ORGANIZATION AND DESCRIPTION OF BUSINESS

9 Months Ended

Sep. 30, 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 or "CCH")) 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. XIAFLEX is currently marketed in the U.S. for the treatment of adult Dupuytren's contracture with a palpable cord in the palm by Auxilium and marketed in Europe and approved in Canada. Swedish Orphan Biovitrum AB ("Sobi") has marketing rights for XIAPEX^® (the EU trade name for CCH) for the treatment of Dupuytren's contracture and Peyronie's disease in 71 Eurasian and African countries. 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.

Pursuant to a March 2006 agreement (the "DFB Agreement") between the Company and DFB Biotech, Inc. ("DFB"), we had the right to receive earn-out payments based on the sales of Santyl.  This right to receive payments on Santyl sales expired in August 2013.

Operational Highlights

On October 23, 2013, we announced that our partner Auxilium had dosed the first patient in its Phase 2a study of XIAFLEX for the treatment of cellulite (edematous fibrosclerotic panniculopathy). Topline results from the study are expected in the first quarter of 2015. As reported by Auxilium, the phase 2a study is a randomized, double-blind multiple-dose study expected to enroll approximately 144 women between the ages of 18 and 45 in the U.S. Patients will be evaluated for treatment efficacy by investigator and patient assessments, as well as 3-D photographic imaging techniques. The study will be conducted in two stages and safety will be evaluated through the collection of adverse events. If the safety and local tolerability profile from the first stage has been found to be acceptable, subjects will be enrolled in stage 2. There are currently no FDA approved pharmaceutical therapies indicated for cellulite. XIAFLEX treatment is intended to target and lyse, or break, those collagen tethers that cause the skin dimpling associated with cellulite with the goal of releasing the dimpling and potentially resulting in smoothing of the skin.

On October 7, 2013, we announced that data from multiple trials evaluating the use of XIAFLEX in adult patients with Dupuytren's contracture with a palpable cord were presented by our partner Auxilium at the 68th Annual Meeting of the American Society for Surgery of the Hand ("ASSH") that took place in San Francisco, California, on October 3 – 5, 2013. Auxilium presented results at ASSH from Year 4 of the Collagenase Optimal Reduction of Dupuytren's - Long-term Evaluation of Success Study ("CORDLESS"). CORDLESS is a five-year observational study designed to assess the rates of recurrence following treatment with XIAFLEX, as well as long-term safety and progression of disease in patients from earlier Auxilium studies. These data indicated that 57.9 percent of patients previously successfully treated with XIAFLEX did not experience disease recurrence based on the study's definition of recurrence, which is a 20 degree change of contracture with a palpable cord, or the joint undergoing medical or surgical intervention. Of the 623 joints assessed, only 12.8 percent of those joints received medical or surgical intervention through Year 4 and of these patients, most were retreated with XIAFLEX. The data also reveal no new long-term adverse events. Of the 86 serious AEs reported through four years of follow-up, only one was considered related to XIAFLEX (decrease in ring finger circumference due to Dupuytren's contracture resolution).

On August 28, 2013, Auxilium announced that the U.S. Food and Drug Administration ("FDA") had notified Auxilium that the FDA was extending the Prescription Drug User Fee Act ("PDUFA") goal date for Auxilium's supplemental biologics license application for XIAFLEXfor the treatment of Peyronie's disease from September 6, 2013 to December 6, 2013.  During the course of recent product label discussions, Auxilium submitted revisions regarding its proposed Risk Evaluation and Mitigation Strategy (REMS) program and other aspects related to the proposed label. The FDA determined that this submission qualified as a major amendment filed during the final three months of the review and extended the PDUFA goal date to December 6, 2013.  The FDA has not requested that any additional clinical studies be performed prior to the revised PDUFA action date.

On July 23, 2013 we presented a poster titled "Biomechanical Evaluation of Human Uterine Fibroids after Exposure to Purified Clostridial Collagenase" at the Society for the Study of Reproduction 46^th Annual Meeting in Montreal, Quebec, Canada.  The poster provided data which showed that highly purified collagenase can reduce the stiffness of human uterine fibroid tissue in laboratory experiments. Increased tissue rigidity has been implicated as a cause of the morbidity associated with uterine fibroids. The results of this ex vivo study show that treatment of fibroids with determined doses of purified collagenase caused a statistically significant decrease in the stiffness of the tissue. This hypothesis was tested in fibroid tissue obtained after hysterectomy or myomectomy surgery from patients. Tissues were injected with collagenase and compared to control-injected tissue.

On July 16, 2013, Auxilium announced that it has entered into a long-term collaboration with Sobi for the development, supply and commercialization of XIAPEX for the treatment of Dupuytren's contracture.  In addition, Auxilium stated that work is on-going to file for approval of XIAPEX for the treatment of Peyronie's disease in the EU. Under the terms of the collaboration agreement, Sobi will receive exclusive rights to commercialize XIAPEX for Dupuytren's contracture and Peyronie's disease, subject to applicable regulatory approvals, in 28 EU member countries, Switzerland, Norway, Iceland, 18 Central Eastern Europe/Commonwealth of Independent countries, including Russia and Turkey, and 22 Middle Eastern & North African countries.  Since 2011, XIAPEX has been approved for the treatment of Dupuytren's contracture in 28 EU member countries, Switzerland, and Norway.  Sobi, via its Partner Products business unit, will be primarily responsible for the applicable regulatory, clinical and commercialization activities for XIAPEX in Dupuytren's contracture and Peyronie's disease in these countries.