decrease was primarily the result of cost cutting actions implemented in late 2011. Significantly lower costs were incurred in the 2012 period versus the 2011 period for personnel and related expenses (decrease of $136,000), legal and patent costs (decrease of $130,000), investor relations expenses (decrease of $42,000), consulting fees (decrease of $25,000) and non-cash stock option expense (decrease of $11,000). These amounts were partially offset by increased costs of $95,000 in 2012 associated with engaging investment bankers to evaluate our strategic options, including advisory and valuation services.

Liquidity and Capital Resources

Overview

We have not commercialized any of our product candidates to date and have incurred significant losses since inception. We have primarily financed our operations through the issuance of common stock and common stock warrants in private and public financings, although as discussed below we have been awarded government grants and will continue to pursue other governmental funding sources. The report of our independent registered public accounting firm regarding our financial statements for the year ended December 31, 2011 contained an explanatory paragraph regarding our ability to continue as a going concern based upon our history of net losses and dependence on future financing in order to meet our planned operating activities.

We incurred a net loss of $429,000 for the period ended March 31, 2012. We only had cash and cash equivalents of $136,000 at March 31, 2012. Based on our current operations, we believe our existing cash resources, coupled with the payments associated with the Lee’s licensing agreement, will be adequate to fund our operations through June 2012, without considering any potential other sources of capital. In any event, we will continue to have a need for financing, which we may not be able to complete either on favorable terms or at all.

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Cash Flows for the Three Months Ended March 31, 2012 and 2011

Net cash provided by operating activities was approximately $19,000 for the three months ended March 31, 2012 as compared to $1.3 million used in operating activities for the same three months in 2011. In 2011 the net cash used in operating activities was primarily the result of our net loss during the period. The 2012 operating activities reflect the receipt of a $200,000 refundable license fee coupled with significantly reduced costs, resulting in a small increase in operating cash for the period. During the three months ended March 31, 2012, we did not purchase furniture and equipment or engage in any other investing activity, as compared with purchases of furniture and equipment of approximately $1,000 for the same period in 2011. Additionally, we did not sell any equity securities during the three months ended March 31, 2012 or engage in any other financing activities. During the same period in 2011, we raised net proceeds from the sale of equity securities of approximately $1.4 million, as described in Note 6 to our unaudited financial statements included in this report.

Future Funding Requirements

The expenditures that will be necessary to execute our business plan are subject to numerous uncertainties that may adversely affect our liquidity and capital resources. We are not currently enrolling patients in any clinical trials. We had intended to commence patient enrollment in a Phase 2 clinical trial of RGN-352 for AMI patients near the end of the first quarter of 2011, but this trial has been placed on clinical hold by the FDA pending resolution of certain manufacturing compliance issues at our original contract manufacturer, which was responsible for formulating, filling and finishing RGN-352. We have put the AMI trial on hold pending access to sufficient capital resources to enable us to retain a cGMP-compliant drug product manufacturer and are focusing our current efforts on the development of RGN-259 for ophthalmic indications.

Even with this change in our clinical development priorities, we currently do not have sufficient capital resources to continue product development beyond May 2012 without additional capital. While we expect to receive an additional $200,000 payment from Lee’s by the end of May 2012 or soon thereafter, we expect that these funds will allow us to continue our minimal level of operations through June 2012, and we will continue to have insufficient resources to initiate any additional trials that we have planned. As described below, we have established a committed equity facility with LPC, but we are currently unable to draw on the facility and our ability to draw on the facility in the future is subject to a number of limitations, including our stock price, as described in “Risk Factors—Risks Related to Our Liquidity and Need for Financing—We are not currently able to access the LPC committed equity facility and, if we are able to do so in the future, we may not be able to access the full amounts available under the LPC committed equity facility.” Therefore, even if we were able to sell shares of our common stock under the LPC facility, based on our recent stock price, the amount of proceeds we would be able to raise would likely not extend our capital resources significantly beyond the second quarter of 2012.

In addition, the length of time required for clinical trials varies substantially according to the type, complexity, novelty and intended use of a product candidate. Some of the factors that could impact our liquidity and capital needs include, but are not limited to:

• the progress of our clinical trials;

• the progress of our research activities;

• the number and scope of our research programs;

• the progress of our preclinical development activities;

• the costs involved in preparing, filing, prosecuting, maintaining, enforcing and defending patent and other intellectual property claims;

• the costs related to development and manufacture of preclinical, clinical and validation lots for regulatory purposes and commercialization of drug supply associated with our product candidates;

• our ability to enter into corporate collaborations and the terms and success of these collaborations;

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• the costs and timing of regulatory approvals; and

• the costs of establishing manufacturing, sales and distribution capabilities.

In addition, the duration and the cost of clinical trials may vary significantly over the life of a project as a result of differences arising during the clinical trial protocol, including, among others, the following:

• the number of patients that ultimately participate in the trial;

• the duration of patient follow-up that seems appropriate in view of the results;

• the number of clinical sites included in the trials; and

• the length of time required to enroll suitable patient subjects.

Also, we test our product candidates in numerous preclinical studies to identify indications for which they may be efficacious. We may conduct multiple clinical trials to cover a variety of indications for each product candidate. As we obtain results from trials, we may elect to discontinue clinical trials for certain product candidates or for certain indications in order to focus our resources on more promising product candidates or indications.

Our proprietary product candidates also have not yet achieved FDA regulatory approval, which is required before we can market them as therapeutic products. In order to proceed to subsequent clinical trial stages and to ultimately achieve regulatory approval, the FDA must conclude that our clinical data establish safety and efficacy. Historically, the results from preclinical studies and early clinical trials have often not been predictive of results obtained in later clinical trials. A number of new drugs and biologics have shown promising results in clinical trials, but subsequently failed to establish sufficient safety and efficacy data to obtain necessary regulatory approvals.

In addition to our obligations under clinical trials, we are committed under an office space lease through January 2013 that requires average base rental payments of approximately $7,300 per month.

Sources of Liquidity

We have not commercialized any of our product candidates to date and have primarily financed our operations through the issuance of common stock and common stock warrants in private and public financings. Our largest stockholder group, which we refer to as Sigma-Tau, has historically provided significant equity capital to us, including private placements of $950,000 in January 2011 and $1.6 million in October 2009. In January 2011, we also raised $500,000 from a registered direct offering of our securities to LPC and an additional $348,200 in sales of common stock to LPC under an equity line facility discussed below.

Committed Equity Line with LPC

In January 2011, we also entered into an $11 million committed equity facility with LPC. We filed a registration statement for the resale by LPC of 15 million shares of common stock issuable under the facility through October 2013. However, because the registration statement related to those shares has ceased to be effective under the Securities Act, we would need to prepare and file a post-effective amendment to the registration statement and have that post-effective amendment declared effective by the SEC before we can sell any of these shares to LPC. If effective, the facility would provide us with the right but not the obligation to direct LPC to purchase up to 200,000 shares of common stock every two business days at a purchase price calculated by reference to the prevailing market price of our common stock without any fixed discount, subject to the floor price of $0.15 per share.

There are no trading volume requirements or restrictions under the facility, and we will control the timing and amount of any sales of our common stock to LPC. Our ability to sell our shares to LPC is also subject to our obtaining all necessary consents, amendments or waivers as may be required, and subject to the shares to be sold having been registered for resale. LPC has no right to require any sales by us, but is obligated to make purchases from us as we direct in accordance with the facility. We can also accelerate the amount of common stock to be purchased under certain circumstances. There are no limitations on use of proceeds, financial or business covenants, restrictions on future funding, rights of first refusal, participation rights, penalties or liquidated damages. We may terminate the facility at any time, in our discretion, without any penalty or cost to us. To date, we have issued an aggregate of 1,530,336 shares of common stock to LPC under this facility for net proceeds of $348,200.

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Licensing Agreements

We also have a license agreement with Sigma-Tau that provides the opportunity for us to receive milestone payments upon specified events and royalty payments in connection with commercial sales of Tß4 in Europe. However, we have not received any milestone payments to date, and there can be no assurance that we will be able to attain such milestones and generate any such payments under the agreement.

We also have entered into a term sheet with Lee’s Pharmaceuticals that provides for a definitive license agreement with the opportunity for us to receive milestone payments upon specified events and royalty payments in connection with any commercial sales of Tß4-based products in China, Hong Kong and Macau. However, we have not yet executed the definitive license agreement with Lee’s, and we cannot assure you that we will be able to do so, nor can we assure you that we will be able to attain any such milestones or generate any such royalty payments under the agreement.

Government Grants

We are also aggressively pursuing government funding. In May 2010, we were awarded a grant from the NIH’s National Heart, Lung and Blood Institute to support the requisite nonclinical development of RGN-352 for patients who have suffered a heart attack. These nonclinical activities are being conducted even though our pending Phase 2 clinical trial of RGN-352 is on clinical hold. Subject to our compliance with the terms and conditions of the grant, we are eligible to receive up to $3.0 million over a three-year period in cost reimbursements for our associated costs incurred for the purposes set forth in the grant. Revenue from the grant will be recorded during the same periods when we incur eligible expenses.

The Patient Protection and Affordable Care Act enacted in 2010 included a new incentive for biotechnology companies like ours, known as the Qualifying Therapeutic Discovery Project grant program. Under this program, small businesses were able to apply for a federal grant in an amount equal to 50% of their eligible investment in qualifying therapeutic discovery projects for 2009 and 2010. Qualifying therapeutic discovery projects included those designed to treat or prevent diseases or conditions by conducting pre-clinical or clinical activities for the purpose of securing FDA approval of a product. We submitted three applications, covering each of our clinical-stage product candidates, and in October 2010 were awarded an aggregate of $733,438 under this program.

Other Financing Sources

Other potential sources of outside capital include entering into strategic business relationships, additional issuances of equity securities or debt financing or other similar financial instruments. If we raise additional capital through a strategic business relationship, we may have to give up valuable rights to our intellectual property. If we raise funds by selling additional shares of our common stock or securities convertible into our common stock, the ownership interest of our existing stockholders may be significantly diluted. In addition, if additional funds are raised through the issuance of preferred stock or debt securities, these securities are likely to have rights, preferences and privileges senior to our common stock and may involve significant fees, interest expense, restrictive covenants and the granting of security interests in our assets.

Our failure to successfully address ongoing liquidity requirements would have a materially negative impact on our business, including the possibility of surrendering our rights to some technologies or product opportunities, delaying our clinical trials, or ceasing operations. There can be no assurance that we will be able to obtain additional capital in sufficient amounts, on acceptable terms, or at all.

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Off-Balance Sheet Arrangements

We do not have any off-balance sheet arrangements, as such term is defined in Item 303(a)(4) of Regulation S-K.

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

Our cash equivalents, which are generally comprised of Federally-insured bank deposits, are subject to default, changes in credit rating and changes in market value. These investments are also subject to interest rate risk and will decrease in value if market interest rates increase. As of March 31, 2012, these cash equivalents were $136,000. Due to the short-term nature of these investments, if market interest rates differed by 10% from their levels as of March 31, 2012, the change in fair value of our financial instruments would not have been material.

Item 4. Controls and Procedures

a) Evaluation of Disclosure Controls and Procedures

Our management, under the supervision and with the participation of our President and Chief Executive Officer, in his capacity as our principal executive officer and our principal financial officer, performed an evaluation of the effectiveness of the design and operation of our “disclosure controls and procedures” (as defined in Rule 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, as amended) as of March 31, 2012. Based upon this evaluation, management has concluded that, as of March 31, 2012, our disclosure controls and procedures were effective to provide reasonable assurance that the information required to be disclosed is recorded, processed, summarized and reported within the time periods specified under applicable rules of the SEC, and that such information is accumulated and communicated to management, including our President and Chief Executive Officer, as appropriate, to allow timely decisions regarding required disclosures.

b) Changes in Internal Controls

There were no changes in our internal control over financial reporting during the three months ended March 31, 2012 that have materially affected, or which are reasonably likely to materially affect, our internal control over financial reporting.

PART II – OTHER INFORMATION

Item 1. Legal Proceedings

  None.

Item 1A. Risk Factors

Set forth below and elsewhere in this report and in other documents we file with the SEC are risks and uncertainties that could cause actual results to differ materially from the results contemplated by the forward-looking statements contained in this report. The descriptions below include any material changes to and supersede the description of the risk factors affecting our business previously disclosed in “Part II, Item 1A. Risk Factors” of the Annual Report.

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Risks Related to Our Liquidity and Need for Financing

Before giving effect to any potential sales of our securities, we estimate that our existing capital resources, coupled with the receipt of the second Lee’s payment, will only be sufficient to fund our operations through June 2012.

We are focusing our current efforts on the development of RGN-259 for ophthalmic indications. We recently completed a Phase 2 clinical trial to evaluate RGN-259 in patients suffering from dry eye syndrome, and we intend to pursue partnering opportunities for RGN-259 based on the data from this trial. We are also supporting a small physician-sponsored Phase 2 study of RGN-259 in severe dry eye. We have completed enrolling 30 patients in our Phase 2 trial for RGN-137 in EB patients. We had intended to commence patient enrollment in a Phase 2 clinical trial of RGN-352 for AMI patients near the end of the first quarter of 2011, but this trial was placed on clinical hold by the FDA. The AMI trial remains on hold pending resolution of regulatory issues and our access to sufficient capital resources. Depending on our capital resources, and if regulatory and manufacturing issues with RGN-352 are resolved, we may also continue to support a proposed physician-sponsored Phase 1/2 clinical trial to evaluate the therapeutic potential of RGN-352 in patients with multiple sclerosis.

Even with the change in our clinical development priorities during 2011, we currently do not have sufficient capital resources to fund our ongoing research and development activities, and we will not be able to sponsor any clinical trials in 2012 without additional funding. We project that our existing capital resources will only be adequate to fund our operations through May 2012. We also expect to receive an additional $200,000 from Lee’s Pharmaceuticals upon the execution of the definitive license agreement that is the subject of a term sheet, although we only expect these additional proceeds, if received, to be sufficient to fund our operations through June 2012. If our stock price increases from its current level, we may, however, make additional sales of common stock under our committed equity facility with Lincoln Park Capital, as described below, which would extend our resources, but our ability to use the committed equity facility depends upon our share price and trading volume. However, even if we are able to sell shares of our common stock under the LPC facility, based on our current stock price the amount of proceeds we would be able to raise, doing so would not extend our capital resources significantly beyond the second quarter of 2012 and, accordingly, we will also need to seek other sources of capital.

Our forecast of the period of time through which our financial resources will be adequate to support our operations is a forward-looking statement and involves risks and uncertainties, and actual results could vary as a result of a number of factors, including the factors discussed elsewhere in this report. We have based this estimate on assumptions that may prove to be wrong, and we could use our available capital resources sooner than we currently expect.

We may not be able to enter into a definitive license agreement with Lee’s Pharmaceuticals, which would have a material adverse effect on our capital resources.

In March 2012, we entered into a term sheet with Lee’s Pharmaceuticals to license the development of Tß4 in any pharmaceutical form, including our RGN-259, RGN-137 and RGN-352 product candidates, in China, Hong Kong and Macau. Upon signing the term sheet, Lee’s paid us $200,000. We expect that the definitive license agreement with Lee’s will be completed by the end of May 2012 or soon thereafter, and upon the execution of the definitive agreement, we will receive an additional $200,000 payment from Lee’s. However, the execution of the definitive agreement with Lee’s is subject to risks, including the negotiation of mutually acceptable terms. If we are unable to agree to the terms of a definitive agreement with Lee’s within 60 days of the date of the term sheet, Lee’s will be permitted to terminate discussions regarding the agreement, in which case we would not receive the additional payment and we would be required to refund the original $200,000 payment. Given our current financial circumstances, unless we are able to generate addition capital resources, we would likely be unable to refund this payment, which would have a material adverse impact on our financial condition and ability to continue operations.

We are not currently able to access the LPC committed equity facility and, if we are able to do so in the future, we may not be able to access the full amount available under the facility.

In January 2011, we entered into a committed equity facility with Lincoln Park Capital, or LPC, under which we may direct LPC to purchase up to $11,000,000 worth of shares of our common stock through October 2013, generally in amounts of up to 200,000 shares every two business days. The amount we can sell under the facility may be increased to 400,000 shares every two business days, as long as the closing sale price of our common stock is not below $0.35 per share on the purchase date. However, the extent to which we will rely on the facility as a source of funding will depend on a number of factors, including the prevailing market price of our common stock and volume of trading and the extent to which we are able to secure working capital from other sources. Specifically, LPC does not have the obligation to purchase any shares of our common stock on any business day that the price of our common stock is less than $0.15 per share. As of the date of this report, we have sold a total of 1.5 million shares to LPC for gross proceeds of approximately $350,000.

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Depending on the prevailing market price of our common stock, we may not be able to sell shares to LPC for the maximum $11,000,000 over the term of the facility. At the minimum price of $0.15 per share, we would be able to sell 200,000 shares for proceeds of $30,000 on each purchase date. Assuming that we sold shares to LPC ten times each month, we would receive $300,000 in proceeds per month, up to the maximum amount available over the remaining term of the facility. In the event that we make less frequent sales to LPC, the aggregate proceeds available to us will be even less.

Currently, we have only registered for resale 12,541,667 additional shares of our common stock that we may sell to LPC. These shares, if and when issued to LPC, would be a combination of shares purchased at the price per share set forth in our purchase agreement with LPC and shares issued as additional pro rata commitment shares for no additional consideration, based on the formula set forth in the agreement. However, because the registration statement related to those shares has ceased to be effective under the Securities Act, we would need to prepare and file a post-effective amendment to the registration statement and have that post-effective amendment declared effective by the SEC before we can sell any of these shares to LPC. Assuming a purchase price of $0.20 per share, we would generate net cash proceeds of approximately $2.5 million. In the event we elect to issue more than the originally registered 15,000,000 shares, we would be required to file a new registration statement and have it declared effective by the SEC before selling such additional shares.

As described elsewhere in this report, we do not currently expect that funding from LPC will be sufficient to extend our operations beyond the second quarter of 2012, and we will need to secure another source of funding in order to satisfy our near term working capital needs. Should the financing we require to sustain our working capital needs be unavailable or prohibitively expensive when we require it, the consequences could be a material adverse effect on our business, operating results, financial condition and prospects.

In addition to our current development objectives, we will need substantial additional capital for the continued development of product candidates through marketing approval and for our longer-term future operations.

Beyond our current liquidity needs, we anticipate that substantial new capital resources will be required to continue our longer-term independent product development efforts, including any and all follow-on trials that will result from our current clinical programs beyond those currently contemplated, and to scale up manufacturing processes for our product candidates. We may be able to obtain funding under the committed equity facility with LPC in order to further some of these efforts. However, the actual amount of funds that we will need will be determined by many factors, some of which are beyond our control. These factors include, without limitation:

• the scope of our clinical trials, which is significantly influenced by the quality of clinical data achieved as trials are completed and the requirements established by regulatory authorities;

• the speed with which we complete our clinical trials, which depends on our ability to attract and enroll qualifying patients and the quality of the work performed by our clinical investigators and contract research organizations chosen to conduct the studies;

• the time required to prosecute, enforce and defend our intellectual property rights, which depends on evolving legal regimes and infringement claims that may arise between us and third parties;

• the ability to manufacture at scales sufficient to supply commercial quantities of any of our product candidates that receive regulatory approval, which may require levels of effort not currently anticipated; and

• the successful commercialization of our product candidates, which will depend on our ability to either create or partner with an effective commercialization organization and which could be delayed or prevented by the emergence of equal or more effective therapies.

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Emerging biotechnology companies like us may raise capital through corporate collaborations and by licensing intellectual property rights to other biotechnology or pharmaceutical enterprises. We intend to pursue this strategy, but there can be no assurance that we will be able to license our intellectual property or product development programs on commercially reasonable terms, if at all. There are substantial challenges and risks that will make it difficult to successfully implement any of these alternatives. If we are successful in raising additional capital through such a license or collaboration, we may have to give up valuable rights to our intellectual property. In addition, the business priorities of a strategic partner may change over time, which creates the possibility that the interests of the strategic partner in developing our technology may diminish and could have a potentially material negative impact on the value of our interest in the licensed intellectual property or product candidates.

Further, if we raise additional funds by selling shares of our common stock or securities convertible into our common stock, including under our committed equity facility with LPC, the ownership interest of our existing stockholders may be significantly diluted. If additional funds are raised through the issuance of preferred stock or debt securities, these securities are likely to have rights, preferences and privileges senior to our common stock and may involve significant fees, interest expense, restrictive covenants or the granting of security interests in our assets.

Our failure to successfully address both our short-term and long-term liquidity requirements would have a material negative impact on our business, including the possibility of surrendering our rights to some technologies or product opportunities, delaying our clinical trials or ceasing our operations.

We have incurred losses since inception and expect to incur significant losses in the foreseeable future and may never become profitable.

We have not commercialized any product candidates to date and incurred net operating losses every year since our inception in 1982. We believe these losses will continue for the foreseeable future, and may increase, as we pursue our product development efforts related to Tß4. As of March 31, 2012, our accumulated deficit totaled approximately $96 million.

As we expand our research and development efforts and seek to obtain regulatory approval of our product candidates to make them commercially viable, we anticipate substantial and increasing operating losses. Our ability to generate revenues and to become profitable will depend largely on our ability, alone or through the efforts of third-party licensees and collaborators, to efficiently and successfully complete the development of our product candidates, obtain necessary regulatory approvals for commercialization, scale-up commercial quantity manufacturing capabilities either internally or through third-party suppliers, and market our product candidates. There can be no assurance that we will achieve any of these objectives or that we will ever become profitable or be able to maintain profitability. Even if we do achieve profitability, we cannot predict the level of such profitability. If we sustain losses over an extended period of time and are not otherwise able to raise necessary funds to continue our development efforts and maintain our operations, we may be forced to cease operations.

Our common stock is quoted on the over-the-counter market, which subjects us to the SEC’s penny stock rules and may decrease the liquidity of our common stock.

Our common stock is traded over-the-counter on the OTC Bulletin Board. Over-the-counter markets are generally considered to be less efficient than, and not as broad as, a stock exchange. There may be a limited market for our stock now that it is quoted on the OTC Bulletin Board, trading in our stock may become more difficult and our share price could decrease. Specifically, you may not be able to resell your shares of common stock at or above the price you paid for such shares or at all.

In addition, our ability to raise additional capital may be impaired because of the less liquid nature of the over-the-counter markets. While we cannot guarantee that we would be able to complete an equity financing on acceptable terms, or at all, we believe that dilution from any equity financing while our shares are quoted on an over-the-counter market would likely be substantially greater than if we were to complete a financing while our common stock is traded on a national securities exchange. Further, we are unable to use short-form registration statements on Form S-3 for the registration of our securities, which could impair our ability to raise additional capital as needed.

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Our common stock is also subject to penny stock rules, which impose additional sales practice requirements on broker-dealers who sell our common stock. The SEC generally defines “penny stock” as an equity security that has a market price of less than $5.00 per share, subject to certain exceptions. The ability of broker-dealers to sell our common stock and the ability of our stockholders to sell their shares in the secondary market will be limited and, as a result, the market liquidity for our common stock will likely be adversely affected. We cannot assure you that trading in our securities will not be subject to these or other regulations in the future.

The report of our independent registered public accounting firm contains explanatory language that substantial doubt exists about our ability to continue as a going concern.

The report of our independent registered public accounting firm on our financial statements for the year ended December 31, 2011 contains explanatory language that substantial doubt exists about our ability to continue as a going concern, without raising additional capital. As described in this report, we estimate that our existing capital resources, without giving effect to potential additional sales of common stock under our committed equity facility with LPC, will be adequate to fund our operations into May 2012. We also expect to receive an additional $200,000 from Lee’s Pharmaceuticals upon the execution of the definitive license agreement that is the subject of a term sheet, although we only expect these additional proceeds, if received, to be sufficient to fund our operations through June 2012. We continue to seek other sources of capital, but if we are unable to obtain sufficient financing in the near term, then we would, in all likelihood, experience severe liquidity problems and may have to curtail our operations. If we curtail our operations, we may be placed into bankruptcy or undergo liquidation, the result of which will adversely affect the value of our common shares.

Risks Related to Our Business and Operations

Our pending Phase 2 clinical trial of RGN-352 was placed on clinical hold by the FDA in March 2011 and we are unsure when, if ever, we will be able to resume this trial.

In the second half of 2010, we implemented the development plans for our phase 2 clinical trial to evaluate RGN-352 in patients who have suffered an acute myocardial infarction, or AMI. We had planned to begin enrolling patients near the end of the first quarter of 2011. However, in March 2011, we were notified by the FDA that the trial was placed on clinical hold as a result of our contract manufacturer’s alleged failure to comply with current Good Manufacturing Practices. The FDA has prohibited us from using any of the active drug or placebo manufactured by this manufacturer in human trials, which will require us to identify a cGMP-compliant manufacturer and to have new material produced in the event that we seek to resume this trial. We have also learned that the contract manufacturer has closed its manufacturing facility and has filed for bankruptcy protection. Significant preparatory time and procedures will be required before any new suitable manufacturer would be able to manufacture RGN-352 for the AMI trial. Since we are unable to estimate the length of time that the trial will be on clinical hold, we have elected to cease activities on this trial until the FDA clinical hold is resolved and the requisite funding might be secured. Consequently, there can be no assurance that we will be able to timely resume or complete this trial, if at all.

All of our drug candidates are based on a single compound.

Our current primary business focus is the development of Tß4, and its analogues, derivatives and fragments, for the regeneration and accelerated repair of damaged tissue from non-healing dermal and corneal wounds, cardiac injury, central/peripheral nervous system diseases and other conditions, as well as an improvement in various functions, such as, but not limited to, cardiac and neurological. Unlike many pharmaceutical companies that have a number of unique chemical entities in development, we are dependent on a single molecule, formulated for different routes of administration and different clinical indications, for our potential commercial success. As a result, any common safety or efficacy concerns for Tß4-based products that cross formulations would have a much greater impact on our business prospects than if our product pipeline were more diversified.

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We may never be able to commercialize our product candidates.

Although Tß4 has shown biological activity in in vitro and animal models and we observed some efficacy in our recent RGN-259 phase 2a trial and earlier Phase 2 dermal trials, we cannot assure you that our product candidates will exhibit activity or importance in humans in large-scale trials. Our drug candidates are still in research and development, and we do not expect them to be commercially available for the foreseeable future, if at all. Only a small number of research and development programs ultimately result in commercially successful drugs. Potential products that appear to be promising at early stages of development may not reach the market for a number of reasons. These include the possibility that the potential products may:

• be found ineffective or cause harmful side effects during preclinical studies or clinical trials;

• fail to receive necessary regulatory approvals;

• be precluded from commercialization by proprietary rights of third parties;

• be difficult to manufacture on a large scale; or

• be uneconomical or otherwise fail to achieve market acceptance.

If any of these potential problems occurs, we may never successfully market Tß4-based products.

We are subject to intense government regulation, and we may not receive regulatory approvals for our drug candidates.

Our product candidates will require regulatory approvals prior to sale. In particular, therapeutic agents are subject to stringent approval processes, prior to commercial marketing, by the FDA and by comparable agencies in most foreign countries. The process of obtaining FDA and corresponding foreign approvals is costly and time-consuming, and we cannot assure you that such approvals will be granted. Also, the regulations we are subject to change frequently and such changes could cause delays in the development of our product candidates.

Three of our drug candidates are currently in the clinical development stage, and we cannot be certain that we or our collaborators will successfully complete the clinical trials necessary to receive regulatory product approvals. The regulatory approval process is lengthy, unpredictable and expensive. To obtain regulatory approvals in the United States, we or a collaborator must ultimately demonstrate to the satisfaction of the FDA that our product candidates are sufficiently safe and effective for their proposed administration to humans. Many factors, known and unknown, can adversely impact clinical trials and the ability to evaluate a product candidate’s safety and efficacy, including:

• the FDA or other health regulatory authorities, or institutional review boards, or IRBs, do not approve a clinical trial protocol or place a clinical trial on hold;

• suitable patients do not enroll in a clinical trial in sufficient numbers or at the expected rate, for reasons such as the size of the patient population, the proximity of patients to clinical sites, the eligibility criteria for the trial, the perceptions of investigators and patients regarding safety, and the availability of other treatment options;

• clinical trial data is adversely affected by trial conduct or patient withdrawal prior to completion of the trial;

• there may be competition with ongoing clinical trials and scheduling conflicts with participating clinicians;

• patients experience serious adverse events, including adverse side effects of our drug candidates, for a variety of reasons that may or may not be related to our product candidates, including the advanced stage of their disease and other medical problems;

• patients in the placebo or untreated control group exhibit greater than expected improvements or fewer than expected adverse events;

• third-party clinical investigators do not perform the clinical trials on the anticipated schedule or consistent with the clinical trial protocol and good clinical practices, or other third-party organizations do not perform data collection and analysis in a timely or accurate manner;

• service providers, collaborators or co-sponsors do not adequately perform their obligations in relation to the clinical trial or cause the trial to be delayed or terminated;

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• we are unable to obtain a sufficient supply of manufactured clinical trial materials;

• regulatory inspections of manufacturing facilities, which may, among other things, require us or a co-sponsor to undertake corrective action or suspend the clinical trials, such as the clinical hold with respect to our Phase 2 clinical trial of RGN-352;

• the interim results of the clinical trial are inconclusive or negative;

• the clinical trial, although approved and completed, generates data that is not considered by the FDA or others to be clinically relevant or sufficient to demonstrate safety and efficacy; and

• changes in governmental regulations or administrative actions affect the conduct of the clinical trial or the interpretation of its results.

There can be no assurance that our clinical trials will in fact demonstrate, to the satisfaction of the FDA and others, that our product candidates are sufficiently safe or effective. The FDA or we may also restrict or suspend our clinical trials at any time if either believes that we are exposing the subjects participating in the trials to unacceptable health risks.

Clinical trials for product candidates such as ours are often conducted with patients who have more advanced forms of a particular condition or other unrelated conditions. For example, in clinical trials for our product candidate RGN-137, we have studied patients who are not only suffering from chronic epidermal wounds but who are also older and much more likely to have other serious adverse conditions. During the course of treatment with our product candidates, patients could die or suffer other adverse events for reasons that may or may not be related to the drug candidate being tested. Further, and as a consequence that all of our drug candidates are based on Tß4, crossover risk exists such that a patient in one trial may be adversely impacted by one drug candidate, and that adverse event may have implications for our other trials and other drug candidates. However, even if unrelated to our product candidates, such adverse events can nevertheless negatively impact our clinical trials, and our business prospects would suffer.

These factors, many of which may be outside of our control, may have a negative impact on our business by making it difficult to advance product candidates or by reducing or eliminating their potential or perceived value. As a consequence, we may need to perform more or larger clinical trials than planned. Further, if we are forced to contribute greater financial and clinical resources to a study, valuable resources will be diverted from other areas of our business. If we fail to complete or if we experience material delays in completing our clinical trials as currently planned, or we otherwise fail to commence or complete, or experience delays in, any of our other present or planned clinical trials, including as a result of the actions of third parties upon which we rely for these functions, our ability to conduct our business as currently planned could materially suffer.

We may not successfully establish and maintain development and testing relationships with third-party service providers and collaborators, which could adversely affect our ability to develop our product candidates.

We have only limited resources, experience with and capacity to conduct requisite testing and clinical trials of our drug candidates. As a result, we rely and expect to continue to rely on third-party service providers and collaborators, including corporate partners, licensors and contract research organizations, or CROs, to perform a number of activities relating to the development of our drug candidates, including the design and conduct of clinical trials, and potentially the obtaining of regulatory approvals. For example, we currently rely on several third-party contractors to manufacture and formulate Tß4 into the product candidates used in our clinical trials, develop assays to assess Tß4’s effectiveness in complex biological systems, recruit clinical investigators and sites to participate in our trials, manage the clinical trial process and collect, evaluate and report clinical results.

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We may not be able to maintain or expand our current arrangements with these third parties or maintain such relationships on favorable terms. Our agreements with these third parties may also contain provisions that restrict our ability to develop and test our product candidates or that give third parties rights to control aspects of our product development and clinical programs. In addition, conflicts may arise with our collaborators, such as conflicts concerning the interpretation of clinical data, the achievement of milestones, the interpretation of financial provisions or the ownership of intellectual property developed during the collaboration. If any conflicts arise with our existing or future collaborators, they may act in their self-interest, which may be adverse to our best interests. Any failure to maintain our collaborative agreements and any conflicts with our collaborators could delay or prevent us from developing our product candidates. We and our collaborators may fail to develop products covered by our present and future collaborations if, among other things:

• we do not achieve our objectives under our collaboration agreements;

• we or our collaborators are unable to obtain patent protection for the products or proprietary technologies we develop in our collaborations;

• we are unable to manage multiple simultaneous product development collaborations;

• our collaborators become competitors of ours or enter into agreements with our competitors;

• we or our collaborators encounter regulatory hurdles that prevent commercialization of our product candidates; or

• we develop products and processes or enter into additional collaborations that conflict with the business objectives of our other collaborators.

We also have less control over the timing and other aspects of our clinical trials than if we conducted the monitoring and supervision entirely on our own. Third parties may not perform their responsibilities for our clinical trials on our anticipated schedule or consistent with a clinical trial protocol or applicable regulations. We also rely on clinical research organizations to perform much of our data management and analysis. They may not provide these services as required or in a timely manner. If any of these parties do not meet deadlines or follow proper procedures, including procedures required by law, the preclinical studies and clinical trials may take longer than expected, may be delayed or may be terminated, which would have a materially negative impact on our product development efforts. If we were forced to find a replacement entity to perform any of our preclinical studies or clinical trials, we may not be able to find a suitable entity on favorable terms or at all. Even if we were able to find a replacement, resulting delays in the tests or trials may result in significant additional expenditures and delays in obtaining regulatory approval for drug candidates, which could have a material adverse impact on our results of operations and business prospects.

We are subject to intense competition from companies with greater resources and more mature products, which may result in our competitors developing or commercializing products before or more successfully than we do.

We are engaged in a business that is highly competitive. Research and development activities for the development of drugs to treat indications within our focus are being sponsored or conducted by private and public research institutions and by major pharmaceutical companies located in the United States and a number of foreign countries. Most of these companies and institutions have financial and human resources that are substantially greater than our own and they have extensive experience in conducting research and development activities and clinical trials and in obtaining the regulatory approvals necessary to market pharmaceutical products that we do not have. As a result, they may develop competing products more rapidly that are safer, more effective, or have fewer side effects, or are less expensive, or they may develop and commercialize products that render our product candidates non-competitive or obsolete.

With respect to our product candidate RGN-259, there are also numerous ophthalmic companies developing drugs for corneal wound healing and other outside-of-the-eye diseases and injuries. Amniotic membranes have been successfully used to treat corneal wounds in certain cases, as have topical steroids and antibacterial agents.

We have initially targeted our product candidate RGN-352 for cardiovascular indications. Most large pharmaceutical companies and many smaller biomedical companies are vigorously pursuing the development of therapeutics to treat patients after heart attacks and for other cardiovascular indications.

With respect to our product candidate RGN-137 for wound healing, Johnson & Johnson has previously marketed Regranex™ for this purpose in patients with diabetic foot ulcers. Other companies, such as Novartis, are developing and marketing artificial skins, which we believe could also compete with RGN-137. Moreover, wound healing is a large and highly fragmented marketplace attracting many companies, large and small, to develop products for treating acute and chronic wounds, including, for example, honey-based ointments, hyperbaric oxygen therapy, and low frequency cavitational ultrasound.

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We are also developing potential cosmeceutical products, which are loosely defined as products that bridge the gap between cosmetics and pharmaceuticals, for example, by improving skin texture and reducing the appearance of aging. This industry is intensely competitive, with potential competitors ranging from large multinational companies to very small specialty companies. New cosmeceutical products often have a short product life and are frequently replaced with newer products developed to address the latest trends in appearance and fashion. We may not be able to adapt to changes in the industry as quickly as larger and more experienced cosmeceutical companies. Further, larger cosmetics companies have the financial and marketing resources to effectively compete with smaller companies like us in order to sell products aimed at larger markets.

Even if approved for marketing, our technologies and product candidates are unproven and they may fail to gain market acceptance.

Our product candidates, all of which are based on the molecule Tß4, are new and unproven and there is no guarantee that health care providers or patients will be interested in our product candidates, even if they are approved for use. If any of our product candidates are approved by the FDA, our success will depend in part on our ability to demonstrate sufficient clinical benefits, reliability, safety, and cost effectiveness of our product candidates relative to other approaches, as well as on our ability to continue to develop our product candidates to respond to competitive and technological changes. If the market does not accept our product candidates, when and if we are able to commercialize them, then we may never become profitable. Factors that could delay, inhibit or prevent market acceptance of our product candidates may include:

• the timing and receipt of marketing approvals;

• the safety and efficacy of the products;

• the emergence of equivalent or superior products;

• the cost-effectiveness of the products; and

• ineffective marketing.

It is difficult to predict the future growth of our business, if any, and the size of the market for our product candidates because the markets are continually evolving. There can be no assurance that our product candidates will prove superior to products that may currently be available or may become available in the future or that our research and development activities will result in any commercially profitable products.

We have no marketing experience, sales force or distribution capabilities. If our product candidates are approved, and we are unable to recruit key personnel to perform these functions, we may not be able to commercialize them successfully.

Although we do not currently have any marketable products, our ability to produce revenues ultimately depends on our ability to sell our product candidates if and when they are approved by the FDA and other regulatory authorities. We currently have no experience in marketing or selling pharmaceutical products, and we do not have a marketing and sales staff or distribution capabilities. Developing a marketing and sales force is also time-consuming and could delay the launch of new products or expansion of existing product sales. In addition, we will compete with many companies that currently have extensive and well-funded marketing and sales operations. If we fail to establish successful marketing and sales capabilities or fail to enter into successful marketing arrangements with third parties, our ability to generate revenues will suffer.

If we enter markets outside the United States our business will be subject to political, economic, legal and social risks in those markets, which could adversely affect our business.

There are significant regulatory and legal barriers to entering markets outside the United States that we must overcome if we seek regulatory approval to market our product candidates in countries other than the United States. We would be subject to the burden of complying with a wide variety of national and local laws, including multiple and possibly overlapping and conflicting laws. We also may experience difficulties adapting to new cultures, business customs and legal systems. Any sales and operations outside the United States would be subject to political, economic and social uncertainties including, among others:

• changes and limits in import and export controls;

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• increases in custom duties and tariffs;

• changes in currency exchange rates;

• economic and political instability;

• changes in government regulations and laws;

• absence in some jurisdictions of effective laws to protect our intellectual property rights; and

• currency transfer and other restrictions and regulations that may limit our ability to sell certain product candidates or repatriate profits to the United States.

Any changes related to these and other factors could adversely affect our business if and to the extent we enter markets outside the United States.

Governmental and third-party payors may subject any product candidates we develop to sales and pharmaceutical pricing controls that could limit our product revenues and delay profitability.

The successful commercialization of our product candidates, if they are approved by the FDA, will likely depend on our ability to obtain reimbursement for the cost of the product and treatment. Government authorities, private health insurers and other organizations, such as health maintenance organizations, are increasingly seeking to lower the prices charged for medical products and services. Also, the trend toward managed health care in the United States, the growth of healthcare maintenance organizations, and recently enacted legislation reforming healthcare and proposals to reform government insurance programs could have a significant influence on the purchase of healthcare services and products, resulting in lower prices and reducing demand for our product candidates. The cost containment measures that healthcare providers are instituting and any healthcare reform could reduce our ability to sell our product candidates and may have a material adverse effect on our operations. We cannot assure you that reimbursement in the United States or foreign countries will be available for any of our product candidates, and that any reimbursement granted will be maintained, or that limits on reimbursement available from third-party payors will not reduce the demand for, or the price of, our product candidates. The lack or inadequacy of third-party reimbursements for our product candidates would decrease the potential profitability of our operations. We cannot forecast what additional legislation or regulation relating to the healthcare industry or third-party coverage and reimbursement may be enacted in the future, or what effect the legislation or regulation would have on our business.

We have no manufacturing or formulation capabilities and are dependent upon third-party suppliers to provide us with our product candidates. If these suppliers do not manufacture our product candidates in sufficient quantities, at acceptable quality levels and at acceptable cost, or if we are unable to identify suitable replacement suppliers if needed, our clinical development efforts could be delayed, prevented or impaired.

We do not own or operate manufacturing facilities and have little experience in manufacturing pharmaceutical products. We currently rely, and expect to continue to rely, primarily on peptide manufacturers to supply us with Tß4 for further formulation into our product candidates. We have historically engaged three separate smaller drug formulation contractors for the formulation of clinical grade product candidates, one for each of our three product candidates in clinical development, although, as described in this report, the contractor we engaged for RGN-352 has filed for bankruptcy and closed its manufacturing facility, and our clinical trials involving RGN-352 have been placed on clinical hold. We currently do not have an alternative source of supply for either Tß4 or the individual drug candidates. If these suppliers, together or individually, are not able to supply us with either Tß4 or individual product candidates on a timely basis, in sufficient quantities, at acceptable levels of quality and at a competitive price, or if we are unable to identify a replacement manufacturer to perform these functions on acceptable terms as needed, our development programs could be seriously jeopardized.

The clinical hold on our RGN-352 trial will require us to have new material manufactured by a new manufacturer in the event that we seek to resume this trial. Significant preparatory time and procedures will be required before any new manufacturer would be able to manufacture RGN-352 for the AMI trial, due to the time required for revalidation of processes and assays related to such production that were already in place with the original manufacturer. Since we are unable to estimate the length of time that the trial will be on clinical hold, we have elected to cease activities on this trial until the FDA clinical hold is resolved and the requisite funding might be secured.

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Other risks of relying solely on single suppliers for each of our product candidates include:

• the possibility that our other manufacturers, and any new manufacturer that we may identify for RGN-352, may not be able to ensure quality and compliance with regulations relating to the manufacture of pharmaceuticals;

• their manufacturing capacity may not be sufficient or available to produce the required quantities of our product candidates based on our planned clinical development schedule, if at all;

• they may not have access to the capital necessary to expand their manufacturing facilities in response to our needs;

• commissioning replacement suppliers would be difficult and time-consuming;

• individual suppliers may have used substantial proprietary know-how relating to the manufacture of our product candidates and, in the event we must find a replacement or supplemental supplier, our ability to transfer this know-how to the new supplier could be an expensive and/or time-consuming process;

• an individual supplier may experience events, such as a fire or natural disaster, that force it to stop or curtail production for an extended period;

• an individual supplier could encounter significant increases in labor, capital or other costs that would make it difficult for them to produce our products cost-effectively; or

• an individual supplier may not be able to obtain the raw materials or validated drug containers in sufficient quantities, at acceptable costs or in sufficient time to complete the manufacture, formulation and delivery of our product candidates.

Our suppliers may use hazardous and biological materials in their businesses. Any claims relating to improper handling, storage or disposal of these materials could be time-consuming and costly to us, and we are not insured against such claims.

Our product candidates and processes involve the controlled storage, use and disposal by our suppliers of certain hazardous and biological materials and waste products. We and our suppliers and other collaborators are subject to federal, state and local regulations governing the use, manufacture, storage, handling and disposal of materials and waste products. Even if we and these suppliers and collaborators comply with the standards prescribed by law and regulation, the risk of accidental contamination or injury from hazardous materials cannot be completely eliminated. In the event of an accident, we could be held liable for any damages that result, and we do not carry insurance for this type of claim. We may also incur significant costs to comply with current or future environmental laws and regulations.

We face the risk of product liability claims, which could adversely affect our business and financial condition.

We may be subject to product liability claims as a result of our testing, manufacturing, and marketing of drugs. In addition, the use of our product candidates, when and if developed and sold, will expose us to the risk of product liability claims. Product liability may result from harm to patients using our product candidates, such as a complication that was either not communicated as a potential side effect or was more extreme than anticipated. We require all patients enrolled in our clinical trials to sign consents, which explain various risks involved with participating in the trial. However, patient consents provide only a limited level of protection, and it may be alleged that the consent did not address or did not adequately address a risk that the patient suffered. Additionally, we will generally be required to indemnify our clinical product manufacturers, clinical trial centers, medical professionals and other parties conducting related activities in connection with losses they may incur through their involvement in the clinical trials.

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Our ability to reduce our liability exposure for human clinical trials and commercial sales, if any, of Tß4 is dependent in part on our ability to obtain sufficient product liability insurance or to collaborate with third parties that have adequate insurance. Although we intend to obtain and maintain product liability insurance coverage if we gain approval to market any of our product candidates, we cannot guarantee that product liability insurance will continue to be available to us on acceptable terms, or at all, or that its coverage will be sufficient to cover all claims against us. A product liability claim, even one without merit or for which we have substantial coverage, could result in significant legal defense costs, thereby potentially exposing us to expenses significantly in excess of our revenues, as well as harm to our reputation and distraction of our management.

If any of our key employees discontinue their services with us, our efforts to develop our business may be delayed.

We are highly dependent on the principal members of our management team. The loss of our chairman and chief scientific advisor, Allan Goldstein, our chief executive officer, J.J. Finkelstein or David Crockford, our VP of Clinical and Regulatory Affairs, could prevent or significantly delay the achievement of our goals. In December 2011, we terminated our employment agreements with Dr. Goldstein, Mr. Finkelstein and Mr. Crockford, who are currently engaged only as part-time employees. And substantially all of our employees are now working only part-time schedules. We cannot assure you that Dr. Goldstein, Mr. Finkelstein or Mr. Crockford, or any other key employees, will not elect to terminate their employment. We do not currently have a full-time chief financial officer. In addition, we do not maintain a key man life insurance policy with respect to any of our management personnel. In the future, we anticipate that we will also need to add additional management and other personnel. Competition for qualified personnel in our industry is intense, and our success will depend in part on our ability to attract and retain highly skilled personnel. We cannot assure you that our efforts to attract or retain such personnel will be successful.

Mauro Bove, a member of our Board, is also a director and officer of entities affiliated with Sigma-Tau and a director of Lee’s Pharmaceuticals, relationships which could give rise to a conflict of interest involving Mr. Bove.

Mauro Bove, a member of our Board of Directors, is also a director and officer of entities affiliated with Sigma-Tau, which collectively make up our largest stockholder group. Sigma-Tau has provided us with significant funding, may continue doing so in the future, and is also our strategic partner in Europe with respect to the development of certain of our drug candidates. We have issued shares of common stock and common stock warrants to Sigma-Tau in several private placement financing transactions, including as recently as January 2011, but we retained the right to repurchase some of these shares under certain circumstances.

We have licensed certain rights to our product candidates generally for the treatment of dermal and internal wounds to Sigma-Tau. Under the license agreement, upon the completion of a Phase 2 clinical trial of either of these product candidates that yields positive results in terms of clinical efficacy and safety, Sigma-Tau is obligated to either make a $5 million milestone payment to us or to initiate and fund a pivotal Phase 3 clinical trial of the product candidate. In 2009, we completed two Phase 2 clinical trials of RGN-137, but these trials were not sufficient to trigger the milestone obligation. There can be no assurance that we will ever receive this payment or be able to initiate a pivotal Phase 3 clinical trial of RGN-137 that would be funded by Sigma-Tau. As a result of Mr. Bove’s relationship with Sigma-Tau, there could be a conflict of interest between Sigma-Tau and our other stockholders with respect to these and other agreements and circumstances that may require the exercise of the Board’s discretion with respect to Sigma-Tau. Any decision in the best interests of Sigma-Tau may not be in the best interest of our other stockholders.

Additionally, Mr. Bove is a non-executive director of Lee’s Pharmaceuticals, in which affiliates of Sigma-Tau have a significant equity interest. In March 2012, we entered into a term sheet in connection with the license of TB4 in any pharmaceutical form, including our RGN-259, RGN-352 and RGN-137 product candidates for development in China, Hong Kong and Macau. Under the expected terms of the license agreement, we are to receive a $200,000 payment from Lee’s upon the execution of the definitive license agreement. There can be no assurance that we will be able to enter into a definitive agreement with Lee’s, or that we will ever receive this payment, or that we will ever receive any further payments from Lee’s under the agreement. As a result of Mr. Bove’s relationship with Lee’s and Sigma-Tau, Mr. Bove may be subject to a conflict of interest in fulfilling his duties to Lee’s, Sigma-Tau and us, in connection with these and other agreements and circumstances that may require the exercise of the Board’s discretion with respect to Lee’s. These conflicts could potentially result in decisions that may not be in the best interest of our other stockholders.

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Risks Related To Our Intellectual Property

We are heavily reliant on our license from the National Institutes of Health for the rights to Tß4, and any loss of these rights would adversely affect our business.

We have received an exclusive worldwide license to intellectual property discovered at the National Institutes of Health, or NIH, pertaining to the use of Tß4 in wound healing and tissue repair. The intellectual property rights from this license form the basis for our current commercial development focus with Tß4. This license terminates upon the last to expire of the patent applications that are filed, or any patents that may issue from such applications, in connection with the license. This license requires us to pay a minimum annual royalty to the NIH, regardless of the success of our product development efforts, plus certain other royalties upon the sale of products created by the intellectual property granted under the license. This license may be terminated for a number of reasons, including our non-payment of the royalty or lack of continued product development, among others. While to date we believe that we have complied with all requirements to maintain the license, the loss of this license would have a material adverse effect on our business and business prospects and may require us to cease development of our current line of Tß4-based product candidates.

If we are not able to maintain adequate patent protection for our product candidates, we may be unable to prevent our competitors from using our technology or technology that we license.

Our success will depend in substantial part on our ability to obtain, defend and enforce patents, maintain trade secrets and operate without infringing upon the proprietary rights of others, both in the United States and abroad. Pursuant to an exclusive worldwide license from the NIH, we have exclusive rights to use Tß4 in the treatment of non-healing wounds. While patents covering our use of Tß4 have issued in some countries, we cannot guarantee whether or when corresponding patents will be issued, or the scope of any patents that may be issued, in other countries. We have attempted to create a substantial intellectual property portfolio, submitting patent applications for various compositions of matter, methods of use and fragments and derivatives of Tß4. We have also in-licensed other intellectual property rights from third parties that could be subject to the same risks as our own patents. If any of these patent applications do not issue, or do not issue in certain countries, or are not enforceable, the ability to commercialize Tß4 in various medical indications could be substantially limited or eliminated.

In addition, the patent positions of the products being developed by us and our collaborators involve complex legal and factual uncertainties. As a result, we cannot assure you that any patent applications filed by us, or by others under which we have rights, will result in patents being issued in the United States or foreign countries. In addition, there can be no assurance that any patents will be issued from any pending or future patent applications of ours or our collaborators, that the scope of any patent protection will be sufficient to provide us with competitive advantages, that any patents obtained by us or our collaborators will be held valid if subsequently challenged or that others will not claim rights in or ownership of the patents and other proprietary rights we or our collaborators may hold. Unauthorized parties may try to copy aspects of our product candidates and technologies or obtain and use information we consider proprietary. Policing the unauthorized use of our proprietary rights is difficult. We cannot guarantee that no harm or threat will be made to our or our collaborators’ intellectual property. In addition, changes in, or different interpretations of, patent laws in the United States and other countries may also adversely affect the scope of our patent protection and our competitive situation.

Due to the significant time lag between the filing of patent applications and the publication of such patents, we cannot be certain that our licensors were the first to file the patent applications we license or, even if they were the first to file, also were the first to invent, particularly with regards to patent rights in the United States. In addition, a number of pharmaceutical and biotechnology companies and research and academic institutions have developed technologies, filed patent applications or received patents on various technologies that may be related to our product candidates. Some of these technologies, applications or patents may conflict with our or our licensors’ technologies or patent applications. A conflict could limit the scope of the patents, if any, that we or our licensors may be able to obtain or result in denial of our or our licensors’ patent applications. If patents that cover our activities are issued to other companies, we may not be able to develop or obtain alternative technology.

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Additionally, there is certain subject matter that is patentable in the United States but not generally patentable outside of the United States. Differences in what constitutes patentable subject matter in various countries may limit the protection we can obtain outside of the United States. For example, methods of treating humans are not patentable in many countries outside of the United States. These and other issues may prevent us from obtaining patent protection outside of the United States, which would have a material adverse effect on our business, financial condition and results of operations.

Changes to U.S. patent laws could materially reduce any value our patent portfolio may have.

The value of our patents depends in part on their duration. A shorter period of patent protection could lessen the value of our rights under any patents that may be obtained and may decrease revenues derived from its patents. For example, the U.S. patent laws were previously amended to change the term of patent protection from 17 years following patent issuance to 20 years from the earliest effective filing date of the application. Because the time from filing to issuance of biotechnology applications may be more than three years depending on the subject matter, a 20-year patent term from the filing date may result in substantially shorter patent protection. Future changes to patent laws could shorten our period of patent exclusivity and may decrease the revenues that we might derive from the patents and the value of our patent portfolio.

We may not have adequate protection for our unpatented proprietary information, which could adversely affect our competitive position.

In addition to our patents, we also rely on trade secrets, know-how, continuing technological innovations and licensing opportunities to develop and maintain our competitive position. However, others may independently develop substantially equivalent proprietary information and techniques or otherwise gain access to our trade secrets or disclose our technology. To protect our trade secrets, we may enter into confidentiality agreements with employees, consultants and potential collaborators. However, we may not have such agreements in place with all such parties and, where we do, these agreements may not provide meaningful protection of our trade secrets or adequate remedies in the event of unauthorized use or disclosure of such information. Also, our trade secrets or know-how may become known through other means or be independently discovered by our competitors. Any of these events could prevent us from developing or commercializing our product candidates.

We may be subject to claims that we or our employees have wrongfully used or disclosed alleged trade secrets of former employers.

As is commonplace in the biotechnology industry, we employ now, and may hire in the future, individuals who were previously employed at other biotechnology or pharmaceutical companies, including competitors or potential competitors. Although there are no claims currently pending against us, we may be subject to claims that we or certain employees have inadvertently or otherwise used or disclosed trade secrets or other proprietary information of former employers. Litigation may be necessary to defend against these claims. Even if we are successful in defending against these claims, litigation could result in substantial costs and would be a significant distraction to management.

Risks Related To Our Securities

Our common stock price is volatile, our stock is highly illiquid, and any investment in our securities could decline substantially in value.

For the period from January 1, 2012 through May 8, 2012, the closing price of our common stock has ranged from $0.11 to $0.22, with an average daily trading volume of approximately 54,000 shares. In light of our small size and limited resources, as well as the uncertainties and risks that can affect our business and industry, our stock price is expected to continue to be highly volatile and can be subject to substantial drops, with or even in the absence of news affecting our business. The following factors, in addition to the other risk factors described in this report, and the potentially low volume of trades in our common stock since it is not listed on a national securities exchange, may have a significant impact on the market price of our common stock, some of which are beyond our control:

• results of pre-clinical studies and clinical trials;

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• commercial success of approved products;

• corporate partnerships;

• technological innovations by us or competitors;

• changes in laws and government regulations both in the U.S. and overseas;

• changes in key personnel at our company;

• developments concerning proprietary rights, including patents and litigation matters;

• public perception relating to the commercial value or safety of any of our product candidates;

• future sales of our common stock, including to LPC under our committed equity facility;

• other issuances of our common stock, or securities convertible into or exercisable for our common stock, causing dilution;

• anticipated or unanticipated changes in our financial performance;

• general trends related to the biopharmaceutical and biotechnological industries; and

• general conditions in the stock market.

The stock market in general has recently experienced relatively large price and volume fluctuations. In particular, the market prices of securities of smaller biotechnology companies have experienced dramatic fluctuations that often have been unrelated or disproportionate to the operating results of these companies. Continued market fluctuations could result in extreme volatility in the price of our common stock, which could cause a decline in its value. You should also be aware that price volatility may be worse if the trading volume of the common stock remains limited or declines.

Our principal stockholders have significant voting power and may take actions that may not be in the best interests of our other stockholders.

Our officers, directors and principal stockholders together control approximately 42% of our outstanding common stock. Included in this group is Sigma-Tau and its affiliates, which together hold outstanding shares representing approximately 37% of our outstanding common stock. A portion of the shares of common stock currently held by Sigma-Tau and its affiliates are subject to voting agreements under which our Board controls the voting power of such stock. We cannot assure you that such voting agreements would prevent Sigma-Tau and its affiliates from taking actions not in your best interests and effectively exercising control over us. These voting agreements expire periodically through September 2012. After their expiration, we will have no control over the voting of these shares controlled by Sigma-Tau, including with respect to the election of directors and approval of significant corporate transactions. This concentration of ownership may have the effect of delaying or preventing a change in control and might adversely affect the market price of our common stock, and therefore may not be in the best interest of our other stockholders.

If securities or industry analysts do not publish research or reports or publish unfavorable research about our business, the price of our common stock and other securities and their trading volume could decline.

The trading market for our common stock and other securities will depend in part on the research and reports that securities or industry analysts publish about us or our business. We do not currently have and may never obtain research coverage by securities and industry analysts. If securities or industry analysts do not commence or maintain coverage of us, the trading price for our common stock and other securities would be negatively affected. In the event we obtain securities or industry analyst coverage, if one or more of the analysts who covers us downgrades our securities, the price of our securities would likely decline. If one or more of these analysts ceases to cover us or fails to publish regular reports on us, interest in the purchase of our securities could decrease, which could cause the price of our common stock and other securities and their trading volume to decline.

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The exercise of options and warrants and other issuances of shares of common stock or securities convertible into common stock will dilute your interest.

As of March 31, 2012, there were outstanding options to purchase an aggregate of 5,524,599 shares of our common stock at exercise prices ranging from $0.14 per share to $3.82 per share and outstanding warrants to purchase 11,332,059 shares of our common stock at a weighted average exercise price of $0.67 per share. The exercise of options and warrants at prices below the market price of our common stock could adversely affect the price of shares of our common stock. Additional dilution may result from the issuance of shares of our capital stock in connection with collaborations or manufacturing arrangements or in connection with other financing efforts, including our committed equity facility with LPC.

Any issuance of our common stock that is not made solely to then-existing stockholders proportionate to their interests, such as in the case of a stock dividend or stock split, will result in dilution to each stockholder by reducing his, her or its percentage ownership of the total outstanding shares. Moreover, if we issue options or warrants to purchase our common stock in the future and those options or warrants are exercised or we issue restricted stock, stockholders may experience further dilution. Holders of shares of our common stock have no preemptive rights that entitle them to purchase their pro rata share of any offering of shares of any class or series.

In addition, most of the outstanding warrants to purchase shares of our common stock have an exercise price above the current market price for our common stock. As a result, these warrants may not be exercised prior to their expiration, in which case we would not realize any proceeds from their exercise.

The sale of shares of our common stock to LPC may cause substantial dilution to our existing stockholders and could cause the price of our common stock to decline.

Under our committed equity facility with LPC, we may sell to LPC, under certain circumstances, up to $11,000,000 of our common stock through October 2013. Generally, we have the right, but no obligation, to direct LPC to periodically purchase up to $11,000,000 of our common stock in specific amounts under certain conditions, which periodic purchase amounts can be increased under specified circumstances. Through the date of this report, we have sold approximately 1,500,000 shares to LPC for net proceeds of $348,200.

We have also agreed to issue to LPC up to an aggregate of 1,916,666 shares of common stock as a fee for LPC’s commitment to purchase our shares. Of these commitment shares, we issued one-half, or 958,333 shares, upon entering into the facility with LPC. The remaining commitment shares are issuable to LPC on a pro rata basis as purchases are made under the facility. In connection with the purchases made to date, we have issued 30,336 of the remaining commitment shares.

Depending upon market liquidity at the time, sales of shares of our common stock to LPC may cause the trading price of our common stock to decline. LPC may ultimately purchase all, some or no additional portion of the $11,000,000 of common stock, and after it has acquired shares, LPC may sell all, some or none of those shares. Therefore, sales to LPC by us could result in substantial dilution to the interests of other holders of our common stock. The sale of a substantial number of shares of our common stock to LPC, or the anticipation of such sales, could make it more difficult for us to sell equity or equity-related securities in the future at a time and at a price that we might otherwise wish to effect sales. However, we have the right to control the timing and amount of any sales of our shares to LPC, and we may terminate the facility at any time, in our discretion, without any cost to us.

Our certificate of incorporation, our stockholder rights plan and Delaware law contain provisions that could discourage or prevent a takeover or other change in control, even if such a transaction would be beneficial to our stockholders, which could affect our stock price adversely and prevent attempts by our stockholders to replace or remove our current management.

Our certificate of incorporation provides our Board with the power to issue shares of preferred stock without stockholder approval. In addition, under our stockholder rights plan, our Board has the discretion to issue certain rights to purchase our capital stock when a person acquires in excess of 25% of our outstanding common shares. Our Board has exempted purchases by Sigma-Tau to date and purchases that may be made by LPC under the committed equity facility from the operation of our stockholder rights plan. The stockholder rights plan may make it more difficult for stockholders to take corporate actions and may have the effect of delaying or preventing a change in control, even if such actions or change in control would be in your best interests. In addition, we are subject to the anti-takeover provisions of Section 203 of the Delaware General Corporation Law. Subject to specified exceptions, this section provides that a corporation may not engage in any business combination with any interested stockholder, as defined in that statute, during the three-year period following the time that such stockholder becomes an interested stockholder. This provision could also have the effect of delaying or preventing a change of control of our company. The foregoing factors could reduce the price that investors or an acquirer might be willing to pay in the future for shares of our common stock.

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We may become involved in securities class action litigation that could divert management’s attention and harm our business and our insurance coverage may not be sufficient to cover all costs and damages.

The stock market has from time to time experienced significant price and volume fluctuations that have affected the market prices for the common stock of pharmaceutical and biotechnology companies. These broad market fluctuations may cause the market price of our common stock to decline. In the past, following periods of volatility in the market price of a particular company’s securities, securities class action litigation has often been brought against that company. We may become involved in this type of litigation in the future. Litigation often is expensive and diverts management’s attention and resources, which could hurt our business, operating results and financial condition.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

None.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

None.

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Item 6. Exhibits

Exhibit No.	Description of Exhibit	Reference*
3.1	Restated Certificate of Incorporation	Exhibit 3.1 to Registration Statement on Form S-1 (File No. 333-166146) (filed April 16, 2010)
3.2	Certificate of Amendment to Restated Certificate of Incorporation	Exhibit 3.2 to Registration Statement on Form S-1 (File No. 333-166146) (filed April 16, 2010)
3.3	Certificate of Amendment to Restated Certificate of Incorporation	Exhibit 3.3 to Registration Statement on Form S-1 (File No. 333-166146) (filed April 16, 2010)
3.4	Certificate of Amendment to Restated Certificate of Incorporation	Exhibit 3.4 to Registration Statement on Form S-8 (File No. 333-168252) (filed July 21, 2010)
3.5	Certificate of Designation of Series A Participating Cumulative Preferred Stock	Exhibit 3.4 to Registration Statement on Form S-1 (File No. 333-166146) (filed April 16, 2010)
3.6	Amended and Restated Bylaws	Exhibit 3.4 to the Company’s Quarterly Report on Form 10-Q (filed August 14, 2006)
3.7	Amendment to Amended and Restated Bylaws	Exhibit 3.6 to the Company’s Registration Statement on Form S-8 (File No. 333-152250) (filed July 10, 2008)
4.1	Specimen Common Stock Certificate	Exhibit 4.1 to Registration Statement on Form S-1 (File No. 333-166146) (filed April 16, 2010)
4.2	Specimen Rights Certificate	Exhibit 4.2 to Registration Statement on Form S-1 (File No. 333-166146) (filed April 16, 2010)

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4.3	Rights Agreement, dated April 29, 1994, between the Company and American Stock Transfer & Trust Company, as Rights Agent	Exhibit 4.3 to Registration Statement on Form S-1 (File No. 333-166146) (filed April 16, 2010)
4.4	Amendment No. 1 to Rights Agreement, dated March 4, 2004, between the Company and American Stock Transfer & Trust Company, as Rights Agent	Exhibit 4.4 to Registration Statement on Form S-1 (File No. 333-166146) (filed April 16, 2010)
4.5	Warrant Agreement, dated May 21, 2010, between the Company and American Stock Transfer & Trust Company, as Warrant Agent	Exhibit 4.6 to Current Report on Form 8-K (File No. 001-15070) (filed May 21, 2010)
4.6	Form of Warrant Certificate	Exhibit 4.6 to Amendment No. 1 to Registration Statement on Form S-1 (File No. 333-166146) (filed May 17, 2010)
10.1	Term Sheet, dated as of March 27, 2012, by and between the Company and Lee’s Pharmaceutical (HK) Limited	Filed herewith
10.2	Letter Agreement between the Company and J.J. Finkelstein, dated January 1, 2012	Exhibit 10.1 to Current Report on Form 8-K (File No. 001-15070) (filed January 6, 2012)
10.3	Letter Agreement between the Company and J.J. Finkelstein, dated April 3, 2012	Filed herewith
10.4	Letter Agreement between the Company and David Crockford, dated January 1, 2012	Exhibit 10.2 to Current Report on Form 8-K (File No. 001-15070) (filed January 6, 2012)
10.5	Letter Agreement between the Company and David Crockford, dated April 3, 2012	Filed herewith
10.6	Letter Agreement between the Company and Allan L. Goldstein, dated January 1, 2012	Exhibit 10.5 to Current Report on Form 8-K (File No. 001-15070) (filed January 6, 2012)
10.7	Letter Agreement between the Company and Allan L. Goldstein, dated April 3, 2012	Filed herewith

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10.8	Amended and Restated Change in Control Agreement between the Company and J.J. Finkelstein, dated April 3, 2012	Filed herewith
10.9	Amended and Restated Change in Control Agreement between the Company and David Crockford, dated April 3, 2012	Filed herewith
10.10	Amended and Restated Change in Control Agreement between the Company and Allan L. Goldstein, dated April 3, 2012	Filed herewith
31.1	Certification of Principal Executive Officer and Principal Financial Officer pursuant to Rules 13a-14 and 15d-14 promulgated under the Securities Exchange Act of 1934	Filed herewith
32.1	Certification of Principal Executive Officer and Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002	Filed herewith**
101	The following materials from the Registrant’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2012, formatted in XBRL (eXtensible Business Reporting Language): (i) Balance Sheets at March 31, 2012 and December 31, 2011; (ii) Statements of Operations for the three months ended March 31, 2012 and 2011; (iii) Statements of Cash Flows for the three months ended March 31, 2012 and 2011; and (iv) Notes to Financial Statements.	Filed herewith***

* Except where noted, the exhibits referred to in this column have heretofore been filed with the Securities and Exchange Commission as exhibits to the documents indicated and are hereby incorporated by reference thereto. The Registration Statements referred to are Registration Statements of the Company.

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** This certification is being furnished solely to accompany this quarterly report pursuant to 18 U.S.C. Section 1350, is not being filed for purposes of Section 18 of the Securities Exchange Act of 1934 and is not to be incorporated by reference into any filing of the registrant, whether made before or after the date hereof, regardless of any general incorporation language in such filing.

*** Pursuant to Rule 406T of Regulation S-T, the Interactive Data Files included in Exhibit 101 hereto are deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, are deemed not filed for purposes of Section 18 of the Securities and Exchange Act of 1934, as amended, and otherwise are not subject to liability under those Sections.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

		RegeneRx Biopharmaceuticals, Inc.
		(Registrant)
Date: May 15, 2012		/s/ J.J. Finkelstein
		J.J. Finkelstein
		President and Chief Executive Officer
	(On Behalf of the Registrant and as Principal Financial Officer)

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EX-10.1

Exhibit 10.1

***Text Omitted and Filed Separately

Confidential Treatment Requested

Under 17 C.F.R. §§ 200.80(b)(4) and 240.24b-2

LEE’S PHARMACEUTICAL (HK) LIMITED/REGENERX BIOPHARMACEUTICALS, INC.

PROPOSED LICENSING TRANSACTION

BINDING TERM SHEET

*HIGHLY CONFIDENTIAL*

March 16, 2012

Parties	Lee’s Pharmaceutical (HK) Limited (“Lee’s” or the “Company”) and RegeneRx Biopharmaceuticals, Inc. (“RegeneRx”)
Licensed Products	Thymosin Beta 4 (Tß4 a synthetic copy of the naturally-occurring 43-amino acid peptide) in any pharmaceutical form, including, without limitation, products identified as RGN-259, RGN-352 and RGN-137.
Field of Use	Any field for human use.
Territory	The People’s Republic of China, including Hong Kong and Macau.
Grant of license	RegeneRx shall grant to Lee’s an exclusive license (with the right to sublicense or assign) to develop, make, have made, import, export, use, distribute, market, promote, offer for sale, and sell Licensed Products in the Territory. Such exclusive license shall survive the change of control, the liquidation, dissolution or the like of RegeneRx for whatever reason.
Licensee fee	US$ 200,000 payable upon execution of this binding Term Sheet. US$ 200,000 payable upon execution of the definitive License Agreement (the “License Agreement”)
Sharing of all clinical and non-clinical data	Lee’s and RegeneRx agree to share all non-clinical and clinical data or other information generated by it necessary for development of Licensed Products, which data and information shall remain confidential.
Joint development committee	Lee’s and RegeneRx will form a development committee (the “Development Committee”) of two persons from each company to convene at least twice annually in person or by teleconference to discuss and agree on the development of the Licensed Products and share information relating thereto.

*** Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

Development milestones and relevant costs	Lee’s shall be obligated to diligently develop one or more Licensed Products on a commercially reasonable basis including reaching the milestones as they will be set by the Development Committee. All costs associated with the development of any of the Licensed Products in the Territory will be borne by Lee’s.
Milestone payments	Lee’s shall pay to RegeneRx: 1.      US$ 0,5 million upon initiation of first commercial sale of the first Licensed Product in the People’s Republic of China. 2.      US$ 1,5 million upon reaching US$ 50 million of aggregate commercial sales in the Territory. 3.      US$ 1,6 million upon reaching US$ 80 million of aggregate commercial sales in the Territory.
Royalty	Every semester, Lee’s shall pay to RegeneRx royalties on annual net sales of Licensed Products in the Territory equal to [***]% up to US$ [***] of aggregate net sales, equal to [***]% on aggregate net sales between US$ [***] and US$ [***] and equal to [***]% on aggregate net sales above US$ [***].
Royalty Term	The royalty term of the License Agreement shall be on a Licensed Product by Licensed Product basis and shall continue until the expiration of the last-to-expire valid and applicable patent within the patent rights within the Territory, or following ten (10) years from the first commercial sale of each Licensed Product in the People’s Republic of China (“Relevant Period”), whichever is later. Additional rules will be included in the License Agreement to regulate the Royalty and the Royalty Term, in case of generic competition regarding any Licensed Product in the Territory.
Intellectual Property	RegeneRx, at its own cost, shall be responsible for and shall prepare, file, prosecute, maintain and defend all of the patents licensed by Lee’s in the Territory, provided that Lee’s shall have the option to elect to control prosecution at its expense.
New Intellectual Property	Any new intellectual property discovered by Lee’s during the term of the License Agreement, in conjunction with development of any Licensed Product, shall be owned by Lee’s and shall be licensed to RegeneRx, at RegeneRx’s request, for use outside the Territory on a royalty-bearing basis (the amount of royalties to be discussed and agreed upon in good faith and on a case-by-case basis between Lee’s and RegeneRx, such royalty not to exceed 4% on relevant net sales).
Manufacturing	RegeneRx will provide sufficient API at no charge for the ophthalmic Phase 2 clinical trial. RegeneRx will provide any additional API for the development work and/or clinical trials to Lee’s at RegeneRx’s cost. Upon commercialization, Lee’s shall purchase API from RegeneRx at reasonable prices (i.e., cost plus) to be discussed and agreed by the Parties, subject to RegeneRx’s ability to deliver required amounts of API. Lee’s will always have the option to source the API on its own or from suppliers of its choice. Upon Lee’s request, RegeneRx and Lee’s will negotiate in good faith to enter into a manufacturing and exclusive supply agreement as soon as practicable following execution of the License Agreement.

*** Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

Confidentiality

All discussions and matters related to this binding Term Sheet are to be kept confidential, including the fact that this binding Term Sheet has been executed, the terms of this binding Term Sheet or existence and content of any negotiations between the Parties.

Negotiation; Disputes

(a) Promptly following the execution of this Term Sheet, the parties shall use commercially reasonable efforts to negotiate the terms of a definitive agreement for a period of sixty (60) days after signature hereof. The terms of the definitive agreement shall be consistent with the terms of this Term Sheet and include other customary terms applicable to a transaction of this type. In the event the parties are unable to reach agreement on the terms of a definitive agreement, then either party may terminate this agreement, unless the parties mutually agree to pursue the dispute resolution provisions below with respect to any disputed terms. In the event of any termination of this Term Sheet: a) RegeneRx will promptly return to Lee’s the 200,000 US$ paid by Lee’s and, b) this term sheet will terminate in all respects and neither party will have any obligation to the other party hereunder. (b) Good Faith Negotiations. In the event of disputes between the Parties arising out of or relating to this binding Term Sheet and the License Agreement, or the breach, termination or invalidity thereof, a Party seeking to resolve such dispute will, by written notice to the other, have such dispute referred to their respective chief executive officers, for attempted resolution by good faith negotiations within fourteen (14) days after such notice is received. (c) Mediation. In the event that the Parties are unable to resolve a dispute through good faith negotiations pursuant to point (a) above, the Parties agree to submit such dispute to non-binding mediation using an industry expert mutually acceptable to the Parties. The costs of any such mediation shall be shared by the Parties equally. (d) Arbitration. If all good faith attempts to resolve a dispute through negotiations and mediation pursuant to points (a) and (b) above have failed after sixty (60) days from notice provided pursuant to point (a) above, then upon the request of either Party, the dispute shall be finally resolved by binding arbitration administered by I.C.C. Arbitration (the “ICC Rules”). (i) The arbitration shall be conducted by a panel of three neutral arbitrators (the “Panel”) appointed in accordance with the ICC Rules.

*** Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

	(ii) The arbitration proceedings shall take place in Geneva, Switzerland. The arbitral proceedings and all pleadings shall be in the English language. Any written evidence originally in a language other than English shall be submitted in English translation accompanied by the original or true copy thereof. (iii) The Panel shall have the power to decide all questions of arbitrability. (iv) At the request of either Party, the Panel will enter an appropriate protective order to maintain the confidentiality of information produced or exchanged in the course of the arbitration proceedings. (v) The Panel is empowered to award any remedy allowed by law, including monetary damages, prejudgment interest and punitive damages, and to grant final, complete, interim or interlocutory relief, including injunctive relief. (vi) Each Party shall bear its own legal fees arising in connection with the dispute. The Panel may assess costs, fees and expenses of the Panel to the Parties in the manner the Panel deems appropriate under the circumstances.
Governing Law	This binding Term Sheet and the License Agreement shall be governed and construed in accordance with the laws of New York, USA without regard to its principles of conflict of laws.
Jurisdiction and Venue	In connection with any dispute arising hereunder or in connection with the subject matter hereof that is not settled in accordance with the rules set forth under “Disputes” above, each of the Parties hereby consents to the exclusive jurisdiction and venue of the courts in Geneva, Switzerland. Each Party hereby irrevocably waives any right that it may have to assert that any such court lacks jurisdiction or that such forum is not convenient.
Press Releases	Except as required by law (including, without limitation and for the avoidance of doubt, the requirements of the U.S. Securities and Exchange Commission, the American Stock Exchange, the Hong Kong Stock Exchange, and any other stock exchange on which securities issued by a Party are traded) or any Governmental Authority, neither Party shall make any press release or other public announcement relating to this binding Term Sheet or to the License Agreement or the transactions described herein without the prior written consent of the other Party

*** Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

Duration of the Agreement The Agreement shall be legally effective for an initial term of three (3) years starting from the Effective Date (the “Initial Term”) and subject to the options to renew as provided below in this Article. RegeneRx hereby irrevocably grants the options to renew (the “Renewal Options”) to Lee’s, which shall be solely exercisable by Lee’s at its own discretion, to renew this Agreement for another extended term of three years (the “Extended Term”) and such Renewal Options can be exercised by the Company for not more than 6 times on the six month period immediately before the expiry date of the Initial Term (for the first time of the exercise of the Renewal Option) and the six months period immediately before the expiry date of the Extended Term (for the time of the exercise of the Renewal Option and onward.   The parties hereto acknowledge and agree that the exercise of the Renewal Option by the Company shall, where applicable, be subject to further independent shareholder approval and any other requirements under the Listing Rules at each time when the Renewal Option is exercised. Lee’s shall serve a written notice (the “Written Notice”) for its intention to exercise the Renewal Option, RegeneRx agrees that upon the service of the Written Notice by Lee’s, RegeneRx will give it written consent to renew this Agreement for the Extended Term. This Agreement shall remain in full force and effect until the expiration of the Initial Term (if the Renewal Option is not exercised by Lee’s) or the expiration of the Extended Term (if the Renewal Options are exercised by Lee’s).   Notwithstanding the Duration time, the effect of this Agreement shall be conditional upon:   a)      all waivers, consents, approvals or confirmations of the Stock Exchange or other governmental and regulatory bodies in Hong Kong or elsewhere which are required or appropriate for the purposes of the entering into and implementation of this Agreement having been obtained (if applicable); and   b)      this Agreement and the transactions contemplated hereunder having been approved by the shareholders at the extraordinary general meeting of Lee’s or the written approval of shareholders of Lee’s approved by the Stock Exchange in lieu of holding an extraordinary general meeting of Lee’s (as the case may be) if such approval is required under the relevant laws, rules and regulations (including the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited).   If the Initial Term and the Extended Term cover the entire Relevant Period, the Company shall, upon the expiration of the Relevant Period, have a royalty-free, fully paid up, perpetual and irrevocable license, with the right to sublicense and/or to assignee.

*** Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

LEE’S PHARMACEUTICAL (HK) LIMITED
/s/ Benjamin Li
Name:	Benjamin Li
Title:	Chief Executive Officer
Date:	3/27/2012
REGENERX BIOPHARMACEUTICALS, INC.
/s/ J.J. Finkelstein
Name:	J.J. Finkelstein
Title:	President & CEO
Date:	3/27/2012

*** Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

EX-10.3

Exhibit 10.3

April 3, 2012

Mr. J.J. Finkelstein

3910 East-West Highway

Chevy Chase, MD 20815

Re: Temporary Employment Terms

Dear J.J.:

Due to the Company’s current financial situation, it is necessary for the Company to reduce its labor costs. Accordingly, the Company is reducing all salaries and work hours. You are being offered the opportunity to continue your employment with RegeneRx Biopharmaceuticals, Inc. (the “Company”) at its Rockville, Maryland location as part-time, temporary employee. Your position will remain as President and Chief Executive Officer, performing such duties as are normally associated with this position and such duties as are assigned to you from time to time. Commencing on April 1, 2012, will receive a salary at a rate of $50.00 per hour for work related to the May 2010 grant from the National Institutes of Health’s National Heart Lung & Blood Institute (the “NIH Grant”), and at a rate of $50.00 per hour for all other work. Such payments will be subject to payroll deductions and all required withholdings and payable in accordance with the Company’s standard payroll practices.

Your typical work schedule will be up to 100 hours per month; however, you will be scheduled according to the Company’s needs, and the Company does not guarantee you any minimum number of hours of work per month. You may be asked to work additional hours; however, you should not work beyond your scheduled work hours for the month unless Allan L. Goldstein has expressly requested you to do so or you have received the written approval of Allan L. Goldstein prior to working the additional time. If you work beyond your scheduled work hours without permission, you will be subject to disciplinary action up to and including termination. You must record your hours worked on a daily basis, including your start and stop times, and meal periods.

You will not be eligible for any Company benefits, including but not limited to: health coverage, holidays, paid vacation, sick leave, and other insurance coverage. You will be eligible for certain minimum benefits required by law, such as workers’ compensation, unemployment, and Social Security.

You acknowledge your continuing obligations under your Proprietary Information, Non-Competition and Inventions Assignment Agreement dated November 4, 2005, which remains in full force and effect. Additionally, your employment continues to be subject to the Company’s personnel policies and procedures as they may be interpreted, adopted, revised or deleted from time to time in the Company’s sole discretion.

RegeneRx Biopharmaceuticals, Inc. — 15245 Shady Grove Road, Suite 470, Rockville, MD 20850

PHONE 301.208.9191 — FAX 301.208.9194 — WEB www.regenerx.com

Your employment with the Company is temporary. The Company anticipates that your employment will continue until June 30, 2012, which will be your employment termination date unless your employment is terminated earlier by you or by the Company. Continued work beyond June 30, 2012, does not automatically convert your employment to regular status.

Your employment relationship with the Company will continue to be at-will. You may terminate your employment with the Company at any time and for any reason whatsoever simply by notifying the Company. Likewise, the Company may terminate your employment at any time, with or without cause or advance notice. Your employment at-will status can only be modified in a written agreement signed by you and by an officer of the Company.

By signing this letter, you acknowledge that the terms described in this letter, together with the your Proprietary Information, Non-Competition and Inventions Assignment Agreement, set forth the entire understanding between us and supersede any other representations or agreements, whether written or oral, including, but not limited to your Second Amended and Restated Employment Agreement dated March 12, 2009, as amended; there are no terms, conditions, representations, warranties or covenants other than those contained herein. No term or provision of this letter may be amended waived, released, discharged or modified except in writing, signed by you and an authorized officer of the Company, except that the Company may, in its sole discretion, adjust salaries, incentive compensation, stock plans, benefits, job titles, locations, duties, responsibilities, and reporting relationships.

Please indicate your acceptance of this offer by signing below and returning it to me.

Sincerely,

/s/ Allan Goldstein

Allan Goldstein

Chairman

ACCEPTED AND AGREED TO:

/s/ J.J. Finkelstein

J.J. Finkelstein

April 3, 2012

Date

EX-10.5

Exhibit 10.5

April 3, 2012

Mr. David R. Crockford

62 Kent Street

Newburyport, MA 01950

Re: Temporary Employment Terms

Dear David:

Due to the Company’s current financial situation, it is necessary for the Company to reduce its labor costs. Accordingly, the Company is reducing all salaries and work hours. You are being offered the opportunity to continue your employment with RegeneRx Biopharmaceuticals, Inc. (the “Company”) at its Rockville, Maryland location as part-time, temporary employee. Your position will remain as Vice President, Clinical and Regulatory Affairs, performing such duties as are normally associated with this position and such duties as are assigned to you from time to time. Commencing on April 1, 2012, will receive a salary at a rate of $96.01 per hour for work related to the May 2010 grant from the National Institutes of Health’s National Heart Lung & Blood Institute (the “NIH Grant”), and at a rate of $50.00 per hour for all other work. Such payments will be subject to payroll deductions and all required withholdings and payable in accordance with the Company’s standard payroll practices.

Your typical work schedule will be up to 20 hours per month for non-grant activities; however, you will be scheduled according to the Company’s needs, and the Company does not guarantee you any minimum number of hours of work per month. You may be asked to work additional hours; however, you should not work beyond your scheduled work hours for the month unless J.J. Finkelstein has expressly requested you to do so or you have received the written approval of J.J. Finkelstein prior to working the additional time. If you work beyond your scheduled work hours without permission, you will be subject to disciplinary action up to and including termination. You must record your hours worked on a daily basis, including your start and stop times, and meal periods.

You will not be eligible for any Company benefits, including but not limited to: health coverage, holidays, paid vacation, sick leave, and other insurance coverage. You will be eligible for certain minimum benefits required by law, such as workers’ compensation, unemployment, and Social Security.

You acknowledge your continuing obligations under your Proprietary Information, Non-Competition and Inventions Assignment Agreement dated November 4, 2005, which remains in full force and effect. Additionally, your employment continues to be subject to the Company’s personnel policies and procedures as they may be interpreted, adopted, revised or deleted from time to time in the Company’s sole discretion.

RegeneRx Biopharmaceuticals, Inc. — 15245 Shady Grove Road, Suite 470, Rockville, MD 20850

PHONE 301.208.9191 — FAX 301.208.9194 — WEB www.regenerx.com

Your employment with the Company is temporary. The Company anticipates that your employment will continue until June 30, 2012, which will be your employment termination date unless your employment is terminated earlier by you or by the Company. Continued work beyond June 30, 2012, does not automatically convert your employment to regular status.

Your employment relationship with the Company will continue to be at-will. You may terminate your employment with the Company at any time and for any reason whatsoever simply by notifying the Company. Likewise, the Company may terminate your employment at any time, with or without cause or advance notice. Your employment at-will status can only be modified in a written agreement signed by you and by an officer of the Company.

By signing this letter, you acknowledge that the terms described in this letter, together with the your Proprietary Information, Non-Competition and Inventions Assignment Agreement, set forth the entire understanding between us and supersede any other representations or agreements, whether written or oral, including, but not limited to your Second Amended and Restated Employment Agreement dated March 31, 2009, as amended; there are no terms, conditions, representations, warranties or covenants other than those contained herein. No term or provision of this letter may be amended waived, released, discharged or modified except in writing, signed by you and an authorized officer of the Company, except that the Company may, in its sole discretion, adjust salaries, incentive compensation, stock plans, benefits, job titles, locations, duties, responsibilities, and reporting relationships.

Please indicate your acceptance of this offer by signing below and returning it to me.

Sincerely,

/s/ J.J. Finkelstein

J.J. Finkelstein

President and Chief Executive Officer

ACCEPTED AND AGREED TO:

/s/ David R. Crockford            

David Crockford

April 3, 2012

Date

EX-10.7

Exhibit 10.7

April 3, 2012

Dr. Allan L. Goldstein

800 25th Street, NW

Apartment 1005

Washington, DC 20037

Re: Temporary Employment Terms

Dear Allan:

Due to the Company’s current financial situation, it is necessary for the Company to reduce its labor costs. Accordingly, the Company is reducing all salaries and work hours. You are being offered the opportunity to continue your employment with RegeneRx Biopharmaceuticals, Inc. (the “Company”) at its Rockville, Maryland location as part-time, temporary employee. Your position will remain as Chairman of the Company’s Board of Directors, performing such duties as are normally associated with this position and such duties as are assigned to you from time to time. Commencing on April 1, 2012, your salary will be at the rate of $50.00 per hour, subject to payroll deductions and all required withholdings and payable in accordance with the Company’s standard payroll practices.

Your typical work schedule will be up to 32 hours per month; however, you will be scheduled according to the Company’s needs, and the Company does not guarantee you any minimum number of hours of work per month. You may be asked to work additional hours; however, you should not work beyond your scheduled work hours for the month unless J.J. Finkelstein has expressly requested you to do so or you have received the written approval of J.J. Finkelstein prior to working the additional time. If you work beyond your scheduled work hours without permission, you will be subject to disciplinary action up to and including termination. You must record your hours worked on a daily basis, including your start and stop times, and meal periods.

You will not be eligible for any Company benefits, including but not limited to: health coverage, holidays, paid vacation, sick leave, and other insurance coverage. You will be eligible for certain minimum benefits required by law, such as workers’ compensation, unemployment, and Social Security.

You acknowledge your continuing obligations under your Proprietary Information, Non-Competition and Inventions Assignment Agreement dated November 4, 2005, which remains in full force and effect. Additionally, your employment continues to be subject to the Company’s personnel policies and procedures as they may be interpreted, adopted, revised or deleted from time to time in the Company’s sole discretion.

Your employment with the Company is temporary. The Company anticipates that your employment will continue until June 30, 2012, which will be your employment termination date unless your employment is terminated earlier by you or by the Company. Continued work beyond June 30, 2012, does not automatically convert your employment to regular status.

RegeneRx Biopharmaceuticals, Inc. — 15245 Shady Grove Road, Suite 470, Rockville, MD 20850

PHONE 301.208.9191 — FAX 301.208.9194 — WEB www.regenerx.com

Your employment relationship with the Company will continue to be at-will. You may terminate your employment with the Company at any time and for any reason whatsoever simply by notifying the Company. Likewise, the Company may terminate your employment at any time, with or without cause or advance notice. Your employment at-will status can only be modified in a written agreement signed by you and by an officer of the Company.

By signing this letter, you acknowledge that the terms described in this letter, together with the your Proprietary Information, Non-Competition and Inventions Assignment Agreement, set forth the entire understanding between us and supersede any other representations or agreements, whether written or oral, including, but not limited to your Second Amended and Restated Employment Agreement dated March 11, 2009, as amended; there are no terms, conditions, representations, warranties or covenants other than those contained herein. No term or provision of this letter may be amended waived, released, discharged or modified except in writing, signed by you and an authorized officer of the Company, except that the Company may, in its sole discretion, adjust salaries, incentive compensation, stock plans, benefits, job titles, locations, duties, responsibilities, and reporting relationships.

Please indicate your acceptance of this offer by signing below and returning it to me.

Sincerely,

/s/ J.J. Finkelstein

J.J. Finkelstein

President & CEO

ACCEPTED AND AGREED TO:

/s/ Dr. Allan L. Goldstein

Dr. Allan Goldstein

April 3, 2012

Date

EX-10.8

Exhibit 10.8

AMENDED AND RESTATED CHANGE IN CONTROL AGREEMENT

THIS AMENDED AND RESTATED CHANGE IN CONTROL AGREEMENT (this “Agreement”) is effective as of April 3, 2012, by and between REGENERX BIOPHARMACEUTICALS, INC., a Delaware corporation (the “Company”), and J.J. FINKELSTEIN (the “Executive”).

RECITALS

The parties previously entered into a Change in Control Agreement, dated as of January 1, 2012 (the “Prior Agreement”), and now desire to amend, restate and supersede the Prior Agreement to reflect certain revisions to the terms and conditions of severance.

The Company and the Executive wish to enter into this Agreement to set forth the compensation and benefits that the Executive will be eligible to receive in the event that the Executive’s employment with the Company terminates following a change in control transaction.

AGREEMENT

In consideration of the mutual covenants and conditions contained in this Agreement, the parties agree as follows:

1. Eligibility for Change in Control Benefits. If (a) a Change in Control is consummated by June 30, 2012, or such other date as consistent with the extension of this Agreement as provided in Section 8, and (b) prior to June 30, 2012, or within twelve (12) months following such Change in Control, the Company terminates the Executive’s employment for any reason (other than Cause or the Executive’s death or disability) or the Executive resigns for Good Reason, and provided that any such termination constitutes a “separation from service” (as such term is defined in Treasury Regulation Section 1.409A-1(h), without regard to any alternative definitions thereunder, a “Separation From Service”), (each such termination event is referred to as a “Covered Termination”), the Executive will be eligible for the compensation and benefits described in Section 2. References to the Company in this Agreement shall be deemed to include any affiliate of the Company, or the acquiring, surviving or successor entity in the Change in Control or their affiliates (collectively, “Successor”), as applicable.

2. Change in Control Benefits.

(a) Accelerated Vesting of Equity Incentives. On the effective date of the Change in Control, any outstanding stock option, or other equity award, held at such time by Executive under the terms of the Company’s Amended and Restated 2000 Stock Option and Incentive Plan or the Company’s 2010 Equity Incentive Plan will become one hundred percent (100%) vested and exercisable in full immediately before such Change in Control transaction and contingent upon its effectiveness.

(b) Severance. Following a Covered Termination, and subject to the terms and conditions set forth in Section 3, the Executive will be eligible for up to six (6) months of his Base Salary (as defined below), which amount shall be calculated as set forth in the table below (the “Severance”), payable in two equal installments, with the first payment occurring on the 60^th day after the effective date of the Change in Control or, if later, the Executive’s Separation from Service (“Initial Payment Date”), and the second installment occurring sixty (60) days after the Initial Payment Date.

Net Proceeds	Severance Amount
Up to $1,000,000	1 month
$1,000,000 through $1,999,999.99	1 month
$2,000,000 through $2,999,999.99	2 months
$3,000,000 through $3,999,999.99	3 months
$4,000,000 through $4,999,999.99	4 months
$5,000,000 through $5,999,999.99	5 months
$6,000,000 and above	6 months

Notwithstanding the above, the maximum amount of the Severance shall be six months of the Executive’s Base Salary in the aggregate.

Examples: In the event of a Change in Control occurring on May 1, 2012, in which the Net Proceeds are $4,500,000, the Severance would equal four months of the Executive’s Base Salary. By contrast, if the Net Proceeds in such a Change in Control transaction are $700,000, then the Severance would equal one month of the Executive’s Base Salary. Likewise, once the Net Proceeds exceed $6 million, the Severance is capped at 6 months of the Executive’s Base Salary.

3. Release and Waiver of Claims. As further consideration for the benefits to be provided by the Company to the Executive under this Agreement, the Executive will be required to execute and deliver to the Company, by no later than the Initial Payment Date, a general release and waiver of all legal claims against the Company, any affiliated or related entity, and their representatives in a form satisfactory to the Company (the “Release”). No payments or benefits will be provided hereunder unless the Release is valid and fully effective and cannot be revoked as of the Initial Payment Date.

4. Other Severance Agreements and Policies. The compensation and benefits provided to Executive pursuant to this Agreement, are in lieu of, and not in addition to, any benefits to which Executive may otherwise be entitled under any other agreement between Executive and the Company in respect of severance or termination pay or benefits, or any Company severance plan, policy or program, or other corporate documents of any type, including any individually negotiated severance provisions as part of any offer letter or employment agreement between the Company and Executive, including the Prior Agreement and Executive’s Second Amended and Restated Employment Agreement dated March 11, 2009, as amended (collectively, “Other Agreements”). The severance pay and benefits provided in this Agreement are intended to supersede and replace any severance pay and benefits to which Executive may otherwise be entitled as a result of any termination from employment and, by executing this Agreement, Executive agrees to waive, forego and forever relinquish any right or entitlement to receive compensation or benefits under any Other Agreements. This waiver and relinquishment is in consideration for the right to severance pay and benefits under the terms of this Agreement, which are in addition to the compensation and benefits that Executive would otherwise be eligible to receive, and applies whether or not Executive actually receives severance pay or benefits hereunder.

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5. Withholding Taxes. The Company will withhold from all payments to be made under this Agreement all federal, state and local income or other taxes required to be withheld and any other required payroll deductions. Alternatively, if permitted by the Company, the Executive will make arrangements satisfactory to the Company for the payment of any taxes and other deductions.

6. Tax Consequences. The Company makes no representation as to the tax consequences to the Executive of the transactions contemplated by this Agreement, which will be the sole responsibility of the Executive.

7. Basis of Payments. All benefits under this Agreement shall be paid by the Company. This Agreement shall be unfunded, and benefits hereunder shall be paid only from the general assets of the Company.

8. Termination. If no Change in Control is consummated by June 30, 2012, then this Agreement will be null and void and of no force or effect unless extended by mutual written agreement of the parties. Anything in this Agreement to the contrary notwithstanding, in the event the Company’s business is discontinued because it is rendered impracticable by substantial financial losses, lack of funding, legal decisions, administrative rulings, declaration of war, dissolution, national or local economic depression or crisis or any reasons beyond the control of the Company, then this Agreement shall terminate as of the day the Company determines to cease operation with the same force and effect as if such day of the month were originally set as the termination date hereof. In the event this Agreement is terminated pursuant to this Section 8, the Executive will not receive severance payments, or any other severance compensation or benefit.

9. No Implied Employment Contract. The Agreement will not be deemed (a) to give the Executive any right to be retained in the employ of the Company or its successors, or (b) to interfere with the right of the Company or its successor to discharge the Executive at any time and for any reason, which right is hereby reserved.

10. Severability. Whenever possible, each provision of this Agreement will be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Agreement is held to be invalid, illegal or unenforceable in any respect under any applicable law or rule in any jurisdiction, such invalidity, illegality or unenforceability will not affect any other provision or any other jurisdiction, but this Agreement will be reformed, construed and enforced in such jurisdiction as if such invalid, illegal or unenforceable provisions had never been contained herein.

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11. Waiver. If either party should waive any breach of any provisions of this Agreement, Executive or it shall not thereby be deemed to have waived any preceding or succeeding breach of the same or any other provision of this Agreement.

12. Complete Agreement. This Agreement constitutes the entire agreement between Executive and the Company with regard to the subject matter hereof. This Agreement is the complete, final, and exclusive embodiment of their agreement with regard to this subject matter and supersedes any prior oral discussions or written communications and agreements, including but not limited to the Prior Agreement. This Agreement is entered into without reliance on any promise or representation other than those expressly contained herein.

13. Amendments. This Agreement may be amended, modified or terminated only in writing signed by Executive and the Company. The Company may only consent to an amendment or modification of this Agreement after such amendment or modification has been approved by the Company’s Board of Directors (the “Board”).

14. Counterparts. This Agreement may be executed in separate counterparts, any one of which need not contain signatures of more than one party, but all of which taken together will constitute one and the same Agreement.

15. Headings. The headings of the sections hereof are inserted for convenience only and shall not be deemed to constitute a part hereof nor to affect the meaning thereof.

16. Successors and Assigns. This Agreement is intended to bind and inure to the benefit of and be enforceable by Executive and the Company, and their respective successors, assigns, heirs, executors and administrators, except that Executive may not assign any of Executive’s duties hereunder and Executive may not assign any of Executive’s rights hereunder without the written consent of the Company.

17. Applicable Law. This Agreement will be governed by the laws of the State of Maryland as such laws are applied to agreements between Maryland residents entered into and to be performed entirely within Maryland.

18. Application of Section 409A. Notwithstanding anything to the contrary set forth herein, any payments and benefits provided under this Agreement that constitute “deferred compensation” within the meaning of Section 409A of the Internal Revenue Code of 1986, as amended (“Code”) and the regulations and other guidance thereunder and any state law of similar effect (collectively, “Section 409A”) shall not commence in connection with the Executive’s termination of employment unless and until the Executive has also incurred a Separation From Service, unless the Company reasonably determines that such amounts may be provided to the Executive without causing him to incur the additional 20% tax under Section 409A.

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It is intended that each installment of severance pay provided for in this Agreement is a separate “payment” for purposes of Treasury Regulation Section 1.409A-2(b)(2)(i). For the avoidance of doubt, it is intended that severance payments set forth in this Agreement satisfy, to the greatest extent possible, the exceptions from the application of Section 409A provided under Treasury Regulation Sections 1.409A-1(b)(4) and 1.409A-1(b)(9).

If the Company (or, if applicable, the successor entity thereto) determines that any payments or benefits constitute “deferred compensation” under Section 409A and the Executive is, on the termination of service, a “specified employee” of the Company or any successor entity thereto, as such term is defined in Section 409A(a)(2)(B)(i) of the Code, then, solely to the extent necessary to avoid the incurrence of the adverse personal tax consequences under Section 409A, the timing of the payments and benefits shall be delayed until the earlier to occur of: (a) the date that is six months and one day after the Executive’s Separation From Service, or (b) the date of the Executive’s death (such applicable date, the “Specified Employee Initial Payment Date”). On the Specified Employee Initial Payment Date, the Company (or the successor entity thereto, as applicable) shall (i) pay to the Executive a lump sum amount equal to the sum of the payments and benefits that the Executive would otherwise have received through the Specified Employee Initial Payment Date if the commencement of the payment of such amounts had not been so delayed pursuant to this Section and (ii) commence paying the balance of the payments and benefits in accordance with the applicable payment schedules set forth in this Agreement.

19. Definitions. For purposes of this Agreement, the following terms shall have the meanings set forth below:

(a) “Base Salary” means the Executive’s annual base salary as in effect as of November 30, 2011. Base Salary does not include bonuses, commissions, overtime, fringe benefits, option grants, equity awards other irregular payments or any other compensation except base salary.

(b) “Cause” means: (i) refusal, failure or neglect to perform the material duties of his employment (other than by reason of Executive’s physical or mental illness or impairment); (ii) willful dishonesty, fraud, embezzlement or misconduct with respect to the business or affairs of the Company; (iii) indictment or conviction of a felony or of any crime involving dishonesty or moral turpitude; or (iv) Executive’s refusal to abide by or comply with the directives of the Board so long as those directives are lawful and ethical.

(c) “Change in Control” means: (i) the sale of all or substantially all of the assets of the Company to an unrelated person or entity; (ii) a merger, reorganization or consolidation in which the holders of the Company’s outstanding voting power immediately prior to such transaction do not own a majority of the outstanding voting power of the surviving or resulting entity, or its parent corporation, immediately upon completion of such transaction; (iii) the sale of all of the capital stock of the Company to an unrelated person or entity; (iv) if any individual, firm, corporation, or other entity, or any group (as defined in Section 13(d) of the Securities Exchange Act of 1934, as amended (the “ Exchange Act ”)), other than (1) a trustee or other fiduciary holding securities of the Company under an employee benefit plan of the Company or (2) Executive becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing 50% or more of (A) the outstanding shares of common stock of the Company, or (B) the combined voting power of the Company’s then-outstanding securities entitled to vote generally in the election of directors; (v) any other transaction in which the owners of the Company’s outstanding voting power prior to such transaction do not own at least a majority of the outstanding voting power of the relevant entity after the transaction, in each case, regardless of the form thereof. Notwithstanding the above, an event is not a “Change in Control” unless it also is a “change in ownership of a corporation” or a “change in ownership of a substantial portion of a corporation’s assets” under Treasury Regulation section 1.409A-3(i)(5)(v) and (vii).

5

(d) “Good Reason” means any of the following: (i) a material diminution of Executive’s responsibilities or duties (provided, however, that the acquisition of the Company and subsequent conversion of the Company to a division or unit of the acquiring company will not by itself be deemed to be a diminution of Executive’s responsibilities or duties), (ii) a relocation of Executive’s principal place of employment by more than 60 miles from its location at the Effective Date of this Agreement, unless consented to by Executive, (iii) a material reduction in the benefits and perquisites to Executive from those being provided as of the date immediately preceding the Change in Control, unless consented to by Executive, (iv) any material failure by the Company to pay or provide the compensation and benefits under the Temporary Employment Terms Offer Letter dated January 1, 2012, except any such circumstance which is part of a general reduction or other concessionary arrangement affecting all employees or affecting senior executive officers, or (v) failure of a Successor in a Change in Control to assume this Agreement. In each such event listed in (i) through (v) above, Executive shall give the Company notice thereof by no later than ninety (90) days after the initial occurrence of the event or condition allegedly constituting Good Reason which shall specify in reasonable detail the circumstances constituting Good Reason. There shall be no Good Reason with respect to any such event or condition cured by the Company within thirty (30) days after such notice. If the Company fails to cure such event or condition within this thirty- (30-) day period, Executive must terminate employment under this provision within ninety (90) days after the cure period has expired (and thereafter Executive may no longer terminate his employment for a Good Reason based upon the event or condition that was not cured). Transferring the Executive’s employment to a Successor is not itself Good Reason to terminate employment under this Agreement, provided, however, that subparagraphs (i) through (v) above shall continue to apply to the Executive’s employment by the Successor.

References to the Company in this Agreement shall be deemed to include any affiliate of the Company, or the acquiring, surviving or successor entity in a Change in Control (as defined below) or their affiliates (collectively, “Successor”), as applicable.

(e) “Net Proceeds” with respect to a Change in Control means all of the cash, assumed liabilities, and the fair market value (as determined in good faith by the Board) on the closing date of all other property that is paid by a third party or by the Company to the Company’s stockholders or others equity stakeholders (e.g., option or warrant holders), or which is paid to the Company in the case of a Change in Control structured as an asset sale or similar transaction, in consideration for their shares or any convertible debt or other equity-linked securities (warrants or options) held by the Company’s stockholders or any third party convertible debt holders or holders of other equity-linked securities (or in consideration of the assets of the Company in the case of a Change in Control structured as an asset sale or similar transaction). Notwithstanding the foregoing, in the case of a Change in Control structured as an acquisition by the Company of a third party (or the purchase of the assets of a third party or similar transaction) in which equity of the Company is issued in the transaction to the third party or its stockholders or other stakeholders (a “Reverse Acquisition”), “Net Proceeds” shall mean the aggregate fair market value, as determined in good faith by the Company’s Board of Directors, immediately prior to the signing of the definitive agreement to effect the transaction. The term “Net Proceeds” excludes, without limitation, (i) any amounts paid into escrow or subject to earn-outs or other contingencies until such amounts have been released from escrow or the earn-out or other contingencies are satisfied, and (ii) any transaction fees of the Company incurred in connection with the transaction that are assumed or paid by the purchaser (such as fees related to legal services, financial advisory services, investment banking services or other professional services). The amount of the Severance paid hereunder shall not reduce the amount of the Net Proceeds.

6

For purposes of clarity, in all situations other than a Reverse Acquisition, the term Net Proceeds is generally intended to capture only those amounts that are received by all of the Company’s stockholders or other equity holders (or by the Company in the case of an asset sale). For example, if portions of the aggregate consideration in a merger transaction are paid at closing to various service providers to satisfy transaction fees (legal, accounting or investment banking services), the intent is to include only the “net” consideration that is ultimately paid to all stockholders or the Company within this definition. In the case of a Reverse Acquisition, the term Net Proceeds is generally intended to capture the net value attributable to the Company in the transaction (immediately prior to the closing of the transaction), and this amount shall be reduced to the extent that the Company is required to pay various service providers to satisfy transaction fees (legal, accounting or investment banking services). However, any part of the merger consideration that is directed or used toward the payment of the Severance is not intended to result in a reduction or offset of the “net” amount that is considered to be paid to stockholders or the Company.

IN WITNESS WHEREOF, this Amended and Restated Change in Control Agreement has been executed by the parties hereto as of the date first above written.

REGENERX BIOPHARMACEUTICALS, INC.
By:	/s/ Allan Goldstein
	Allan Goldstein
	Chairman
EXECUTIVE:
/s/ J.J. Finkelstein
J.J. Finkelstein

7

EX-10.9

Exhibit 10.9

AMENDED AND RESTATED CHANGE IN CONTROL AGREEMENT

THIS AMENDED AND RESTATED CHANGE IN CONTROL AGREEMENT (this “Agreement”) is effective as of April 3 2012, by and between REGENERX BIOPHARMACEUTICALS, INC., a Delaware corporation (the “Company”), and DAVID R. CROCKFORD (the “Executive”).

RECITALS

The parties previously entered into a Change in Control Agreement, dated as of January 1, 2012 (the “Prior Agreement”), and now desire to amend, restate and supersede the Prior Agreement to reflect certain revisions to the terms and conditions of severance.

The Company and the Executive wish to enter into this Agreement to set forth the compensation and benefits that the Executive will be eligible to receive in the event that the Executive’s employment with the Company terminates following a change in control transaction.

AGREEMENT

In consideration of the mutual covenants and conditions contained in this Agreement, the parties agree as follows:

1. Eligibility for Change in Control Benefits. If (a) a Change in Control is consummated by June 30, 2012, or such other date as consistent with the extension of this Agreement as provided in Section 8, and (b) prior to June 30, 2012, or within twelve (12) months following such Change in Control, the Company terminates the Executive’s employment for any reason (other than Cause or the Executive’s death or disability) or the Executive resigns for Good Reason, and provided that any such termination constitutes a “separation from service” (as such term is defined in Treasury Regulation Section 1.409A-1(h), without regard to any alternative definitions thereunder, a “Separation From Service”), (each such termination event is referred to as a “Covered Termination”), the Executive will be eligible for the compensation and benefits described in Section 2. References to the Company in this Agreement shall be deemed to include any affiliate of the Company, or the acquiring, surviving or successor entity in the Change in Control or their affiliates (collectively, “Successor”), as applicable.

2. Change in Control Benefits.

(a) Accelerated Vesting of Equity Incentives. On the effective date of the Change in Control, any outstanding stock option, or other equity award, held at such time by Executive under the terms of the Company’s Amended and Restated 2000 Stock Option and Incentive Plan or the Company’s 2010 Equity Incentive Plan will become one hundred percent (100%) vested and exercisable in full immediately before such Change in Control transaction and contingent upon its effectiveness.

(b) Severance. Following a Covered Termination, and subject to the terms and conditions set forth in Section 3, the Executive will be eligible for up to six (6) months of his Base Salary (as defined below), which amount shall be calculated as set forth in the table below (the “Severance”), payable in two equal installments, with the first payment occurring on the 60^th day after the effective date of the Change in Control or, if later, the Executive’s Separation from Service (“Initial Payment Date”), and the second installment occurring sixty (60) days after the Initial Payment Date.

Net Proceeds	Severance Amount
Up to $1,000,000	1 month
$1,000,000 through $1,999,999.99	1 month
$2,000,000 through $2,999,999.99	2 months
$3,000,000 through $3,999,999.99	3 months
$4,000,000 through $4,999,999.99	4 months
$5,000,000 through $5,999,999.99	5 months
$6,000,000 and above	6 months

Notwithstanding the above, the maximum amount of the Severance shall be six months of the Executive’s Base Salary in the aggregate.

Examples: In the event of a Change in Control occurring on May 1, 2012, in which the Net Proceeds are $4,500,000, the Severance would equal four months of the Executive’s Base Salary. By contrast, if the Net Proceeds in such a Change in Control transaction are $700,000, then the Severance would equal one month of the Executive’s Base Salary. Likewise, once the Net Proceeds exceed $6 million, the Severance is capped at 6 months of the Executive’s Base Salary.

3. Release and Waiver of Claims. As further consideration for the benefits to be provided by the Company to the Executive under this Agreement, the Executive will be required to execute and deliver to the Company, by no later than the Initial Payment Date, a general release and waiver of all legal claims against the Company, any affiliated or related entity, and their representatives in a form satisfactory to the Company (the “Release”). No payments or benefits will be provided hereunder unless the Release is valid and fully effective and cannot be revoked as of the Initial Payment Date.

2.

4. Other Severance Agreements and Policies. The compensation and benefits provided to Executive pursuant to this Agreement, are in lieu of, and not in addition to, any benefits to which Executive may otherwise be entitled under any other agreement between Executive and the Company in respect of severance or termination pay or benefits, or any Company severance plan, policy or program, or other corporate documents of any type, including any individually negotiated severance provisions as part of any offer letter or employment agreement between the Company and Executive, including the Prior Agreement and Executive’s Second Amended and Restated Employment Agreement dated March 11, 2009, as amended (collectively, “Other Agreements”). The severance pay and benefits provided in this Agreement are intended to supersede and replace any severance pay and benefits to which Executive may otherwise be entitled as a result of any termination from employment and, by executing this Agreement, Executive agrees to waive, forego and forever relinquish any right or entitlement to receive compensation or benefits under any Other Agreements. This waiver and relinquishment is in consideration for the right to severance pay and benefits under the terms of this Agreement, which are in addition to the compensation and benefits that Executive would otherwise be eligible to receive, and applies whether or not Executive actually receives severance pay or benefits hereunder.

5. Withholding Taxes. The Company will withhold from all payments to be made under this Agreement all federal, state and local income or other taxes required to be withheld and any other required payroll deductions. Alternatively, if permitted by the Company, the Executive will make arrangements satisfactory to the Company for the payment of any taxes and other deductions.

6. Tax Consequences. The Company makes no representation as to the tax consequences to the Executive of the transactions contemplated by this Agreement, which will be the sole responsibility of the Executive.

7. Basis of Payments. All benefits under this Agreement shall be paid by the Company. This Agreement shall be unfunded, and benefits hereunder shall be paid only from the general assets of the Company.

8. Termination. If no Change in Control is consummated by June 30, 2012, then this Agreement will be null and void and of no force or effect unless extended by mutual written agreement of the parties. Anything in this Agreement to the contrary notwithstanding, in the event the Company’s business is discontinued because it is rendered impracticable by substantial financial losses, lack of funding, legal decisions, administrative rulings, declaration of war, dissolution, national or local economic depression or crisis or any reasons beyond the control of the Company, then this Agreement shall terminate as of the day the Company determines to cease operation with the same force and effect as if such day of the month were originally set as the termination date hereof. In the event this Agreement is terminated pursuant to this Section 8, the Executive will not receive severance payments, or any other severance compensation or benefit.

9. No Implied Employment Contract. The Agreement will not be deemed (a) to give the Executive any right to be retained in the employ of the Company or its successors, or (b) to interfere with the right of the Company or its successor to discharge the Executive at any time and for any reason, which right is hereby reserved.

3.

10. Severability. Whenever possible, each provision of this Agreement will be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Agreement is held to be invalid, illegal or unenforceable in any respect under any applicable law or rule in any jurisdiction, such invalidity, illegality or unenforceability will not affect any other provision or any other jurisdiction, but this Agreement will be reformed, construed and enforced in such jurisdiction as if such invalid, illegal or unenforceable provisions had never been contained herein.

11. Waiver. If either party should waive any breach of any provisions of this Agreement, Executive or it shall not thereby be deemed to have waived any preceding or succeeding breach of the same or any other provision of this Agreement.

12. Complete Agreement. This Agreement constitutes the entire agreement between Executive and the Company with regard to the subject matter hereof. This Agreement is the complete, final, and exclusive embodiment of their agreement with regard to this subject matter and supersedes any prior oral discussions or written communications and agreements, including but not limited to the Prior Agreement. This Agreement is entered into without reliance on any promise or representation other than those expressly contained herein.

13. Amendments. This Agreement may be amended, modified or terminated only in writing signed by Executive and the Company. The Company may only consent to an amendment or modification of this Agreement after such amendment or modification has been approved by the Company’s Board of Directors (the “Board”).

14. Counterparts. This Agreement may be executed in separate counterparts, any one of which need not contain signatures of more than one party, but all of which taken together will constitute one and the same Agreement.

15. Headings. The headings of the sections hereof are inserted for convenience only and shall not be deemed to constitute a part hereof nor to affect the meaning thereof.

16. Successors and Assigns. This Agreement is intended to bind and inure to the benefit of and be enforceable by Executive and the Company, and their respective successors, assigns, heirs, executors and administrators, except that Executive may not assign any of Executive’s duties hereunder and Executive may not assign any of Executive’s rights hereunder without the written consent of the Company.

17. Applicable Law. This Agreement will be governed by the laws of the State of Maryland as such laws are applied to agreements between Maryland residents entered into and to be performed entirely within Maryland.

18. Application of Section 409A. Notwithstanding anything to the contrary set forth herein, any payments and benefits provided under this Agreement that constitute “deferred compensation” within the meaning of Section 409A of the Internal Revenue Code of 1986, as amended (“Code”) and the regulations and other guidance thereunder and any state law of similar effect (collectively, “Section 409A”) shall not commence in connection with the Executive’s termination of employment unless and until the Executive has also incurred a Separation From Service, unless the Company reasonably determines that such amounts may be provided to the Executive without causing him to incur the additional 20% tax under Section 409A.

4.

It is intended that each installment of severance pay provided for in this Agreement is a separate “payment” for purposes of Treasury Regulation Section 1.409A-2(b)(2)(i). For the avoidance of doubt, it is intended that severance payments set forth in this Agreement satisfy, to the greatest extent possible, the exceptions from the application of Section 409A provided under Treasury Regulation Sections 1.409A-1(b)(4) and 1.409A-1(b)(9).

If the Company (or, if applicable, the successor entity thereto) determines that any payments or benefits constitute “deferred compensation” under Section 409A and the Executive is, on the termination of service, a “specified employee” of the Company or any successor entity thereto, as such term is defined in Section 409A(a)(2)(B)(i) of the Code, then, solely to the extent necessary to avoid the incurrence of the adverse personal tax consequences under Section 409A, the timing of the payments and benefits shall be delayed until the earlier to occur of: (a) the date that is six months and one day after the Executive’s Separation From Service, or (b) the date of the Executive’s death (such applicable date, the “Specified Employee Initial Payment Date”). On the Specified Employee Initial Payment Date, the Company (or the successor entity thereto, as applicable) shall (i) pay to the Executive a lump sum amount equal to the sum of the payments and benefits that the Executive would otherwise have received through the Specified Employee Initial Payment Date if the commencement of the payment of such amounts had not been so delayed pursuant to this Section and (ii) commence paying the balance of the payments and benefits in accordance with the applicable payment schedules set forth in this Agreement.

19. Definitions. For purposes of this Agreement, the following terms shall have the meanings set forth below:

(a) “Base Salary” means the Executive’s annual base salary as in effect as of November 30, 2011. Base Salary does not include bonuses, commissions, overtime, fringe benefits, option grants, equity awards other irregular payments or any other compensation except base salary.

(b) “Cause” means: (i) refusal, failure or neglect to perform the material duties of his employment (other than by reason of the Executive’s physical or mental illness or impairment); (ii) willful dishonesty, fraud, embezzlement or misconduct with respect to the business or affairs of the Company; (iii) willful dishonesty or misrepresentation with respect to Executive’s educational or employment history; (iv) indictment or conviction of a felony or of any crime involving dishonesty or moral turpitude; (v) breach of any obligation under the Proprietary Information, Nonsolicitation, Noncompetition and Inventions Assignment Agreement; or (vi) Executive’s refusal to abide by or comply with the directives of the Board or the Company’s Chief Executive Officer, so long as those directives are lawful and ethical.

5.

(c) “Change in Control” means: (i) the sale of all or substantially all of the assets of the Company to an unrelated person or entity; (ii) a merger, reorganization or consolidation in which the holders of the Company’s outstanding voting power immediately prior to such transaction do not own a majority of the outstanding voting power of the surviving or resulting entity, or its parent corporation, immediately upon completion of such transaction; (iii) the sale of all of the capital stock of the Company to an unrelated person or entity; (iv) if any individual, firm, corporation, or other entity, or any group (as defined in Section 13(d) of the Securities Exchange Act of 1934, as amended (the “ Exchange Act ”)), other than (1) a trustee or other fiduciary holding securities of the Company under an employee benefit plan of the Company or (2) Executive becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing 50% or more of (A) the outstanding shares of common stock of the Company, or (B) the combined voting power of the Company’s then-outstanding securities entitled to vote generally in the election of directors; (v) any other transaction in which the owners of the Company’s outstanding voting power prior to such transaction do not own at least a majority of the outstanding voting power of the relevant entity after the transaction, in each case, regardless of the form thereof. Notwithstanding the above, an event is not a “Change in Control” unless it also is a “change in ownership of a corporation” or a “change in ownership of a substantial portion of a corporation’s assets” under Treasury Regulation section 1.409A-3(i)(5)(v) and (vii).

(d) “Good Reason” means any of the following: (i) a material diminution of Executive’s responsibilities or duties (provided, however, that the acquisition of the Company and subsequent conversion of the Company to a division or unit of the acquiring company will not by itself be deemed to be a diminution of Executive’s responsibilities or duties), (ii) a relocation of Executive’s principal place of employment by more than 60 miles from its location at the Effective Date of this Agreement, unless consented to by Executive, (iii) a material reduction in the benefits and perquisites to Executive from those being provided as of the date immediately preceding the Change in Control, unless consented to by Executive, (iv) any material failure by the Company to pay or provide the compensation and benefits under the Temporary Employment Terms Offer Letter dated January 1, 2012, except any such circumstance which is part of a general reduction or other concessionary arrangement affecting all employees or affecting senior executive officers, or (v) failure of a Successor in a Change in Control to assume this Agreement. In each such event listed in (i) through (v) above, Executive shall give the Company notice thereof by no later than ninety (90) days after the initial occurrence of the event or condition allegedly constituting Good Reason which shall specify in reasonable detail the circumstances constituting Good Reason. There shall be no Good Reason with respect to any such event or condition cured by the Company within thirty (30) days after such notice. If the Company fails to cure such event or condition within this thirty- (30-) day period, Executive must terminate employment under this provision within ninety (90) days after the cure period has expired (and thereafter Executive may no longer terminate his employment for a Good Reason based upon the event or condition that was not cured). Transferring the Executive’s employment to a Successor is not itself Good Reason to terminate employment under this Agreement, provided, however, that subparagraphs (i) through (v) above shall continue to apply to the Executive’s employment by the Successor.

6.

References to the Company in this Agreement shall be deemed to include any affiliate of the Company, or the acquiring, surviving or successor entity in a Change in Control (as defined below) or their affiliates (collectively, “Successor”), as applicable.

(e) “Net Proceeds” with respect to a Change in Control means all of the cash, assumed liabilities, and the fair market value (as determined in good faith by the Board) on the closing date of all other property that is paid by a third party or by the Company to the Company’s stockholders or others equity stakeholders (e.g., option or warrant holders), or which is paid to the Company in the case of a Change in Control structured as an asset sale or similar transaction, in consideration for their shares or any convertible debt or other equity-linked securities (warrants or options) held by the Company’s stockholders or any third party convertible debt holders or holders of other equity-linked securities (or in consideration of the assets of the Company in the case of a Change in Control structured as an asset sale or similar transaction). Notwithstanding the foregoing, in the case of a Change in Control structured as an acquisition by the Company of a third party (or the purchase of the assets of a third party or similar transaction) in which equity of the Company is issued in the transaction to the third party or its stockholders or other stakeholders (a “Reverse Acquisition”), “Net Proceeds” shall mean the aggregate fair market value, as determined in good faith by the Company’s Board of Directors, immediately prior to the signing of the definitive agreement to effect the transaction. The term “Net Proceeds” excludes, without limitation, (i) any amounts paid into escrow or subject to earn-outs or other contingencies until such amounts have been released from escrow or the earn-out or other contingencies are satisfied, and (ii) any transaction fees of the Company incurred in connection with the transaction that are assumed or paid by the purchaser (such as fees related to legal services, financial advisory services, investment banking services or other professional services). The amount of the Severance paid hereunder shall not reduce the amount of the Net Proceeds.

For purposes of clarity, in all situations other than a Reverse Acquisition, the term Net Proceeds is generally intended to capture only those amounts that are received by all of the Company’s stockholders or other equity holders (or by the Company in the case of an asset sale). For example, if portions of the aggregate consideration in a merger transaction are paid at closing to various service providers to satisfy transaction fees (legal, accounting or investment banking services), the intent is to include only the “net” consideration that is ultimately paid to all stockholders or the Company within this definition. In the case of a Reverse Acquisition, the term Net Proceeds is generally intended to capture the net value attributable to the Company in the transaction (immediately prior to the closing of the transaction), and this amount shall be reduced to the extent that the Company is required to pay various service providers to satisfy transaction fees (legal, accounting or investment banking services). However, any part of the merger consideration that is directed or used toward the payment of the Severance is not intended to result in a reduction or offset of the “net” amount that is considered to be paid to stockholders or the Company.

IN WITNESS WHEREOF, this Amended and Restated Change in Control Agreement has been executed by the parties hereto as of the date first above written.

7.

REGENERX BIOPHARMACEUTICALS, INC.
By:	/s/ J.J. Finkelstein
	J.J. Finkelstein
	CEO
EXECUTIVE:
/s/ David R. Crockford
David R. Crockford

8.

EX-10.10

Exhibit 10.10

AMENDED AND RESTATED CHANGE IN CONTROL AGREEMENT

THIS AMENDED AND RESTATED CHANGE IN CONTROL AGREEMENT (this “Agreement”) is effective as of April 3, 2012, by and between REGENERX BIOPHARMACEUTICALS, INC., a Delaware corporation (the “Company”), and DR. ALLAN L. GOLDSTEIN (the “Executive”).

RECITALS

The parties previously entered into a Change in Control Agreement, dated as of January 1, 2012 (the “Prior Agreement”), and now desire to amend, restate and supersede the Prior Agreement to reflect certain revisions to the terms and conditions of severance.

The Company and the Executive wish to enter into this Agreement to set forth the compensation and benefits that the Executive will be eligible to receive in the event that the Executive’s employment with the Company terminates following a change in control transaction.

AGREEMENT

In consideration of the mutual covenants and conditions contained in this Agreement, the parties agree as follows:

1. Eligibility for Change in Control Benefits. If (a) a Change in Control is consummated by June 30, 2012, or such other date as consistent with the extension of this Agreement as provided in Section 8, and (b) prior to June 30, 2012, or within twelve (12) months following such Change in Control, the Company terminates the Executive’s employment for any reason (other than Cause or the Executive’s death or disability) or the Executive resigns for Good Reason, and provided that any such termination constitutes a “separation from service” (as such term is defined in Treasury Regulation Section 1.409A-1(h), without regard to any alternative definitions thereunder, a “Separation From Service”), (each such termination event is referred to as a “Covered Termination”), the Executive will be eligible for the compensation and benefits described in Section 2. References to the Company in this Agreement shall be deemed to include any affiliate of the Company, or the acquiring, surviving or successor entity in the Change in Control or their affiliates (collectively, “Successor”), as applicable.

2. Change in Control Benefits.

(a) Accelerated Vesting of Equity Incentives. On the effective date of the Change in Control, any outstanding stock option, or other equity award, held at such time by Executive under the terms of the Company’s Amended and Restated 2000 Stock Option and Incentive Plan or the Company’s 2010 Equity Incentive Plan will become one hundred percent (100%) vested and exercisable in full immediately before such Change in Control transaction and contingent upon its effectiveness.

(b) Severance. Following a Covered Termination, and subject to the terms and conditions set forth in Section 3, the Executive will be eligible for up to six (6) months of his Base Salary (as defined below), which amount shall be calculated as set forth in the table below (the “Severance”), payable in two equal installments, with the first payment occurring on the 60^th day after the effective date of the Change in Control or, if later, the Executive’s Separation from Service (“Initial Payment Date”), and the second installment occurring sixty (60) days after the Initial Payment Date.

Net Proceeds	Severance Amount
Up to $1,000,000	1 month
$1,000,000 through $1,999,999.99	1 month
$2,000,000 through $2,999,999.99	2 months
$3,000,000 through $3,999,999.99	3 months
$4,000,000 through $4,999,999.99	4 months
$5,000,000 through $5,999,999.99	5 months
$6,000,000 and above	6 months

Notwithstanding the above, the maximum amount of the Severance shall be six months of the Executive’s Base Salary in the aggregate.

Examples: In the event of a Change in Control occurring on May 1, 2012, in which the Net Proceeds are $4,500,000, the Severance would equal four months of the Executive’s Base Salary. By contrast, if the Net Proceeds in such a Change in Control transaction are $700,000, then the Severance would equal one month of the Executive’s Base Salary. Likewise, once the Net Proceeds exceed $6 million, the Severance is capped at 6 months of the Executive’s Base Salary.

3. Release and Waiver of Claims. As further consideration for the benefits to be provided by the Company to the Executive under this Agreement, the Executive will be required to execute and deliver to the Company, by no later than the Initial Payment Date, a general release and waiver of all legal claims against the Company, any affiliated or related entity, and their representatives in a form satisfactory to the Company (the “Release”). No payments or benefits will be provided hereunder unless the Release is valid and fully effective and cannot be revoked as of the Initial Payment Date.

2

4. Other Severance Agreements and Policies. The compensation and benefits provided to Executive pursuant to this Agreement, are in lieu of, and not in addition to, any benefits to which Executive may otherwise be entitled under any other agreement between Executive and the Company in respect of severance or termination pay or benefits, or any Company severance plan, policy or program, or other corporate documents of any type, including any individually negotiated severance provisions as part of any offer letter or employment agreement between the Company and Executive, including the Prior Agreement and Executive’s Second Amended and Restated Employment Agreement dated March 11, 2009, as amended (collectively, “Other Agreements”). The severance pay and benefits provided in this Agreement are intended to supersede and replace any severance pay and benefits to which Executive may otherwise be entitled as a result of any termination from employment and, by executing this Agreement, Executive agrees to waive, forego and forever relinquish any right or entitlement to receive compensation or benefits under any Other Agreements. This waiver and relinquishment is in consideration for the right to severance pay and benefits under the terms of this Agreement, which are in addition to the compensation and benefits that Executive would otherwise be eligible to receive, and applies whether or not Executive actually receives severance pay or benefits hereunder.

5. Withholding Taxes. The Company will withhold from all payments to be made under this Agreement all federal, state and local income or other taxes required to be withheld and any other required payroll deductions. Alternatively, if permitted by the Company, the Executive will make arrangements satisfactory to the Company for the payment of any taxes and other deductions.

6. Tax Consequences. The Company makes no representation as to the tax consequences to the Executive of the transactions contemplated by this Agreement, which will be the sole responsibility of the Executive.

7. Basis of Payments. All benefits under this Agreement shall be paid by the Company. This Agreement shall be unfunded, and benefits hereunder shall be paid only from the general assets of the Company.

8. Termination. If no Change in Control is consummated by June 30, 2012, then this Agreement will be null and void and of no force or effect unless extended by mutual written agreement of the parties. Anything in this Agreement to the contrary notwithstanding, in the event the Company’s business is discontinued because it is rendered impracticable by substantial financial losses, lack of funding, legal decisions, administrative rulings, declaration of war, dissolution, national or local economic depression or crisis or any reasons beyond the control of the Company, then this Agreement shall terminate as of the day the Company determines to cease operation with the same force and effect as if such day of the month were originally set as the termination date hereof. In the event this Agreement is terminated pursuant to this Section 8, the Executive will not receive severance payments, or any other severance compensation or benefit.

9. No Implied Employment Contract. The Agreement will not be deemed (a) to give the Executive any right to be retained in the employ of the Company or its successors, or (b) to interfere with the right of the Company or its successor to discharge the Executive at any time and for any reason, which right is hereby reserved.

10. Severability. Whenever possible, each provision of this Agreement will be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Agreement is held to be invalid, illegal or unenforceable in any respect under any applicable law or rule in any jurisdiction, such invalidity, illegality or unenforceability will not affect any other provision or any other jurisdiction, but this Agreement will be reformed, construed and enforced in such jurisdiction as if such invalid, illegal or unenforceable provisions had never been contained herein.

3

11. Waiver. If either party should waive any breach of any provisions of this Agreement, Executive or it shall not thereby be deemed to have waived any preceding or succeeding breach of the same or any other provision of this Agreement.

12. Complete Agreement. This Agreement constitutes the entire agreement between Executive and the Company with regard to the subject matter hereof. This Agreement is the complete, final, and exclusive embodiment of their agreement with regard to this subject matter and supersedes any prior oral discussions or written communications and agreements, including but not limited to the Prior Agreement. This Agreement is entered into without reliance on any promise or representation other than those expressly contained herein.

13. Amendments. This Agreement may be amended, modified or terminated only in writing signed by Executive and the Company. The Company may only consent to an amendment or modification of this Agreement after such amendment or modification has been approved by the Company’s Board of Directors (the “Board”).

14. Counterparts. This Agreement may be executed in separate counterparts, any one of which need not contain signatures of more than one party, but all of which taken together will constitute one and the same Agreement.

15. Headings. The headings of the sections hereof are inserted for convenience only and shall not be deemed to constitute a part hereof nor to affect the meaning thereof.

16. Successors and Assigns. This Agreement is intended to bind and inure to the benefit of and be enforceable by Executive and the Company, and their respective successors, assigns, heirs, executors and administrators, except that Executive may not assign any of Executive’s duties hereunder and Executive may not assign any of Executive’s rights hereunder without the written consent of the Company.

17. Applicable Law. This Agreement will be governed by the laws of the State of Maryland as such laws are applied to agreements between Maryland residents entered into and to be performed entirely within Maryland.

18. Application of Section 409A. Notwithstanding anything to the contrary set forth herein, any payments and benefits provided under this Agreement that constitute “deferred compensation” within the meaning of Section 409A of the Internal Revenue Code of 1986, as amended (“Code”) and the regulations and other guidance thereunder and any state law of similar effect (collectively, “Section 409A”) shall not commence in connection with the Executive’s termination of employment unless and until the Executive has also incurred a Separation From Service, unless the Company reasonably determines that such amounts may be provided to the Executive without causing him to incur the additional 20% tax under Section 409A.

4

It is intended that each installment of severance pay provided for in this Agreement is a separate “payment” for purposes of Treasury Regulation Section 1.409A-2(b)(2)(i). For the avoidance of doubt, it is intended that severance payments set forth in this Agreement satisfy, to the greatest extent possible, the exceptions from the application of Section 409A provided under Treasury Regulation Sections 1.409A-1(b)(4) and 1.409A-1(b)(9).

If the Company (or, if applicable, the successor entity thereto) determines that any payments or benefits constitute “deferred compensation” under Section 409A and the Executive is, on the termination of service, a “specified employee” of the Company or any successor entity thereto, as such term is defined in Section 409A(a)(2)(B)(i) of the Code, then, solely to the extent necessary to avoid the incurrence of the adverse personal tax consequences under Section 409A, the timing of the payments and benefits shall be delayed until the earlier to occur of: (a) the date that is six months and one day after the Executive’s Separation From Service, or (b) the date of the Executive’s death (such applicable date, the “Specified Employee Initial Payment Date”). On the Specified Employee Initial Payment Date, the Company (or the successor entity thereto, as applicable) shall (i) pay to the Executive a lump sum amount equal to the sum of the payments and benefits that the Executive would otherwise have received through the Specified Employee Initial Payment Date if the commencement of the payment of such amounts had not been so delayed pursuant to this Section and (ii) commence paying the balance of the payments and benefits in accordance with the applicable payment schedules set forth in this Agreement.

19. Definitions. For purposes of this Agreement, the following terms shall have the meanings set forth below:

(a) “Base Salary” means the Executive’s annual base salary as in effect as of November 30, 2011. Base Salary does not include bonuses, commissions, overtime, fringe benefits, option grants, equity awards other irregular payments or any other compensation except base salary.

(b) “Cause” means: (i) refusal, failure or neglect to perform the material duties of his employment (other than by reason of Executive’s physical or mental illness or impairment); (ii) committing willful dishonesty, fraud, embezzlement or misconduct with respect to the business or affairs of the Company; (iii) indictment or conviction of a felony or of any crime involving dishonesty or moral turpitude; or (iv) Executive’s refusal to abide by or comply with the directives of the Company’s Board of Directors.

(c) “Change in Control” means: (i) the sale of all or substantially all of the assets of the Company to an unrelated person or entity; (ii) a merger, reorganization or consolidation in which the holders of the Company’s outstanding voting power immediately prior to such transaction do not own a majority of the outstanding voting power of the surviving or resulting entity, or its parent corporation, immediately upon completion of such transaction; (iii) the sale of all of the capital stock of the Company to an unrelated person or entity; (iv) if any individual, firm, corporation, or other entity, or any group (as defined in Section 13(d) of the Securities Exchange Act of 1934, as amended (the “ Exchange Act ”)), other than (1) a trustee or other fiduciary holding securities of the Company under an employee benefit plan of the Company or (2) Executive becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing 50% or more of (A) the outstanding shares of common stock of the Company, or (B) the combined voting power of the Company’s then-outstanding securities entitled to vote generally in the election of directors; (v) any other transaction in which the owners of the Company’s outstanding voting power prior to such transaction do not own at least a majority of the outstanding voting power of the relevant entity after the transaction, in each case, regardless of the form thereof. Notwithstanding the above, an event is not a “Change in Control” unless it also is a “change in ownership of a corporation” or a “change in ownership of a substantial portion of a corporation’s assets” under Treasury Regulation section 1.409A-3(i)(5)(v) and (vii).

5

(d) “Good Reason” means any of the following: (i) a material diminution of Executive’s responsibilities or duties (provided, however, that the acquisition of the Company and subsequent conversion of the Company to a division or unit of the acquiring company will not by itself be deemed to be a diminution of Executive’s responsibilities or duties), (ii) a relocation of Executive’s principal place of employment by more than 60 miles from its location at the Effective Date of this Agreement, unless consented to by Executive, (iii) a material reduction in the benefits and perquisites to Executive from those being provided as of the date immediately preceding the Change in Control, unless consented to by Executive, (iv) any material failure by the Company to pay or provide the compensation and benefits under the Temporary Employment Terms Offer Letter dated January 1, 2012, except any such circumstance which is part of a general reduction or other concessionary arrangement affecting all employees or affecting senior executive officers, or (v) failure of a Successor in a Change in Control to assume this Agreement. In each such event listed in (i) through (v) above, Executive shall give the Company notice thereof by no later than ninety (90) days after the initial occurrence of the event or condition allegedly constituting Good Reason which shall specify in reasonable detail the circumstances constituting Good Reason. There shall be no Good Reason with respect to any such event or condition cured by the Company within thirty (30) days after such notice. If the Company fails to cure such event or condition within this thirty- (30-) day period, Executive must terminate employment under this provision within ninety (90) days after the cure period has expired (and thereafter Executive may no longer terminate his employment for a Good Reason based upon the event or condition that was not cured). Transferring the Executive’s employment to a Successor is not itself Good Reason to terminate employment under this Agreement, provided, however, that subparagraphs (i) through (v) above shall continue to apply to the Executive’s employment by the Successor.

References to the Company in this Agreement shall be deemed to include any affiliate of the Company, or the acquiring, surviving or successor entity in a Change in Control (as defined below) or their affiliates (collectively, “Successor”), as applicable.

6

(e) “Net Proceeds” with respect to a Change in Control means all of the cash, assumed liabilities, and the fair market value (as determined in good faith by the Board) on the closing date of all other property that is paid by a third party or by the Company to the Company’s stockholders or others equity stakeholders (e.g., option or warrant holders), or which is paid to the Company in the case of a Change in Control structured as an asset sale or similar transaction, in consideration for their shares or any convertible debt or other equity-linked securities (warrants or options) held by the Company’s stockholders or any third party convertible debt holders or holders of other equity-linked securities (or in consideration of the assets of the Company in the case of a Change in Control structured as an asset sale or similar transaction). Notwithstanding the foregoing, in the case of a Change in Control structured as an acquisition by the Company of a third party (or the purchase of the assets of a third party or similar transaction) in which equity of the Company is issued in the transaction to the third party or its stockholders or other stakeholders (a “Reverse Acquisition”), “Net Proceeds” shall mean the aggregate fair market value, as determined in good faith by the Company’s Board of Directors, immediately prior to the signing of the definitive agreement to effect the transaction. The term “Net Proceeds” excludes, without limitation, (i) any amounts paid into escrow or subject to earn-outs or other contingencies until such amounts have been released from escrow or the earn-out or other contingencies are satisfied, and (ii) any transaction fees of the Company incurred in connection with the transaction that are assumed or paid by the purchaser (such as fees related to legal services, financial advisory services, investment banking services or other professional services). The amount of the Severance paid hereunder shall not reduce the amount of the Net Proceeds.

For purposes of clarity, in all situations other than a Reverse Acquisition, the term Net Proceeds is generally intended to capture only those amounts that are received by all of the Company’s stockholders or other equity holders (or by the Company in the case of an asset sale). For example, if portions of the aggregate consideration in a merger transaction are paid at closing to various service providers to satisfy transaction fees (legal, accounting or investment banking services), the intent is to include only the “net” consideration that is ultimately paid to all stockholders or the Company within this definition. In the case of a Reverse Acquisition, the term Net Proceeds is generally intended to capture the net value attributable to the Company in the transaction (immediately prior to the closing of the transaction), and this amount shall be reduced to the extent that the Company is required to pay various service providers to satisfy transaction fees (legal, accounting or investment banking services). However, any part of the merger consideration that is directed or used toward the payment of the Severance is not intended to result in a reduction or offset of the “net” amount that is considered to be paid to stockholders or the Company.

IN WITNESS WHEREOF, this Amended and Restated Change in Control Agreement has been executed by the parties hereto as of the date first above written.

REGENERX BIOPHARMACEUTICALS, INC.
By:	/s/ J.J. Finkelstein
	J.J. Finkelstein
	CEO
EXECUTIVE:
/s/ Dr. Allan L. Goldstein
Dr. Allan L. Goldstein

7

EX-31.1

EXHIBIT 31.1

CERTIFICATION

I, J.J. Finkelstein certify that:

1. I have reviewed this quarterly report on Form 10-Q of RegeneRx Biopharmaceuticals, Inc.;

2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;

3. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the issuer, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation;

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 15, 2012
	/s/ J.J. Finkelstein
	J.J. Finkelstein
	President and Chief Executive Officer
	(Principal Executive Officer and Principal Financial Officer)

EX-32.1

EXHIBIT 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of RegeneRx Biopharmaceuticals, Inc. (the “Company”) on Form 10-Q for the period ended March 31, 2012 (the “Report”), I, J.J. Finkelstein, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m or 78o(d)); and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company as of and for the periods presented in the Report.

This certification accompanies this Report to which it relates, shall not be deemed “filed” with the Securities and Exchange Commission and is not to be incorporated by reference into any filing of the Company under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended (whether made before or after the date of the Report), irrespective of any general incorporation language contained in such filing.

Date: May 15, 2012
	/s/ J.J. Finkelstein
	J.J. Finkelstein
	President and Chief Executive Officer
	(Principal Executive Officer and Principal Financial Officer)

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Income Taxes

3 Months Ended

Mar. 31, 2012

Income Taxes [Abstract]

Income Taxes

4. INCOME TAXES

As of March 31, 2012, there have been no material changes to our uncertain tax positions disclosures as provided in Note 8 of the Annual Report. We do not anticipate that total unrecognized tax benefits will significantly change prior to March 31, 2013.

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Stock-Based Compensation

3 Months Ended

Mar. 31, 2012

Stock-Based Compensation [Abstract]

Stock-Based Compensation

3. STOCK-BASED COMPENSATION

We measure stock-based compensation expense based on the grant date fair value of the awards, which is then recognized over the period which service is required to be provided. We estimate the value of our stock option awards on the date of grant using the Black-Scholes option pricing model and amortize that cost over the expected term of the grant. We recognized $57,109 and $65,617 in stock-based compensation expense for the three months ended March 31, 2012 and 2011, respectively. We expect to recognize the compensation cost related to non-vested options as of March 31, 2012 of $225,173 over the weighted average remaining recognition period of 1.4 years.

We did not grant any stock options during the three months ended March 31, 2011. We used the following forward-looking range of assumptions to value each stock option granted to employees, consultants and directors during the three months ended March 31, 2012:

	2012
Dividend yield	0.0	%
Risk-free rate of return	0.9	%
Expected life in years	4 - 4.75
Volatility	73 - 77	%
Forfeiture rate	2.6	%

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Balance Sheets (USD $)	Mar. 31, 2012	Dec. 31, 2011
ASSETS
Cash and cash equivalents	$ 135,510	$ 116,092
Grant receivable	99,884	214,450
Prepaid expenses and other current assets	24,134	24,603
Total current assets	259,528	355,145
Property and equipment, net of accumulated depreciation of $119,005 and $116,985	14,926	16,946
Other assets	11,503	11,503
Total assets	285,957	383,594
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Accounts payable	543,969	451,881
Accrued expenses	340,899	358,778
Refundable license fee	200,000
Total current liabilities	1,084,868	810,659
Commitments
Stockholders' equity (deficit)
Preferred stock, $.001 par value per share, 1,000,000 shares authorized; no shares issued
Common stock, par value $.001 per share, 200,000,000 shares authorized; 81,390,618 issued and outstanding as of March 31, 2012; 81,390,618 issued and outstanding as of December 31, 2011	81,391	81,391
Additional paid-in capital	95,081,021	95,023,912
Accumulated deficit	(95,961,323)	(95,532,368)
Total stockholders' equity (deficit)	(798,911)	(427,065)
Total liabilities and stockholders' equity (deficit)	$ 285,957	$ 383,594

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Organization, Business Overview And Basis Of Presentation

3 Months Ended

Mar. 31, 2012

Organization, Business Overview And Basis Of Presentation [Abstract]

Organization, Business Overview And Basis Of Presentation

1. ORGANIZATION, BUSINESS OVERVIEW AND BASIS OF PRESENTATION

Organization and Nature of Operations.

RegeneRx Biopharmaceuticals, Inc. ("RegeneRx", the "Company", "We", "Us", "Our"), a Delaware corporation, was incorporated in 1982. We are focused on the discovery and development of novel molecules to accelerate tissue and organ repair. Our operations are confined to one business segment: the development and marketing of product candidates based on Thymosin Beta 4 ("T²4"), an amino acid peptide.

Management Plans to Address Operating Conditions.

On March 27, 2012, we entered into a term sheet with Lee's Pharmaceutical (HK) Limited ("Lee's") for the license of Tß4 in any pharmaceutical formulation, including our RGN-259, RGN-352 and RGN-137 product candidates, in China, Hong Kong and Macau. Lee's paid us $200,000 upon signing of the term sheet, and Lee's will pay us an additional $200,000 upon signing of the definitive license agreement, which we expect to occur by May 31, 2012 or soon thereafter. The amount is classified as refundable license fee on the balance sheet. Sigma-Tau Finanziaria S.P.A., an international pharmaceutical company, which together with its subsidiaries and affiliates, collectively beneficially own approximately 39% of our common stock and represent our largest stockholder group, also collectively own approximately 28% of Lee's. The receipt of the initial $200,000 will support our operations for thirty to sixty days. Receipt of the additional $200,000 from the signing of the definitive license agreement will provide funding of planned operations through the second quarter of 2012. We continue to evaluate potential strategic options, including the licensing of additional territorial rights to our proprietary clinical programs. Additionally, beginning in late 2011, we began implementing significant cost-saving measures to conserve capital resources and maintain a minimal level of operations, while seeking additional funding and/or to complete a strategic transaction. To that end, in December 2011 we reduced the salaries of all of our employees to approximately $2,800 per employee per month, and we granted stock options to them (in lieu of a portion of the cash salary adjustment) that vested at the end of the year. Beginning in January 2012, all employees became part-time hourly employees with reduced work schedules. Additionally, in January 2012, we discontinued providing employee health benefits and company-sponsored 401(k) matching contributions. The majority of our research and development staff's efforts since this time have been directed to work under a grant that we received from the National Institutes of Health ("NIH").

We have incurred net losses of $6.0 million for the year ended December 31, 2011 and $429,000 for the three-month period ended March 31, 2012. Since inception, and through March 31, 2012, we have an accumulated deficit of $96 million and we had cash and cash equivalents of $136,000 as of March 31, 2012. Currently, we are not enrolling patients in any of our clinical trials. We had intended to commence patient enrollment in a Phase 2 clinical trial of RGN-352 for AMI patients near the end of the first quarter of 2011, but this trial has been placed on clinical hold by the FDA pending resolution of certain manufacturing compliance issues at our original contract manufacturer, which was responsible for formulating, filling and finishing RGN-352. We have put the AMI trial on hold pending access to sufficient capital resources to enable us to retain a new drug product manufacturer and are focusing our current efforts on the development of RGN-259 for ophthalmic indications.

We have stopped enrolling and have closed a Phase 2 trial to evaluate RGN-137 in patients suffering from epidermolysis bullosa, or EB. We plan to have the data analyzed once we have the financial resources. Given these objectives and as noted above, we project that our existing capital resources, coupled with the expected $200,000 payment from Lee's upon entry into the definitive license agreement, will fund our planned operating activities through the end of June 2012, without giving effect to any other financing sources, including any purchases under our committed equity facility with Lincoln Park Capital, which is subject to a number of conditions that limit our ability to draw against such facility (See Note 6).

We anticipate incurring additional losses in the future as we continue to explore the potential clinical benefits of T²4-based product candidates over multiple indications. We will need substantial additional funds in order to initiate any further preclinical studies or clinical trials, and to fund our operations beyond June 2012. Accordingly, we have an immediate need for financing and are in the process of exploring various alternatives, including, without limitation, a public or private placement of our securities, debt financing, corporate collaboration and licensing arrangements, or the sale of our company or certain of our intellectual property rights.

These factors raise substantial doubt about our ability to continue as a going concern. The accompanying financial statements have been prepared assuming that we will continue as a going concern. This basis of accounting contemplates the recovery of our assets and the satisfaction of our liabilities in the normal course of business.

Although we intend to continue to seek additional financing or a strategic partner, we may not be able to complete a financing or corporate transaction, either on favorable terms or at all. If we are unable to complete a financing or strategic transaction, we may not be able to continue as a going concern after our funds have been exhausted, and we could be required to significantly curtail or cease operations, file for bankruptcy or liquidate and dissolve. There can be no assurance that we will be able to obtain any sources of funding. The financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should we be forced to take any such actions.

To achieve profitability we, and/or a partner, must successfully conduct pre-clinical studies and clinical trials, obtain required regulatory approvals and successfully manufacture and market those pharmaceuticals we wish to commercialize. The time required to reach profitability is highly uncertain, and there can be no assurance that we will be able to achieve sustained profitability, if at all.

Basis of Presentation.

The accompanying unaudited interim financial statements reflect, in the opinion of management, all adjustments (consisting only of normal recurring adjustments) necessary for a fair presentation of our financial position, results of operations and cash flows for each period presented. These statements have been prepared in accordance with U.S. generally accepted accounting principles ("GAAP") and with the rules and regulations of the SEC, for interim financial statements. Accordingly, they do not include all of the information and footnotes required by GAAP. The accounting policies underlying our unaudited interim financial statements are consistent with those underlying our audited annual financial statements. These unaudited interim financial statements should be read in conjunction with the audited annual financial statements as of and for the year ended December 31, 2011, and related notes thereto, included in our Annual Report on Form 10-K for the year ended December 31, 2011 (the "Annual Report").

The accompanying December 31, 2011 financial information was derived from our audited financial statements included in the Annual Report. Operating results for the three-month period ended March 31, 2012 are not necessarily indicative of the results to be expected for the year ending December 31, 2012 or any other future period.

References in this Quarterly Report on Form 10-Q to "authoritative guidance" are to the Accounting Standards Codification issued by the Financial Accounting Standards Board ("FASB").

Subsequent events have been evaluated through the filing date of these unaudited financial statements.

Use of Estimates.

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Critical accounting policies involved in applying our accounting policies are those that require management to make assumptions about matters that are highly uncertain at the time the accounting estimate was made and those for which different estimates reasonably could have been used for the current period. Critical accounting estimates are also those which are reasonably likely to change from period to period, and would have a material impact on the presentation of our financial condition, changes in financial condition or results of operations. Our most critical accounting estimates relate to accounting policies for clinical trial accruals and share-based arrangements. Management bases its estimates on historical experience and on various other assumptions that it believes are reasonable under the circumstances. Actual results could differ from those estimates.

Sponsored Research Revenues.

We account for non-refundable grants as "Sponsored research revenues" in the accompanying statements of operations. Revenues are recognized when persuasive evidence of an arrangement exists, the associated research or other services have been performed, the related underlying costs are incurred, the contract price is fixed or determinable and collectability is reasonably assured. For the three months ended March 31, 2012 and 2011, all of our revenues were from one NIH grant.

Research and Development.

Research and development ("R&D") costs are expensed as incurred and include all of the wholly-allocable costs associated with our various clinical programs passed through to us by our outsourced vendors. Those costs include: manufacturing T²4; formulation of T²4 into the various product candidates; stability for both T²4 and the various formulations; pre-clinical toxicology; safety and pharmacokinetic studies; clinical trial management; medical oversight; laboratory evaluations; statistical data analysis; regulatory compliance; quality assurance; and other related activities. R&D includes cash and non-cash compensation, employee benefits, travel and other miscellaneous costs of our internal R&D personnel, six persons in total, who are wholly dedicated to R&D efforts. R&D also includes a pro-ration of our common infrastructure costs for office space and communications.

Cost of Preclinical Studies and Clinical Trials.

We accrue estimated costs for preclinical studies based on estimates of work performed. We estimate expenses incurred for clinical trials that are in process based on patient enrollment and based on clinical data collection and management. Costs based on clinical data collection and management are recognized based on estimates of unbilled goods and services received in the reporting period. We monitor the progress of the trials and their related activities and adjust the accruals accordingly. Adjustments to accruals are charged to expense in the period in which the facts that give rise to the adjustment become known. In the event of early termination of a clinical trial, we would accrue an amount based on estimates of the remaining non-cancelable obligations associated with winding down the clinical trial.

Recent Accounting Pronouncements.

For a discussion of recent accounting pronouncements please refer to Note 2, "Summary of Significant Accounting Policies—Recent Accounting Pronouncements," in the Annual Report. We did not adopt any new accounting pronouncements during the three months ended March 31, 2012 that had or are expected to have a material impact on our financial statements.

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Net Loss Per Common Share

3 Months Ended

Mar. 31, 2012

Net Loss Per Common Share [Abstract]

Net Loss Per Common Share

2. NET LOSS PER COMMON SHARE

Net loss per common share for the three-month periods ended March 31, 2012 and 2011, respectively, is based on the weighted-average number of shares of common stock outstanding during the periods. Basic and diluted loss per share are identical for all periods presented as potentially dilutive securities have been excluded from the calculation of the diluted net loss per common share because the inclusion of such securities would be antidilutive. The potentially dilutive securities include 16,856,658 shares and 20,879,931 shares in 2012 and 2011, respectively, reserved for the exercise of outstanding options and warrants.

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Balance Sheets (Parenthetical) (USD $)	Mar. 31, 2012	Dec. 31, 2011
Balance Sheets [Abstract]
Property and equipment, accumulated depreciation	$ 119,005	$ 116,985
Preferred stock, par value	$ 0.001	$ 0.001
Preferred stock, shares authorized	1,000,000	1,000,000
Preferred stock, shares issued	0	0
Common stock, par value	$ 0.001	$ 0.001
Common stock, shares authorized	200,000,000	200,000,000
Common stock, shares issued	81,390,618	81,390,618
Common stock, shares outstanding	81,390,618	81,390,618

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Document And Entity Information	3 Months Ended
	Mar. 31, 2012	May 14, 2012
Document And Entity Information [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Mar. 31, 2012
Document Fiscal Period Focus	Q1
Document Fiscal Year Focus	2012
Entity Registrant Name	REGENERX BIOPHARMACEUTICALS INC
Entity Central Index Key	0000707511
Current Fiscal Year End Date	--12-31
Entity Filer Category	Smaller Reporting Company
Entity Common Stock, Shares Outstanding		81,679,080

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Statements Of Operations (USD $)	3 Months Ended
	Mar. 31, 2012	Mar. 31, 2011
Statements Of Operations [Abstract]
Sponsored research revenue	$ 224,837	$ 602,457
Operating expenses:
Research and development	257,446	1,514,785
General and administrative	396,354	685,059
Total operating expenses	653,800	2,199,844
Loss from operations	(428,963)	(1,597,387)
Interest income	8	1,018
Net loss	$ (428,955)	$ (1,596,369)
Basic and diluted net loss per common share	$ (0.01)	$ (0.02)
Weighted average number of common shares outstanding	81,390,618	79,438,368

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Stockholders' Equity

3 Months Ended

Mar. 31, 2012

Stockholders' Equity [Abstract]

Stockholders' Equity

6. STOCKHOLDERS' EQUITY

On January 5, 2011, we entered into a securities purchase agreement with Lincoln Park Capital Fund, LLC ("LPC"), pursuant to which we sold in a registered direct offering 1,851,852 shares of our common stock to LPC at a price per share of $0.27, for gross proceeds of $500,000 before offering expenses (the "Registered Offering"). As part of the Registered Offering, we also issued to LPC, for no additional consideration, a warrant to purchase 740,741 shares of common stock at an exercise price of $0.38 per share (the "LPC Warrant"). Subject to certain ownership limitations, the LPC Warrant is exercisable until January 7, 2016. The exercise price of the LPC Warrant is subject to adjustment in the case of stock splits, stock dividends, combinations of shares and similar recapitalization transactions.

The Registered Offering was made pursuant to an S-3 shelf registration statement on (SEC File No. 333-150675), which was declared effective by the SEC on May 16, 2008, pursuant to a prospectus supplement filed with the SEC on January 7, 2011.

The Registered Offering closed on January 7, 2011. No discounts or placement agent fees were payable in connection with the Registered Offering, and the Company used the proceeds from the Registered Offering for preclinical and clinical development of the Company's drug candidates and for general corporate purposes, including working capital.

On January 5, 2011, we entered into three separate securities purchase agreements (each, a "Sigma-Tau Purchase Agreement" and together, the "Sigma-Tau Purchase Agreements") with affiliates of Sigma-Tau Group, our largest stockholder (the "Sigma-Tau Purchasers"), with respect to the private placement (the "Private Placement") of an aggregate of 3,518,519 shares of common stock (the "Sigma-Tau Shares") at a price per share of $0.27, for gross proceeds of $950,000. No discounts or placement agent fees were payable in connection with the Private Placement, and we used the net proceeds of the Private Placement for working capital and other general corporate purposes.

In connection with the Private Placement, we also issued to the Sigma-Tau Purchasers warrants (the "Sigma-Tau Warrants") to purchase an aggregate of 1,407,407 additional shares of common stock at an exercise price of $0.38 per share. The Sigma-Tau Warrants are exercisable until January 7, 2016. The exercise price of the Sigma-Tau Warrants is subject to adjustment in the case of stock splits, stock dividends, combinations of shares and similar recapitalization transactions. The Private Placement closed on January 7, 2011.

In connection with the Private Placement, on January 5, 2011, we and the Sigma-Tau Purchasers entered into an agreement (the "Warrant Amendment") to amend the terms of certain outstanding warrants held by the holders of such warrants (the "Holders"). Under the Warrant Amendment, all outstanding warrants held by the Holders that were issued between March 2006 and December 2008, exercisable for an aggregate of 3,046,453 shares of Common Stock and with exercise prices between $1.60 per share and $4.06 per share, were amended to reduce their exercise prices to $0.38 per share and to extend their expiration dates to December 31, 2011. The incremental fair value transferred to the holders pursuant to the Warrant Amendment was not material. All of the amended warrants expired unexercised on December 31, 2011.

On January 4, 2011, we and LPC also entered into a committed equity facility (the "LPC Equity Facility"), together with a Registration Rights Agreement (the "Registration Rights Agreement"), whereby we have the right to sell to LPC up to $11,000,000 of our common stock through October 2013 (any such shares sold being referred to as the "Purchase Shares"). Under the Registration Rights Agreement, we filed a registration statement related to the transaction with the SEC covering the Purchase Shares and the Additional Commitment Shares (as defined below), which was declared effective by the SEC on February 11, 2011. We will generally have the right, but not the obligation, over a 30-month period that began in April 2011, to direct LPC to periodically purchase the Purchase Shares in specific amounts under certain conditions. The purchase price for the Purchase Shares will be the lower of (i) the lowest trading price on the date of sale or (ii) the arithmetic average of the three lowest closing sale prices for the common stock during the 12 consecutive business days ending on the business day immediately preceding the purchase date. In no event, however, will the Purchase Shares be sold to LPC at a price of less than $0.15 per share.

In consideration for entering into the LPC Equity Facility, we issued to LPC 958,333 shares of common stock as an initial commitment fee (the "Initial Commitment Shares") and are required to issue up to 958,333 shares of common stock as additional commitment shares on a pro rata basis (the "Additional Commitment Shares") as we direct LPC to purchase our shares under the Equity Facility over the term of the agreement. The LPC Equity Facility may be terminated by us at any time at our discretion without any cost to us. The proceeds that may be received by us under the LPC Equity Facility are expected to be used for preclinical and clinical development of our drug candidates and for general corporate purposes, including working capital.

Under the LPC Equity Facility, we have agreed that, subject to certain exceptions, we will not, during the term of the LPC Equity Facility, effect or enter into an agreement to effect any issuance of common stock or securities convertible into, exercisable for or exchangeable for common stock in a "Variable Rate Transaction," which means a transaction in which we: 

·issue or sell any debt or equity securities that are convertible into, exchangeable or exercisable for, or include the right to receive additional shares of common stock either (A) at a conversion price, exercise price or exchange rate or other price that is based upon and/or varies with the trading prices of or quotations for the shares of common stock at any time after the initial issuance of such debt or equity securities, or (B) with a conversion, exercise or exchange price that is subject to being reset at some future date after the initial issuance of such debt or equity security or upon the occurrence of specified or contingent events directly or indirectly related to our business or the market for the common stock; or 

·enter into any agreement, including, but not limited to, an equity line of credit, whereby we may sell securities at a future determined price. 

We have also agreed to indemnify LPC against certain losses resulting from our breach of any of our representations, warranties or covenants under the agreements with LPC.

During 2011, we sold 1,500,000 shares of common stock to LPC as Purchase Shares for $348,200 in net proceeds. We also issued 30,336 Additional Commitment Shares in connection with this purchase. At December 31, 2011 additional sales to LPC were not available as our share price was less than $0.15 per share. During the three months ended March 31, 2012 we did not sell any shares to LPC, and we may not sell additional shares to LPC until such time as we have filed a post-effective amendment to the original registration statement and such amendment has been declared effective by the SEC.

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Statements Of Cash Flows (USD $)	3 Months Ended
	Mar. 31, 2012	Mar. 31, 2011
Operating activities:
Net loss	$ (428,955)	$ (1,596,369)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation and amortization	2,020	2,543
Non-cash share-based compensation	57,109	65,617
Changes in operating assets and liabilities:
Grants receivable	114,566	6,858
Prepaid expenses and other current assets	469	166,539
Other assets		5,752
Accounts payable	92,088	129,054
Accrued expenses	(17,879)	(58,073)
Refundable license fee	200,000
Net cash provided by (used in) operating activities	19,418	(1,278,079)
Investing activities:
Purchase of property and equipment		(1,084)
Net cash used in investing activities		(1,084)
Financing activities:
Net proceeds from the issuance of common stock		1,398,615
Net cash provided by financing activities		1,398,615
Net increase in cash and cash equivalents	19,418	119,452
Cash and cash equivalents at beginning of period	116,092	3,790,352
Cash and cash equivalents at end of period	$ 135,510	$ 3,909,804

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Fair Value Measurements

3 Months Ended

Mar. 31, 2012

Fair Value Measurements [Abstract]

Fair Value Measurements

5. FAIR VALUE MEASUREMENTS

The authoritative guidance for fair value measurements defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or the most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Market participants are buyers and sellers in the principal market that are (i) independent, (ii) knowledgeable, (iii) able to transact, and (iv) willing to transact. The guidance describes a fair value hierarchy based on the levels of inputs, of which the first two are considered observable and the last unobservable, that may be used to measure fair value which are the following:

• Level 1 — Quoted prices in active markets for identical assets and liabilities.
• Level 2 — Observable inputs other than quoted prices in active markets for identical assets and liabilities.
• Level 3 — Unobservable inputs.

At March 31, 2012, we held no qualifying liabilities, and our only qualifying assets that required measurement under the foregoing fair value hierarchy were money market funds and U.S. Treasury Bills included in Cash and Cash Equivalents valued at $136,000, using Level 1 inputs.