ORGANIZATION AND DESCRIPTION OF BUSINESS

3 Months Ended

Mar. 31, 2013

ORGANIZATION AND DESCRIPTION OF BUSINESS [Abstract]

ORGANIZATION AND DESCRIPTION OF BUSINESS

1. ORGANIZATION AND DESCRIPTION OF BUSINESS

We are a biopharmaceutical company involved in the development of an injectable collagenase for multiple indications. We have a development and license agreement with Auxilium Pharmaceuticals, Inc. ("Auxilium") for injectable collagenase (which Auxilium has named XIAFLEX® (collagenase clostridium histolyticum)) for clinical indications in Dupuytren's contracture, Peyronie's disease, frozen shoulder (adhesive capsulitis) and cellulite (edematous fibrosclerotic panniculopathy) (the "Auxilium Agreement"). Auxilium has an option to acquire additional indications that we may pursue, including human and canine lipoma. Auxilium is currently selling XIAFLEX in the U.S. for the treatment of Dupuytren's contracture. In addition, Auxilium has an agreement with Asahi Kasei Pharma Corporation ("Asahi") pursuant to which Asahi has the right to commercialize XIAFLEX for the treatment of Dupuytren's contracture and Peyronie's disease in Japan. Auxilium also has an agreement with Actelion Pharmaceuticals Ltd. ("Actelion") pursuant to which Actelion has the right to commercialize XIAFLEX for the treatment of Dupuytren's contracture and Peyronie's disease in Canada, Australia, Brazil and Mexico. Auxilium has been granted a Notice of Compliance (approval) by Health Canada for XIAFLEX for the treatment of Dupuytren's contracture in adults with a palpable cord in Canada.

Pursuant to a March 2006 agreement (the "DFB Agreement") between the Company and DFB Biotech, Inc. ("DFB"), we continue to receive earn-out payments based on the sales of Santyl.  Our right to receive earn-out payments with respect to the marketed topical product sold to DFB expires in August 2013, and we expect to receive our final earn-out payment for Santyl by the end of the year.

Operational Highlights

In March 2013, we announced positive, statistically significant top-line data from the phase IIa study of XIAFLEX for the potential treatment of frozen shoulder (adhesive capsulitis). This open-label, controlled dose-ranging phase IIa study was conducted by Auxilium and was designed to assess the safety and efficacy of XIAFLEX for the treatment of Stage 2 unilateral idiopathic frozen shoulder in comparison to an exercise-only control group. The data from this phase IIa study support the progression into the next stage of development, which Auxilium plans to initiate in the second half of 2013.

In February 2013, we announced that The Journal of Urology had electronically published on its website the uncorrected proof of Auxilium's phase II clinical program, which assessed XIAFLEX for the potential treatment of Peyronie's disease. The manuscript is currently scheduled to appear in print in the July 2013 print version of The Journal of Urology.

In January 2013, Auxilium expanded the field of its license for injectable collagenase to include the potential treatment of adult patients with cellulite by exercising its exclusive option under our development and license agreement. As a result of this exercise, we received a license fee payment of $500,000 from Auxilium.  We paid a portion of this payment to the Research Foundation of the State University of New York at Stony Brook pursuant to the terms of our in-licensing agreement. Auxilium's exercise of this option followed its fourth quarter 2012 announcement of top-line 30-day data from the phase Ib study of XIAFLEX for the potential treatment of adult patients with cellulite, in which all doses of XIAFLEX were generally well-tolerated.  These data support the progression into a phase IIa clinical trial in cellulite, which Auxilium plans to initiate in the second half of 2013.